Thread: So Many changes from this Warning Post in November of 2005

Hope I have posted in the right section this time round.


Overview
=======

A number of people have begun touting so-called "investment" opportunities in the Iraq Dinar as a "sure way" to make a lot of money with little or no risk. Buying the Iraq Dinar is a high risk investment with a poor outlook.

A Little History
===========

The official rate of the old Iraq Dinar, $3.22 USD (U.S. Dollars), was set in 1982 by Saddam Hussein. The old Iraq Dinar could not be freely traded, so this rate was never tested or upheld on the world market.

The current Iraq Dinar (IQD) was introduced between October 2003 and January 2004 by the Coalition Provisional Authority in close consultation with financial experts from Iraq and the international community. The IQD is currently valued at a little less than seven hundredths of a US cent. (1 USD = 1460 IQD). The old "Saddam" Dinar has no current value and is worth only what a collector is willing to pay for it.

What's Happening Now?
=================

The IQD is not freely traded, and is not being used in any significant international transactions. We are unable to locate any official bank or foreign exchange office outside of Iraq that will exchange the IQD.

The IQD trades on a very small, tightly controlled exchange. The total volume of IQD traded by the Central Bank of Iraq is in the thousands of dollars, compared to the $1,900 billion dollars traded on the Foreign exchange market every day. This small number of trades makes the IQD's value effectively immaterial.

The Central Bank of Iraq's stated objective is not to promote the free trade of IQD, as is the case in a true free market economy, but rather to keep the value of the IQD stable. The only way the Bank can ensure the semblance of stability is by tightly controlling the exchange of IQD on the market, and by ensuring that the currency cannot freely trade on the open market. They evidently fear that open trading of the IQD would lead to a rout in which the value of the IQD would sink to practically nothing.

Consider the situation. Why tightly control the trading of the IQD if it is likely to appreciate in value? If the value of the IQD were to surge, this could be held out as evidence of a surge of confidence in Iraq's economy. So why not open the IQD to free trading? Why would this be done unless the Iraqi Central Bank itself feels that the IQD would decline in value in a free market?

A Snapshot of Iraq Today
===================

The current situation in Iraq is pretty grim:

Over a decade of international economic sanctions and a devastating war has left the infrastructure in tatters
$125 billion of external debt
Millions of dollars in post-war debt
No stable government
Insurgency steadily on the rise
Oil facilities and pipelines are sabotaged regularly
Many (including the former Prime Minister of Iraq) predict out-and-out civil war
These aren't the kind of conditions typically conducive to the creation of booming economies. More to the point -- a 450,000% increase in the value of the IQD (as predicted by some of its promoters) seems ridiculous in the face of these challenges.

But Surely There's Oil Under Those Dunes?
===============================

A lot of the hype over the IQD centers around Iraq's vast oil reserves and their supposed economic value. The oil market is extremely unpredictable. An economy based on oil alone (oil makes up 95% of Iraq's foreign exchange earnings), will mirror that unpredictability. Let's look at a real-world example: Venezuela.

Oil accounts for 80% of Venezuela's national exports and 50% of its government revenues. The country is one of the world's top five oil producers. In the last four years, Venezuela has experienced intense political instability, including an oil strike and an attempted coup d'état. The resulting economic chaos has led to the extreme devaluation of the Venezuelan Bolivar -- today, it is worth only about a third of its US Dollar value from January 2000, and only about a quarter of its Euro value from January 2000.

Investing in a country's currency is tantamount to investing in that country's economy as a whole, not in any single commodity. Investing in the Iraq Dinar is not the same as investing in Iraq's oil.

But What About Kuwait?
==================

Promoters of the IQD like to compare Iraq now to post-Gulf War Kuwait -- but this is comparing apples to oranges.

Before the Gulf War, Kuwait had a stable government and its foreign investments generated more income for its economy than its oil did. After the war, despite losing a third of its pre-war investment portfolio (over $100 billion USD), Kuwait still had a solvent economy, a stable government, and an intact infrastructure. Of course its currency increased.

In comparison, Iraq entered the war with a $125 billion USD debt, has almost no infrastructure, no stable government, and no other foreign income except its oil -- the vulnerability and unpredictability of which we have already pointed out. The outlook for its economy and the IQD is grim for the foreseeable future.

In late 2004, the US was successful in convincing some foreign creditors to "forgive" some of Iraq's debt. However, debt forgiveness is seldom a blessing, and generally comes at a very heavy price. Other countries whose foreign debts have been "forgiven" have found it nearly impossible to generate any foreign investment afterwards. Think about it: how would you feel about investing in Iraq again if you lost your entire investment (i.e. you "forgave" it) last time?

If it Sounds Too Good to be True...
=========================

Ask yourself one question: if the Iraq Dinar is such a hot commodity, why would anyone in the know be willing to sell it to you? If you thought that the IQD was going to multiply in worth by hundreds of thousands of percent, would you sell it? Of course not -- you'd be too busy buying as much of it as you could.

But if you thought that the IQD was going to go down in value over time, well, then you might start trying to convince people that it was a "great deal" so that you could get rid of all of yours before it nose dives.

Remember the old saying: if it sounds too good to be true, it probably is. You never know, you might make a fortune!

I personally have invested $200 worth. Good luck to all you investors.

Adster, Mike, and all the Dinar Gang. Remember this back in November of 2005? Most of us wasn't even apart of the Gang yet. Now to bring this upto date should all have fun here with there new found education. I will start here with the Irag of today(Nov 05). This is for fun and all. Please all new educated answers of updates.

Originally Posted by lightrayspips

A Snapshot of Iraq Today
===================

The current situation in Iraq is pretty grim:-Now the hopes of they Iraqi Goverment would like and are trying to get Iraqi people back to the post Wars era. Like go biuld back to 1982 and then move forward.
Over a decade of international economic sanctions and a devastating war has left the infrastructure in tatters-There is more construction going on there then all in the world in that one country. In my opinion.
$125 billion of external debt-I believe all but 800 million has been forgiven.
Millions of dollars in post-war debt-???? This I dont know how to answer this one. But I am sure all coalitions involed are dedicated to do something for this.
No stable government-Total Government inplace now.
Insurgency steadily on the rise-Steadly Droping. Even cutting deals with the Government.
Oil facilities and pipelines are sabotaged regularly-Back to producing 2.5 million bls aday
Many (including the former Prime Minister of Iraq) predict out-and-out civil war-Now,predicting a total comeback in less than 4 years to the post Sadam days.
These aren't the kind of conditions typically conducive to the creation of booming economies.-To the contrary. It seems to of have been.
More to the point -- a 450,000% increase in the value of the IQD (as predicted by some of its promoters) seems ridiculous in the face of these challenges.-Nolonger Ridiculous anymore. So many changes since this time have been changing the out-look of Iraq.

Man, so many changes in less than a year. I bet they are regreting this now. I only hope they still have that $200.00 worth. If any of my answers need be updated please feel free.

lolz .. nice that you feel responsible for testing and warning the gang. sorry to disappoint you but i don't take tests any more. i do take full responsibility for my choices and actions and answer to nobody but myself and my Maker.

Originally Posted by clueless

lolz .. nice that you feel responsible for testing and warning the gang. sorry to disappoint you but i don't take tests any more. i do take full responsibility for my choices and actions and answer to nobody but myself and my Maker.

Test? This is no Test. This is to see the changes that we have learnt that have change since this late 05 post. I changed the title clueless so it wouldn't be missleading again. Sorry

Thanks for this good post!

Neno, sorry for the confusion .. again.. seems a bad habit of mine. i was only talking about the change of subject title for the thread. and did not mean anything at all about your great responses. i actually was groggy enough that i missed that it was an old post.. thought it was a new post of an old set of info. just totally off base here. oh well... loz

Originally Posted by clueless

Neno, sorry for the confusion .. again.. seems a bad habit of mine. i was only talking about the change of subject title for the thread. and did not mean anything at all about your great responses. i actually was groggy enough that i missed that it was an old post.. thought it was a new post of an old set of info. just totally off base here. oh well... loz

My bad clueless. I changed the title again.

MEMORIES,

Funny, but I just love going back and debunking naysayer posts, especially on forums. Had some great fun on Talk$hit recently. It is always nice when you pick a winner and so many can enjoy the ride, never mind destination. LOL

Good luck to all, Mike

Hey Mike! Where is our 'destination' and.....

Are we there yet?
Are we there yet?
Are we there YET?!? lol!

Tiff

Originally Posted by Offshore-Wealth.com

MEMORIES,

Funny, but I just love going back and debunking naysayer posts, especially on forums. Had some great fun on Talk$hit recently. It is always nice when you pick a winner and so many can enjoy the ride, never mind destination. LOL

Good luck to all, Mike

Talk$hit. I thought they $hitGold over there.