Imagine a currency from a faraway land. After purchase, a short wait period to yield over 100,000% ROI. Allows you to leave the investment arena and live the life you’ve always dreamed of.
Will it be good?
The currency that we will be looking at is the Iraqi Dinar aka IQD.
First of all, Iraq has potential! Potential bag! Annual GDP change 8.6% in 2011, 8.4% in 2012, 10.2% in 2013 and a projected report of similar numbers over the next five years.
While most of the global economy is in decline, Iraq is clearly not.
So why are we seeing a report of 5 million investors buying Iraqi Dinars? Do they know what we are?
The crux of the deal is simple, it is said that the Dinar sales pumpers say the Iraqi Dinar is ridiculously undervalued and the only option is to complete a reassessment, so those dinar holders won’t be far from waking up in the future to realize they have a substantial sum of $100,000 for every $1 invested.
Some dinar communities expect less and some expect more
Many of us know that Iraq has a lot of potential and is excellent, despite the constant fluctuations in daily life. A great example of how the economy is performing is when Iraq had its first IPO since Saddam Hussein, an Iraqi telecommunications company called Asiacell was finally listed as the largest IPO in the Middle East and North Africa since the Saudi Arabian Mining Company was listed in 2008 on the Saudi stock exchange.
Even if you consider oil and oil prices, Iraq currently holds the fifth place worldwide in terms of oil reserves. It’s even better, much of Iraq isn’t even explored yet! Especially when you consider new technologies for exploration, the reserves currently recorded will certainly be higher.
As you can clearly see, Iraq is a success waiting to happen.
My prediction is that we will see a face value of the Iraqi Dinar where three zeros will be removed from the currency, meaning that the current legal tender becomes void when exchanged for a legal tender. New legislation is enacted within a 90-day period.
An example would be, today you fill up your car to argue with 25,000 dinars which is equivalent to $21.47 and once face value plays out you have new notes written as 20 and 5 notes. You go back to the same spot to buy your gas, and instead of using 25,000 dinars, you pay with a new bid of 25 dinars. This means that the purchasing power is exactly the same, nothing more, no less, no winners and no losers. Meanwhile, the exchange strength to USD remains the same 25 dinars making you $21.47. I would like to take a moment to consider what happened in late 2003 and early 2004 when the Coalition Provincial Government issued a new Iraqi Dinar (currently in circulation) in exchange for an old Iraqi Dinar bearing the face of Saddam.
From October 15, 2003 to January 15, 2004, all those in Iraq were able to exchange for the new legal tender, those outside of Iraq were not. Once on January 15th, the holders of the old bid could no longer be exchanged and the bid became void.
The risk facing currency speculators is that Iraq will realign face value and its history may even make a domestic exchange that only drives people who can’t get to Iraq with a bunch of useless currency. value. I think you have to take this seriously when one considers whether the Union Provincial Government (US, UK etc) did it when in power, now Iraq has full power, she has right to do the same and likely will.
Some might say that, if Iraq is considering such action, there is certainly a moral obligation to stop selling to overseas buyers. Unfortunately, it is the duty of the Central Bank of Iraq to sell as much currency to the highest bidder.
[Tweet “If Iraq is considering such action certainly it is a moral obligation to stop selling to overseas buyers.
Section 32 of the currency law gives them the right to remove three zeros and only allow domestic exchanges.
Iraq still has just over 71 million physical banknotes and with a revaluation it would be worth a staggering 11 trillion US dollars, even if you double the amount of US money
Dollars in circulation, you will only end up with 25% IQD (M2)
It is also thought conversely that Iraq will use oil as a hedge of Iraqi currency support/inflation because of the fact that oil is burned, sold and used up aka exhausted. There is no magic repository in which oil is stored, as it must be continuously sold or used, which means that every time a barrel goes through this process, the currency has become overvalued.
Conclude
For many dinar owners outside of Iraq, the future remains bleak contrary to what pampers dinars will tell you. The fact that the numbers don’t add up is enough to tell you this get-rich-quick fallacy is just, well, a fallacy.
Baghdad Invest a website focused on giving investors a sense of authenticity of the Iraqi Dinar.
This article was written by: Baghdad Invest.