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Is The Iraqi Dinar Worthless Paper Or Maker Of Millionaires?


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Dozens of people have signed up for tax consultations with me over the years looking for a windfall profit on the U.S. government revaluation of the Iraqi dinars back into U.S. dollars. In other words, these were people holding dinars who were hoping they could exchange them for dollars again.

Most dinar investors are current and ex-military, warzone contractors and now speculators. A cottage industry of promoters has sprung up on the Internet promising dinar “get rich” schemes. Many have invested, say, $5,000 and they hope to make millions. I’ve always thought it was a scam, as it sounded too good to be true.

These people ask me about their potential large tax bills. Most hope for long-term capital gains tax rates, currently up to 15 percent. I have to give them the bad news: holding physical currency is considered ordinary gain or loss in Section 988 (foreign currency transactions). Unlike forex traders, who don’t hold physical currency and don’t take or make delivery, they can’t file a capital gains election to opt out of Section 988 and into short- and long-term capital gains treatment.

That means no lower 60/40 futures tax rate either (Section 1256). At least, it’s not considered a personal loss which otherwise can’t be deducted, as is the case when a person returns from a vacation and exchanges his left over currency from that trip. Investors in dinars can deduct ordinary losses in Section 988, but few expect a loss.

Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed is about how the four leading central bankers from the U.S., U.K., France and Germany navigated in and out of WWI and financed recoveries and German reparations. These central bankers went off and on the gold and new dollar standards by manipulating their exchange and interest rates and much more. This is how money and power (military and otherwise) go hand in hand.

Our current situation begs the question: Did the Bush administration plan on, and is the Obama administration still considering, paying for part or all of the Iraq war by collecting taxes from the revaluation of the dinar?

If this scheme has any resemblance of reality, it could be an interesting revenue raiser for the government, and I know the government is hunting for revenue raisers and closing of tax loopholes.

Maybe the story here is just that it’s a scam. But, if rumors in the marketplace are true, and the dinar does revalue and allow conversion for most to pre-war levels, what are the ramifications for the government, Iraq, the military, investors and taxpayers? Also, what’s holding up the revaluation? Can Iraq handle it?

It does sound like a happy ending which makes me suspicious. How much tax revenue do U.S., state and local governments stand to collect? How many former and current military personnel and contractors stand to become millionaires overnight?

http://iqd.me/l/l6

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I saw this today, it is an interesting read. This is the first time I have seen the dinar discussed in any of the big financial press. Even better, it is not all negative, and in fact seems to be somewhat positive.

http://blogs.forbes.com/greatspeculations/2011/07/27/is-the-iraqi-dinar-worthless-paper-or-maker-of-millionaires/?partner=yahootix

FM

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Read that this morning ...... I'm taking it as a positive. Even the financial guru's at Forbes can't tell if this is a scam or not but at least they see the potential. It made me feel a lot better, I've been writing this investment off for the last 4 months so this is a good turn.

It's still no guarantee but it's back to being a possibility.....

let's hope

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You did not take into consideration that it may just be a good investment.. Not a Millionaire maker but maybe 2, 3 or even 4 times ROI. Not a scam as I do not see anyone losing money, although the way some of the pumpers manipulate the emotions of newbies is scandalous. It is part of an overall investment stategy. It would be wonderful if it Rv's and makes us all millionaires and it would still be good if it only makes 3 or 4 times you money. Unfortunately those that really believe that they would be millionaires will no doubt be unhappy if they do not get that million dollar return. As my mother used to say hope for the best but be ready for the worst. If you can do that you can deal with this ride no matter how it turns out.

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The writer is neither pro nor con when it comes to the IQD. As he ends the piece there is a note of skepticism, but that comes with the territory. No investment banker or writer is going to say it is a sure thing. I would dare say that within the next few weeks he will give time to researching the background of the IQD and the growing economy in Iraq. Even then he will not say that it is a sure thing.

What I liked about the article is that he did not "poo, poo" the investment as a total scam. Though in some respects I which he had. REASON: Large and wealthy investors may not of considered the dinar until this piece. Now they may swoop in an purchase multi millions to make billions! That would be bad for the nation as well as us. IMO.

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The writer is neither pro nor con when it comes to the IQD. As he ends the piece there is a note of skepticism, but that comes with the territory. No investment banker or writer is going to say it is a sure thing. I would dare say that within the next few weeks he will give time to researching the background of the IQD and the growing economy in Iraq. Even then he will not say that it is a sure thing.

What I liked about the article is that he did not "poo, poo" the investment as a total scam. Though in some respects I which he had. REASON: Large and wealthy investors may not of considered the dinar until this piece. Now they may swoop in an purchase multi millions to make billions! That would be bad for the nation as well as us. IMO.

Read more: http://dinarvets.com/forums/index.php?/topic/76960-forbes-opinion-piece/#ixzz1TJWtYfTX

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You did not take into consideration that it may just be a good investment.. Not a Millionaire maker but maybe 2, 3 or even 4 times ROI. Not a scam as I do not see anyone losing money, although the way some of the pumpers manipulate the emotions of newbies is scandalous. It is part of an overall investment stategy. It would be wonderful if it Rv's and makes us all millionaires and it would still be good if it only makes 3 or 4 times you money. Unfortunately those that really believe that they would be millionaires will no doubt be unhappy if they do not get that million dollar return. As my mother used to say hope for the best but be ready for the worst. If you can do that you can deal with this ride no matter how it turns out.

Wow, I wonder how many Dinar Vets out there consider I'm a pumper? I have been telling my wife I believe it will RV by the end of the year and that I believe it will be valued at least at a dime a Dinar. ;) ;) ;)

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Wow, I wonder how many Dinar Vets out there consider I'm a pumper? I have been telling my wife I believe it will RV by the end of the year and that I believe it will be valued at least at a dime a Dinar. ;) ;) ;)

Who cares what anybody thinks? Forum boards are just a lot of people sitting at their computers at home or office typing their opinion. No real experts here........ A dime would be sweet. I've already doubled my investment of dinar holdings. Not many currencies out there have doubled over the past 7 years for sure. If you stand facing the east you can smell the oil bubbling out of the ground. No worries, I'm Bullish on the DINAR.....DayTrader

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Read that this morning ...... I'm taking it as a positive. Even the financial guru's at Forbes can't tell if this is a scam or not but at least they see the potential. It made me feel a lot better, I've been writing this investment off for the last 4 months so this is a good turn.

It's still no guarantee but it's back to being a possibility.....

let's hope

I agree, at least it's a step in the right direction. A few years ago, everyone thought it was a scam... not so much anymore

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I saw this today, it is an interesting read. This is the first time I have seen the dinar discussed in any of the big financial press. Even better, it is not all negative, and in fact seems to be somewhat positive.

http://blogs.forbes.com/greatspeculations/2011/07/27/is-the-iraqi-dinar-worthless-paper-or-maker-of-millionaires/?partner=yahootix

FM

Agreed.... and, nice avatar!

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Niether. Not a scam. No instant $Millionaires.

Ok.. But if one would have been waiting for a few years with Dinars in their hands.....And it supposedly hit it big at one point.... Would you still deem their wealth blessing ( hopefully) as "instant" ?

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Who cares what anybody thinks? Forum boards are just a lot of people sitting at their computers at home or office typing their opinion. No real experts here........ A dime would be sweet. I've already doubled my investment of dinar holdings. Not many currencies out there have doubled over the past 7 years for sure. If you stand facing the east you can smell the oil bubbling out of the ground. No worries, I'm Bullish on the DINAR.....DayTrader

Excellent post-imo

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