|The Investment Scam That Refuses to Die|
By Justin Rohrlich SEP 24, 2012 10:00 AM
When a sales pitch begins with, "I'd like to explain to you why the Iraqi Dinar is not a scam," it's...a scam.
"What consumers are not told is that the Dinars can be redeemed only in Iraq, as most of the established currency exchange houses and banking institutions cannot convert the Dinar to US dollars. Since no exchange exists for the Iraqi Dinar, dealers can charge whatever they want to sell and buy back the Dinars. These dealers often register with the US Treasury as a Money Services Business (MSB ). An MSB registration is nothing more than a form they file; it does not reflect any experience in trading currency nor entail any qualifications on the part of the dealer, other than basic anti-money laundering requirements. The reason dealers seek this registration is to lend legitimacy to their scam and avoid more stringent regulation."
“There is minimal risk associated with investing in Iraqi currency and the potential of yield is very high.”
“There is a high chance that the increase in the exchange rate will coincide with the reduction of military force of the USA present in Iraq. Chances are also high that an appreciation might take place just before the Iraqi elections. Many international organizations such as IMF and WTO are working with Iraqi government to bring forth Iraq’s financial system to the rest of the world. It is believed that Iraqi currency will soon be available for trade openly in the international market, which will only lead to greater economic stability to the region. As for how high the evaluation of the Iraq currency would be, some conjecture can be made in this regard. A sudden high growth is quite possible given similar circumstances in the past. This valuation could be anything between the values of 0.01 US Dollars to 1.49 US Dollars. Once this first evaluation is complete chances are there will be more steady progressive growth in the future. This steady growth will prevent an international financial rush. With a steady increment, it will form a limit on the exchange rates in the Iraqi Dinar as many would keep their Dinars expecting further growth. This constant progress in the appreciation of the Dinar will allow for the formation of a free fling market as some investors will sell their Dinars as others hold on to it while some will purchase expecting bigger returns.
An “evaluation of the Iraq currency”? The “formation of a free fling market”? Some explanation is in order. Fortunately, TampaDinar.com has a handy chat feature on its website:
Me: I am wondering about Iraqi Dinars as an investment
Jan: It is a very good investment. Things are progressing rapidly in Iraq, and it is a fact that the Dinar will revalue at some point. It is not an overnight-become-rich investment, but more something for the long term.
Jan: Iraq is in the process of joining the WTO, as soon as that happens, the Dinar will revalue. The key is to hold on to the dinars until that happens.
Me: And what does it mean exactly to revalue? (sorry for all the questions...I'm kind of new to this)
Jan: Banks are not holding the Dinar yet, as it is not yet on the Foreign Exchange. The Revalue means that the value changes....it is highly unlikely it will go down as it is very low at the moment (the exchange rate is 0.0008).
Jan: Iraq is second only to Saudi Arabia in their oil reserves, the country is getting to be very strong. The US government poured over 200 billion in Iraq to rebuild the country, and big US companies are investing in Iraq.
Jan: Such as BP, GE, Pepsi, AT&T, Exxon Mobil, Royal Dutch Shell.
Jan: Looking at all this, it is unlikely the value of the dinar will go lower...no doubt it can only go up.
Jan: Yes, that will happen in January 2013. The value of the dinar will remain the same. They will start printing the new currency. It is overall a good thing as the deletion of the zeros is expected to raise the value of the dinar and will serve the actual purpose of investment (which is to go up).
Me: So like, a 500 dinar note would be worth 5?
Jan: No, the value will remain the same. Iraq only does this for their accounting purposes.
Me: You lost me...
Jan: At the moment, for example, the Iraqi people literally carry a bag of money to buy a loaf of bread. By deleting the zeros, the CBI diminishes the number of dinars they will have to put out.
Me: Okay, if I buy 3 million in Dinars today and three zeros get dropped at some point, doesn't that make my 3 million only worth 300,000?
Jan: Not sure what you are asking?
Me: If I buy 3 million in dinars today and three zeros get dropped, isn’t my 3 million then worth 300,000?
Me: Jan? You still with me?
Jan: Can you please hold for a very brief moment (on phone)...I do apologize....
Five minutes later…
Jan: Thank you very much for your patience...The value will remain the same as the whole monetary system will change....what you were able to buy for 3 million, you will now be able to buy for 300.000.
Me: but my 3 million that I bought previously would only be worth 300,000?
Jan: The value will not go down, it will remain the same.
Me: If this were a stock and I bought shares at 100 dollars after which I was able to buy the same shares for 20 dollars, that would mean that my investment tanked, no?
Jan: Both currencies will remain in circulation during the time of exchange....we are awaiting more news from the CBI, and will notify all our customers once we do have some more information.