Wednesday, December 14, 2011

A Unique Perspective on the Dinar

I recently came across a video on YouTube where a minister named Sammy Tippit is talking about his experiences with currencies as he traveled around the world preaching in various nations through the past forty years.  If you want to listen to his views here's the link.  In this video he mentions that Breitling discussed this with him and they thought that it would be a good idea for him to share from his perspective.  (This isn't offered as criticism of Rev. Tippit.  He admits to not being any kind of authority on this type of investment, and he was responsible enough to say that there is risk and he didn't invest any more than he could afford to lose.)  He lists several countries whose currencies appreciated over the years as examples of why he thinks the dinar has to go up in value.  Among them:
  1. Romania - Romania experienced hyperinflation from 1991-1997.  In 2005 they redenominated, removing four zeros from the old lei to create the new leu.  Iraq mentioned Romania's RD (along with Turkey's) to determine how they should proceed with their redenomination. 
  2. Ukraine - Ukraine experienced hyperinflation from 1993-1995.  In 1996 they redenominated, removing five zeros from the old hryvnia to create the third issue of karbovanets.
  3. Russia - Russia experienced hyperinflation from 1993-1995.  In 1998 they redenominated, removing three zeros from the old ruble to create the new ruble.
  4. Brazil - Brazil experienced hyperinflation from 1981-1993.  They redenominated several times beteween 1986 and 1994, replacing the cruzado and the cruzeiro real until finally they introduced the real at a rate of 2750 to 1.  Not exactly a lop since the math is a bit trickier, but essentially the same as a lop.  Shabibi mentioned Brazil's successful redenomination in a recent statement regarding Iraq's future RD.   

If you've listened much to Breitling you know that he tends to rant against people who believe that Iraq will lop.  I find that somewhat ironic since he apparently encouraged Rev. Tippit to share his views, and the reverend is making a good case here for the lop, since all of the countries he mentioned did exactly that.  He states that now when he goes to those countries their currencies are much more valuable against the USD than they were in the past.  Why do you suppose that is?  It's because they redenominated.  They issued new currencies with zeros removed that gave them greater purchasing power.  The value went up and the supply went down, which is exactly what Iraq is telling us that they intend to do with the dinar.  There's a good chance that if he goes to Iraq in a few years he will experience the same thing there that he did in the other countries that he mentioned.  But it doesn't mean that anybody is going to become a millionaire by investing in the dinar.

People like Breitling exclaim "where do these people get this lop stuff?".  The answer is very simple.  Research.  Information on redenominations is all over the web.  Anybody can find it with a little effort.  Will Iraq redenominate or remove (lop) the three zeros from their currency as so many other nations have done in the past?  That remains to be seen.  But the precedent is there, and what Iraq is describing sure sounds consistent with what others have done.  And as the reverend stated, the results were often quite positive for their currencies.


  1. The difference is that none of these sold their currency all over the world beforehand and stated they wanted their currency as part of the foreign currency reserves. Though it is clear your a pro re-denomination, the facts don't support such in this case. What is supported is a clear RV. Maybe not at the rate the gurus state, but RV non the less.

  2. None of those countries had the advantage of web-based currency dealers and forums to pump their currencies either. No, I'm not pro-redenomination. I still own dinar and would love to see an RV, but the numbers aren't there for a revaluation to more than a few cents IMO. I'd take a straight-up RV to a penny over a lop/RV to a dollar any day, but I'm not too optimistic about that because of Iraq's stated goal of dedollarization. This video was done to express confidence in the revaluation of the IQD, but the examples given support the exact opposite, thus the post. Thanks for the comment.

  3. Web-based currency dealers would not exist if the US Treasury did not authorize them. That in itself seems like a story.

    One can always find reasons to not agree, some even very minuet. I don't think you can characterize this investment especially when talking numbers, because in reality we don't know the real numbers or what the real plan might be. If the dinar sold outside of Iraq is meant to be world foreign currency reserves as stated by the CBI, then in reality, this RV is very possible.

    If you would be post an article that is more objective or to counter your re-denomination article, you would have more credibility.

  4. You don't seriously believe that there's a lack of pro-RV posts, articles, and conference calls on the internet do you? I think if anybody's credibility is in question it's the people throwing out bogus rates, dates, and intel. I'm addressing things that those douchebags won't touch. Along with a few others, I represent the balance in this investment. Sorry if that offends anybody. Actually, no I'm not.

  5. The US Treasury didn't authorize any of the web based currency traders to trade currency, that's one of the bigger deceptions on the web. Said dealers have a "money service business" certificate which is not an authorization, but a registration, not exactly the same thing. What those business's are intended to do is provide currency exchange for personal use to those traveling to the region or doing business with entities who engage in commerce in foreign denominations. Money Service Businesses also are regulated in 41 states and to do business with people in those states, are required to register (and post a cash bond) in each of those states.
    Something NONE of these businesses are permitted to do is engage in investment transactions, and while they have for the most part are getting away with it so far, some of them have been warned or scared off, most notably the major banks who used to sell Dinar, and this is the reason they no longer do, because they have legitimate investment subsidiaries which of course won't touch the Dinar trade, but are put at risk by the retail banking subsidiary selling Dinar to people are are treating it as an investment. Not to mention that in spite of people citing an Executive Order, it is in fact technically illegal to buy or sell Dinar in the USA, with the exception of Money Service Business transactions intended to provide local currency to travelers.
    But I know, you know more than me about this stuff because you read it on the internet and I only spent a few years at the Foreign Reserves desk of the Bank of England.
    The dinar now in circulation will be replaced by a new issue, which will be worth 1:1000 to the current issue Dinar. When that happens, you'll have a set period of time to exchange them, but you'll most likely have to go do it in person, and it's not out of the realm of possibility that Iraq will limit the amount of Dinar they'll let you bring back to Iraq during that period, as it is and always has been illegal to take any OUT of Iraq since the current ones were issued, unless you had an export certificate. Which means that the pretty paper you now have is just that, pretty paper and is unlikely to return your costs and definitely isn't going to make most of you a profit.


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