Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content
  • CRYPTO REWARDS!

    Full endorsement on this opportunity - but it's limited, so get in while you can!

The Dinar's Dismal Future: Sell Now (Opinion Piece)


Recommended Posts

7/28/2014 @ 9:18AM 204 views

The Dinar's Dismal Future: Sell Now

WideModern_JohnWasik_111113320x213.jpg

John Wasik

Contributor

It’s not looking good for the Iraqi dinar revaluation.

For those just tuning in, millions of Iraqi dinars have been sold to “investors” hoping to make a windfall when, and if, the currency is revalued in their favor. No one knows how many people have been sold this tale of overnight wealth since the dealers for these notes are not regulated.

As you’ve probably noted from the headlines, Iraq is in bad shape. Sunni insurgents have taken most of the northwestern part of the country; the central government and army are weak, abusive and indecisive; and the Kurds are asserting their virtual autonomy in the Northeast.

Iraq is basically enmeshed in a brutal civil war without any cohesive social fabric to pull it back together. Except for some military advisers, the U.S. and Western powers are staying out of the country. Iraq could very well break apart into three separate regions dominated by Sunnis, Shiites and Kurds. No one is sure what’s going to happen next.

Where does that leave the untold thousands holding dinars who are awaiting their payday? The endgame may be near for this currency, which probably won’t survive if the country breaks up.

Professor Cory Bunting, director of the Capital Markets Center at Virginia Commonwealth University in Richmond, Virginia, is not optimistic. Prof. Bunting has been watching the situation and offered me this blunt advice:

“In my opinion, the dinar will never ‘revalue’ to the rate the pro-dinar pundits lead people to believe. In fact, it remains to be seen if the country of Iraq, as we know it today, will even exist in its present form in 10 years time. Many people who currently hold dinars probably view them as a ‘sunk cost’ or a call option on a dream.

If I held dinar, I would sell them back to a currency dealer. You will likely lose about 20% as the bid price ( to sell to dealers) is far below what the price is to buy from them.

As an investor, I would just take the 20% loss and move on rather than sit on a stack of paper that will likely be worth nothing, or nearly nothing, in ten years time. That said, taking losses is hard for most people and hope springs eternal that wealth is just around the corner.”

What, sell a pile of potentially lucrative lottery tickets? Who in their right mind would want to do that?

The reason it’s so difficult to take a loss in dinar is that 1) they were oversold by currency dealers, 2) people believed the “story” that the dinar would be revalued upward, 3) they didn’t cost much to begin with and 4) losses are felt twice as intensely as gains. No one likes to take a loss and move again, although it’s the rational thing to do.

670px-20_dinars_front.jpg

The front of the 20 dinar bill. (Photo credit: Wikipedia)

Although no regulator knows how many investors hold the dinar, Prof. Bunting estimates “that there are around 40 trillion Dinar in circulation and only about 5 trillion actually reside in Iraq so the rest in held by dinar speculators around the world. I guess you could say that the Dinar is Iraq’s largest export product).”

In the interim, heed this advice about currency dealers in general:

•“The Iraqi dinar scheme has been surprisingly long-lived, giving federal and state regulators and nonprofit consumer groups time to issue warnings about the dinar and other foreign currency investment opportunities. Take them seriously

•Read the prospectus or offering document. You should receive a written statement that provides all relevant information about the investment and the company selling it, including the company’s history, operations, financial conditions, and key personnel. No prospectus? Don’t invest.

•If I buy the investment, then what? Who is going to buy the dinars you have in a drawer in your house? While there are no guarantees in the return of, say, a mutual fund that invests in stocks, you can at least sell it the day after you bought it.”

Even though I’ve been warning about dinar buying for years, I have no idea what the Iraq Central Bank will do with this currency. It may very well revalue it in the favor of those who hold it. But it has to go through a lot of anguish and bloodshed before that happens.

http://www.forbes.com/sites/johnwasik/2014/07/28/the-dinars-dismal-future-sell-now/

  • Upvote 2
  • Downvote 4
Link to post
Share on other sites
  • Replies 98
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

Never invest more that you can't afford to lose. I'm here until the end.! Patience is a virtue.

Appearantly he has not been watching the strides Iraq has been making on all fronts as a country over the last month. I say things have never looked better.

Just did a quick little research on Wasik, and I'm surpised Forbes would even publish his stuff. He literally wrote the book on Keynesian investments, so he probably thinks the best way to make money

Seriously? BTW why is this in the News section.

Moved it to the rumor section. Not trying to stir stuff up...it was there so I brought it here to get people's opinions.

  • Upvote 3
Link to post
Share on other sites

I suspect we will have the answer to that question within the next 8 weeks, IMHO. That reporter is pessimistic. I, on the other hand, am optimistic. I believe I will go with my gut instinct which rarely ever fails me!  :eyebrows:    I've waited this long to see the outcome and things are definitely looking like Iraq will be around in the next 10 years if they keep moving forward without Maliki in the drivers seat. The man is so blinded by his own bloc's greed for power that he will single handedly insure the end of Iraq as we know it today. The funny thing is, even his own tribe is turning their back on him these days!!!  :)

Edited by jcfrag
  • Upvote 6
Link to post
Share on other sites

Thanks k98Knight....Is that the new Kurd 20 that he's holding...if it is that's the first that would confirm they have been printed....The timing of this article and every thing else is more of an assurance than anything else...

  • Upvote 3
Link to post
Share on other sites

Just did a quick little research on Wasik, and I'm surpised Forbes would even publish his stuff. He literally wrote the book on Keynesian investments, so he probably thinks the best way to make money as an investor, these days, is to ride the stock market up because the Fed is doing everything it can to prop up the DOW and S&P. He thinks global warming is going to be a $4 trillion industry because man is destroying the world.

 

Besides all that, he's got his facts wrong in this piece. He says Kurdistan is on the verge of separation. The election of Masoum, a Talabani ally, is a direct signal that the Kurds aren't going anywhere any time soon. If Maliki gets re-elected, that may change, but it doesn't look like that's going to happen, and the Kurds have said they support anyone but Maliki. Sure, ISIS is in control in a few parts, but they are very small in number, and their success, so far, is solely attritutable to the local population's hatred of Maliki, and will dissipate as soon as Maliki goes. 

 

If Maliki stays, I would say this guy is right, and wouldn't have argued with him two months ago, but he's using old information to argue that Iraq is about to collapse.

 

Oh, and remember all those articles about the dinar being undervalued, as stated by various Iraqi economists? Yeah, that, too. 

  • Upvote 7
Link to post
Share on other sites

Hmmm... my simple mind says.. what a coincidence that this article coming out right when Iraq is working their hardest to form the GOI.  There is always speculation with any investment, it happens all day long in stock market. The difference is in risk tolerance.  I liken dinar as penny stocks, which can give you big return or it can fold to nothing.  It takes money to make money :) Currently there are people buying and selling dinar.  You can sell your dinar and lose $200-$250 per million and even though it's not traded internationally, dinar is still one country's currency and let's not forget they are loaded with natural resources that just oozing out of their ground.  They are movin' and shakin', looks like they can't wait to fly.

 

There are always two sides of the coin in every situation and dinar world is not an exception.  There will be a camp who believes it will gain enormously, and there is another camp who doesn't believe but still follow it.. because it's human nature to try to prove it one way or the other.  If you buy dinar and have decided it's money gone and you can afford to lose it, I say ride it to the end.

 

The bottom line with every investment is how you feel about the investment, what your risk tolerance is, when you decide to get out if you have had enough :)

Edited by Nadita
  • Upvote 3
Link to post
Share on other sites

Not a very professional piece written for someone who has written many books on wealth and money.  John, you seem to be a bit too emotional about this investment, instead of staying inside the lines and giving us an objective view of Iraq's monetary system.  Makes me "highly" suspicious of you. :twocents:

 

:butt-kicking:

Edited by Goldiegirl
  • Upvote 6
Link to post
Share on other sites

To add to my comment above :)

 

You got it right, Prof Bunting.. Iraq will not exist in its present time in 10 years time because Iraq will emerge as a world player in the next decade.  Prof, if I may suggest, you need to study what is underneath Iraq's soil. 

  • Upvote 1
Link to post
Share on other sites

I would not want to be someone who convinced people to sell dinar and then have

it revalue to any substantial rate. In today's world your life expectancy would be greatly

diminished.

Someone paid him a lot of money to write this article. They are hoping that because he's well known (well somewhat) and is supposed to know something (well somewhat) about investments, that we would believe him and sell our dinar.

  • Upvote 1
Link to post
Share on other sites

Someone paid him a lot of money to write this article. They are hoping that because he's well known (well somewhat) and is supposed to know something (well somewhat) about investments, that we would believe him and sell our dinar.

 

If someone can pay him to write such a thing like this.. I won't even waste my money to buy or read his book.  Sometimes I feel bad for the dinarians out there, with the news flying like rockets by hamas, the rumors that keeps turning like the guinea pig's wheel, and the pressure of daily lives.. we are all thrown any which way they can spin us.  Hoping with some news, we all can be grounded and not getting too dizzy and finally we all will see the light at the end of the tunnel, even though it's dim but we see it.  We need to encourage each other like the geese formation.  If we are all in this together, let's encourage each other.  My experience has been in this dinar world, I say it again, some gurus have legit info and we just have to know which one.. I learn not to throw the baby with the bath water and the tub lol 

 

LGD,

 

I hear you and I don't want to think about it.  Even though time to time, the conversation comes up and my only prayer is that people will get smarter and waking up :)

Edited by Nadita
  • Upvote 1
Link to post
Share on other sites

Someone paid him a lot of money to write this article. They are hoping that because he's well known (well somewhat) and is supposed to know something (well somewhat) about investments, that we would believe him and sell our dinar.

Very true GG, just that some positions aren't worth putting yourself in for any amount

of money.

Nadita, hun, here's some down to earth encouragement.

$100trillion dollars worth of oil.

No one is going to stop that from flowing for very long.

And sooner or later someone in Iraq is going to realize just exactly how to use that

kind of power.

  • Upvote 3
Link to post
Share on other sites
Guest
This topic is now closed to further replies.
  • Recently Browsing   0 members

    No registered users viewing this page.




  • Testing the Rocker Badge!

  • Live Exchange Rate

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.