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posted in rumour section because i want to believe it is a rumour!!! Three Currency Scams to Avoid at All Costs Published Tue, Jul 30th, 2013 Karen Canella, Senior Correspondent Scams have been around since snake oil-selling days. And as long as human nature plays a role, they will be forever. After all, in this world of instant gratification, it’s easy to prey on the greed, impatience and desperation of others. And it’s not surprising that people seem to be falling for these scams harder than ever… Still suffering collective hangovers from the tech implosion of the early 2000s – and the financial massacre in 2008 – investors are struggling to recoup trillions of dollars lost in retirement accounts and real estate equity. So what’s an investor to do? You can use investment tools that provide faster ways to grow money over shorter periods of time, but risk is a huge factor. You can take the slower, less-risky route – but you might fear that you’ll outlive your money. Instead, investors are looking for a quick fix, which is exactly where the trouble starts. Pounds, Dinars and Bitcoin… Oh My! One of our jobs here at Wall Street Daily is to help you sniff out scams a mile away. And for some reason, people are drawn to one troublemaker in particular: currency scams. Maybe it’s the sheer mystery of investing in foreign currencies, like the dinar – or even fantasy currencies like Bitcoin. Either way, there are three currency stories making their rounds on the internet lately that are certainly garnering attention – which you should avoid at all costs. ~ Currency Scam #1: Egyptian Pound I’m sure you’ve seen recent headlines over the past few days about the Egyptian pound strengthening. Before you know it, some clown will suggest that amid an Egyptian revolution – and downward spiral of the pound’s value – a revival is in the cards. The rags-to-riches opportunity will then be splashed across the internet… except no one can read the small print in hieroglyphics. Let’s shed a little light on the situation. According to Reuters Middle East, it’s true that the Egyptian pound has appreciated since the removal of President Mohamed Morsi on July 3. But it’s also true that the currency was put up for sale three times a week back in December 2012 to prevent a currency crisis. And the central bank has since allowed the currency to lose more than 11% of its value on the official market. Now, I’m not saying that investing in the Egyptian pound will never be a viable option, but if anyone tells you now is the time – don’t listen. Marked by high poverty and unemployment rates, domestic debt totaling $187 billion U.S. dollars, and chronic corruption – Egypt is a perfect example of a country not to invest in. I don’t see too many people Cairo-bound for vacation lately, either. And tourism is a main source of foreign currency for Egypt. Historically, a healthy currency is contingent upon healthy politics. For now, stability in that region seems nowhere in sight. ~ Currency Scam #2: Iraqi Dinar The Kuwait dinar often serves as the backdrop for the story behind a potential Iraq dinar revival. However, any similarity stops at the word “dinar.” This oil-rich country made huge economic and technological strides after the first Gulf War, and Kuwait’s currency – eventually backed by gold and silver – became one of the most valued currencies in the world. People expected the Iraqi dinar to perform similarly after the 2003 invasion. Not a chance. Going on 10 years, this scam hasn’t turned anyone into a millionaire, or even a thousand-aire. In fact, since the fall of Saddam Hussein’s regime, one note has been worth less than a tenth of a U.S. penny. Word of warning today: Expect a flare-up in dinar marketing. Sellers often refer to the government of Iraq revaluing its currency to make it appear stronger and more attractive. Wouldn’t you know, just as the dinar’s value plunges further, Iraq parliament is considering just that. Last week, Al-Monitor (The Pulse of the Middle East), reported that a member of the Iraqi parliament’s Economic Committee said, “Reforming the management of the Iraqi currency now requires the deletion of three zeros. The Iraqi currency is weak, and the money supply has amounted to multi-trillions because of the existence of these useless zeros. The country will witness a significant increase in oil revenues, financial earnings and high budgets. Thus, we need to print new banknotes, as estimated by the Central Bank.” So, let’s say they replace older, inflated bills with new banknotes at the current rate. It doesn’t mean that value will suddenly skyrocket. In fact, if you bought the old currency and Iraq revalues it, you’re up the Tigris and Euphrates Rivers without a paddle. Let’s say Iraq decides to give a one-month exchange period before demonetizing the old notes. The only place you can declare “out with the old and in with the new” is in Iraq. That won’t be a very profitable flight, which brings me to the latest currency scam… ~ Currency Scam #3: Bitcoin Sorry, but any currency that can be described as speculative, unstable, volatile, curiosity-driven and invisible is a little far-fetched to me. As Louis Basenese said in a recent WSD article, “There’s no inherent value in a bunch of ones and zeros in cyberspace.” Call me old-fashioned, but I like to crinkle my dollars and hear my wallet change jingle. It’s not that Bitcoins don’t have actual value. You can buy them with U.S. dollars and sell them on Mt. Gox, the world’s oldest and largest Bitcoin exchange. It’s that middle ground that concerns me the most. If someone hacks into your Bitcoin wallet and buys from the latest “Bitcoin accepted here” company, you have no recourse. There’s no calling customer service or being reimbursed from a bank. Considering even Top Secret government files aren’t immune, it can’t be very complicated to crack a cyber safe. And because there are no federal regulations, Bitcoins make it easier for businesses on the shady side of the street to sell porn, guns, drugs, etc. Not to say that all of those things can’t be bought with physical currency, but the lack of regulation and oversight is disturbing. It’s puzzling that with all of the intangibles, Bitcoin is backed by serious bankroll. Founders Fund, a venture capital firm backed by the co-founders of Paypal, gave $2 million to BitPay, a startup that processes Bitcoin payments. Then, Coinbase, also involved in transactions, secured $5 million in capital from Silicon Valley’s Union Square Ventures. Just last week, twins Cameron and Tyler Winklevoss, of Facebook fame, filed paperwork with the SEC to create a Bitcoin ETF. Listed as the Winklevoss Bitcoin Trust, it’s valued at $20 million, the going rate for 236,000 Bitcoins. We’ll just cross that scam when we get there… To protect yourself from scams like these in the future, the North American Securities Administrators Association (NASAA) has compiled a list of five warning signs of investment fraud. Of course, if you do think you’re being scammed, the Securities Exchange Commission would love to hear from you. So would we. Ahead of the tape, Karen Canella