Tuesday, October 14, 2014

October Update

It's been a month since I did a post, so I thought I should write something.  The truth is there really isn't much to talk about.  The "war" against ISIS isn't going well, but even if we could instantly eradicate them it wouldn't bring about any increase in the official value of the IQD.  The leadership in Iraq is still trying to figure out who is in charge of what and how they're going to proceed from here.  And of course the gurus are still saying "any day now".

I've been asked to comment on a couple of things.  First is this Dave Schmidt guy.  I've already given him two Douchebag of the Month awards.  The guy is a serious contender for the 2014 Dinar Douchebag of the Year.  For anybody who is on the fence about him check out the links below.




The second thing is the Zimbabwe dollar.  Somebody emailed me telling me that the gurus are pumping it again and that it's a scam.  NO KIDDING!?!?!?!  I know the fact that the ZWD has a ton of zeros excites people at the possibilities of a revaluation, but you have to realize that the currency is valued that low for a reason.  NOBODY WANTS IT!  Nobody except for gullible speculators, that is.  From Wikipedia:

"Despite attempts to control inflation by legislation, and three redenominations (in 2006, 2008 and 2009), use of the Zimbabwean dollar as an official currency was effectively abandoned on 12 April 2009 due to the skyrocketing inflation."

Just because something has a very low price doesn't mean it's undervalued.  Toothpicks are pretty cheap too.  Why not stock up on them?  Maybe the Central Bank of Toothpicks will raise the value on them and you'll get rich!  It makes about as much sense as buying Zimbabwe dollars.  As one honest ZWD dealer says "ZIMBABWE CURRENCY IS DEFUNCT AND NOT LEGAL TENDER ANYWHERE.". 

In closing, I'd like to direct you to a great post.  Jay Adkisson from Forbes did an article called "You Can't Fix Stupid - The Iraqi Dinar Scam Lives" a couple of years ago, and every month or so he updates it with his thoughts on the dinar investment.  This month he said, among other things:

"Sometimes currencies lose their value to the point where the mere size of the bills means they have become impractical. Thus, if you’re having to pay for a pack of smokes with a Dinar-10,000 bill, things are obviously out-of-whack, and the government has to re-denominate the currency so that the folks using the currency don’t lose all confidence in it and start trading in some other currency. That is what is happening to the Dinar.

But re-denomination of a currency does not, repeat NOT, change its value relative to other currencies. What actually happens with a redomination is that the government simply issues new bills, knocking a few zeros off, and then sets a deadline by which the old bills become worthless unless they are traded in by that date. So, the local resident might take in their old Dinar-10,000 bills and exchange them for new Dinar-100 bills."

http://www.forbes.com/sites/jayadkisson/2012/07/30/you-cant-fix-stupid-the-iraqi-dinar-scam-lives/  (Give the page a minute to load, and then scroll down to the bottom right before the comments.)

Now, lest anybody conclude that Jay talks about the dinar like I do, I assure you it's the other way around.  Experts like Jay and John Jagerson are responsible for my epiphany.  I learned what I know from them, from a few sharp guys who frequently comment on this blog, and from my own research.  My thanks once again to Jay for his frank analysis of this scam.  Until next time.




  1. Good Job on the Zimbabwe Dollar. Many people point to the fact that Currency Exchange Websites still shows quotes for the ZWD as evidence that it will make a comeback. The quotes shown at these sites are dated and not realistic. One, xe.com shows the ZWD as 361,900 to 1 USD. This makes a 100 Trillion ZWD Note worth 276 million USD.... If only one could find someone willing to pay that for the notes that dealers sell for $25.

    Another site is more realistic and quotes the ZWD at 92,233,720,368,547,760 per USD. That means you need 923 100 Trillion ZWD notes to equal one USD.

    Which quote is correct? If you look at the market, where willing buyers and sellers meet, the defunct, legal tender nowhere, the ZWD is worth 0.0000000000003 of a US Dollar. That works out to $25 for 100 Trillion.

    By all means, buy a note or two and impress your friends, mail one to a congressman offering to pay of the US Debt, or any number of other novel things, just try to keep a modicum of skepticism when someone tells you you will make millions off of it...

  2. Zimbabwe doesn't even have an official currency produced by it's government. The South African rand and US dollar are the most common currencies used in Zimbabwe. Both are accepted as legal tender. Zimbabwe dollars that are floating around are novelties. You can buy a ZWD 100,000,000,000,000 note for $5.75 at the local pawn shop. They have stacks of them. It's a conversation piece. It isn't legal tender anywhere. You couldn't even buy $5.75 worth of goods or services in Zimbabwe with it. No merchant would accept it. How can Zimbabwe possibly revalue a currency it doesn't even have?


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