DrDinar Blog

Please answer our 2 question Spring 2011 Dinar survey, it’s important!

***Survey is closed***
Thank you for your participation to all survey participants. Results will be posted in the weeks to come.
-Darren Chabluk June 4 2011.

This is your chance to get the information you are looking for, well, unless it involves the crystal ball but I’ll see what I can do…

Iraq Banking System Moving to 21st Century in 2014

Recently, there was a Reuters news article with a headline titled, ‘Iraq to boost retail banking via mobiles, Internet.’ Upon reading that most people would naturally assume that this is good news for the Iraq banking sector. Many people perceived this as ‘huge’ news and have even tried to convince others of the same. What some need to understand is that, the people with this thought process just do not fully understand the banking system as it is here in Iraq. If they did, they would not had perceived this news as ‘huge’.

These individuals are the same people that also claim that Iraq does not have a tradable international currency (which Iraq does). At some point in time, hopefully in the near future, it will be good for the banking system, but that’s only when they they get the single payer system in place. It’s one thing to have it constructed and installed, training is another. If they are lucky, they will have it completed in the banking system by the end of the year. It will take them an additional 18 months to complete the training and get acclimated to it.

In case some of you are wondering how the banks in Iraq will transfer funds outside of Iraq, It will be by correspondent banking agreements. There are several banks that have correspondent banking agreements with foreign banks outside of Iraq. These Iraqi banks use the foreign banking system (SWIFT) to facilitate transactions abroad. The Iraqi bank has no single payer system that conducts the due diligence to investigate where the funds are exactly coming from. Keep in mind that there are Anti-Money Laundering Laws (AML). In Iraq the AML penalties are very harsh on the banks and on any individuals. The Iraqi banking sector is seeking ways to get away from the correspondent agreements. They want to stop criminals from funneling money, independently investigate exactly where the funds being sent or received are coming from, as well as who actually owns the money.

There is a caveat in that the Iraqi Parliament must pass legislation to even use this particular payment system. The CBI is not as independent as people think, they have to get the permission of the Iraqi government on nearly every move they make. Such as, 1.) Parliaments vote on the new Iraqi dinar currency, 2.) reviewing of the CBI Report on Re-Denomination Revaluation reports, and lastly, Ministry of Finance giving the approval of banking licenses.

http://www.americancontractor.com

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American Contractor
skype: americancontractor
e-mail: ac@americancontractor.com
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Managing a large list in the Dinar network has one distinct advantage. I can see trends in the dinar industry from dealers and bloggers around the world. Investor behavior for the dinar has always been very interesting to watch.

How is Bin Laden’s death related to stability in the dinar? I suppose it is one less major potential enemy for the dinar, an enemy as perceived by many involved in the spike in Dinar sales in May 2011. How else can we explain the little frenzy that is going on here with our dinar?

Central Bank of Iraq in May of 2011 is imposing a hefty transaction fee inside Iraq when US dollars are used. The CBI is enforcing these rates on foreign currency transactions inside Iraq to force everyone inside of Iraq to use Iraq Dinar instead of US dollar or Euro or other popular middle eastern currency’s in the region. This is good news for the Iraq dinar, every little bit helps.

There is also a tax in Iraq which is related to foreign currency transactions in the CBI’s effort to get everyone in Iraq to use the Dinar. Common sense tells me that the Iraq Dinar must be the most popular currency in Iraq, it’s motherland, in order to have a revaluation. Maximize the value of the dinar with all possibly methods beforehand, then, we will see.

As always, invest only what you can afford to loose. If you feel like you’ve put too much into your dinar investment you need to sell off dinar till you feel you can afford the loss. Ali from DinarTrade will buy your dinar. And if you bought back in around 2006 or earlier you should get back everything you paid. The dinar has gone up since then.

On the contrary, if you are comfortable with your dinar investment then hold on and enjoy the ride. Buy more if you can handle the risk. In my opinion the opportunity is not as risky as it once was. There are other risks that are all tied into the realm of the ‘risky investment’ we are dealing with here. We are dealing with Governments here, and corruption, massive corruption. That being said, prepare for the worst and hope for the best and you are in good hands. If you are mad about this, you need to sell now. Period.

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Written for http://www.DrDinar.com
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Germany lopped zeros from their banknotes after world war II in what was a devaluation of their currency after loosing the war. We will refer to this as a ‘bad’ lop.

Vietnam revalued their currency decades after the Vietnam War, will Iraq take decades? I don’t know, do you? I’m guessing they won’t only because of the nature of Iraqi trade; Oil.

What is a good lop?

Well, let is be clear that a devaluation is not a function of a revaluation. Having one cancels out the other.

The Iraqi Government for years has ‘quietly’ talked about the possibility of putting their currency on the world market, a revaluation.

I recall hearing a top official of the Iraqi Government say that ‘timing is crucial’ for the revaluation and if it were done too soon it would be bad for one reason or another. Iraq wants to revaluate at the proper time so that they can potentially double within a day or two AFTER the revaluation similar to Kuwait.

Sorry I got sidetracked there, what is a good lop? Right now the Iraqi currency has banknotes like the 25,000 note, a 10,000 note, 5000, 1000, 500, 250, and 50. The first 3, the largest notes, have many zeros. If an Iraqi buys a pair of shoes with only 500’s they would need to have a wad of cash big enough to choke a goat. That is one reason for a good zero lop. But what happens to your 25,000 notes with a ‘good’ lop?….

What happens when a stock on wall street ‘lops zeros’ so to speak. I once bought AIG stock just after the september 2008 stock market crash. Well, AIG lopped a zero or two off the stock value but my stock got ‘pro rated’ and I didn’t actually loose anything at all except for the old perceived value of owning hundreds of shares, I now owned about 20 shares, but, they had the same value in total, as before.

Now why would Iraq want to have a good lop? Well, I’m only speculating here but maybe Iraq would like their non ‘inflated looking’ banknotes back. If, and this is only in theory, if, the dinar was lopped of 3 decimal places, 3 zeros on the 25,000 note then it will be a 25 note. Almost the same value as the US dollar as of today, before a revaluation. According to my good lop theory your old notes will be worth the same thing as the new notes, for at least some amount of ‘trade in’ time; Or there may be no trade in time. With the old Saddam notes, there was a trade in time before they became of no value in Central Bank of Iraq.

As always, only invest what you can afford to loose. That said, enjoy your investing experience.

I have always been against the ‘bad lop’ and I still am. There is so much stuff on the Internet about an evil bad lop, and every time I see someone it always seems to be written by someone who has never written about the dinar before. Some freelance writer, a critic.

You may need to cash in for the new notes to avoid a loss, worst case scenario. That, is my opinion. And I have never called myself a financial adviser. I have, called myself of a critic of a dinar critics, a reporter, and I am a dinar investor. But I only invest what I can afford to loose and have said this for years. If you are looking for ways to lower the risk of accessing the opportunity than that is where my expertise comes in.

For example, doing a wire transfer without getting ripped off during the wire procedure itself. Who you are wiring too, that is a whole other story. If you are aware of the risk of Dinar and accept that, then, I can recommend the dealers who have the best reputations, that, I can do for you. Reducing the risk of access procedures. If you want to sell your dinar now, I can help you with that too. Anyone want to sell? I will buy it ; ) Please sell your dinar if you feel you have invested more than you can afford to loose. I’m no cheerleader, wrong site.

Ali from DinarTrade.com will buy your dinar now if you want to sell. And, he’s the only dealer I recommend now because I like his business ethics. Sell your dinar now and you will most likely get what you paid, or a little less depending on when you bought.

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Written by Darren Chabluk for http://DrDinar.com
This article may be reprinted online or offline as
long as the link remains hyper-linked online.
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