To Buy or NOT To Buy the Iraqi Dinar

[rico]

The Currency to Own this Decade

(Hint: It’s Not the Iraqi Dinar)

By Sean Hyman,Editor, Currency Cross Tra

It’s a strange currency world we live in.

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

At the same time, other currencies have theexact opposite problem - they’re too strong. The Japanese yen has gained somuch in value that the Bank of Japan had to intervene several times over thepast 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 buyand hold.

But unfortunately, some are finding the Iraqidinar...

>>Advertisement

Forget the Dollar, Forget the Euro:What’s Left?

With the euro coming unhinged more each month,and the dollar sinking for the past 10 years, it’s hard to know where to turn.

But that’s exactly why having a diversifiedcurrency portfolio is so important.

This year, nine of the world’s top currencyexperts joined forces to tell you exactly how to build your portfolio for thenext 10 years.

Clickhere for the details.

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

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

For my money, there are much strongeralternative currencies to buy and hold for the long-run. I’ll introduce you toone 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 youbuy 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 wewould classify as a politically sound country. After all, they just put theirnew constitution together in 2005.

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

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

That means the big institutional players don’twant anything to do with this currency. If they did, you would be able to tradeit.

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

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

Just Because It Revalues,

Doesn’t Mean You Profit

As a currency, most speculators have beenbuying the Iraqi dinar because they are hanging their hats on a potentialrevaluation. Various websites have been claiming this revaluation will happensince 2004.

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

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

In 2005, the Turkish government revalued thelira 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 lirain dollar terms. Before the revaluation, one dollar bought you 1.3 millionlira. After the revaluation, one dollar bought you 1.35 lira.

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

Now could the same thing happen in Iraq?Absolutely.

That’s why I would much rather focus on morestable emerging markets with currencies that have a much higher statisticalprobability of rising in value.

For instance, the Chinese renminbi...

Forget the Dinar, Buy This Instead...

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

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

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

The most respected financial minds in theindustry 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 holddollars, euros, and gold in their coffers will be able to stockpile tradableChinese renminbi instead. Scary thought, right? It would be a devastating blowto the U.S. dollar, and would force the dollar/renminbi exchange rate toplummet.

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

If commodities were priced in anything butdollars, everything you buy on a daily basis would skyrocket in price. As acountry, we would be forced to pay for real commodities with real assets (notjust 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 thesteady moving hand of the market.

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

Have a Nice Day!

Sean Hyman

Editor, Currency Cross Trader

P.S. At this year’s Expo, all our keynote speakersgave their “trades of the decades” - the currency plays to buy and hold for thenext 10 years. That includes the Chinese renminbi.

(GEES !! I hope this guy is wrong and just trying to sell his own ideas.....rico)

[Ridewithme38]

Interesting that currency experts are using the term Revaluation for Turkey...that would explain the video from yesterday where the currency expert mentioned Revaluation with the Dinar

Maybe we're using the terms wrong? Maybe printing the lower notes with three less zeros is Redenomination and taking three zero's off the exchange rate is Revalution...and they are NOT seperate things

Edited September 8, 2011 by Ridewithme38

[MoneyMoney7]

The Currency to Own this Decade

(Hint: It’s Not the Iraqi Dinar)

By Sean Hyman,Editor, Currency Cross Tra

It’s a strange currency world we live in.

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

At the same time, other currencies have theexact opposite problem - they’re too strong. The Japanese yen has gained somuch in value that the Bank of Japan had to intervene several times over thepast 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 buyand hold.

But unfortunately, some are finding the Iraqidinar...

>>Advertisement

Forget the Dollar, Forget the Euro:What’s Left?

With the euro coming unhinged more each month,and the dollar sinking for the past 10 years, it’s hard to know where to turn.

But that’s exactly why having a diversifiedcurrency portfolio is so important.

This year, nine of the world’s top currencyexperts joined forces to tell you exactly how to build your portfolio for thenext 10 years.

Clickhere for the details.

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

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

For my money, there are much strongeralternative currencies to buy and hold for the long-run. I’ll introduce you toone 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 youbuy 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 wewould classify as a politically sound country. After all, they just put theirnew constitution together in 2005.

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

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

That means the big institutional players don’twant anything to do with this currency. If they did, you would be able to tradeit.

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

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

Just Because It Revalues,

Doesn’t Mean You Profit

As a currency, most speculators have beenbuying the Iraqi dinar because they are hanging their hats on a potentialrevaluation. Various websites have been claiming this revaluation will happensince 2004.

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

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

In 2005, the Turkish government revalued thelira 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 lirain dollar terms. Before the revaluation, one dollar bought you 1.3 millionlira. After the revaluation, one dollar bought you 1.35 lira.

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

Now could the same thing happen in Iraq?Absolutely.

That’s why I would much rather focus on morestable emerging markets with currencies that have a much higher statisticalprobability of rising in value.

For instance, the Chinese renminbi...

Forget the Dinar, Buy This Instead...

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

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

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

The most respected financial minds in theindustry 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 holddollars, euros, and gold in their coffers will be able to stockpile tradableChinese renminbi instead. Scary thought, right? It would be a devastating blowto the U.S. dollar, and would force the dollar/renminbi exchange rate toplummet.

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

If commodities were priced in anything butdollars, everything you buy on a daily basis would skyrocket in price. As acountry, we would be forced to pay for real commodities with real assets (notjust 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 thesteady moving hand of the market.

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

Have a Nice Day!

Sean Hyman

Editor, Currency Cross Trader

P.S. At this year’s Expo, all our keynote speakersgave their “trades of the decades” - the currency plays to buy and hold for thenext 10 years. That includes the Chinese renminbi.

(GEES !! I hope this guy is wrong and just trying to sell his own ideas.....rico)

All you so-called experts don't know everything.

[TonyDownTheShore]

This was posted yesterday.

[msm2137]

Good thoughts. This man is just conservitative. I like my dinar better.

[keylime]

I guess this guy wasn't invited to the investors symposium going on in London right now where they are showing the world why they are one of the top countries to invest in and believe their dinar will be the most powerful in the ME. And that they are specifically determined to diversify so that OIL isn't the only thing that their GDP depends on.

also once this does go international the so called "Big Boys" I would say are going to jump in this.

Well after the RV I will certainly look into the renminbi.

[4aprofit]

These RETARDS have'nt done their homework...this Soveriegn Investor article is a joke....there's already been an RV of some sorts, especially for those that have been invested long-term in the dinar cash holdings, the ISX and Warka Bank Acct's....and the stuff has'nt even materialized as per it's finality...these idiot's are already judging the dinar like it's past tense...and the curtain has'nt even been un-veiled yet...how stupid or pro-dump can one get...Hang onto those dinars...IMO...there are many paid to deter speculation, especially as we near the end of this ride...We surely will see won't we?....For what it's worth....

Edited September 8, 2011 by 4aprofit

[JWJW11]

This is the same guy who was calling the dinar a scam and now hes on to this! Hes found a way to make a buck!

[Realdinar]

Smoke and mirrors