Iraqi Dinar Revaluation
Iraqi Dinar Revaluation
I set up the “Iraqi Dinar Opinions” category so we can post different perspectives and points of view that differ between websites, news media, rumors, “guru’s” and well educated people as it pertains to Iraq and the Iraqi Dinar speculation. An article was recently published, “Inside The Dubious Dinar Revaluation Ruse”.
I wanted to take the time to address this article, although I do not know this author, anyone that has been following this “speculation” can see where he is off base concerning many of his comments. Even the top notch “traders” are investing in emerging markets over sea’s because in many cases are far more favorable than US stocks. Some US stocks pay 2%-5% dividends, stocks that pay any higher than that are pretty risky in my opinion. We have all seen some major companies go out of business altogether, (Hostess to name one) and many of the “green energy”, “solar”, “battery tech” etc, stocks decline significantly in recent years and many of those go out of business all together. Tesla motors on the other hand, has had huge gains, one college student spent his life savings of about thirty thousand dollars and his stock is now worth over a quarter million. There is an exception to every rule.
Depending on your financial situation, should dictate to each individual, what is best for them, like fixed income people to name one group. Others can put on some added risk for even greater gains without risking their retirement or way of life. In my opinion, to make a blanket statement that you are better off to “invest in US stocks” does not apply to everyone.
The figures that were stated in his article are not current at best, you can buy a million Iraqi dinar for about one thousand dollars and if need be can be sold back to a dealer for around eight hundred dollars, maybe a little more or less. I suspect this will change as many international banks are setting up shop in Iraq, like JP Morgan, Citi bank, etc.
We are not advocating or suggesting that everyone should speculate on the Iraqi dinar, once again it depends on your financial situation. We ARE saying, do not invest your life savings expecting to be an over night millionaire as the “so called guru’s” say everyday! Is it possible? I suppose it is, is it probable? I don’t think so. Many of you may have heard this before, but I will state it again for those that have not. When Saddam was in power, there were about 25 Billion dinars in circulation (according to Wikipedia):
“The dinar was pegged at par with the British pound until 1959 when, without changing its value, the peg was switched to the United States dollar at the rate of 1 dinar = 2.8 dollars. By not following the devaluations of the U.S. currency in 1971 and 1973, the dinar rose to a value of US$3.3778, before a 5 percent devaluation reduced the value of the dinar to US$3.2169, a rate which remained until the Gulf War, although in late 1989, the black market rate was reported at five to six times higher (3 dinars for US$1) than the official rate.”
That being said, there are about 32 Trillion “New” Iraqi dinars in circulation now, how many Iraqi dinars held outside the country of Iraq is up for debate, however, if you take the total number (assuming the CBI holds 20% as required) that leaves about 25 Trillion Iraqi dinars outstanding or in other words, what the CBI is responsible for backing. If it RV’ed straight across ( no deletion of zero’s), at 1 to 1, Iraq, the CBI would be responsible to back 25 Trillion dinars or in this case dollars. In this scenario, Iraq would be in debt for 25 Trillion dollars to back their currency, (assuming we all wanted to cash in now). It is up for debate as to how much Iraqi Dinar all the other countries hold, including their governments, but we know that the CBI’s daily auctions are selling the dollar and taking in Iraqi Dinar. They may hold a significant amount more than we know of, which reduces the amount that they have to back, and offset their debt to exchange. The more they retain the less they are responsible to back and the more it increases their holdings of the dinar…. Make sense?
This is why no one knows exactly what they WILL do, all kinds of articles, statements etc on what they are discussing, but NOTHING definitive.
In my opinion, the worst I can get is about a 200%-300% return and here is my thinking: If they remove/delete the 3 zero’s as some have surmised, then it MUST be from the rate and the physical notes at the very same time, if you remove the “preceding zero’s” as stated in many articles, the ONLY preceding zero’s are in the “rate”, which is currently .0008576, that would leave .8576 (almost .86 cents). If the zero’s are removed from the notes at the same time, it would reduce the currency in circulation from 25 Trillion to 25 Billion. What was Saddam’s rate and currency in circulation? It is stated above. In my opinion, it paves the way to back to the $3 dollar rate as it was before, maybe even a little higher.
In summary: If I paid $1000 dollars for a million Iraqi Dinar it should be worth about 3 thousand dollars sometime in the future. Beats the heck out of a 5% dividend rate…IMO? I could go on and on, both in support of this speculation and against it, but I remain hopeful that I have chosen a viable option to make my money work the most for me and my family.
Just a note here, I’m not a person that promotes or encourages others to speculate as I have, but I will say this, there are a few that do just that, when they themselves do NOT have any significant holdings in the Iraqi dinar. I do have a significant amount of money speculated in this and I hope for the best..backed by facts, not some guru’s unsubstantiated opinion.
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I hope you will all continue to visit our site and get the latest information/news on the Iraqi dinar.
Thanks again everyone.