Douchie for August 5-11

This was a great week for dinar douchebaggery.  Lots of good competition. 

Before we get to the finalists I have to mention this.  On Friday Dan "Checkmate" Atkinson said:

I believe 80% of the intel we've been getting is wrong...I also believe as we move closer to this event its probably closer to 90% somewhere...it is just flip flopping every other day...now more than ever the news is very very important because we definitely can't depend on nothing else...I hate to say it but nothing else really has any credibility...what do you believe in? Absolutely not the news but it gives us some kind of a guideline...

A rare moment of honesty from the 2011 Douchebag of the Year.  But it makes one wonder .... if 80% or 90% of his intel is crap, what exactly are his members paying for?




The 3rd runner up is our old friend Kaperoni.  (NOTE!  Kap contacted me and stated that this is from five months ago.  Somehow it just got recycled on Dinar Guru.  My apologies.  But my observations stand.)  On Wednesday Kaperoni said:

Now this quote is simply amazing. “This does not affect the value of the dinar so far but it opens the dinar to the free currency market such as against the dollar, etc.”It is telling us that the value of the old dinar (3 zero notes) is not effected. Clearly, this is what we want. Some may want to interpret this saying “yes the value does not change and the exchange rate also stays the same,” ie (LOP) Well this next quote…puts an end to that theory as well...“If three zeros were lifted from the IQD, this means the IQD becomes stronger 1000 times in terms of value.”This in itself is all we need to be assured of our investment. But the good Dr. [Bakri] gives us the dagger in the LOPster heart with this gem of an example…“For example, a pack of cigarettes that was selling for 1000 dinar would be only 1 dinar. If it was a conversion like that, if the three zeros were lifted from the previous currency, this means the old 1000 dinars will buy 1000 packs of cigarettes instead of 1.”

http://www.dinarguru.com/#ixzz22zS0lKlH


Actually Dr. Bakri makes a very compelling case for a lop when he says "This does not affect the value of the dinar" and "a pack of cigarettes that was selling for 1000 dinar would be only 1 dinar".   If the value of the old dinar isn't affected but the value increases 100,000% for the new currency, that is the very definition of a three zero lop. (I hate these cigarette illustrations. All they do is confuse people.) My take on what the good doctor is saying is that the old Saddam dinars (the previous currency) could have been lopped, which would have made the IQD a thousand times more valuable than it is now. (Thus you would have been able to buy 1000 packs of cigarettes for 1000 dinar instead of only 1 pack.) Why didn't they? My guess is that they wanted to wait until they got inflation under control and things stabilized to their satisfaction. That way a lop would have a better chance of succeeding. The immediate need in 2004 was to get rid of the Saddam dinars and get the Iraqi people used to using a new currency which was reflective of their new political and economic systems, as well as demonetizing the dinar held by insurgents/terrorists. The need now is to simplify cash transactions and reduce the money supply.


Here are a couple of better accounts of what Iraq is planning.


In 2010, the Central Bank of Iraq announced their plans to redenominate the Iraqi Dinar to ease cash transactions. The intention would be to drop three zeros from the nominal value of bank notes; but the actual value of the dinar would remain unchanged. That would mean that 1,000 IQD (pre-redenomination) and 1 dinar (post-redenomination) would both be worth the same amount in US Dollars.

http://www.xe.com/currency/iqd-iraqi-dinar#additionalinfo



BAGHDAD -- The Iraqi Central Bank is planning to redenominate the national currency in an effort to ease transactions and allow people to carry less paper money, RFE/RL's Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of a Central Bank advisory panel, told RFI that a plan has been made to remove three zeros from the currency and phase out the current banknotes late this year.

Salih said by the end of 2010 the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation. He did not specify when the new notes would be issued.

Both will be legal tender in Iraq until the old notes are completely withdrawn.

Iraqi officials have had a long-running plan to redenominate the Iraqi dinar. In 2006, the Finance Ministry recommended to the Central Bank that it carry out such a plan.

Salih pointed out that banks are having a hard time accepting cash savings and deposits, but by dropping the zeros it will make it easier for both the banks to deal with their customers and for the general public to carry money. He said some 80 percent of Iraq's money supply is cash in circulation.

Salih added that in 1990 the value of banknotes in circulation was about 25 billion Iraqi dinars but is currently some 25 trillion dinars.

Economic analyst Hilal al-Tahhan told RFI that the bank's move is overdue. He said he expects the currency change to go smoothly because of the decision to allow both the old and new banknotes to coexist, leading to less turbulence in the economy.

The current exchange rate is 1,167 Iraqi dinars to the U.S. dollar.


http://www.rferl.org/content/Iraq_Planning_Currency_Redenomination/1950504.html





Our 2nd runner up is Brad Huebner from the BH Group.  On Monday Brad said:

As you know, the Iraqi dinar and all of the massive natural resources that are now discovered and the tremendous amounts to come in the future, are the catalysts to create the capital for this realignment to happen. Hopefully for all of you that are losing patience this shows you how important the Iraqi dinar is, and why the United States was the creator of the original plan and sacrificed so much with our involvement in the Gulf War. We don't do anything without some type of reason, and we will benefit greatly as we need to because the United States is the most bankrupt country in the world with more debt than anyone. The plan was supposed to go much quicker as we all know, but much like it did under the Bush/Clinton administrations for the Kuwaiti dinar revaluation ... and there were many mistakes made along the way this time, but there was no road map to follow for the plan. I personally believe only countries, governments, and privileged individuals were the only ones who were supposed to benefit from the original plan. Fortunately or unfortunately - however you want to look at it - things dragged out way too much long, and this plan started to leak to other influential people and it started spreading like wildfire until it actually got down to the everyday common man on the street. These events and timeframes exacerbated the total amount of dinar to what some estimate to be approximately 90 trillion today. However, the vast amount of natural resources that are being discovered in Iraq all the time will help the value of the dinar to come out high enough to help realign the world's financial crisis and reward us investors handsomely. Consider that only about 40% of Iraq has actually been explored for its natural resources, so I'm sure there will be many positive finds that will help Iraq have the highest valued currency in the world.

I've addressed many of these points before, but for the sake of the new readers I'll repeat.

• The global realignment is a theory, as is the idea that Iraq's natural resources will be instrumental in executing this realignment, so no ... we don't "know" this. That's why it's called speculation.
• The sacrificed lives were part of a geopolitical strategy to remove a perceived threat to our national security and transform Iraq into a thriving capitalist country in a region that has been a breeding ground for terrorist organizations. They weren't sacrificed so that Iraq could in effect hand over trillions of dollars to nations and investors holding dinar.
• There was no Kuwaiti dinar revaluation, and therefore no revaluation plan for the Bush/Clinton administrations.
• The idea that "we weren't supposed to know" is a pumper line. If we weren't supposed to know then we wouldn't know. It's that simple. Think about it. Trillions of dollars? If there was such a plan and somebody leaked it out they'd certainly end up dead, and Brad wouldn't be blabbing about it on the internet.
• Even if only 40% of Iraq has been explored that has nothing to do with the value of their currency. If they discovered a trillion barrels of oil right below the surface tomorrow that wouldn't affect their currency's value because it's being backed by their foreign currency reserves, not their oil. And even if their GDP tripled overnight that wouldn't necessarily mean a higher currency value. Their GDP and foreign currency reserves are growing now but the value isn't changing, is it? Brad is either intentionally misrepresenting how Iraq's currency valuation is determined or he's ignorant of that. Either way this isn't who you want to listen to.
• Even if Iraq lops it's highly unlikely that they will have the world's most valuable currency any time soon. IMO it will take decades to climb from $1 to $3 for the simple reason that currency values don't move that much. It would create instability in the nation's economy.

Our 1st runner up is Vic1 from the Gatekeepers.  Should our winner be unable to uphold his duties as this week's Douchebag Vic1 will be the guy we turn to.  On Sunday Vic1 said:

[vic1tgk] THE UNITED STATES TREASURY ….BOUGHT 150 MILLION(DOLLARS) WORTH OF DINARS A DAY FOR MONTHS PRIOR TO OUR TROOPS MOVING OUT!!! NOW …WHY ? ASK YOURSELF….WHY WOULD THE UST…DO THAT? AND THEN SLEEP ON IT …TONITE…

http://theiraqidinar.com/2012/08/05/vic1tgk-oomf-8512/


$150 million would buy about 175 billion dinar.  If they bought every day for two months that would be 60 days at least, so 60 x 175 billion = 10.5 trillion dinar according to my math.  And that's just two months.  So it could be more.  Are we to believe that the US Treasury bought over 10 trillion dinar in the months preceding the US troop withdrawl?  Really Vic?  That would mean that upwards of $10 billion USD (in addition to the $7 billion or so per month that already comes in via petrodollars) flowed into Iraq during those months.  Why wasn't that reflected in their foreign currency reserves?

(Iraq's foreign currency reserves total in Sept. 2011 was about $58 billion.  As of May 2012 that figure grew to about $63 billion, less than half of which was USD.  So we can conclude that the total increase from September 2011 to May 2012 was about $5 billion of which less than half was USD, and most of that no doubt was petrodollars.  Where's the big spike from dinar sales to the UST Vic?)

This claim is based on a post Vic or one of his team members read at Dinar Vets.  It was posted back in December with little fanfare.

http://dinarvets.com/forums/index.php?/topic/94838-what-is-behind-the-drop-zeroes-the-iraqi-dinar/

The original was posted here.

Let me just clarify first of all that this wasn't a news report.  It wasn't a statement from the GOI, the CBI, or the US Treasury.  It was an op-ed from some guy in Iraq who goes by "D. Father of judgment".  This same guy goes on to say that Joe Biden is betting on the destruction of the euro, that the US wants to take over Europe, and that the price of Iraqi oil will drop to $1.  Sorry Vic, but your great research here has basically just referenced an Arabish translation of a rant from some anti-American Iraqi wackjob.  Show me some documentation from the US Treasury or the CBI and we'll talk.

Now let me show you what CBI advisor Saleh said.

"As I think that the Iraqi currency amounts is very little out side and its there only in the neighboring countries like Syria, Iran, Turkey, Saudi.. etc, and it went there for a tourism and small trading process only, your question is that when the Iraqi Dinar will be a reserve currency for other countries, and my answer is that Iraq have a lot of goods and his abilities is very strong and if the steps goes right in the future the Iraqi currency will be a reserve currency for other countries."

http://americancontractor.com/uncategorized/iraq-to-sell-oil-in-dinars-says-cbi



He's saying that the dinar is only being held in small amounts by neighbouring countries. 

   

And now for this week's Douchie winner.  On Tuesday BGG did a solo conference call where he served up a smorgasbord of douchebaggery.  He stated:

• News organizations can't call the dinar a scam any more than they can call the Canadian dollar a scam because it's a legitimate currency (I haven't heard anybody saying that Canada is going to revalue their currency by 100,000% or more, have you?  I guarantee you if they do, that will be deemed a scam)
• He told his friend that there's no way you'll lose money on this thing because as soon as they become an internationally recognized currency the value will go up immediately (There's no guarantee that they will ever become an internationally recognized currency, or that they'll become one before they lop.  But even if they do, S. Korea's currency is the 11th most traded on forex and it's valued at $.000886, slightly higher than the IQD.  How much money are you gonna make if it spikes $.000029?  In short, there's no guarantee that the value of the dinar that speculators hold will ever increase in value.)
• The dinar is an investment, not a lottery ticket (At first this seems to provide him with some credibility, but he has already stated that the value will go up and later he says it will probably go to more than $1.  How is that not a lottery ticket for somebody holding a few million dinar?)
• Iraq's economy is booming and projected to keep growing at an enormous rate, and they're finding new deposits of gold and natural gas all the time. (Irrelevant since currencies aren't valued according to what's in the ground.  Iraq is backing the dinar with their foreign currency reserves, and those reserves only grow as Iraq's GDP grows which means that the value isn't likely to grow by more than 20% a year.  However, their GDP is currently growing at about 10% and their currency's value is stable because they're reflecting their economic growth by printing more money, not by raising the value.  So if they continue this practice the dinar's value wouldn't go up even if they quadruple their GDP.)
• There's a 200 page report that was recently declassified that shows in detail "this whole plan", and it was written long before it was ever implemented.  (I'm assuming that he means the plan to remove Saddam, put a new government in place, and revalue their currency once things stabilize which will generate a windfall in the trillions to repay us for liberating them.  I'd really like to see this report, because I'm convinced that "The Plan" is a pumper fabrication.)
• The current rate is UN imposed (Iraq's currency started depreciating 20 years ago when the sanctions were imposed, so I suppose the UN is indirectly responsible.  But they did not devalue the dinar as a pre-war strategy as some of these pumpers are saying.  The idea that the current value doesn't reflect their wealth based on their GDP is monkey poop.  The value is there.  It's just spread out over trillions of dinar and billions of USD.)
• Shabibi has stated that almost all of the 000 notes are accounted for (Accounted for maybe.  Out of circulation?  I don't think so.  There's 30 trillion dinar outside of banks according to the CBI website.  We've read numerous reports about how the Iraqis aren't using the 50, 250, and 500 notes.  So what's left?  The ones with three zeros, of course!  The 1000, 5000, 10K, and 25K, notes.  Yeah, they're accounted for all right, but they're still in circulation both here and in Iraq.  And Iraq has to back every cotton pickin' one of them.)

Tom "BGG" Sanders
Aug. 5-11 Douchie winner

https://www.freeconferencecallhd.com/playback.asp?n=752-17-65-67-17-65-67-17-65-67-17-65-67295623-17-65-6748931022163-17-65-67;0MTAwNTkwMDY=1



As I pointed out a few weeks ago when you see dinar dealers, dinar site owners, and dinar intel providers all hanging out together you have to smell a rat or two.  And when you read the BS that BGG was putting out this week you know you're dealing with a douche.