Has this ever happened to you? You purchased several million Dinar and it was all sold before your initial order even arrived in your own hands? This was something that kept happening to me when I sold Dinar as one of Canadas largest Iraq Dinar dealers. It grabs attention and its fun to tell veteran Dinar investors about that experience. Dinar dealers selling Dinar before a revaluation sell at or near a price called Average Market Value.
Average Market Value is the average price that consumers are willing to pay for a certain good or service such that the good or services price has not been set and backed by a Government law or in this case, Dinar has not yet been backed by World Bank at a fixed Exchange Rate.
What is the average market value of the Iraq Dinar?
There is an easy way to quickly find out what the average market value of Iraqi Dinar is. The average price that a consumer is willing to pay for 1 Dinar can be found by executing the following simple steps:
Go to eBay, search for Iraq Dinar, then take the average of the top 10 sellers of Dinar. Keep in mind you must compare apples to apples. 1 seller might have a million dinar for sale, another seller may have single notes. You can’t count the same seller twice either. So find out what each of the top 10 sellers are selling 1 dinar for and take an average.
Central Bank of Iraq exchange rate is a totally different story. Because Iraq Dinar is a restricted currency according to banks outside of Iraq we cannot buy Dinars at the current exchange rate unless we open an account at Warka Bank in Iraq, or go to Iraq to buy Dinar!
Anyone wanting to purchase Dinar outside of Iraq must pay a markup. This markup is the difference between the exchange rate and the average market value that investors are willing to pay. This margin is what gives dinar dealers incentive to distribute the currency and produce a profit.
One of the 25,000 Dinar notes in excellent condition can fetch up to $100US or more at a coin shop in America. Meanwhile, the exchange rate values the note at less than $20 and dealers sell such note for $22 and up.
Revaluation of the Iraq Dinar currency will see the Dinar put onto the world market and accepted at currency exchange houses around the world. What does this entail? Well, Dinar dealers as we know it will have to compete with major banks and much smaller margins for one thing. This will put most Dinar dealers as we know it out of business. The great thing about the reval of the Dinar when it occurs is that the Dinar will be accepted around the world for exchange at the same rate as it is in Iraq.
What some experts are predicting is that the initial revaluation of the Iraq Dinar will create a huge sell off for most people holding the Dinar. The Central Bank of Iraq will be in a frenzy to buy back as much Dinar as humanly possible. Then the second cycle of the reval will take place as the exchange rate will increase, allowing Iraq to sell much of the dinar it just bought back at a profit. This is similar to what happened with the Kuwaiti Dinar reval. Folks that sold off after the reval, saw a huge jump in the value just after they sold upon the initial reval spiked rate. How long are You willing to hold on?
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This article may be reproduced online and offline as long as
this box remains and hyperlinked online. Written by Darren
Chabluk for http://DrDinar.com/blog
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