I've heard many people sum this investment up as a no-brainer. They state that the downside is only 20% or so and the upside is a potential windfall in the millions. If that was the case I would agree that it's a no-brainer, but I don't believe these people realize the true potential downside and upside. That's one of the reasons I started this blog.
The downside here is very simple. You could lose everything you invest. There's no guarantee that you will be able to exchange your dinar for USD when Iraq re-denominates. You could be left with worthless currency if Iraq decides to only honor in country exchanges or if the dealers all disappear after a lop. And even if you are able to exchange, who's to say that the rate will remain where it is now prior to the RD? Contrary to the opinion of many investors, the dinar could depreciate much further than it already has. Currently the dinar is close to 1000 to 1 IQD to USD. Prior to Turkey's RD they were at about 1,000,000 to 1. If the IQD depreciates further prior to the RD your downside potential increases far beyond 20%.
Here's a theory on how things could unfold presented by one of our regular DDB commenters named F8.
"Say you have accumulated 10 million dinar and think you're gonna be rich. Iraq announces that they are going to replace the currency with the new 'no zero' notes. Being a typical dinaidjit, you think you're rich! but eventually it will get pounded into your head that no, it's just like everyone has been saying, (on DV they had to say it in a special closet, but still) it's a straight LOP. That's okay, you think, long term investment and all, so you begin to make your plans to swap your old notes for the new. No bank will touch it, they've all said for years they wouldn't and for the love of Bob, it wasn't just smoke and mirrors, they really aren't going to touch it. So you call your online pump it up dinar dealers. No one answers. Hell, they've known all along, and once the word was out, they wisely went into hiding at an undisclosed location with Dick Cheney. For there safety. About this time, you finally get a straight answer that the expiration date that the desperately stupid on the forums is not only real, but you're gonna have to go to Iraq, not to cash in and be rich, but just to keep from losing the 10 grand you have in the dinar in the closet. So you look on priceline.com and find out it's gonna be $1500 and take two days (actual Priceline price, I checked) but hey, if you don't go, you're gonna lose it all because even Ebay at $350 a million is drying up by now, you're not the only one panicking. So you take a week off work, get your flight and go, with 10 million dinar in your checked bag, to Kuwait. There you find that to rent a car to go to Iraq is illegal, so you have to hire a driver from the livery service adn this is a big boom to them, another $1,000. You hate to do it, but you're gonna lose $10,000 so you do. You get to the border and the customs agent opens your bag, has a big episode and eventually explains to you that it's illegal to bring in a) any b)more than X Dinars, but this being Iraq, if you give him half of them, he'll not notice the other half. Now you're getting pissed, but hey, half or nothing, so you negotiate (thanks for the advice on cash in Adam Montana!) him down to giving him 3 million and letting you keep 7 million. Okay, you've flown around the world, taken a week off work, paid bribes spent big money for a flight, car etc...now after a night listening to the bombs go off in town, you finally make it down to the local Warka Bank. You want to both cash in, and check up on the $2500 you deposited there when the very smart Guru told you to. You're very happy they're still open. after the stories of them being insolvant etc... SO you go in the bank, the teller tells you that yes, the accounts are fine, although all the citizens lost 25% of their deposits. What? The foreigners? Well, they lost everything, the recovery funds only paid out Iraqis. So sorry. So, let's cash in your dinar for the new notes, shall we? You can cahs in as much as you want, up to 1 million dinar per day. You have 7 million? Oh my, why would anyone want to cash in 3 and a half years pay all at once? Sorry, there are no exceptions. So you go get a room, cause, well, this is gonna take a week. Your livery won't stay a week, but he'll gladly come back next week to pick you up, it'll only be $1500. The bank takes the 10% tax Iraq has imposed on all foreign cash ins. So lets recap, $1500 for the flight, $2500 for the car, $500 for a hotel room, $3000 for the bribe going into the country, oh, and we didn't mention the $1500 more they took to let you leave with more than the limit, either. Can you see where this is going? People are gonna lose everything because even if you have ten million, it's gonna cost that much or more to simply exchange them old notes for new. And that's why the dealers are gonna be hard to find."
Chew on that for awhile. As for the upside, there's no way that anybody will receive 1000 times their investment. Given Iraq's money supply, rate of oil production, GDP ... etc. the most they could conceivably support would be a few cents which would amount to no more than 50 times the initial investment, and that's nothing more than a remote possibility. In all likelihood the rosiest scenario is making about a 300% ROI if Iraq lops and then RVs up to $3+.
So instead of looking at this as a no-brainer because the most you can lose is 20% and you could potentially make millions, I think potential investors should look at it this way. "I could lose everything and the most I could make is probably only 2 or 3 times my investment." I have to wonder how many would invest thousands or tens of thousands of dollars looking at it that way? If a no-brainer is something you don't even have to think about then I guess I would refer to this as a brainer, because there's plenty to consider.
Addressing the hype surrounding the Iraqi dinar to prevent more people from being misled about this investment.
We will be updating this blog periodically so please join to be notified about the updates.
Unfortunately, I think F8's scenario could very easily become the reality. However, even if we were able to somehow find a way to exchange here in the U.S., I've never been able to understand where these people came up with their 20% risk assessment.
ReplyDeleteMost of us, when purchasing our Dinars several years ago, paid a spread to the dealers of approximately 20% over face value. THAT 20% is already lost if there is a redenomination with no substantial RV attached. In the past year or so, that initial purchase spread has increased to roughly 40%, as dealers are now charging as much as $1,220/million. So our "current" loss is a minimum of either 20 or 40%, depending upon date of purchase.
Then we have to look at the cost of exchanging BACK to U.S. Dollars. Even if a few of the dealers happen to stick around, planning to make additional money on the exchange, common sense tells us that charging merely ANOTHER 20% would likely be a gift. IF they were to be so generous, the loss then amounts to 40% (or 60% if you purchased more recently). Unfortunately, it's far MORE likely that these dealers would charge MUCH more than 20% - because they can.
So these 20% people need to take a harder look at the loss potential. I suspect that at a minimum, we're looking at a 40% loss, and more likely 60-80% - or quite possibly, the TOTAL loss described by F8.
Personally, my plan is to seek out active duty personnel in Iraq and donate my Dinars to them, asking that they throw big parties for their units and local Iraqi kids, buying them stuff they've never had access to before. I see that as a much more logical option than making the greedy dealers richer.
If my worst case scenario comes to pass,and really I think most of it will, I promise you the dealers will be harder to find than a credible Oakie update. If Iraq restricts movement of currency into and out of Iraq,the dealers won't be able to move money any better than anyone else, with the exception that they may know a few people to bribe, and if it were me, I'd be offering 10 cent on the dollar at best. Why pay more, it will be worthless after X date for sure, and you never know, even if you have a source to smuggle it in or out if your source is gonna be there in the week-ten days it would take to get your dinar from you and send it overseas. Be very surprised if Iraq does not place these restrictions on the new note exchange, they have had several chances to lift the laws on moving Dinar out of Iraq and have not done so. As well, getting an export certificate to legally take dinar outside Iraq has not been routine or even easy, they have for their own reasons been pretty steadfast in wanting to keep all the physical currency in country. The reason for this is every physical Dinar outside Iraq is their money that they created and circulated to service their domestic economy. If that money is outside Iraq, it is in effect an expense to them as idle capital not available for domestic use and increasing their reliance on US Dollars, something they would rather get away from. In their view, and it's one I'd share in their place, the people smuggling it out were depriving them of tax revenue by decreasing the velocity of their money supply, increased the effort needed to build their domestic economy and flouting the law. Toss in the fact that any money they prevent from being exchanged is essentially free money to them, and the no brainer here is why would they let you bring it back?
DeleteI had been thinking along the same lines for the last couple years. That Iraq would make it VERY tough to get dinar back into Iraq for the exchange. Lately I’m not so sure of that. Reason being they have said they will have a one year period where both currencies are in the market place and a TEN… again, TEN year period that banks will except it. If they were going to make it hard to exchange, why would they give a ten year period? To use a pumper line… maybe that is a smokescreen. It would not surprise me one bit if when they finally announce the lop, they shorten up the exchange period. I think they realize if they talk about a short exchange period ahead of time, people will panic and exchange their dinar for dollars before the redenomination.
ReplyDeleteI have one question for all you experts expressing your indepth knowledge of currency swaps/RVs/RIs and buy/sell trades. HOW MANY of these transactions have you successfully seen through completion/closing/settlement/you-were-named-on-the-FPA & collected... meaning your bank account was credited? If you have successfully completed one in a lifetime as a principal,a mandate or a broker ...you probably are not here right-now discussing any part of the experience.
ReplyDeleteSimply said ... this is a crap-shoot and all this pontification is as reliable as your prediction of weather tomorrow,next week or next month. YOUR ONE SURE BET IS THERE WILL BE WEATHER.......
Let’s see. There have been about 80 redenominations in the last 40 years. They all have been basically the same. The differences being the number of zeros deleted, and the length of the exchange period.
DeleteThe countries that joined the Euro also redenominated, but that was a different situation and doesn’t apply to Iraq since they are not joining a currency union at this time.
Iraq has stated that they are redenominating and deleting 3 zeros. They have even stated that they are doing just as the other countries have done. That pronouncement coupled with 80 or so past redenominations as examples should allow a person of even average intelligence to figure the outcome of this scam.
Sorry that you don’t seem to get it.
YOU HAVE TO BE INVESTED EINSTEIN TO 'NOT' GET IT. Davie YOU'RE TRYIN TO IMPRESS US..... WAY TOO HARD. GO FIND YOURSELF AN EASTER EGG.
DeleteActually, dipstick, I was on the foreign reserve trading desk at the Bank of England in 1990-1992 so I indeed was involved in the so called Kuwaiti RV, which may have been theoretically possible but the story is nothing like the fairy tale you've been told. My PhD is in International Business and I worked for one of the Federal Reserve Banks, too. So no, I'm not guessing, I understand sovereign wealth creation and capital relationships between nations, as well as central banking. And it may not be as good as reading Adam Montana's book, but I didn't learn it on the internet, I learned it at some of the better universities in the world.
DeleteNow, go tell mommy the RV didn't happen AGAIN and you just got pimp slapped on the internet.
SAM
ReplyDeleteANOTHER SHARE FROM A COLLEAGUE SPEAKING ABOUT ONE OF OUR GURU FRIENDS. THIS GURU HOUSES IN THE MYSTIC LAND OF IRWIN AND HE WRITES ABOUT THE MASKED PSYCHO-CLOPS ESCAPING AGAIN...
Advanced Member
Group: Members
Posts: 40
Joined: 12-April 11
Posted 03 April 2012 - 05:15 PM
It's pick your poison when you pick a guru. Peoples Dinar The Land of Irwin. Their leader, SteveI, has Bi-polar outbursts with narcissistic reflux. He disguises these conditions with Blessings. Nothing can be more disturbing coming from a professed Christian. Several mods are cast in a mold, faintly like the Branch Davidians. Discipline is fine, respect and order are fine, humbleness is a (yes master) fine, but blind-faith in whatever Steve's word is a prerequisite for remaining a member. His catchy little sayings and well-intended lectures don't go far when you breach your own advice. Calling members idiots because they don't unquestionably swallow his words, or they remember and re-state his quotes from past months ... that can piss him off subjecting the member to exile or silencing. No intended or combative disrespect need take place. Just disagree with the dude. A script for drugs to medicate his erratic behavior and a serious prayer are in order.
The members are repeatedly hammered with (it's his money, his rules, his contracts, his contacts, his intel, his partner and his will. They are just the court jesters, there to heap praise and to polish his throne.
They can enjoy their serenity at that site but realize misguidance and misGod'ed are one and the same. Just note that contributors with substance have gravitated away from PD. No one will stay after they figure out you are not allowed a brain. But the real wake up is the waste of time it has become being part of a control freak that goes ballistic when discussions venture toward macro-econ rather than micro-rv.
TOTAL DIS-ENCHANTMENT IS FINALLY TAKING PLACE. IN THE SITES AND THE INVESTMENT
ReplyDeleteIt's actually very much the same on the site perceived to be the most "tolerant" in Dinar Fantasyland. The difference is that Adam Wyoming is smarter, having learned over a period of several years that he will be more readily accepted by his minions of throne polishers by "appearing" to be the ultra-conservative, best informed guru, who while insisting that he believes that a revaluation of "at least" 10 cents will occur "soon," the remote possibility exists that a redenomination "could" occur, thereby employing a CYA tactic. The reality is that by calling for a "ridiculously low" RV, he is in fact encouraging people to buy even MORE Dinars, because at 10 cents, his believers will be convinced that they probably don't have enough to achieve real wealth.
ReplyDeleteHe takes advantage of both ends of the spectrum by encouraging the posting of the craziest predictions while personally maintaining that conservative stance, calmly moving the goalposts further and further, 6 months at a time, with few people noticing that he's likely making more money on his multiple websites than ANY of the other moron pumpers and gurus at the expense of his faithful followers. He certainly doesn't like to be called out on it, as he's demonstrated on many occasions.
Legolas
DeleteDinar Fantasyland.......? How simply ironic ... and that name cloaks his actual intent.
I have not conducted an extensive search of Dinar havens like Sam or possibly you. My exposure, like many with any curiosity, came through a son having served in Iraq. His quest, to show the old man his savy, created my interest. Okie reminded me of ' Buffaloe Bob and Howdy-Doodie ' ...with the ' Three Amigos ' being evident. I have refrained from exposing too much interest because of the son. I do believe Sams' total exposure of Montana to be the real legacy for the craze. Nothing is better evidence to the real goals of these Gorilla Marketeers but do not attempt logic with any follower.
We can make all kinds of claims about our credentials on the net expounding our impressive CVs but who is to know whether the poser is a PHD in ' SERIAL KILLINGS ' or a scholar/professor in economics who can not wipe their ass like our astute present governmental administration.
I REFLECT...The most total opposite of pleasure is not pain but boredom, for we are willing to risk pain to make a boring life interesting ...
Funny you use the phrase "no-brainer" which seems to be Sonny1's mantra... There is nothing to support any of their misleading claims...Adam whoever he is hides behind his scam of VIP so he doesn't have to respond to the non VIP members...when Iraq recently adjusted their rate it was technically a revalue...but for some reason that doesn't count for Adam...wasn't he supposed to close VIP after the RV?...isn't he supposed to set investments up for VIP members after the RV?...I wonder what the amount needs to be for it to be considered a revalue. Either way he and Sonny are two of the biggest liars in the game and they have honed their skills very well....once the realization of the redenomination finally hits the dinar community the flood of dinar for sale will collapse the market and value of it outside of Iraq...at which point I hope people start going to jail.
ReplyDeleteI feel very sorry for the people who are VIP. Such a scam and you are definetily right about Adam and sonny. They got it down to a T.......especially sonny
DeleteMore and more are waking up and are selling off and there is less interest in the dinar which is good and could be because of a site like this. There will always be the ones who are too far brainwashed that once it does RD they won't believe it lol
DeleteI totally agree with you jmw. Think about it If you are trying to communicate factsand maintain credibility why even have a rumor sections?. I look at people like TerryK and Okie, Breitling... pulling crap out of their ass on a daily basis. I am continually amazed at the fact the Dinar Sheep keep buying it.........but they do daily.
ReplyDeleteI often wonder if these same pumpers( Adam and his partners??, DD,..) have been earning commissions on all of the financial advisors telling the holders of the Dinar how to hide the potential cash after the dinar revalues from the IRS with offshore corporations and banks. Not sure if DV's VIP rooms provides this service but its big big money
Jmw I am a liar? Wow I guess you are just as big a loser as those others said you were. And to think I took your back time and time again. Go f yourself.
ReplyDeletegrow up sonny1
ReplyDeletegrow up? he called me a liar which was completely uncalled for, did you tell him to grow up or just me?
ReplyDeleteThat's because you are a liar......also your response to jmw is that of a child but you'll come back and play victim just as always.
Deletei think dc put it best callingfoolsout, your obviously intimidated by me, and stalking me. why dont you just do you, and stay away from the adult table....
ReplyDeletethis is between jmw and i, it has no barring on you, mind your own...
Intimidated. Lol. Hardly
DeleteSorry Sam.
Guys, sonny1 has decided that he wants to comment here and I think we should make some effort to include him. As you may have noticed I have never listed sonny1 as a pumper or given him a Douchie. That's because I have no evidence that he is making any money off of the dinar and I have seen him take responsibility for things that he gets wrong. In fact sonny1 actually went to bat for Legolas when he was banned at DV. I may not agree with him but I welcome his participation here so I'm going to have to insist that there be no more namecalling, accusations, or insults. And sonny1 try not to agitate, okay? Please just focus on discussing the investments in a civil manner. Comments that violate this policy will be removed. Thanks for your cooperation everybody.
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