Dinar Recaps Note: AJ's Intel Comments are in reference to articles posted earlier on the blog - here are the links to those specific articles - They will open in a new window for ease of viewing -
Why Investors Keep Flocking To Dinar LINK
Will The Dinar Revaluate? LINK
AJs Intel April 25-2013
Good Day to All,
One of the biggest questions I get is will the Dinar be Revaluated? The below article and its paragraphs I have reproduced touches on the subject quite well but does not give the whole picture, which I will try and cover here.
Joseph Cafariello states:
“One short sentence answers all these questions: the Central Bank of Iraq regulates the flow of money through controlled auctions. Needless to say, this is not normal. In most other countries, money can be easily exchanged into a number of currencies at the will and whim of any citizen. The exchange rates are allowed to move freely according to the forces of supply and demand, interest rates, etc.”
Read More Link On Right
This sentence really stands out for me;
“The exchange rates are allowed to move freely according to the forces of supply and demand, interest rates, etc.”
In Iraq the exchange rate is not moving freely globally on the free markets; why, Iraq is still under sanctions and the exchange rate will not be allowed to move freely until those sanctions are removed and the Iraq government becomes stable.
Along with the exchange rate moving up and down somewhat, the exchange rate is not moving enough to really make a difference. The only free movement I have seen is between the dealers of the dinar here in the USA. There are some competitions going on between those dealers, which in turn drive the price down for us to buy. The exchange rate of the Iraq Dinar is about .0008557.
The second paragraph that glares is;
“By controlling the amount of USD available in Iraq, the Iraqi government controls the value of the USD relative to its own currency, thereby stabilizing the dinar. It is as close as you can get to an outright currency peg.”
Sure this is a currency peg, but a UN sanctioned currency peg that will not move freely until the sanctions are removed, period ending.
The third paragraph that shows its face in this article that in somewhat of not the whole picture is this;
“This is why the CBI is going to such great lengths to control the amount of USD in circulation through auctions. It wants to keep the dinar cheap. Not too cheap so as to introduce hyper inflation. But cheap enough to maximize the value of its import income and get as much construction and labor for its money as it can.”
I agree with his analogy all along the way of his writing concerning the value of the Dinar vs. the US dollar and the small rise and fall of the dinar, but in my opinion Iraq’s import income is being settled in US dollars. And the US dollar still controls in the Iraq market place, despite the recent monetary controls on the US dollar the CBI has put into play.
The fourth paragraph that glares it this;
“What if it takes another 5 or 10 years for that revaluation to come? Might there be better returns elsewhere? Investors have to weigh the pros and cons and make their own investment choices.”
A wise investor knows that the later paragraph could be true. This why wise investors do not put all eggs in one basket, as the old saying goes and always has cushions to fall back on to regain any losses that may occur along the way of investing.
The Iraq Dinar RV?RI could take as much as 5 to 10 years to reach the goal of having significant value once again, this is something we all as wise investors must take to heart as the investment is not a get rich quick scheme that happens overnight. But on the other hand I have my doubts as time is concerned.
I believe the RV?RI may take place much sooner than the article suggests and that is going to be dependent upon Iraq, its government, infrastructure and getting all the laws passed and implemented and possibly the removal of certain government employees. And defiantly the removal of corruption among certain governmental personalities in Iraq!
To sum it all up, we are in a good place and the blessing will come eventually.
God Bless All, AJ