I received some good feedback from my article Iraqi Dinar Increasing However Many Challenges Ahead. I thought it would be useful to share with my readers because I learned a lot. I am leaving the name of the responder private because it is not important who it is. What is important is that the information is accurate.
Here is the letter I received:
May I ask if you are a Dinar dealer… or anyway affiliated with dinar dealers?
What are your qualifications to write an article about the Dinar?
You must be aware of the Dinar scam being pushed all over the internet. The coordinated effort to dup people into believing the dinar will increase 100,000% and more is simply dispicabal. Numorous web sites set up for pushing rumor after rumor. While anyone who trys to educate members on simple economics and explian why the dinar will never increase that much is quickly banned. You must also be aware that Iraq has a M2 of about 40 TRILLION dinar, and with an M2 that high and GDP as low as Iraq has, they have no chance of a substantial increase. It’s not traded on the Forex. The only way to invest in it is to buy it from a dealer, (a few banks also sell it) and put it in a shoe box under your bed and hope for the best. I guess you could open an account in Iraq, but that certainly is risky also. The risk is overwhelming if you also consider the Iraqi central bank has talked repetedly of rebasing the dinar, issuing a new currency and doing a 1000:1 swap. Also known as redenomination… or a 3 zero lop. How could you possibly write an article about the dinar and mention none of this??
Here is my Response:
Thank you for your email. No I am not a Dinar dealer nor do I have any realationships with any dinar dealers. I wrote the article because I was encouraged by some of the news coming out of Iraq lately. Also, I like to learn about world currencies that are not considered majors. I realize I may have missed some information in my article, however I believe I covered the story well. As I told of the difficult time the economy is having with unemployment and how they are getting beat out in pricing wars by Iranian imports. As well as the positive information as well as the stock market increase.
I also mentioned that if anyone was interested in investing in the Dinar that it is very high risk. As for my qualifications to write about the Dinar, well I spent a good deal of time researching the article and I spent a year in Iraq as a U.S soldier. Now I know that does not qualify me to write about the dinar but I know about the people of Iraq and I know that they are hard working, intelligent and proud of their country. I would never ever say that they have no chance of economic prosperity. On the contrary they have a great chance because of the character of the people.
David, I have no idea what you are talking about when you say members being banned? I would not ban you from my site, actually I would like permission for me to post your comment on my site as you have provided valuable information to my readers and I would like to add my readers to be aware of as much as possible. The purpose of my blog is to educate and not scam.
How is it that you have so much information on the Dinar, and why would the Iraqi central bank want to debase the Dinar and finally do you believe that there is no hope at all for the iraqi economy nor the Dinar?
Thanks so much for taking the time to write,
Here is his second response:
What is your site?
How do I know so much about the dinar? Well… like many people I fell for the hype, bought a large amount thinking a revalue was to happen any day. That was about 4 years ago. They are still pushing the “any day” thing. I did a lot of due diligence on Iraq and currencies in general. I compared Iraq’s currency and economic numbers to every other country in the middle east and to many many other countries world wide. Exchange rate is just an arbitrary number and means very little. Most people are not aware that Italy had an exchange rate of about 1600:1 for years and years. Italy’s economy was in the top 5 in the world during that time and Italians were certainly not poor. It’s simple… would you rather make 100 dollars a week, or 1,000,000 dinars a week? Obviously the dinars are worth more. The value of a countries currency is not measured simply by the exchange rate. You have to also consider how much of that currency is out there floating around. Iraq has a massive amount of currency compared to other countries.
Iraq is not going to DEbase the dinar, they are going to REbase it. If you have 1000 dinars currently worth $1 (rounded for simplicity), Iraq will issue a new currency and give you 1 new dinar for ever 1000 old dinars, the new dinars will each be worth $1. So there is no change in the value of Iraq’s currency. They currently have about 40 Trillion dinars worth about .001 per dinar. After the exchange they will have about 40 Billion dinars worth about $1 a piece. It’s the same exact thing. Nothing changed, it’s just much less currency, but a higher value per unit. In the past 30 or so years, over 70 times countries have done just what I described. Sometimes it’s 3 zeros, like Iraq has talked about. Sometimes it’s more or less than 3. No country, never ever, not once… has a country revalued like the scammers are trying to convince people of.
There is a lot of hope for Iraq’s economy. The current dinar could even appreciate further. But we’re talking about 10 or 20%, but nothing like the 100,000% people are talking about.
Generally, the bigger a countries economy the more currency they need. So as the Iraqi economy grows they will need more currency. But in almost all cases, countries just print and issue more currency… they don’t raise the exchange rate to create more currency.
The true story about the dinar is not it’s investment potential.
The true story about the dinar in the massive revaluation scam being pushed… and the total silence about that scam.
The theory behind this is that Iraq and the coalition authority intentionally pushed the dinar into the hands of as many people as possible to gain support for the war. If everyone was holding dinar, they would be rooting for success in Iraq. Simply put… the dinar was a huge phsy-op plan. The plan was just to push it the other middle eastern countries. That’s where they really wanted the support. The internet turned it into a world wide phenomenon. It makes perfect sense. Sell trillions of dinars, refill Iraq’s foreign currency reserves and gain support for the war. It worked like a charm.
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