A true Forex investor’s perspective

[rdubya]

Well guys, I know whole-heartedly you will all bash me for posting this. I could care less about the (-)’s I am about to receive, all I want is for everyone to look at all SIDES of this investment. With everyone being so caught up with all the RV rumors lately I feel many of you have forgot this is an INVESTMENT and in no way a sure thing. The more independent digging I did, the worse it looked. I decided to recruit the help of a TRUE guru, a man who specializes in foreign exchange. He is Harvard educated and extremely knowledgeable. Whether or not anyone wants to listen to what he says is entirely out of my hands. What I can control though, is MY level of involvement. I wrote this man seeking his opinion on a few different questions, which I will copy and past below.

Take this for what it is and nothing more: a different perspective from someone who lives this every day. To respect HIS privacy I will not post his name or email address. If this makes you think “I’m making it all up” then fine. All I know is I will go back to reality and not let this Dinar thing take up the amount of time in my life that it was. On the remote possibility that it happens, I’ll hear about it. If not, well it’s been a fun ride guys.

Below you will find my email exchange with this man; I suppose to get the full idea you would have to start at the bottom and read up (MY first email to him, followed by response, etc, etc.). Believe what you will. I wish everyone good luck.

------ EMAIL RESPONSES COPIED BELOW------

From: (REMOVED FOR PRIVACY)

Sent: Sunday, January 16, 2011 2:24 PM

To: Ryan (REMOVED FOR PRIVACY)

Subject: RE: A few questions from a young USMC veteran

Hi Ryan,

Hey – strong work with the JPY trading! I am definitely not “in” with the IRS but you should know that currency gains get very favorable tax treatment compared to other kinds of investments (for future reference.)

Holding the dinar as a long term investment is a good question. The assumption many people will make is that a currency’s value will rise relative to the dollar when an economy improves. This is actually not the case. Sometimes it will and sometimes it won’t – usually they don’t. It would not be in the best interest of the Iraqi government to allow their currency to appreciate (or deflate) and fortunately for them there are some very effective tools they can use to make sure its value doesn’t rise. If you are interested in making a bet on the Iraqi economy I would look for a business investment rather than a currency investment. Unlike the relationship between a stock and revenue or profits; currencies don’t have a positive relationship to GDP. Currency values are subject to supply of the currency (money printing) and interest/inflation rates. All of those things tend to go wayyyy up when an economy does well, and inflation and money-printing tend to be very bad for value against other currencies.

I know it is quite popular to pick on a weak dollar these days in the press but the facts don’t support it. The dollar is relatively strong compared to other major currencies (the Chinese Yuan being an exception). That doesn’t mean the US has sound fiscal or monetary policy it just means that most of the other major systems are messed up as well. The dollar is about as valuable today versus global currencies as it has been over the last few decades. Slightly weaker but not by very much. If I had a gun to my head and I had to bet against either the US or the Iraqi currency it would be the Iraqi currency.

Before you make your decision you have to separate the connection that some people make between a growing economy and a currency’s value. They are not positively correlated like many people think. I mentioned Turkey and Venezuela in my last note because they are classic examples of very robust, growing economies (with massive natural resources) that suffered from insane levels of inflation at the same time this decade. If you think there are prospects for oil or whatever in Iraq – great, buy a stock that will benefit from that or speculate in oil, because the dinar is just as likely to fall by 50% as gain by 50% as the economy grows.

(REMOVED FOR PRIVACY)

-------------------------------------------------------------------------------------------------------

From: Ryan (REMOVED FOR PRIVACY)

Sent: Sunday, January 16, 2011 11:07 AM

To: (REMOVED FOR PRIVACY)

Subject: RE: A few questions from a young USMC veteran

Mr. (REMOVED FOR PRIVACY),

I truly appreciate the time you took to answer my questions. I can only imagine how many emails you get daily requesting your opinion or advice. In all honesty, I didn’t expect a response; but as the old cliché goes… You never know until you ask.

I have dabbled in currency investing before, though on a very small scale. While I was stationed in Japan I would play the day to day Yen (JPY) changes. I would go to the Base Exchange while the rate was hovering around ¥116 and exchange $2,000 or so. Then, I would stash that away and forget about it until the rates would drop to around ¥100. After that I would monitor the exchange rates closely; on more than one occasion I was able to turn roughly $300 or more profit. On a side note, I hope you’re not “in” with the IRS; as I’m unsure whether that would be considered capitol gains, which I never claimed. While not much, it was easy money and provided a couple “free” trips to Tokyo or Osaka (I was stationed in Iwakuni, just south of Hiroshima); which leads me to another question, if you don’t mind. Before I decide to frame the Dinar as a memento to my glamorous vacations in Iraq, I thought I should ask you; would holding the Dinar as a long term investment be worth it?

I understand the predictability of a nation in Iraq’s volatile circumstance is miniscule. However, what would hold a nation with as much potential GDP as Iraq has from slowly appreciating against the Dollar? With the Dollar’s current weaknesses and the IMF’s SDR including the lowest Dollar percentage in a decade, what is stopping a(n) (hypothetically stable) Iraqi economy from gaining? Regarding potential GDP, while it has long been suspected that Iraq’s oil reserves are around 150 billion barrels, the majority of their prospective reserves are unexplored and not yet appraised. Being in hydrocarbon exploration gives me a slight insight to this. For example, Gulf Keystone (London based Exploration Company) recently announced a completed appraisal in the Kurdish regions of Iraq. They revealed the appraised prospect at up to 2.2 billion barrels, calling the resource “massive”.

Again, I am NOT pinning my retirement on the outcome of a war tattered country located at the heart of one of the World’s most conflicted regions. I have my 401k, and a small college trust that went unused and continues to while I reap my G.I. benefits. The largest factor I foresee preventing the Dinar from slowly appreciating is the proposed Middle Eastern version of the Euro. However, I have very little knowledge on forex matters; I know only what I’ve been able to dig up these last two weeks. While majoring in engineering, the only economic class I’ve taken is…. None. Given that, my knowledge of economics is limited to what I’ve taught myself. So I’m quite positive there are factors in play regarding foreign economies that I am unaware of.

While not surprised, I am definitely disappointed about the Dinar. With your permission, I would like to copy your previous response (contact info undisclosed of course) on a forum I frequent. However petty it may be, playing devil’s advocate always brings joy. Okay, so that’s only part true. Honestly, I’ve read people’s posts that were seriously hurting from overextending themselves in this Dinar scam. Instead of buying their kids presents, these people invested in Dinar. I read one post where a man has forgone his mortgage payment for three months, buying Dinar because he believed “gurus’ who stated that the revaluation has happened. I’ll most likely be heavily chastised for posting it but I could care less as it already goes inline with every other post I’ve made. If I can help ONE person think rationally about this “investment” then I feel I’ve already made a difference.

I think the most painful (or pitiful) thing is the fact that the majority of the “gurus” use Christianity as a means to push Dinar. They claim this is God’s will and that God will return wealth to Christians; this of course, will be done through Iraq’s currency. I am not mocking religion here by any means, I’m Episcopalian and believe fully; I’m merely emphasizing the absurdity of their claims. To claim God will intervene on an Investment. They prey on people’s irrationality and misinformation. Like shady Three-card Monte hustlers the Dinar dealers use misdirection and slight of hand to systematically induce an information cascade geared at the would-be-investor. I of course cannot prove that the gurus are connected to the dealers but gut instinct tells me I’m correct.

Since stumbling across your Dinar article (REMOVED FOR PRIVACY) I have read many of your other writings. I thoroughly enjoy reading you and appreciate the information that you provide.

Thanks,

Ryan

----------------------------------------------------------------

From: (REMOVED FOR PRIVACY)

Sent: Saturday, January 15, 2011 8:35 PM

To: Ryan (REMOVED FOR PRIVACY)

Subject: RE: A few questions from a young USMC veteran

Hi Ryan,

Its funny you would send me this note today. I just finished an interview with a reporter doing some background for an article on the same subject. Allow me to answer your questions directly….

Your instincts are correct, the dinar scam is still a scam. Currencies are not “revalued” like you read about online in the dinar forums. They are usually remonetized in much the same way that a reverse stock split is done. The purchasing power is not increased because the dinar is merely revalued with fewer zeroes. This has happened in a few other economies recently (Venezuela and Turkey to name two). For example, if you had 1,000 dinars today worth $1 (or whatever) and they revalued to be 1 Dinar to $1 dollar they would do that by exchanging your 1,000 dinars into 1 new dinar not 1,000 new dinars.

As you can imagine, I have been in this business long enough to see several versions of this scam come and go. This one bothers me particularly because many of the victims are young men and women in the armed forces who are very intelligent but don’t have international currency trading experience. The scammers take advantage of that lack of knowledge and build on a common optimism about the eventual re-emergence of the Iraqi economy. All the past revaluation examples they use (German Mark, Kuwaiti Dinar, etc, etc,) didn’t happen the way they say. Revaluations are extremely disruptive; they don’t increase the total purchasing power of the currency you are holding; and usually result in an immediate price-shock of lower overall value. It is the last resort of an economy trying to get back on its feet.

Based on your note you sound like a sincere, intelligent person who has bigger things going for them than this dinar stuff. I would suggest you stick the dinar back in your boxes as a souvenir and not worry about the scam. I have tried many times to talk friends out of the scam but once they decide to believe its like some kind of weird religion, so if you have a buddy bugging you about it I would just leave it alone. Otherwise, you just get sucked into the vortex of internet scammers and rumors.

Bottom line: Unfortunately (or fortunately depending on your point of view) investing in the currency market is very boring but it does offer a moderate return to traders willing to take some risk. It is also very complicated because the big players (governments and central banks) hold all the aces so to speak, but it can be interesting if you ever want to learn more.

I get a lot of letters like this and I usually don’t have time to reply; however, I your questions were coming from the right place and I wanted to support you with what I have to give. If you have specific questions I would be happy to either answer them for you or direct you to reliable sources for further research.

Best wishes,

(REMOVED FOR PRIVACY)

------------------------------------------------------------------------------------------

From: Ryan (REMOVED FOR PRIVACY)

Sent: Friday, January 14, 2011 8:35 PM

To: (REMOVED FOR PRIVACY)

Cc: (REMOVED FOR PRIVACY)

Subject: A few questions from a young USMC veteran

Mr. (REMOVED FOR PRIVACY),

To start off, I would like to say I appreciate your insight and knowledge in investment; specifically your depth of understanding in forex. Now, let me get to the point. I am 29 year old Marine Corps Veteran; currently I am enrolled in the University of Houston’s Mechanical Engineering program and work full time for a seismic oil and gas exploration company. My question is this: Do you still hold your belief regarding the strength (or weakness) of the Iraqi Dinar “investment”? (REMOVED FOR PRIVACY) a few years back and at first paid very close attention to it. After a few months of hype, I gave up on keeping abreast and stored the Dinar away, almost forgetting about it.

It wasn’t until a family friend started talking about it that I even remembered my “stash”. With a little digging (and a WHOLE lot of sifting through the rubbish) I was able to come up with some interesting correlations between current events and a plausible (though most likely highly improbable) revaluation. I’m a fairly levelheaded individual; being such, I don’t allow myself to get wrapped up in pipe dreams regarding instant wealth or “guarantees” of 1000X returns. That is probably why I work 50+ hours a week and attend 15+ hours of class a semester. However, if there is a CHANCE that the outlook of the Dinar has changed, I would be extremely interested in hearing it.

REAL news regarding the matter is darn near nonexistent. I attempt to sift through the rumors that are out there but have really only been able to come to one conclusion. You see, there are forums and “news” sites specifically aimed towards the Dinar. All of them contain Dinar “Gurus” who speak of “intel” they have that says the Dinar has/is revaluing RIGHT NOW. EVERY week it’s “the Dinar has revalued; you will be able to cash it in at your local bank by Monday”. My take on this, is that all these “Gurus” are actually compensated from the Dinar sellers for getting their followers amped into a buying frenzy. Everyone wants to buy just a little more before it revalues so their eminent wealth will be that much greater.

Again, let me stress that I do not buy into this one bit. Although an actual investor’s perspective would be truly refreshing. I appreciate any response or insight you can give in this matter. Thank you for your time.

Best regards,

Ryan (REMOVED FOR PRIVACY)

[nir]

I agree however it all depends. There are many factors affecting this and if Iraq plays it right we might see an RV. I have posted in the past what Iraq has to do for a RV to take place but if they follow Iran's route for example then forget about the RV. Now your friend has valid points and I respect that but if the GDP is growing and imports are less than exports and inflattion would be low than we are certain to see an RV. If things go the other way No RV people. Be well and stay real thanks for a great post!

[MPG350]

Good info, I have always thought the idea of making 10,000% on my first currency trade is a little to crazy hopefully I can make something of the RV at worst I can get most of my money back on ebay in a year if nothing happens.

[kevnutz]

Thanks for the post. It is sad to think of the guy who hasn't paid his mortgage payment based on such a long shot. I hope this post helps others to think before they gamble.

[roger01]

I have a question. Although I understand that it will not nessessarily change based on the economic growth, why cant the Dinar RI/RV when a few days before the invasion in 2003, the Dinar (although set by Saddam traded at $2.32 or so, then dropped overnight to .0004. Why cant it jump right back up, when theyre almost out of debt? Second question, from my understanding... the only thing that would change for the Iraq economy would be thier purchasing power of foreign goods, as most of thier budget is based on the Petro Dollar, which will probably be regulated by OPEC with all of the other oil producing countries in the Middle East. Please dont think Im questioning your thought, but please explain those factors.

Thank you!

[deenar]

If you go to dinar sites only when looking for IQD info, you are not a very smart investor. One must look at IMF and World Bank documentation, as well as CBI if they want to get an idea of where this is going. I'm not saying it's a sure thing, just that there is lots of good info out there that you can dig up yourself(much of it positive) without relying on members of a dinar site to spoon feed the info to you. Also remember that this has NEVER happened before(Kuwait was a different situation entirely) so I wouldn't expect a forex trader to know how this will play out. Thanks for the post.

[AKReindeer]

If you go to dinar sites only when looking for IQD info, you are not a very smart investor. One must look at IMF and World Bank documentation, as well as CBI if they want to get an idea of where this is going. I'm not saying it's a sure thing, just that there is lots of good info out there that you can dig up yourself(much of it positive) without relying on members of a dinar site to spoon feed the info to you. Also remember that this has NEVER happened before(Kuwait was a different situation entirely) so I wouldn't expect a forex trader to know how this will play out. Thanks for the post.

Yes, very well written replies to your questions. However, deenar does make a good point as I bolded in the quote above. Further, if you look at a statement from his last email to you, it does suggest that he is not completely familiar with the unique dynamics of Iraq

If you think there are prospects for oil or whatever in Iraq – great, buy a stock that will benefit from that or speculate in oil, because the dinar is just as likely to fall by 50% as gain by 50% as the economy grows.

Regardless, it is a sobering, and realistic view of the dinar investment as a whole - something that should be included in the due diligence process when thinking of investing.

[gjames_54]

Well guys, I know whole-heartedly you will all bash me for posting this. I could care less about the (-)’s I am about to receive, all I want is for everyone to look at all SIDES of this investment. With everyone being so caught up with all the RV rumors lately I feel many of you have forgot this is an INVESTMENT and in no way a sure thing. The more independent digging I did, the worse it looked. I decided to recruit the help of a TRUE guru, a man who specializes in foreign exchange. He is Harvard educated and extremely knowledgeable. Whether or not anyone wants to listen to what he says is entirely out of my hands. What I can control though, is MY level of involvement. I wrote this man seeking his opinion on a few different questions, which I will copy and past below.

Take this for what it is and nothing more: a different perspective from someone who lives this every day. To respect HIS privacy I will not post his name or email address. If this makes you think “I’m making it all up” then fine. All I know is I will go back to reality and not let this Dinar thing take up the amount of time in my life that it was. On the remote possibility that it happens, I’ll hear about it. If not, well it’s been a fun ride guys.

Below you will find my email exchange with this man; I suppose to get the full idea you would have to start at the bottom and read up (MY first email to him, followed by response, etc, etc.). Believe what you will. I wish everyone good luck.

------ EMAIL RESPONSES COPIED BELOW------

From: (REMOVED FOR PRIVACY)

Sent: Sunday, January 16, 2011 2:24 PM

To: Ryan (REMOVED FOR PRIVACY)

Subject: RE: A few questions from a young USMC veteran

Hi Ryan,

Hey – strong work with the JPY trading! I am definitely not “in” with the IRS but you should know that currency gains get very favorable tax treatment compared to other kinds of investments (for future reference.)

Holding the dinar as a long term investment is a good question. The assumption many people will make is that a currency’s value will rise relative to the dollar when an economy improves. This is actually not the case. Sometimes it will and sometimes it won’t – usually they don’t. It would not be in the best interest of the Iraqi government to allow their currency to appreciate (or deflate) and fortunately for them there are some very effective tools they can use to make sure its value doesn’t rise. If you are interested in making a bet on the Iraqi economy I would look for a business investment rather than a currency investment. Unlike the relationship between a stock and revenue or profits; currencies don’t have a positive relationship to GDP. Currency values are subject to supply of the currency (money printing) and interest/inflation rates. All of those things tend to go wayyyy up when an economy does well, and inflation and money-printing tend to be very bad for value against other currencies.

I know it is quite popular to pick on a weak dollar these days in the press but the facts don’t support it. The dollar is relatively strong compared to other major currencies (the Chinese Yuan being an exception). That doesn’t mean the US has sound fiscal or monetary policy it just means that most of the other major systems are messed up as well. The dollar is about as valuable today versus global currencies as it has been over the last few decades. Slightly weaker but not by very much. If I had a gun to my head and I had to bet against either the US or the Iraqi currency it would be the Iraqi currency.

Before you make your decision you have to separate the connection that some people make between a growing economy and a currency’s value. They are not positively correlated like many people think. I mentioned Turkey and Venezuela in my last note because they are classic examples of very robust, growing economies (with massive natural resources) that suffered from insane levels of inflation at the same time this decade. If you think there are prospects for oil or whatever in Iraq – great, buy a stock that will benefit from that or speculate in oil, because the dinar is just as likely to fall by 50% as gain by 50% as the economy grows.

(REMOVED FOR PRIVACY)

-------------------------------------------------------------------------------------------------------

From: Ryan (REMOVED FOR PRIVACY)

Sent: Sunday, January 16, 2011 11:07 AM

To: (REMOVED FOR PRIVACY)

Subject: RE: A few questions from a young USMC veteran

Mr. (REMOVED FOR PRIVACY),

I truly appreciate the time you took to answer my questions. I can only imagine how many emails you get daily requesting your opinion or advice. In all honesty, I didn’t expect a response; but as the old cliché goes… You never know until you ask.

I have dabbled in currency investing before, though on a very small scale. While I was stationed in Japan I would play the day to day Yen (JPY) changes. I would go to the Base Exchange while the rate was hovering around ¥116 and exchange $2,000 or so. Then, I would stash that away and forget about it until the rates would drop to around ¥100. After that I would monitor the exchange rates closely; on more than one occasion I was able to turn roughly $300 or more profit. On a side note, I hope you’re not “in” with the IRS; as I’m unsure whether that would be considered capitol gains, which I never claimed. While not much, it was easy money and provided a couple “free” trips to Tokyo or Osaka (I was stationed in Iwakuni, just south of Hiroshima); which leads me to another question, if you don’t mind. Before I decide to frame the Dinar as a memento to my glamorous vacations in Iraq, I thought I should ask you; would holding the Dinar as a long term investment be worth it?

I understand the predictability of a nation in Iraq’s volatile circumstance is miniscule. However, what would hold a nation with as much potential GDP as Iraq has from slowly appreciating against the Dollar? With the Dollar’s current weaknesses and the IMF’s SDR including the lowest Dollar percentage in a decade, what is stopping a(n) (hypothetically stable) Iraqi economy from gaining? Regarding potential GDP, while it has long been suspected that Iraq’s oil reserves are around 150 billion barrels, the majority of their prospective reserves are unexplored and not yet appraised. Being in hydrocarbon exploration gives me a slight insight to this. For example, Gulf Keystone (London based Exploration Company) recently announced a completed appraisal in the Kurdish regions of Iraq. They revealed the appraised prospect at up to 2.2 billion barrels, calling the resource “massive”.

Again, I am NOT pinning my retirement on the outcome of a war tattered country located at the heart of one of the World’s most conflicted regions. I have my 401k, and a small college trust that went unused and continues to while I reap my G.I. benefits. The largest factor I foresee preventing the Dinar from slowly appreciating is the proposed Middle Eastern version of the Euro. However, I have very little knowledge on forex matters; I know only what I’ve been able to dig up these last two weeks. While majoring in engineering, the only economic class I’ve taken is…. None. Given that, my knowledge of economics is limited to what I’ve taught myself. So I’m quite positive there are factors in play regarding foreign economies that I am unaware of.

While not surprised, I am definitely disappointed about the Dinar. With your permission, I would like to copy your previous response (contact info undisclosed of course) on a forum I frequent. However petty it may be, playing devil’s advocate always brings joy. Okay, so that’s only part true. Honestly, I’ve read people’s posts that were seriously hurting from overextending themselves in this Dinar scam. Instead of buying their kids presents, these people invested in Dinar. I read one post where a man has forgone his mortgage payment for three months, buying Dinar because he believed “gurus’ who stated that the revaluation has happened. I’ll most likely be heavily chastised for posting it but I could care less as it already goes inline with every other post I’ve made. If I can help ONE person think rationally about this “investment” then I feel I’ve already made a difference.

I think the most painful (or pitiful) thing is the fact that the majority of the “gurus” use Christianity as a means to push Dinar. They claim this is God’s will and that God will return wealth to Christians; this of course, will be done through Iraq’s currency. I am not mocking religion here by any means, I’m Episcopalian and believe fully; I’m merely emphasizing the absurdity of their claims. To claim God will intervene on an Investment. They prey on people’s irrationality and misinformation. Like shady Three-card Monte hustlers the Dinar dealers use misdirection and slight of hand to systematically induce an information cascade geared at the would-be-investor. I of course cannot prove that the gurus are connected to the dealers but gut instinct tells me I’m correct.

Since stumbling across your Dinar article (REMOVED FOR PRIVACY) I have read many of your other writings. I thoroughly enjoy reading you and appreciate the information that you provide.

Thanks,

Ryan

----------------------------------------------------------------

From: (REMOVED FOR PRIVACY)

Sent: Saturday, January 15, 2011 8:35 PM

To: Ryan (REMOVED FOR PRIVACY)

Subject: RE: A few questions from a young USMC veteran

Hi Ryan,

Its funny you would send me this note today. I just finished an interview with a reporter doing some background for an article on the same subject. Allow me to answer your questions directly….

Your instincts are correct, the dinar scam is still a scam. Currencies are not “revalued” like you read about online in the dinar forums. They are usually remonetized in much the same way that a reverse stock split is done. The purchasing power is not increased because the dinar is merely revalued with fewer zeroes. This has happened in a few other economies recently (Venezuela and Turkey to name two). For example, if you had 1,000 dinars today worth $1 (or whatever) and they revalued to be 1 Dinar to $1 dollar they would do that by exchanging your 1,000 dinars into 1 new dinar not 1,000 new dinars.

As you can imagine, I have been in this business long enough to see several versions of this scam come and go. This one bothers me particularly because many of the victims are young men and women in the armed forces who are very intelligent but don’t have international currency trading experience. The scammers take advantage of that lack of knowledge and build on a common optimism about the eventual re-emergence of the Iraqi economy. All the past revaluation examples they use (German Mark, Kuwaiti Dinar, etc, etc,) didn’t happen the way they say. Revaluations are extremely disruptive; they don’t increase the total purchasing power of the currency you are holding; and usually result in an immediate price-shock of lower overall value. It is the last resort of an economy trying to get back on its feet.

Based on your note you sound like a sincere, intelligent person who has bigger things going for them than this dinar stuff. I would suggest you stick the dinar back in your boxes as a souvenir and not worry about the scam. I have tried many times to talk friends out of the scam but once they decide to believe its like some kind of weird religion, so if you have a buddy bugging you about it I would just leave it alone. Otherwise, you just get sucked into the vortex of internet scammers and rumors.

Bottom line: Unfortunately (or fortunately depending on your point of view) investing in the currency market is very boring but it does offer a moderate return to traders willing to take some risk. It is also very complicated because the big players (governments and central banks) hold all the aces so to speak, but it can be interesting if you ever want to learn more.

I get a lot of letters like this and I usually don’t have time to reply; however, I your questions were coming from the right place and I wanted to support you with what I have to give. If you have specific questions I would be happy to either answer them for you or direct you to reliable sources for further research.

Best wishes,

(REMOVED FOR PRIVACY)

------------------------------------------------------------------------------------------

From: Ryan (REMOVED FOR PRIVACY)

Sent: Friday, January 14, 2011 8:35 PM

To: (REMOVED FOR PRIVACY)

Cc: (REMOVED FOR PRIVACY)

Subject: A few questions from a young USMC veteran

Mr. (REMOVED FOR PRIVACY),

To start off, I would like to say I appreciate your insight and knowledge in investment; specifically your depth of understanding in forex. Now, let me get to the point. I am 29 year old Marine Corps Veteran; currently I am enrolled in the University of Houston’s Mechanical Engineering program and work full time for a seismic oil and gas exploration company. My question is this: Do you still hold your belief regarding the strength (or weakness) of the Iraqi Dinar “investment”? (REMOVED FOR PRIVACY) a few years back and at first paid very close attention to it. After a few months of hype, I gave up on keeping abreast and stored the Dinar away, almost forgetting about it.

It wasn’t until a family friend started talking about it that I even remembered my “stash”. With a little digging (and a WHOLE lot of sifting through the rubbish) I was able to come up with some interesting correlations between current events and a plausible (though most likely highly improbable) revaluation. I’m a fairly levelheaded individual; being such, I don’t allow myself to get wrapped up in pipe dreams regarding instant wealth or “guarantees” of 1000X returns. That is probably why I work 50+ hours a week and attend 15+ hours of class a semester. However, if there is a CHANCE that the outlook of the Dinar has changed, I would be extremely interested in hearing it.

REAL news regarding the matter is darn near nonexistent. I attempt to sift through the rumors that are out there but have really only been able to come to one conclusion. You see, there are forums and “news” sites specifically aimed towards the Dinar. All of them contain Dinar “Gurus” who speak of “intel” they have that says the Dinar has/is revaluing RIGHT NOW. EVERY week it’s “the Dinar has revalued; you will be able to cash it in at your local bank by Monday”. My take on this, is that all these “Gurus” are actually compensated from the Dinar sellers for getting their followers amped into a buying frenzy. Everyone wants to buy just a little more before it revalues so their eminent wealth will be that much greater.

Again, let me stress that I do not buy into this one bit. Although an actual investor’s perspective would be truly refreshing. I appreciate any response or insight you can give in this matter. Thank you for your time.

Best regards,

Ryan (REMOVED FOR PRIVACY)

Although this guy is grad from Harvard, his info is still opinionated. He talks about reval of the dinar and others are talking about a reinstatement, so how will this currency be reintroduced to the world? How possible could it be that several countries are holding the dinar and that they are being scammed also? ( considering who printed this new currency and why) There are other bright minds that have looked into all of the pro's and con's of investing in the dinar and the bottom line is that this investment is a personal decision! Who cares what all of these so called experts think! I am going with my gut feeling and all of the information that I am reading about in regards to how Iraq is doing, what the international communities are asking them to do and what resources that they have to offer the rest of the world, leaves me with a DAMN GOOD FEELING RIGHT ABOUT NOW!!!! My personal belief is....How can this be a scam???? Every currency is worth something right? Based on what the country has to off the world (GNP) The IQD will be backed by other countries because everyone knows that Iraq's time has come.

[Soldier]

Of course your about to get negatives...lmao...you think this very educated, harvard grad, along with every smart financial guru, bank president in the United States has anything on the Dinar vet Gurus. You must be mistaken..lmfao

[WarriorPoet]

Thank you very much for your research and digging into this more??

Question: If this is a scam, why did Bush sign the Executive Order (can't remember the #)

Thank you!!

[KramerDinar]

If the US was rich in resources and everyone here was on welfare, do you think anyone would invest in this country. These people went from having money to overnight being poor because their currency took a nose dive. People also need to stop using the word "scam". If it was a scam, you would not be able to sell back and because banks are selling as well, do you really think with all the hot water they just came out of with a bailout they are going to go right back into another. The only scam being run is by the pumpers who talk each day about an RV tomorrow. It is like seeing a sign in a bar that says "free beer tomorrow", yet when you go back the sign applies to the next day. And this is not some overnight get rich scheme either. This started 7 years ago, so either this is the longest scam in history or something true is going to come from it and I have my money on the latter option. Also, lets assume 80% of investors in this own 1 million dinar or less. I do not even own that much but we will use that for a basis. If it RV's at 1=1, this 80% now have $1 million USD. After the spread lets say $950K. After taxes about $600-$650K. By the time people were to use this money to buy a new house or pay off their current one, pay off debt and maybe invest in retirement, where are these people sitting. They are debt free, but they are not rich. They are living comfortably. In my opinion, I do not seem that hard to believe. Now if the same number was used and it RV's at 6=1, yes I would assume a little far fetched. I think if you throw a little logic into the mix the picture is a little more clear.

[aliveandcare]

Thank you very much for your research and digging into this more??

Question: If this is a scam, why did Bush sign the Executive Order (can't remember the #)

Thank you!!

Presidential Order 13303 doesnt say to buy Dinar. It simply states that US citizens have the same rights as Iraqi Citizens when investing in Iraq. Whichever form of investing you want to do. You hold the same rights as an Iraqi citizen.

[WarriorPoet]

Presidential Order 13303 doesnt say to buy Dinar. It simply states that US citizens have the same rights as Iraqi Citizens when investing in Iraq. Whichever form of investing you want to do. You hold the same rights as an Iraqi citizen.

Thank you for the explanation

[TechOps]

I have a question. Although I understand that it will not nessessarily change based on the economic growth, why cant the Dinar RI/RV when a few days before the invasion in 2003, the Dinar (although set by Saddam traded at $2.32 or so, then dropped overnight to .0004. Why cant it jump right back up, when theyre almost out of debt? Second question, from my understanding... the only thing that would change for the Iraq economy would be thier purchasing power of foreign goods, as most of thier budget is based on the Petro Dollar, which will probably be regulated by OPEC with all of the other oil producing countries in the Middle East. Please dont think Im questioning your thought, but please explain those factors.

Thank you!

It is a valid statement... This needs to be answered.... i believe this is a unique point with iraq vs the other countries ref in the emails above....

[zantac]

Question: If this is a scam, why did Bush sign the Executive Order (can't remember the #)

Good question I wonder why?

Perhaps he also said.

“The Iraq War will pay for its self”

Did he mean?

The USA citizen can buy as much IQD as possible to fill the CBI to the rafters with $s

Let them invest in Iraq

I am sure mister Bush meant to say but not directly.

Invest in Iraq commercially

Then some clever F****R came along & said hell lets get all the suckers on this planet to buy the currency, make them think it will RV at a massive rate

Hence why we pay for the war

[MrRich]

Thanks for the post rdubya. I think I know who this guy is, and he is well qualified to give his opinion on forex trading, but if he is who I think he is this investment isn't something he's very familiar with since it's a speculative investment with physical currency. This investment may or may not be a "scam" in the sense that unsophisticated investors are being convinced that they'll received $2-3 million for every $1000 they invest. (And of course there are plenty of scammers out there pumping for dinar dealers or trying to suck naive investors into other schemes like MLM.) The only way we'll know is to wait and see how this plays out, but it certainly isn't a scam in the sense of being sold a worthless product. It's just like exchanging your USD for the currency of any other country except that you have to pay the upcharges to the dealers.

[frs61]

Thanks for the post rdubya. I think I know who this guy is, and he is well qualified to give his opinion on forex trading, but if he is who I think he is this investment isn't something he's very familiar with since it's a speculative investment with physical currency. This investment may or may not be a "scam" in the sense that unsophisticated investors are being convinced that they'll received $2-3 million for every $1000 they invest. (And of course there are plenty of scammers out there pumping for dinar dealers or trying to suck naive investors into other schemes like MLM.) The only way we'll know is to wait and see how this plays out, but it certainly isn't a scam in the sense of being sold a worthless product. It's just like exchanging your USD for the currency of any other country except that you have to pay the upcharges to the dealers.

Ahh Scooby Doo, the voice of reason. Thanks for keepin it real.

[rdubya]

Thanks for the post rdubya. I think I know who this guy is, and he is well qualified to give his opinion on forex trading, but if he is who I think he is this investment isn't something he's very familiar with since it's a speculative investment with physical currency. This investment may or may not be a "scam" in the sense that unsophisticated investors are being convinced that they'll received $2-3 million for every $1000 they invest. (And of course there are plenty of scammers out there pumping for dinar dealers or trying to suck naive investors into other schemes like MLM.) The only way we'll know is to wait and see how this plays out, but it certainly isn't a scam in the sense of being sold a worthless product. It's just like exchanging your USD for the currency of any other country except that you have to pay the upcharges to the dealers.

I discussed the nuances involved when referring to this as a "scam" with him. This isn't a scam in the same sense as the Nigerian Princess emails, but it's a scam non the less. Now please here me out and finish reading what i have to say before you jump to conclusions.

This is a scam only because of how the Dinar is presented. It's advertised using misinformation and guerilla marketing tactics. There are inaccurate comparisons made between this and other circumstances. Now this ALL falls more onto the buyers responsibility than the seller but unfortunately many people allow themselves to fall victim because they don't know any better. They see the words "investment" and all the talk of how ALL these other countries have done it (RV). Well, as another member pointed out in a heated response to my post, THIS HAS NEVER BEEN DONE BEFORE! EVER! Why in the WORLD would these dealers use that as a comparison IF IT'S NOT RELEVANT? Because, they're selling a tainted product under false pretense knowing the customer will be inexperienced in regards to foreign currency and economy.

I am glad there are some on here that understand this is ONLY an investment and a long shot one at that.

I wish everyone the best of luck in this investemnt. I just hope that those who are entirely consumed by it get back in touch with reality.

-Dub

[Econman33]

Thanks for the post rdubya. I think I know who this guy is, and he is well qualified to give his opinion on forex trading, but if he is who I think he is this investment isn't something he's very familiar with since it's a speculative investment with physical currency. This investment may or may not be a "scam" in the sense that unsophisticated investors are being convinced that they'll received $2-3 million for every $1000 they invest. (And of course there are plenty of scammers out there pumping for dinar dealers or trying to suck naive investors into other schemes like MLM.) The only way we'll know is to wait and see how this plays out, but it certainly isn't a scam in the sense of being sold a worthless product. It's just like exchanging your USD for the currency of any other country except that you have to pay the upcharges to the dealers.

Agreed. Another factor that I did not see mentioned in original post was that a country's Debt/ GDP ratio and their ability to cover that debt is also a factor in the currency value. I believe currently Iraq debt is about 14% of GDP. As oil and other commodities/ products are traded, this percentage should drop further, thus raising currency value if all other variables remain static. Stability is the biggest challenge for Iraq at this point. Some interesting numbers on the CBI site under Statistics and Key Financial Indicators. Notice the trends over the last 7 years. Things are looking better.

[deenar]

Good question I wonder why?

Perhaps he also said.

“The Iraq War will pay for its self”

Did he mean?

The USA citizen can buy as much IQD as possible to fill the CBI to the rafters with $s

Let them invest in Iraq

I am sure mister Bush meant to say but not directly.

Invest in Iraq commercially

Then some clever F****R came along & said hell lets get all the suckers on this planet to buy the currency, make them think it will RV at a massive rate

If the IQD investment is a scam, please show this. Currency trading dwarfs stock trading. Something in the area of 4 trillion dollars a day. Yes, I know that this is not a sure thing, but alot more money is made through currency investing than investing in stock.

Hence why we pay for the war

Where in the hell did that come from? I was trying to respond to Zantac's post but somehow it got melded together with it.

[NoviceInvestor]

An interesting open read ..one of the rare positives on this site which is important for those on this site as they need some balance to put into prespective the rumors/ficticious facts that abound on this site...an RV/RI is not going to happen until the GOI/IMF intends it to happen...and who knows how long that will be??? Ad infinitum could be the answer

[dinardarius]

HEY! Everybody our (USA) government is full of highly educated stupid a - - 's running us into major debt. They don't even read anything before they sign it ! I think this Harvard guy didn't really do his due on the Iraq dinar. Turkey and what ever other counries have not had the same set up as Iraq has. So GORVing

[MrRich]

I discussed the nuances involved when referring to this as a "scam" with him. This isn't a scam in the same sense as the Nigerian Princess emails, but it's a scam non the less. Now please here me out and finish reading what i have to say before you jump to conclusions.

This is a scam only because of how the Dinar is presented. It's advertised using misinformation and guerilla marketing tactics. There are inaccurate comparisons made between this and other circumstances. Now this ALL falls more onto the buyers responsibility than the seller but unfortunately many people allow themselves to fall victim because they don't know any better. They see the words "investment" and all the talk of how ALL these other countries have done it (RV). Well, as another member pointed out in a heated response to my post, THIS HAS NEVER BEEN DONE BEFORE! EVER! Why in the WORLD would these dealers use that as a comparison IF IT'S NOT RELEVANT? Because, they're selling a tainted product under false pretense knowing the customer will be inexperienced in regards to foreign currency and economy.

I am glad there are some on here that understand this is ONLY an investment and a long shot one at that.

I wish everyone the best of luck in this investemnt. I just hope that those who are entirely consumed by it get back in touch with reality.

-Dub

Actually I haven't seen too much advertising of the dinar. When I first heard about it I looked it up on the internet and like everybody else I saw tons of sites calling it a scam. I only bought because of the research that I read from other dinar investors. Sure, I found a lot of nonsense saying RV tomorrow at $3.86 with all kinds of ridiculous rumors, but there was also plenty of circumstantial evidence that there was a plan in the works to revalue Iraq's currency by monetizing their oil. If they have reduced their money supply to 10 trillion dinar they could afford a $1 RV because they have at least $10 trillion in proven reserves. That's what sold me on this, not any guerilla marketing tactics.

[imgesing]

I agree with Scooby Doo!

This is an investment.

When you invest you speculate based on what you read from reliable sources. (hopefully)

High Risk High Yeild!

So, when I see news of political figures heading to the region, all the advancements of their government and QUOTES from members of the new formed government and president it gives me great hope.

We went to war there for obvious reasons beyond Hussain. We arent in DARFUR...! Our government and private companies (OIL) are entrenched in this RV. We are mearly hanging on to the edges of a much larger picture.

This is simply "my belief" based on what I have read. And I would be more then happy to be corrected. I know much less then the avid financial guru.

Praying for a RV and soon...

[jimmey309]

rdubya --

Thank you for the post.

Yes, this post is disconcerting.

However, the responder's opinion

is a calculated one that takes

many factors into account,

but not all factors.

No one could do that.

Many things in life

have some element of Ponzi

in them.

I dare say this opportunity

has more than its fair share.

However, every successful

investment started with

a successful dream and taking chances.

It takes a great deal of

imagination not just hard

work [ as well as luck ]

to be successful at many

lucrative opportunities.

Many fail.

But many are successful.

It pays to try to envision

where an investment opportunity

realistically can go

before getting involved in it.

I have previously described

an experienced dealer who

told me before I got involved

that we have a decent chance

of making a small profit

on this opportunity

and a small chance of making a killing.

He also stated he owned a substantial

amount of this financial instrument.

Honesty from a dealer.

Interesting.

Back in 2004, did anyone envision

that in Jan. 2011 Iraq would move

towards a unified governing body ?

Sure, maybe they envisioned this

but at this time ?

With all the factions in Iraq,

who could say for certain this would happen

at this time?

Who knew exactly when Chapter 7 would be

partially or totally lifted ?

My vision is that if Iraq can get to 5 million bpd

within the next 5 to 8 years,

they would have the ability to increase values of

any of their resources [ including their currency ]

in a meaningful way should they choose to do so.

What is your vision ?

The responder's vision may be a negative one

indeed.

And maybe the odds favor his.

The odds do not make an opportunity

successful.

Otherwise, the Patriots would have

beaten the Jets.

Nearly 2 years ago, there was a little

known company that developed

pharmaceuticals / drugs / medicines.

All the so - called financial

market experts bad mouthed this opportunity.

The stock for this company had a short

position in it at one point near 50 % .

The stock was trading for around $ 4 a share.

I claim that experience and vision could

have led a properly motivated, due - diligence investor

to this opportunity.

Within a relatively short period of time,

the stock price rose many fold.

All the experts had huge egg on their

face.

Now I am not recommending we take

fliers on every bad-mouthed stock.

But a little vision and hard work

could have helped an experienced investor

to the stock above.

The name of the corporation is Dendreon.

No one knows for certain if IQD will be the next

Dendreon or not.

But one thing is for certain :

With no investment in IQD,

I guarantee the opportunity can not be a

Dendreon.

I have chosen my side.

This is just all IMHO.

I am not a currency expert.

Just a regular person with

an optimistic , hopeful outlook.

I remember when the blind monkey beat the financial expert at

trading the financial markets.

I just hope I am not too blind.