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The Currency to Own this Decade


Charlie Echo
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(This is an email I received from a company that is involved with currency trading....Doesn't sound too far out of reason, but that doesn't mean I like what they are saying)

It’s a strange currency world we live in.

The two most traded currencies - the dollar and euro - are both suffering. The euro is fighting an uphill battle with a sovereign debt crisis, while the dollar is paying the price for all the Fed’s currency meddling over the last few years.

At the same time, other currencies have the exact opposite problem - they’re too strong. The Japanese yen has gained so much in value that the Bank of Japan had to intervene several times over the past year to drag down its value.

With all these currency crises in full swing, it’s no surprise that investors are looking for alternative currencies to buy and hold.

But unfortunately, some are finding the Iraqi dinar...

Thanks to some slick marketing campaigns, first-time currency investors are pouring their savings into the Iraqi dinar because they believe it “will revalue and hand them a fortune” a few years down the line.

Personally, I don’t buy into this dinar story.

For my money, there are much stronger alternative currencies to buy and hold for the long-run. I’ll introduce you to one in just a second. First, let’s take a closer look at the dinar...

The “Big Boys” Steer Clear of the Dinar

The short answer is, as a currency investment, the Iraqi dinar is sorely lacking in the fundamentals that you want when you buy a currency for the long-term.

Besides being an oil nation (and let’s face it, there are plenty more desirable oil nations out there), Iraq is not what we would classify as a politically sound country. After all, they just put their new constitution together in 2005.

And long-term growth? Stability? That’s all debatable in Iraq.

But all that aside, what’s more important is you can’t trade the Iraqi dinar. The dinar is NOT one of the 60 tradable currency pairs in the $4 trillion Forex market.

That means the big institutional players don’t want anything to do with this currency. If they did, you would be able to trade it.

Instead, only the most speculative retail, individual investors are buying into this Iraqi dinar theory. That’s a bit concerning. It tells me that these retail investors have been sold a bill of goods - not a real asset with long-term value.

In fact, I look at this currency more like a penny stock than anything else. It’s extremely risky, more like a shot in the dark than a long-term currency play. That’s why none of my currency colleagues recommend it.

Just Because It Revalues,

Doesn’t Mean You Profit

As a currency, most speculators have been buying the Iraqi dinar because they are hanging their hats on a potential revaluation. Various websites have been claiming this revaluation will happen since 2004.

But let’s assume for a second that Iraq did revalue their currency. That does NOT mean the currency will necessarily leap in value compared to the U.S. dollar.

After all, “revaluing the currency” didn’t help anyone holding the Turkish lira a few years back.

In 2005, the Turkish government revalued the lira from 1,350,000 lira to 1.35 lira.

In other words, the government slashed six zeroes off the price of the lira. But in reality, the “new lira” was still worth the same amount as the old lira in dollar terms. Before the revaluation, one dollar bought you 1.3 million lira. After the revaluation, one dollar bought you 1.35 lira.

But whether it was a million lira or a single lira, this revalued currency was still worth the same in dollars.

Now could the same thing happen in Iraq? Absolutely.

That’s why I would much rather focus on more stable emerging markets with currencies that have a much higher statistical probability of rising in value.

For instance, the Chinese renminbi...

Forget the Dinar, Buy This Instead...

At this year’s Global Currency Expo, five different currency experts recommended you buy and hold the Chinese renminbi for the next 10 years (that includes yours truly).

(By the way, not one expert at our sold-out currency conference recommended you buy the Iraqi dinar - and these guys are the top of their fields.)

So why buy the renminbi? It’s more than just the real possibility the Chinese will revalue their renminbi once again, or even let it free-float.

The most respected financial minds in the industry are saying that the Chinese renminbi will eventually replace the U.S. dollar as either the next, or one of the next reserve currencies of the world.

That means central banks which currently hold dollars, euros, and gold in their coffers will be able to stockpile tradable Chinese renminbi instead. Scary thought, right? It would be a devastating blow to the U.S. dollar, and would force the dollar/renminbi exchange rate to plummet.

More importantly, it also means the dollar will have some competition for pricing of the world’s commodities.

If commodities were priced in anything but dollars, everything you buy on a daily basis would skyrocket in price. As a country, we would be forced to pay for real commodities with real assets (not just more printed dollars), like all other countries in the world do now.

Buying the Iraqi dinar wouldn’t help you there. But buying the currency that commodities could potentially be priced in (like the renminbi) would offer some protection.

Again, no “revaluation” necessary... just the steady moving hand of the market.

Bottom line: there are plenty of reasons NOT to buy the Iraqi dinar this year, and plenty of great reasons to buy renminbi instead. So I say stick to the currencies that have value, and leave the dinar for the speculators who don’t know any better.

Have a Nice Day!

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I got the same e-mail. They do not think to high od the dinar. The big guys steer clear of the dinar. Leave buying dinar to speculators who know no better.

Well when the dinar revalues and none of their clients make any money, they will all lose customers who realize that these guys have no clue in foreign currency.

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I don't get it!?! If the Dinar goes to even a penny, the return was alot more than the investment. Why wouldn't anybody whose in the currency trading business take that gamble!?! I understand the risk, as does everyone else on this site, but that is exactly what they want to do with the other currency from around the world. Big Sigh.....

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Bottom line: there are plenty of reasons NOT to buy the Iraqi dinar this year, and plenty of great reasons to buy renminbi instead. So I say stick to the currencies that have value, and leave the dinar for the speculators who don’t know any better.

Have a Nice Day!

This report, via email, was written by By Sean Hyman, Editor, Currency Cross Trader : http://sovereign-investor.com/

I have subscribed to them for many years. They really DO have a great deal of valid 'intell' available.

After reading this today, I actually felt GOOD that they are recommending people away from the dinar for a couple of reasons. One being, as has been mentioned here at DV, is that it will keep most people AWAY from the dinar if they had even heard about it OR were considering purchasing it. Two, there is no doubt in my mind that there are a number of them at the Sovereign Investor that WILL take a 'chance' and buy the dinar since the return can be so high.

I also believe that most of them are not as educated in the minutia relative to the dinar that has been posted here on DV [and I am not referring to the Rumors section].

All in all, I chuckled to myself and felt GOOD that Hyman had sent the email out! :D

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Just what makes you think that the currency experts aren't buying dinar? I would be willing to bet that the majority of them own dinar. Will they ever admit to it? No. If it ends up not making money, then they don't look foolish and save face. If it does make money, they reap the reward and then can admit they bought in or not admit it and no one will be the wiser. Either way, I wouldn't be looking for the experts to be showing their hands at this time.

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Really, how much research did he do? <_<

You can't compare what happend in Turkey with Iraq. :blink:

Not the same situation.

I feel with the knowledge of the people here on DV,

we have a better collective understanding of the Dinar

than most anyone else, period! ;)

And besides, the amount invested is very minimal.

Not a big risk at all. :D

I lost more money in my mutual fund, than I have invested in the Dinar.

So, I think I'm ok with this, and sticking to it.

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I just read this in my email......thought about sharing....but here it is.....I read where they talk about not recommending dinar.....but no where did they mention not owning dinar....I truly understand not recommending the IQD to a prospective client that you have fiduciary responsibility to... can you imagine the phone calls when this dosen't RV this week....this year... next year?.....I know ....he talks about a 10 year plan on currency transactions...I just cannot wrap my arms around the intimation that this was a speculative opportunity for the unknowing....Just supposing you left that money in chase....or....BOA.....or any other financial institution....how much do you think you would have made....lets see; savings account...average balance 10K monthly interest earned......$1.04....now look at this; 10K buys approximately 10,000,000.00 IQD.....Shabs says most valuable currency in the region....lets say he was drunk when he said this and we have a megar RV of.....lets say $.05....earning a tidy sum of $500,000.00...less the 10K initial invested perhaps $500.00 in transactions fees and lets say 50% tax @ $245.000.00....still leaves the possibility of net $244,500.00 off a ten thousand investment. Moreover, lets suppose Keep is correct... and... we're all screwed......worse that could happen, I Break Even.......as jacapo (sp) said to the Count of Monte Cristo....."How could this be a bad deal" just saying!

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I love how they carefully condescend to "first-time investors" who find dinar, as if they're "experts"... but, of course, that's what they're selling in their newsletter, so-called "expert advice".... this is probably how Madoff got started.

Why not suggest investors hold both?... In ten years (or less), they're be telling us the Renminbi investment is a long shot, too.

Most of us already know this about dinar... but if it pays off even in the smallest way, it's a great investment.

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This report, via email, was written by By Sean Hyman, Editor, Currency Cross Trader : http://sovereign-investor.com/

I have subscribed to them for many years. They really DO have a great deal of valid 'intell' available.

After reading this today, I actually felt GOOD that they are recommending people away from the dinar for a couple of reasons. One being, as has been mentioned here at DV, is that it will keep most people AWAY from the dinar if they had even heard about it OR were considering purchasing it. Two, there is no doubt in my mind that there are a number of them at the Sovereign Investor that WILL take a 'chance' and buy the dinar since the return can be so high.

I also believe that most of them are not as educated in the minutia relative to the dinar that has been posted here on DV [and I am not referring to the Rumors section].

All in all, I chuckled to myself and felt GOOD that Hyman had sent the email out! :D

Sometimes Investing company's don't tell investors where the best "fishing holes" are... just keep leading them along to the decent spots.. but save the best for themselves... at least I have had that experience in the past. Just a thought!

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Well thats a big Plus to me, as long as the know it all big boys play ball in another park we dint have to worry about them running down the profit. Now when it does RV watch the big Boys start buying in the market then , beside cussing them selfs for not being invested. I'm happy as a pig in **** i bought in How about you. :D

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These 'experts' know nothing more than any of us. Except for a few shining examples, who truly can predict market trends, most of them only made money for their clients when times were so good everybody was making money. Also bear in mind that they have a herd like mentality and like to play safe with paper instrument (which have as a matter of fact, turned out to be the most dangerous). Don't forget until very recently they wouldn't even recommend gold as a solid investment.

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This guy is clearly a pumper of the Chinese Renminbi, he probably holds Dinar secretly. :lol:

Agree, pump, pump, pump

Sometimes Investing company's don't tell investors where the best "fishing holes" are... just keep leading them along to the decent spots.. but save the best for themselves... at least I have had that experience in the past. Just a thought!

Yes Sir E Bob. We just move forward. It's our money and we invest the way we want. It's like the longshot at the races. everyone thinks your a nut when you pick the longshot, but your smiling all the way to the ticket booth.

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Kinda like the Florida Tea Party that is owned by the Florida Democratic party.

I know of one democratic "plant" running as a Tea Party candidate,

but your jumping off in to the deep end here with this statement.

How about an article or link to back this up.

I wouldn't put it past the Democrats to try something like this,

but to say the WHOLE Florida Tea Party is "OWNED" by the Dems

with out anything to back it up, is irresponsible.

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