SunnySide wrote on April 20th, 2013, 10:30 am:MEMPHIS DO YOU THINK IT'S MORE BENEFICIAL TO WAIT FOR THE SECOND RV DOWN THE ROAD OR TO GO INTO DONG?
I DID SOME NUMBER CRUNCHING AND WANTED TO PICK YOUR BRAIN. I'll PM U THIS POST NUMBER. ALSO BY NO MEANS IS THIS ASKING FOR SOLID FINANCIAL ADVICE MORE JUST AN OPINION.
I WILL PROBABLY DIVERSIFY AND DO A BIT OF EVERYTHING BUT WANTED TO KNOW YOUR THOUGHTS> THANKS
Memphis Replies: SunnySide...great question! <<<rolling up sleeves>>> but not an easy one to answer properly!
There are many factors to consider. With the anticipated drop to the value of USD coming it might be unwise to cash in all IQD if (operative word here) IF one does not have a plan, a strategy to place those monies into something tangible other than the USD.
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The immediate monies from the RV (or RI if you are hung up on political correctness) need to be divested into 'stuff'. This thinking seems to be very sound from the conversations I have had with others.
Next step is the purchase of VND. Not everyone is interested in further currency speculating and that's ok!
If you (speaking to the group here at large) have been going to the Dr. with ulcers for the past year then perhaps you might be better suited to buying OTHER stuff such as a home, land, and gold/silver beyond the obvious use of this blessing as we simply give to others who are in need. For those with the 'stomach' here are some thoughts:
Once the initial re-pricing of the IQD has happened then your dinars with have a new 'set value'. Ascribe any number you like here, it doesn't change the math.
Now, the question becomes: "What FURTHER increase am I likely to see in the IQD value?"
If you settle on a figure of let's say a factor 2x it's present 'set value' then you anticipate doubling your holdings true?
IF however the VND has not yet been re-priced from it's present value we need to ask ourselves: "Is the VND likely to increase an order of magnitude GREATER THAN 2x?"
If the answer is yes, then those IQD that we have sitting in a drawer ought to be snatched up and put to work for us.
There is an obvious loss involved in making this xfer from dinar to dong. We will be taxed (an as yet unknown %) upon the surrender of our dinar. This loss will IMO be greatly offset by the anticipated increase in the dong.
Numbers projected for the VND have ranged from a few pennies to nearly $1 USD! My own tendency is to err on the low side of such projections.
Assuming you buy VND for $75/million and neglecting your taxation on the dinar you will own over 13,000 dong for ever $1 spent. Should the dong re-price at $.08 (eight pennies) then you have multiplied your IQD (that were sitting in a drawer) by a factor of over x1000.
Obviously, the numbers here get pretty crazy. It is possible that the initial re-pricing (ROI) on the VND will exceed that of the IQD.
Will ppl still be holding on to dinars despite this huge potential to 'put them to work' for us?
Yep. I and many others I know will STILL have some dinars squirreled away in a drawer but IMO the logic to put them to work is sound. Thanks for the question! I have tried to keep this short and simple...