From another blog - A No-Brainer?

[umbertino]

QUOTE

Thursday, April 5, 2012

I've heard many people sum this investment up as a no-brainer. They state that the downside is only 20% or so and the upside is a potential windfall in the millions. If that was the case I would agree that it's a no-brainer, but I don't believe these people realize the true potential downside and upside. That's one of the reasons I started this blog.

The downside here is very simple. You could lose everything you invest. There's no guarantee that you will be able to exchange your dinar for USD when Iraq re-denominates. You could be left with worthless currency if Iraq decides to only honor in country exchanges or if the dealers all disappear after a lop. And even if you are able to exchange, who's to say that the rate will remain where it is now prior to the RD? Contrary to the opinion of many investors, the dinar could depreciate much further than it already has. Currently the dinar is close to 1000 to 1 IQD to USD. Prior to Turkey's RD they were at about 1,000,000 to 1. If the IQD depreciates further prior to the RD your downside potential increases far beyond 20%.

Here's a theory on how things could unfold presented by one of our regular DDB commenters named F8.

"Say you have accumulated 10 million dinar and think you're gonna be rich. Iraq announces that they are going to replace the currency with the new 'no zero' notes. Being a typical dinaidjit, you think you're rich! but eventually it will get pounded into your head that no, it's just like everyone has been saying, (on DV they had to say it in a special closet, but still) it's a straight LOP. That's okay, you think, long term investment and all, so you begin to make your plans to swap your old notes for the new. No bank will touch it, they've all said for years they wouldn't and for the love of Bob, it wasn't just smoke and mirrors, they really aren't going to touch it. So you call your online pump it up dinar dealers. No one answers. Hell, they've known all along, and once the word was out, they wisely went into hiding at an undisclosed location with **** Cheney. For there safety. About this time, you finally get a straight answer that the expiration date that the desperately stupid on the forums is not only real, but you're gonna have to go to Iraq, not to cash in and be rich, but just to keep from losing the 10 grand you have in the dinar in the closet. So you look on priceline.com and find out it's gonna be $1500 and take two days (actual Priceline price, I checked) but hey, if you don't go, you're gonna lose it all because even Ebay at $350 a million is drying up by now, you're not the only one panicking. So you take a week off work, get your flight and go, with 10 million dinar in your checked bag, to Kuwait. There you find that to rent a car to go to Iraq is illegal, so you have to hire a driver from the livery service adn this is a big boom to them, another $1,000. You hate to do it, but you're gonna lose $10,000 so you do. You get to the border and the customs agent opens your bag, has a big episode and eventually explains to you that it's illegal to bring in a) any b)more than X Dinars, but this being Iraq, if you give him half of them, he'll not notice the other half. Now you're getting pissed, but hey, half or nothing, so you negotiate (thanks for the advice on cash in Adam Montana!) him down to giving him 3 million and letting you keep 7 million. Okay, you've flown around the world, taken a week off work, paid bribes spent big money for a flight, car etc...now after a night listening to the bombs go off in town, you finally make it down to the local Warka Bank. You want to both cash in, and check up on the $2500 you deposited there when the very smart Guru told you to. You're very happy they're still open. after the stories of them being insolvant etc... SO you go in the bank, the teller tells you that yes, the accounts are fine, although all the citizens lost 25% of their deposits. What? The foreigners? Well, they lost everything, the recovery funds only paid out Iraqis. So sorry. So, let's cash in your dinar for the new notes, shall we? You can cahs in as much as you want, up to 1 million dinar per day. You have 7 million? Oh my, why would anyone want to cash in 3 and a half years pay all at once? Sorry, there are no exceptions. So you go get a room, cause, well, this is gonna take a week. Your livery won't stay a week, but he'll gladly come back next week to pick you up, it'll only be $1500. The bank takes the 10% tax Iraq has imposed on all foreign cash ins. So lets recap, $1500 for the flight, $2500 for the car, $500 for a hotel room, $3000 for the bribe going into the country, oh, and we didn't mention the $1500 more they took to let you leave with more than the limit, either. Can you see where this is going? People are gonna lose everything because even if you have ten million, it's gonna cost that much or more to simply exchange them old notes for new. And that's why the dealers are gonna be hard to find."

Chew on that for awhile. As for the upside, there's no way that anybody will receive 1000 times their investment. Given Iraq's money supply, rate of oil production, GDP ... etc. the most they could conceivably support would be a few cents which would amount to no more than 50 times the initial investment, and that's nothing more than a remote possibility. In all likelihood the rosiest scenario is making about a 300% ROI if Iraq lops and then RVs up to $3+.

So instead of looking at this as a no-brainer because the most you can lose is 20% and you could potentially make millions, I think potential investors should look at it this way. "I could lose everything and the most I could make is probably only 2 or 3 times my investment." I have to wonder how many would invest thousands or tens of thousands of dollars looking at it that way? If a no-brainer is something you don't even have to think about then I guess I would refer to this as a brainer, because there's plenty to consider.

END QUOTE

Edited July 2, 2012 by umbertino

[The Machine]

This is something I was aware of from day 1 ....... it's the way i look at all investments, I never assume anything.

Well here's hoping this scenario never happens .... +1 for the post though

[caz1104]

Shhhhhhhhhhhhhh genius at work. You mean to tell me it was'nt a guarantee that I would make millions...............NOOOOOOOOOOOOOOOOOOOOOOO! I agree with the above poster.

[alan_coaks_3]

if it does RD the exchange rate stays the same. the only thing that changes is that we will only be able to cash in a certain amount of are old dinars in for new ones at some rate like 1000 to 1

i am almost pretty sure that the online dealers wont give you the new currency that comes out. they will only give you cash for it. And yes your right the dealers can disappear overnight if they wanted to i have seen website liike that that are there and then gone the next.

i highly doubt were going to be Millionaires. with this investment were either gonna make money or lose all. in order for us to make a profit we would have to trade in are old dinars at a 1 to 1 rate.

[dinarck]

Shhhhhhhhhhhhhh genius at work. You mean to tell me it was'nt a guarantee that I would make millions...............NOOOOOOOOOOOOOOOOOOOOOOO! I agree with the above poster.

Caz why do you have to ridicule any post that threatens your RV and at the same time attack anyone who ridicules a fantasy post supporting your RV?

I think your pattern is clear.

[caz1104]

Caz why do you have to ridicule any post that threatens your RV and at the same time attack anyone who ridicules a fantasy post supporting your RV?

I think your pattern is clear.

Goodmorning Dinarck, I see your in your usual frame of mind,darkness. Just responding to an obvious point,was'nt trying to ridicule anyone. My point was simple anyone thinking that this or ANY speculative investment is a guarantee is sadly mistaken imo. Best to all

[dinarck]

Goodmorning Dinarck, I see your in your usual frame of mind,darkness. Just responding to an obvious point,was'nt trying to ridicule anyone. My point was simple anyone thinking that this or ANY speculative investment is a guarantee is sadly mistaken imo. Best to all

O of course caz. It's just like you said huh? You like SWFGs opinion better. Haha

[sandstorm]

Goodmorning Dinarck, I see your in your usual frame of mind,darkness. Just responding to an obvious point,was'nt trying to ridicule anyone. My point was simple anyone thinking that this or ANY speculative investment is a guarantee is sadly mistaken imo. Best to all

Sadly mistaken. that is so negative. im surprised caz, normally you ridicule people about tone for using emotional adjectives.

[caz1104]

Sadly mistaken. that is so negative. im surprised caz, normally you ridicule people about tone for using emotional adjectives.

My bad "happily" mistaken

[securityguy]

Rule #1...Never purchase more than you can afford to loose. If you got greedy and bought more than you could afford and this speculation (notice I said SPECULATION, not Investment) goes South, who should you blame? I personally spent no more than I would if I went out and booked a four day guided fishing trip to British Columbia. I do this about every other year to recharg my batteries..

[jackster]

One bit of information was left out of the original post.

If the traveler is carrying $10,000 or more out of the US, they must disclose this fact. This US$10,000 is the total of all types of currencies. Even IQD. If the sum of the IQD and US Dollars combined is $10,000 or greater, they must disclose this information.

Failure to do so, and they can confiscate all of the money and press charges.

When entering into the US, the same applies.

[dhardage]

O of course caz. It's just like you said huh? You like SWFGs opinion better. Haha

Ok you two..............we all know that you love eachother (not in a creepy kinda way) Now kiss and make up!!

[jackster]

I don't think the issue is about whether the "investor" makes or loses money on this "investment". But the original post does a very good job of presenting it.

It's about the money that dealers and pumpers are making. I understand that a dealer of IQD makes 20% roughly. On a $1,100 transaction of IQD, then the dealer should make $200-$220.

How many $1,100 selling transactions has any dealer made just these past twelve months? If the dealer conducts 1 transaction per day, then he has made 30 transactions per month. $6000 a month. Not bad.

If he could make 5 transactions per day, then he's doing very good.

Many people think to themselves "It's only $1,100. I'm not going to miss that. I spend more money each year at Starbucks."

We've been hit with a lot of wildfires where I'm at. The scammers are hitting the phones asking for people to give money to support the victims. $100? $50? $10? You're investing in the rebuilding of these victims' lives. It may only be $50, but it will help no one that needs it. Get a thousand people to give and you've done good.

[dinarck]

My bad "happily" mistaken

Caz I found this quote from you in the main forums interesting........quote "Misery loves company.Maybe we should suggest the lop section,misery,discontent,& self importance are the main items on the menu down there."

Funny how you failed to mention the fabrication, lies, wishfulthinking, and complete delusion that you cheerlead in the main forums. I wonder why that is? I think maybe those things are ok with you since they support your precious "RV". Misery is nonexistent with me Caz. I am perfectly happy not being a follower thankyou very much.

[WorkerBee]

Ok you two..............we all know that you love eachother (not in a creepy kinda way) Now kiss and make up!!

Ha ha, I'm with you, I think they secretly look forward to each other's posts. Kinda sweet, (in a non creepy way).

[alan_coaks_3]

the only thing we need to worry about is what the exchange rate of are old dinars for the new dinars will be