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.
Early on in the life of this blog I conducted interviews with members of the dinar community. My purpose in doing this frankly was to provide content for the search engines (which apparently worked), but it was also to provide examples to the dinar community of people who had stories to tell about how their views on the dinar had evolved since they first invested. One interview that I conducted was with a dinar forum owner known affectionately as Chuckles.
Chuckles was kicked out of several dinar forums for "being a troublemaker", so he started his own forum where people were free to discuss the dinar from all viewpoints. Nobody was banned for being negative or a "lopper". There were no ads and no paid membership or post-RV programs. He paid the monthly expenses out of his own pocket just because he wanted to provide an environment that was needed.
For the first few months there wasn't much traffic to his forum, but when a mod revolt occurred at Dinar Vets a couple thousand people found their way over to his Dinar Dater site. ("Dater" was his tongue in cheek reference to the "RV Monday" BS from dinar gurus who are perpetually setting dates and rates, but when the site became well known some of the other forum owners started ignorantly referring to it as a dating site.) The site became a popular location for some well known people in the dinar community, and because of that Chuckles was able to find some of the answers that he had been looking for about this "investment". In time he sold off his dinar and denounced it as a scam. The forum closed down in late 2012.
Chuckles took his name from his love of comedy and his incredible sense of humour. He loved to make people laugh, and even mentioned his wish to try his hand at doing standup. The photo below is one he provided for me when I posted my interview with him.
In that interview Chuckles said that he learned about the dinar from his father who was approached by a member of the BH Group. They sold him on the possibility of a huge payout and like many of us who have since learned better he quickly bought a few million, thinking that he didn't have time to do sufficient research. When he told Chuckles about the dinar he also bought a few million "just in case", but he was always trying to figure out just how Iraq was going to pull this off. That set him on a quest for the facts, and that quest eventually led him to this blog. He was then able to direct his father to accurate information and his dad sold off his dinar. Shortly after that his dad's acquaintances in the BH Group were indicted, and he expressed his gratitude to Chuckles for getting him out of this scam.
Tragically, we lost Chuckles in July to a medical condition that had plagued him for some time. He leaves behind a wife and daughter along with many friends from his days of playing in bands and his years of working in IT. He also leaves behind a thankful dinar crowd whom he welcomed into his forum at no expense to them and with no pressure to conform. He will be missed.
It’s not looking good for the Iraqi dinar revaluation.
For those just tuning in, millions of Iraqi dinars have been sold to “investors” hoping to make a windfall when, and if, the currency is revalued in their favor. No one knows how many people have been sold this tale of overnight wealth since the dealers for these notes are not regulated.
As you’ve probably noted from the headlines, Iraq is in bad shape. Sunni insurgents have taken most of the northwestern part of the country; the central government and army are weak, abusive and indecisive; and the Kurds are asserting their virtual autonomy in the Northeast.
Iraq is basically enmeshed in a brutal civil war without any cohesive social fabric to pull it back together. Except for some military advisers, the U.S. and Western powers are staying out of the country. Iraq could very well break apart into three separate regions dominated by Sunnis, Shiites and Kurds. No one is sure what’s going to happen next.
Where does that leave the untold thousands holding dinars who are awaiting their payday? The endgame may be near for this currency, which probably won’t survive if the country breaks up.
Professor Cory Bunting, director of the Capital Markets Center at Virginia Commonwealth University in Richmond, Virginia, is not optimistic. Prof. Bunting has been watching the situation and offered me this blunt advice:
“In my opinion, the dinar will never ‘revalue’ to the rate the pro-dinar pundits lead people to believe. In fact, it remains to be seen if the country of Iraq, as we know it today, will even exist in its present form in 10 years time. Many people who currently hold dinars probably view them as a ‘sunk cost’ or a call option on a dream.
If I held dinar, I would sell them back to a currency dealer. You will likely lose about 20% as the bid price ( to sell to dealers) is far below what the price is to buy from them.
As an investor, I would just take the 20% loss and move on rather than sit on a stack of paper that will likely be worth nothing, or nearly nothing, in ten years time. That said, taking losses is hard for most people and hope springs eternal that wealth is just around the corner.”
What, sell a pile of potentially lucrative lottery tickets? Who in their right mind would want to do that?
The reason it’s so difficult to take a loss in dinar is that 1) they were oversold by currency dealers, 2) people believed the “story” that the dinar would be revalued upward, 3) they didn’t cost much to begin with and 4) losses are felt twice as intensely as gains. No one likes to take a loss and move again, although it’s the rational thing to do.
Although no regulator knows how many investors hold the dinar, Prof. Bunting estimates “that there are around 40 trillion Dinar in circulation and only about 5 trillion actually reside in Iraq so the rest in held by dinar speculators around the world. I guess you could say that the Dinar is Iraq’s largest export product).”
In the interim, heed this advice about currency dealers in general:
“The Iraqi dinar scheme has been surprisingly long-lived, giving federal and state regulators and nonprofit consumer groups time to issue warnings about the dinar and other foreign currency investment opportunities. Take them seriously
Read the prospectus or offering document. You should receive a written statement that provides all relevant information about the investment and the company selling it, including the company’s history, operations, financial conditions, and key personnel. No prospectus? Don’t invest.
If I buy the investment, then what? Who is going to buy the dinars you have in a drawer in your house? While there are no guarantees in the return of, say, a mutual fund that invests in stocks, you can at least sell it the day after you bought it.”
Even though I’ve been warning about dinar buying for years, I have no idea what the Iraq Central Bank will do with this currency. It may very well revalue it in the favor of those who hold it. But it has to go through a lot of anguish and bloodshed before that happens.
Iraq is already splitting into three states (USA Today)
Ever since U.S. forces invaded Iraq and toppled Saddam Hussein in 2003, the U.S. government has worried that Iraq would splinter into three states — each representing the feuding religious and ethnic factions the dictator held together through his iron rule.
It may no longer be necessary to worry that Iraq will break apart. In many ways, it already has.
The radical Islamic State that seized a swath of western and central Iraq last month effectively left the nation in three pieces, government officials and analysts say.
The United States worries that a fractured Iraq could lead to a failed state, allowing the radical Islamists to establish a stronghold from which they can export terrorism to other parts of the region and world.
Ryan Crocker, who served as U.S. ambassador to Iraq from 2007 to 2009, described the divisions as "Shiastan," "Jihadistan" and Kurdistan. The references are to the majority Shiite Muslims, who run the national government in Baghdad; the insurgent Sunni Muslim jihadists who make up the Islamic State; and the ethnic Kurds, who have long presided over an oil-rich, semiautonomous enclave in the north
"In a sense, it's apocalypse now," Crocker said.
"Iraq is not one Iraq anymore," Fuad Hussein, chief of staff to Kurdistan Regional Government President Massoud Barzani, said at the Washington Institute for Near East Policy during a recent U.S. visit.
The challenge for Washington is determining whether — and how — the country can be pieced back together. The Obama administration says Iraq must stay united if it is to take back the country from the radical Islamists.
Ironically, Joe Biden had argued as a U.S. senator in 2006, when Iraq was in the throes of sectarian violence, that the country be divided into three autonomous regions with a weak central government . His idea never gained traction, and the administration in which he serves as vice president argues the opposite view.
"The strongest single blunt to that threat (division) would be a strong capable federal government in Iraq that is actually able to exert control and influence to push back on that threat," Elissa Slotkin, a top Pentagon official, testified to Congress recently.
Politicians in Baghdad are haggling over formation of a unity government that can fulfill the mission outlined by Slotkin. By custom, the top three jobs are parceled out to the three factions.
Last week, Kurdish politician Fouad Massoum was named the new president of Iraq by Parliament. His selection followed lawmakers' election of a Sunni, Salim al-Jabouri, as speaker of Parliament.
Lawmakers have a long way to go before creating a broad government that would lessen tensions among the Kurds, Sunnis and Shiites. Prime Minister Nouri al-Maliki, a Shiite, has been widely criticized within his country and the USA for limiting Sunni participation in his government and empowering Shiite militias that have targeted Sunnis during his eight-year rule. Al-Maliki is fighting to stay in office for a new four-year term.
One key to holding Iraq together is convincing the Kurds, who have long sought an independent state, to remain part of the central government. The Obama administration is trying to convince Kurdish leaders to remain part of Iraq.
"Without the Kurds, you're going to have a struggle with all Sunni Arabs against an Iranian-backed Shiite rump state," said James Jeffrey, a former U.S. ambassador to Iraq.
The Kurds have seized on the offensive by the radical Sunnis to further assert their independence. Kurdish forces have occupied territory abandoned by Iraq's army, attempted to sell oil without Baghdad's approval and announced plans for a referendum on independence.
"Division is the only solution, provided that this division should be consensual," said Barzo Ibrahim, a civil engineer in Irbil, in Kurdistan. "This is the most difficult part of the task."
The Kurds have the best chance of survival should they break away from Iraq's central government. They have created an oasis of political stability in the north, fueled by their own oil reserves and protected by one of the most disciplined fighting forces in the region, the peshmerga.
The Kurds have used the crisis to expand their control over oil-rich Kirkuk in the north by taking over positions from Iraq's army when it retreated in the face of attacks from Islamic militants. It's not clear whether the Kurds will withdraw should the crisis subside.
"They are making the most of the current tactical situation," said Mark Kimmit, a retired Army brigadier general and former State Department official with extensive experience in Iraq.
"They achieved on the ground what they were unable to achieve politically, by moving into positions abandoned by the Iraqi security forces," he said.
The Kurdish regional government has begun pumping oil from the Kirkuk field into its own network, so it can sell it independently through its pipeline into Turkey, according to the Iraq Oil Report, which covers the industry. Baghdad considers the move illegal.
The Kurds have said Iraq's central government hasn't fulfilled its commitment to support the regional government's budget, leaving the government with no choice but to sell its own oil.
Baghdad still has control over the bulk of Iraq's oil wealth. The Kurdish region produces about 220,000 barrels per day, compared with about 2.6 million in the Shiite south.
The Sunnis, whose power center is in western Iraq, have little in the way of resources to fall back on. Their anger against al-Maliki's Shiite-dominated government has driven many to support the Islamic State.
While the government's forces are in disarray, al-Maliki has turned again to Shiite militias to help provide security, further heightening sectarian tensions.
Iraq has long had sectarian clashes and divisions. The Sunni minority held power for centuries until the United States ousted Saddam, a Sunni. Iraq's mostly Sunni Baath Party, which ruled Iraq for decades, ruthlessly suppressed Shiites and Kurds.
Some Iraqis, such as Omar Mohammed, a dentist in Diyala in eastern Iraq, see a splintered Iraq as the only solution after so many episodes of sectarian bloodshed.
"I would accept any solution to stop the bloodshed," he said, "even if it was a confederation or division."
Since September of 2011 I have been blogging about the dinar "investment", exposing frauds, reporting on pumper lies, and debunking guru rubbish. When I started writing the expectation of a historic windfall to speculators was palpable, and very few seemed willing to jump on board with me, but slowly the sentiments have turned until now I truly believe the trend has reversed itself. People are getting facts rather than hype, and are waking up to reality by the tens of thousands.
Among the holdouts though, are the innumerable devotees who are convinced that this big RV will happen despite all of the numbers, facts, and documentation that I (or any other guru-buster) provide. The reason is usually this ..... Iraq is the location of the ancient city of Babylon, and they have been told that Babylon must be rebuilt in order for bible prophecy to be fulfilled. In order for that to happen, Iraq needs a valuable currency, so the dinar must revalue.
With that reasoning in mind, I'd like to approach this subject from a different angle. Why do people believe that Babylon must be rebuilt? The answer in most cases is remakably similar to the situation with the dinar - GURUS! You see, the church world is crawling with self-professed experts on bible prophecy who have proven to be wrong time and time again.
In 1970 Hal Lindsey wrote a book entitled "The Late, Great, Planet Earth" which ignited an incredible interest in bible prophecy by addressing current events and stating that they were somehow linked to bible prophecy. This was the height of the cold war and the nuclear arms race, and people were on edge about the possibility of mutually assured destruction from a nuclear conflict. That book went on to sell 30 million copies, and prompted dozens of imitators who attempted to cash in on the popularity of the topic.
Unfortunately the book was full of misinterpretations, misconceptions, and just plain bad theology. For example, Lindsey stated that the Soviet Union would be the empire of the antichrist. Well the Soviet Union collapsed a quarter of a century ago. He also stated his belief that Jesus would return by 1988 because in Matthew 24:32 Jesus said "Now learn a parable of the fig tree; When his branch is yet tender, and putteth
forth leaves, ye know that summer is nigh: So likewise ye, when ye shall see all
these things, know that it is near, even at the doors. Verily I say unto you,
This generation shall not pass, till all these things be fulfilled."
Lindsey claimed thata biblical generation was 40 years and the modern nation of Israel was created in 1948, so he concluded that 1988 was the cutoff date. His subsequent book "Countdown to Armageddon" included his belief that the 1980s would see unprecedented tribulation and international chaos. In fact the global economy did quite well in the 1980s, and the decade ended with the collapse of the Soviet Union.
I'm not trying to pick on Hal Lindsey here. There are plenty of other bible prophecy teachers who have an equally poor track record, but I don't think anybody was more influential in embedding these misconceptions into the minds of evangelicals. Having said that, Hal Lindsey was never one to take the rebuilding of Babylon to mean modern day Iraq. He always subscribed to the theory that the Babylon of bible prophecy is the revived Roman Empire, which would make the city of Rome the modern Babylon. In fact many bible prophecy teachers have concluded that the prophetic references to Babylon in the New Testament were referring to Rome, and with good reason. Peter referred to Rome as Babylon in his first epistle.
From Wikipedia:
"In 1 Peter 5:13 Babylon is designated as the place from which that Epistle was written, but this has traditionally been interpreted as an example of the figurative sense of "Babylon", as a metaphor for Rome. Peter is believed to have spent the last years of his life in Rome."
As you can see there is no consensus on how to interpret the references to Babylon. But let's just assume for the sake of argument that the references are to be taken literally. Does that mean that this is being fulfilled today with the GOI and the dinar? Couldn't things change drastically? Suppose the recent incursion of ISIS into Iraq is a precursor to a revamping of Iraq and its currency. Or suppose the GOI recovers and fends off the radicals. They could still replace the IQD with a new dinar as they have stated they will on numerous occasions. You see, even a literal interpretation of the references to Babylon doesn't mean that the IQD will go up in value.
It's a bad idea to invest money based upon the interpretation of bible prophecy by so-called prophecy experts. Just as with the dinar, there are prophecy teachers who are confusing and misleading people for their own gain.
Recently noted prophecy authors Perry Stone, Sid Roth, and John Hagee were promoting the "Blood Moon" theory on the lunar eclipse. This theory is thoroughly debunked in the video below.
Perry Stone claims to have studied the bible for 80,000 hours. He's 54 years old, so let's assume that he started studying at the tender age of 10. That's 44 years. If we divide 80,000 hours by 44 years we come up with 1818 hours a year. Divide that by 365 and you get about 5 hours a day every day for 44 years. That include school days, work days, sick days, holidays ... you name it. And that's assuming that he started at 10. Does this sound like a guru exagerration to you?
John Hagee is a very controversial figure. Among other things he claims that terrorists will disable the electric grid in the US with an electromagneticpulse bomb.
Both of these guys have sold millions of copies of their books that are full of hype, fearmongering, and bad theology. I could name several others who have capitalized (literally) on the popularity of this topic, but suffice it to say that in my opinion 90% of what you hear from bible prophecy "experts" is bunk.
I've said all along that you should do your own research on the dinar rather than listening to gurus. Well now I will say the same thing regarding bible prophecy teachers. I know that bible prophecy seems confusing at first, but I promise you with a little effort you can start to make sense of it. For that matter all of your spiritual needs are too important to entrust to some spiritual guru. It's okay to learn what you can from bible teachers, but do your own research to see if their teaching stands up. After awhile you'll be amazed at all of the religious BS you've uncovered.
For the first few months there wasn't much traffic to his forum, but when a mod revolt occurred at Dinar Vets a couple thousand people found their way over to his Dinar Dater site. ("Dater" was his tongue in cheek reference to the "RV Monday" BS from dinar gurus who are perpetually setting dates and rates, but when the site became well known some of the other forum owners started ignorantly referring to it as a dating site.) The site became a popular location for some well known people in the dinar community, and because of that Chuckles was able to find some of the answers that he had been looking for about this "investment". In time he sold off his dinar and denounced it as a scam. The forum closed down in late 2012.
In that interview Chuckles said that he learned about the dinar from his father who was approached by a member of the BH Group. They sold him on the possibility of a huge payout and like many of us who have since learned better he quickly bought a few million, thinking that he didn't have time to do sufficient research. When he told Chuckles about the dinar he also bought a few million "just in case", but he was always trying to figure out just how Iraq was going to pull this off. That set him on a quest for the facts, and that quest eventually led him to this blog. He was then able to direct his father to accurate information and his dad sold off his dinar. Shortly after that his dad's acquaintances in the BH Group were indicted, and he expressed his gratitude to Chuckles for getting him out of this scam..jpg)
.jpg)
.jpg)