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Don’t Be Fooled By the Iraqi Dinar Scam


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Don’t Be Fooled By the Iraqi Dinar Scam Currency trading? Legitimate investment. And that's what Iraqi dinar scammers hang their hat on to bleed you dry.

Jun 3, 2014, 1:45 pm EDT  |  By John Jagerson, Editor, SlingShot Trader

I was first introduced to the Iraqi dinar scam by a friend of mine who asked me if it was a good investment several years ago. And I’m amazed to see how long it has persisted, not to mention how active the scam is today.

iraqi-dinar-Promo.jpg
Source: ©iStock.com/darkangel314

The Iraqi dinar scam disproportionately makes victims of people who don’t have money to lose — including returning servicemen and women — and that’s why I’m passionate about speaking out against it.

How the Iraqi Dinar Scam Works

The scam is basically perpetrated by dinar currency dealers, who work through “promoters” on message boards and through church and social groups to sell physical dinar currency. They promise that the dinar, which currently trades at about 1,200 to the U.S. dollar, will soon be “revalued” to a much higher rate. They usually promise returns of several thousand percent when you buy dinar.

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The dealers get away with it because as long as you are not directly promoting the dinar as an investment, the dealers can sell it without it being a registered/regulated security.

The promoters get away with what they do because, as long as you are not selling the dinar, you can pretty much say anything you want about it.

The connections between the dealers and the promoters are usually hidden behind false names and corporate shells.

For example, there is a large dealer here in my local area owned by the wife of a popular dinar promoter who goes by an online pseudonym. Hidden relationships like this are more common in this scam than you might think. Very few have been shut down by the FTC or SEC, and I expect that will remain the case in the future. 

Why Is This a Scam?

The underlying premises used by the dealers/promoters to convince inexperienced currency traders that this is a “sure thing” are relatively easy to refute, but victims have to be willing to confirm the facts for themselves.

Here is a brief summary of the lies told by the scammers and why they aren’t true:

Currencies are not stocks: Scammers suggest that because Iraq sits on one of the world’s largest (and easiest-to-access) oil reserves, the dinar will appreciate as they export this commodity. If Iraq were a company and the dinar was a stock this would be true, however, oil exporters work very hard to prevent their currencies from appreciating. There is even an economic problem called“Dutch disease” that describes what happens when a commodity exporter’s currency appreciates in value. The bottom line is that Iraq doesn’t want an appreciating currency because it wouldn’t do the country any good. Iraq wants economic growth, not currency growth. If oil exports increased the value of a currency, why don’t other exporters experience appreciation? Much more often they experience the opposite: devaluation.

You can’t do business internationally with a low exchange rate: The argument that a country can’t do business if its base currency (the dinar) is only worth a fraction of a U.S. penny is a common but absurd argument. In the modern global economy, the decimal place in an exchange rate doesn’t matter. If it did, how could South Korea, Indonesia, Madagascar, or Vietnam be such large exporters of consumer goods? You don’t need to look farther than the tag on your shirt to confirm that each of these exporters, with currency exchange rates lower than the dinar, don’t have any problems exporting goods.  Revaluations like this happened before in Kuwait: There are many legends of investors buying Kuwaiti dinar just after the Iraq invasion in 1990 when physical Kuwaiti dinar was selling for “pennies on the dollar.” Subsequently, the Kuwaiti dinar was brought back up to its pre-invasion value in 1991 to be worth more than the dollar. This comparison sounds compelling … until you realize that most of Kuwait’s wealth was held in the banks (unavailable to Saddam Hussein’s government) and the same government and monetary system was reinstalled within a few months. None of that is true for Iraq. The only thing the current government and dinar of Iraq has in common with the pre-invasion country and currency are the names “Iraq” and “dinar.”

What’s the Harm?

I am often challenged by victims and scammers that investing in the dinar is “just a risk” like any other investment, including stocks. However, saying that the dinar is just a risk like buying stock is like comparing the risk of walking out your front door and walking out the door of an airplane in mid-flight. It is possible that either activity will lead to your death or injury, but one is much, much more likely.

 
 

With a scam like this, the risks are always understated or just undisclosed. Here are a few to think about:

Liquidity: There is currently no active market for dinars. You can buy them and sell them through dealers, but the difference between the buy and sell price can be 20% or more. If Iraq redenominates their currency (a common issue with developing economies), then it could be very difficult to exchange those dinar anywhere outside Iraq.

Unregistered investment: The dealer/promoters are only operating legally because of a technicality that allows currency dealers to sell hard currency to individuals without having to be a licensed investment advisor or broker/dealer. They hide their real identities behind pseudonyms and can shut down and restart as easily as you can buy an Internet domain. Victims have no recourse if their “investment” goes bad or they were lied to.

Inflation: Most developing economies suffer from very high inflation, if not hyper-inflation. Iraq is running a very large fiscal deficit and already has been warned by the IMF that at this rate, the deficit will likely lead to economic problems. If the price for Brent-oil drop much further, they won’t be able to support their economy and inflation (already running very high) will ramp up quickly.

 

The Dinar Trap

For years, I have watched more and more new investors sink money into the Iraqi dinar, then become obsessed with watching for their ship to come in. Many of them wind up not only losing their money, but also their time, marriages and jobs over their obsession with this get-rich-quick scam.

Like all investments, if it sounds too good to be true — it is.

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Thanks for the post. I beginning to think this guy might be telling the truth. It's been over 10 plus years and still no RV. No one still don't know what's Iraq is really doing. I hope this is false but my faith is getting very thin about this whole thing. Been in this thing for over 7 plus years and patience is very thin right now.

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I prefer to listen to what Iraq is saying about the IQD rather than listen to a so called couch seatee currency expert john jaggerson. Jonnny you will have to do better than the Iraqis call the dinar grossley undervalued. They will accept article 8 at somepoint soon. Then the Iraqi dinar should gain value over time.

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I really liked the video that came out a while back...where they interviewed one of the specialists with Auerbach Grayson...and investment firm..as per why they went into Iraq to seek opportunities and investments...from what is best remembered...he stated that they really started getting interested and looking at Iraq even moreso...due to all the negative press!...

 

And was'nt it Templeton Funds...from what I best remember a few years ago...whereby they depicted having 5.4% of their entire portfolio invested in Iraq!...

 

So...even if the dinar does'nt go up...or lets say it doesnt go up for a while longer...with some of the largest investors are moving into Iraq...wouldnt that seem to be making a statement that we may be as well off..if not better off...holding their funny money...instead of what we are already holding...the US Dollar...while taxes rise...and through inflation..we are losing up to 50% more now on certain items...from just a year ago even?

 

My dinars dont eat anything...and they have had 10 years to tank...and they havent...so is this just more media blitzing with rhetoric and posturing as we near something good perhaps?...

 

Anyway..what do we have to lose holding some dinar...and if this expert is so good...why isnt he warning us of whats inevitably going to happen to the doillar?...Thats what he needs to be getting his toilet paper ready for IMO...lol...

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Yep , gonna hold on to mine. The money has already been spent and I get along very well without it. I would have spent the money on other things and many of them on things that would have been gone by now, but I still have my Dinar. Just saying. :twocents: :twocents:

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What amuses me is that JJ and others can't seem to let the "Dinar Scam" thing go. There have been multiple articles and interviews stating basically the same thing the past few years with JJ. It makes me wonder like SOME here did JJ invest early on and then suddenly think they were hoodwinked and now has a score to keep..............just a thought.

Edited by caz1104
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:salute: Thanks for the post YOTA (+1) ... Unfortunately he doesn't mention the asset value of Iraq's natural resources, CBI Reserve Assets, Statements made by the CBI Governers from Shabibi to Saleh to Turki, the plan laid out in the Future of Iraq Project which states that the intent is to return the value of the IQD back to the pre-Saddam rate of $3.33 (the Golden Dinar). Iraq has followed the plan; however, Maliki has restricted the development as set forth in the plan, and hindered progress of Iraq's recovery.  Hopefully, this will soon come to an end in the next few weeks...! Just a few thoughts to consider...!  :tiphat: 

Edited by ronscarpa
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Yep , gonna hold on to mine. The money has already been spent and I get along very well without it. I would have spent the money on other things and many of them on things that would have been gone by now, but I still have my Dinar. Just saying. :twocents: :twocents:

 

Exactamondo!!!!

:salute: Thanks for the post YOTA (+1) ... Unfortunately he doesn't mention the asset value of Iraq's natural resources, CBI Reserve Assets, Statements made by the CBI Governers from Shabibi to Saleh to Turki, the plan laid out in the Future of Iraq Project which states that the intent is to return the value of the IQD back to the pre-Saddam rate of $3.33 (the Golden Dinar). Iraq has followed the plan; however, Maliki has restricted the development as set forth in the plan, and hindered progress of Iraq's recovery.  Hopefully, this will soon come to an end in the next few weeks...! Just a few thoughts to consider...!  :tiphat: 

 

I totally agree my friend!!!

 

No need for AM to chime in.....all these points are covered....in it to win it baby!!!!!

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Jj has no idea what he's talking about. There is no inflation and if there is it was caused by the banks. The cbi printed 30 trillion dinarto keep it from appreciating to fast. He never talks about how they've been reducing the money supply. I think its at 4 billion notes now and they stated they want to get it down to 1 billion.

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I find it amazing that these guys never seem to tire of telling us that we are making a mistake.

 

I would think that their time would be better served carrying a "The World is coming to an end" sign while walking down main street.

 

Everyone already knows that this investment is a risk. Point taken & we concede it.

 

BUT

 

Is it IMPOSSIBLE for this investment to do exactly what the dinar sellers say it will? No? YES?

 

The odds are better, in my eyes, than winning the Lottery: so allow me the "dream" if you will without your constant "I told you so" articles!

 

Ghee Whizz Bad enough Uncle Sam is killing our economy without someone else trying to invade my dreams! :(

Edited by gymrat76541
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I think Johnny wrote this piece back in 2010?

I though I remember reading a similar article back in 2010.  Just a few "tweaks" here and there.  Most of the "super heros to the rescue" have about the same story to spin.  Who knows, they might be correct . . . but I don't think so.  

I would just like to read what they say when the IQD revalues.  What do you bet that they spin their story in THEIR favor!  Like, "that's what i've been saying all along!"  

Dying "skunks" make more "sent-s."  

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