Imagine a currency from a distant land. Once purchased, a short period of time awaits to generate an ROI of over 100,000%. Allowing you to leave the investment arena and live the life you’ve always dreamed of.
Would be nice, wouldn’t it?
The currency we will be looking at is the Iraqi Dinar aka IQD.
First of all, Iraq has potential! Bag of potential! The annual change of GDP was 8.6% in 2011, 8.4% in 2012, 10.2% in 2013 and the report expected the same figure for the next five years.
While most of the global economy is in decline, Iraq is clearly not.
So why are we seeing 5 million auctioned investors buying the Iraqi Dinar? Do they know something we don’t?
The main point of the agreement is simple, it is said by those who pumped the sale of the dinar that the Iraqi dinar is ridiculously undervalued and the only option is to complete a “revaluation” so that those who hold the dinar now will one day in the not too distant future realize their has a huge drop 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 excellence, despite the constant chaos in daily life. A good example of how the economy is doing is when Iraq had its first IPO since the Saddam Hussein era, an Iraqi telecom company called Asiacell which was the largest IPO listing in the Middle East and North Africa since the listing of Saudi Arabia Mining in 2008 on the Arab Stock Exchange Saudi.
Even if you consider oil and oil prices, Iraq currently holds fifth place worldwide for oil reserves. It gets even better though, most of Iraq is unexplored! Especially when you consider new technologies for exploration, the currently documented reserves will definitely be higher.
As you can clearly see, Iraq is a success waiting to happen.
My prediction is that we will see a denomination of the Iraqi Dinar where three zeros will be removed from the currency meaning that the current valid tender becomes void once exchanged for a newly issued valid tender within 90 days.
For example, today you fill your car for the sake of argument with a note of 25,000 dinars which is equivalent to $ 21.47 and when the denomination takes place you have printed a new note say 20 and a note of 5 dinars. You return to the same location to buy your petrol and instead of using 25,000 dinars, you pay with a new tender of 25 dinars. This means that purchasing power is the same, nothing less and nothing more, no winners and no losers. Meanwhile, the exchange power to USD remains the same 25 dinars making you $21.47. I would like to take a moment to look at what happened in late 2003 and early 2004 when the Federal Territorial Authority issued the new Iraqi Dinar (which is now in circulation) in exchange for the old Iraqi Dinar bearing Saddam’s face.
From October 15, 2003 to January 15, 2004, all those inside Iraq could change to tender the new law, those outside Iraq could not. After January 15, those holding the old tender will no longer be able to switch and the tender will become invalid.
The risk that currency speculators face is that Iraq will do a renaming and given its history may even do an exchange within the country only leaving those who can’t get to Iraq with a pile of worthless currency. I think you have to look at this seriously when one considers that if the Combined Territorial Authority (America, Britain and others) did it when in power, now that Iraq has full power, he is within his rights to do the same and probably will.
Some might say, “if Iraq is considering such action surely the moral duty is to stop selling to foreign buyers.” Unfortunately, the Central Bank of Iraq’s obligation is to sell as much of its currency to the highest bidder.
[Tweet “If Iraq is considering such action surely the moral obligation is to stop selling to foreign buyers”]
Section 32 of the currency law gives them the right to remove the three zeros and allow exchange within the country only.
Iraq still has more than 71 physical money charts alone and with revaluation it would be worth a staggering 11000000000 US Dollars even if you would double the amount of US
Dollars in your circulation will only end up with 25% of IQD (M2)
It is also backwards to think that Iraq will use oil to support the Iraqi currency / inflation hedge because the reality is that oil is burned, sold and used up. There is no magical vault in which the oil is stored, as it must always be sold or used which means that every time the barrel goes through this process the currency has become more valuable.
Conclusion
For many dinar holders outside of Iraq, the future will be bleak as opposed to what the dinar dinar dinar is. The fact that the numbers don’t add up should be enough to tell you the get-rich-quick fall is just that, evil.
Baghdad Invest a website that focuses on bringing a sense of realism to Iraqi Dinar investors.
Thank you for reading!
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