One of the questions I get a lot is this:
“Does it matter what size Dinar notes I have”?
To answer it simply – it’s not the size of your note, it’s how you use it. (I can’t WAIT for this topic to be brought up regarding the Dong! You know… the Vietnamese Dong? It’s not the size of your Dong, its… nevermind.)
True to Dinar Speculation tradition, your buddy Adam Montana is here to help break this topic down into small bite sized chunks.
Dinar Basics: History of the Dinar.
In 1932, the Iraqi Dinar was equal to USD $4.86. From 1932 to 1973, the Iraqi Dinar was valued from $2.80 to $3.39. 1974 to 1985 the Iraqi Dinar floated from $2.80 to $3.39.
In 2001, war disrupted oil production and the value of the Iraqi Dinar fluctuated between $0.33 and $1.32 from 1986 to 2003.
Since the overthrow of Saddam Hussein’s regime in 2003, Iraq has been in turmoil and the value of the Dinar dropped from its previous strong position to a low $0.00027. To date, the Dinar has risen to $0.00067… more than double its value 6 years ago. While that’s impressive on it’s own, that’s nothing compared to what economists project for the future of the Dinar.
Many experts speculate that the Dinar could appreciate from $0.10 to $2.80, and possibly overnight… which is why the majority of us are involved in this topic.
Current Dinar Value
Iraqi Dinar is currently valued at approximately 1170 IQD to 1 USD, meaning for every $1 you get 1,170 Dinars. Since the Dinar is so low in value, it literally takes almost 4,000 Dinar (or “Iraqi Dollars”) to buy a loaf of bread! Can you imagine bringing $4,000 dollars to the store for a loaf of bread? If a loaf of bread in the US is $2.00, and my average shopping trip is $140, that means that my average shopping trip in Iraq would be $163,800! That’s not a huge issue in and of itself, as long as I’m using a Visa card… but what if I’m paying with cash? When is the last time you counted out 164 grand in 20’s?
For this reason, Iraqi Dinar notes come in much larger sizes. It’s a lot easier to get to 160k when you’re counting by 25,000’s. Instead of (8,200) $20 bills, they count out (7) $25,000 notes. Much easier, right?
Now that you understand the basics on the current value and the history of the Dinar’s value, let’s look at what would happen to those large notes if the currency revalued to its former place.
A Dinar Reval Speculation
- Fact: Iraq one of the largest natural gas reserves in the world – even more than Kuwait.
- Fact: Iraq holds the world’s fourth largest reserves of crude oil (black gold) – even more than Kuwait.
- Fact: Iraq is moving quickly towards a stable, peaceful democracy capable of sustaining peace and commerce.
Considering those three facts alone, why is the Dinar not worth more, like the Saudi’s and Kuwaiti’s currency? I speculate that it isn’t worth the same simply because the trigger hasn’t been pulled. The pile of obstacles preventing that trigger from being pulled is getting smaller and smaller, and I strongly believe that one day soon we are all going to wake up to find that it has happened.
We do have a couple of things to worry about, as investors. One possible scenario is this:
The Iraqi Dinar revalues at 1:1, meaning every 25,000 IQD note you hold is now worth $25,000 USD! The Iraqi government will have to cover every note that comes in, which is arguably no problem since they have so much natural riches. However, why would they make it easy for us to sit on millions? They won’t! How could they make it hard for investors to recover their profits?
Simple. Let’s say Iraqi Dinar revalues at 0.10:1, and at the same time Iraq places a mandatory recall on large notes with a 30 day deadline. This means that if you don’t cash your 25,000 Dinar note in IMMEDIATELY, you lose your money. In 30 days, your 25,000 note is worth nothing more than what a collector will pay for it. What will you do then?
Once again, the answer is simple. You will take the 10 cents! You were forced to cash in at a lower rate. Make sense?
The good news is that your investment paid off… the bad news is you missed out on the FUTURE growth of the newly revalued Iraqi Dinar.
So, what do I suggest? Listen, I don’t get paid to pump the dinar. I’m not a dealer; I’m just a guy who loves sharing news and educating people. This is an opportunity that can help many lives, and that’s all the reason I need to be involved. I don’t get paid to open Warka accounts, and I don’t get paid to pump the ISX. I am NOT a pumper! I am simply here to help… so here’s my advice.
There are three ways to invest in the Iraqi Dinar. One is cash dinar, another is open a Warka Account, and the third is investing in the ISX. My advice is to remain diversified in all of your investments. Don’t spend more than you can afford to lose, and don’t let greed blind you. Perhaps we’ll wake up millionaires tomorrow… or maybe we’ll have to wait another day. I’ll be here writing about it, either way.
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