Should you buy Iranian Rial?
First let me say I am not a financial advisor or attorney of any kind. I am just an investor, like you, giving you my honest opinion from my research and current knowledge of the subject matter.
Second let me say it sicken my stomach to see so many people being lulled into purchasing the Iranian Rial inknowing what they are really getting themselves into. STOP FOLLOWING THE HERD AND THINK FOR YOURSELF!
So in my last news letter dated 1/27 (LINK), I gave you many reasons as to why you should stay away from the Iranian Rial currency. Some of you will listen and some will be stubborn and get burned. Many have already purchased the currency not really knowing or understanding fully what they are doing.
You will be stuck with it for a very long time I can assure you. You think you are worried about when the Iraqi dinar will increase in value? Hold on to your hat because with the Iranian Rial you are in it for the VERY, VERY LONG haul !
Is Iran making progress? Yes- they have some conditions that qualified them to be relieved of SOME sanctions but let’s not put the horse before the cart. Let’s now hurry into this investment, just not yet. Let me tell you why.
From the aspects of buying and holding the paper currency, put aside all the unpatriotic reasons and the aspects as a citizen of the free world and the dealing with the violation of homeland security terrorism laws in the USA, you should know that the rate for the Iraqi Dinar is around 1,180 Dinars per US dollar. The Iranian Rial is 30,000 Rial per US Dollar. So you tell me which one has more value today? ….that is if you want to base it all on just pure economics and greed alone?
In my recent articles I reviewed will all my readers information about the problems Iraq is having in stabilizing to a consistent rate for the Dinar. I talked about differences between the market rate, currency auction rate, street rate and the rate used in Kurdistan. All these rates are different and the IMF is mandating that they all adjust to one common aligned rate. This is called adjusting away from MCP (multiple currency practices), which the IMF does not like in a country’s currency.
Remember in the January 12th published news brief on an MOU between the IMF and Iraq, the IMF mandated that Iraq remove all barriers precluding them from moving to an international tradable currency. This was great news to us investors. The MCP was one of those barriers. They gave them until the end of February to deal with this issue. In the past we read article after article from Tamini,of the Parliamentary financial committee, who has audited the countries currency practices and reported the issues back to the CBI and the Finance Ministry.
Why am I telling you all this?
I am telling you this because now the IMF is mandating that the MCP also be dealt with in Iran concerning the Rial. Sound familiar?
Iran has been dealing with the same issue. Even though the Iranian government wants to paint a rosy picture for all the investors, they are far from movement of the Rial to any significant increase in value. It will be a very long time until it moves the way many of you speculator, rookie currency investors expect.
You only expect a very large jump soon because once again you are listening to all these idiotic so called intel “gurus” who are filling you mind with gobbly goop once again. Of course we know what they have at stake an we know they are selling the currency. So go figure? Do you think they are going to be honest with you? They know your state of mind and they are going to play games with you.
I quote from a recent article (see below) on this subject matter –
“The official exchange rate, as set by the Central Bank of Iran, is approximately 30,000 rials to the dollar, but the black-market rate is closer to 36,000. The next step for Iran is to eliminate this dual system, says Rabii. "Now, the official policy of the central bank is to once again have a single rate after sanctions are lifted," he says. "In the first six months post-sanction, it wants to try to bring the two rates together:”
Remember also headings on article are deceiving and we have been burnt so many times already by only reading the article and not its full content. So the title of the article states “SANCTION REMOVAL UNVEILS IRAN CURRENCY HOPES”. Really?
What sanctions removed? What currency hopes?
I quote from the article again (if you bother to read it) –
“Iran has a diversified economy and is capable of exporting a wide category of goods, from steel, petrochemicals and fertilizers to pistachios, saffron and, of course, Persian rugs. However, market participants agree the rial's appreciation prospects are poor, and IT MIGHT EVEN FALL IN VALUE.”
I quote from the article again (if you bother to read it) –
“Ramin Rabii, chief executive officer at Turquoise Partners, believes it will take a few years before there is significant foreign direct investment in Iran, due to years of sanctions and local bureaucracy. "Demand for local currency from foreigners will not be that significant," he says. "There will be some demand, BUT NOT TO THE POINT THAT [IT CAN APPRECIATE] IN THE NEXT FEW MONTHS OR YEARS”
I quote from the article again (if you bother to read it) –
“"There will be some demand, but not to the point that it can appreciate IN THE NEXT FEW MONTHS OR YEARS." The drop in commodity prices is putting Iran's budget under pressure, despite its diversified economy, and IT MIGHT EVEN BE IN THE INTEREST OF THE GOVERNMENT TO DEVALUE THE RIAL, predicts Rabii.”
I quote from the article again (if you bother to read it) –
“but Rabii says this has been in the works for a while. "They have been talking about it for years – as long as I can remember," he says. "If you ask me how optimistic I am [about this happening] in the next year, I am very pessimistic. This is more of a longer-term trend. It's NOT GOING TO HAPPEN IN THE SHORT TERM"
Iran is now also on a huge misinformation campaign with the west to try to sucker you into buying their currency. I warned you about this propaganda too.
Now I want to cover another aspect in more detail. Remember all you investors who were skeptics and would write to me telling your opinions (in frustration) that Iraq will never be a peaceful nation. You based you opinion on assumptions of why the constant fighting between the Sunnis, the Kurds and the Sheites. But in complaining did you really try to look at who was causing most of the damage and why? Did you really understand what was going on behind the scenes with those constant street bombings, blowing up of mosques and other dirty acts of terrorism. Yes it was infact instigated by the Maliki government security forces and his private Iranian militias. Remember a united nation can not be broken. It will stand together and fight any foe. “United We Stand Divided We Fall” are not just patriotic words applicable to the USA on the forth of July. These are words of wisdom applicable to any nation that wants freedom. Iraq can overcome all obstacles just as many said Hitler was too strong to ever defeat, but the allies did it, just as the Iraqi people too will rise to the occasion and take back their country. They will finally unite and defeat all FOREIGN (Iran) and DOMESTIC enemies (Maliki and his goons, crocked Sheites).
Take back their country you ask? From whom you ask ISIS and DAASH?
When all is said and done with ISIS and DAASH you will find that they were the least of the problems for Iraq I can assure you. It is the ultimate defeat and the pushing out of the Iranian Kud forces out of Iraq once and for all that will be the ultimate challenge and obstacle to the Iraqi freedom.
Who supports and arms these Iranian forces in Iraq and how do they pay for it?
We know Maliki was funding their efforts in the past with Iraqi revenues. Now they rely on funding directly from Iran since Abadi has cut off all this corruption and Maliki is no longer in the driver seat to funnel money to them.
So now the big push by Iran is to sucker investors to flock to Iran and invest their money. Caution is needed, however, since where will this money be going? We know for a fact US dollars from any direct currency investment is flowing directly to support Kud forces in Iraq. This is a fact not rumor. Do you want to continue to support these forces or kick their little behinds out of Iraq so we can get going with the needed currency reforms needed in Iraq? So stop wining and complaining about the hold up of the IQD revaluation if you are part of the problem and not the solution.
SANCTION REMOVAL UNVEILS IRAN CURRENCY HOPES
Farah Khalique Published on: 1/28/16
Iran is emerging from the shadows to re-establish itself as a prime player in the Middle East. Moves are afoot to rid the country of its black-market exchange rate and develop a working currency forward market.
Iranians thought this day would never come – crippling economic sanctions have been lifted, Western countries are welcoming trade delegates from Tehran to talk business and president Hassan Rouhani is signing billion-dollar deals for Iran to buy jets and manufacture cars. The future looks brighter for Iran and has piqued the interest of international investors.
Switch on money tap
Dominic Bokor-Ingram, portfolio adviser at Charlemagne Capital, believes "a lot" of investment is going to flow into the country, as Iranian companies start spending once again on capital expenditure. "They have been starved of an export route, but Iran manufactures things the rest of the region needs," he says. "Now that they can export again, we will see companies investing – that will be a combination of foreign money and also domestic money." Charlemagne Capital has teamed up with Iranian investment firm Turquoise Partners to launch the Cyprus-domiciled Turquoise Variable Capital Investment Fund. Since its launch in mid-December, the fund has assets under management of around €48 million from European and UK investors and is up almost 14%, according to Bokor-Ingram. Sky-high yields are what makes Iran attractive to investors – even just depositing funds in an Iranian bank account can yield real returns of 20%, due to high interest rates. Bond yields are nudging 24%, says Bokor-Ingram, and a dedicated wealth manager can achieve returns of about 30%, says Emad Mostaque, strategist at emerging markets (EM) research consultancy Ecstrat.
The simple carry trade – borrowing in a currency with low interest rates such as US dollars and investing in higher yielding Iranian securities – works only as long as the exchange rate remains constant. Oil revenues account for around 10% of GDP. Renaissance Capital forecasts a total $54 billion of export receipts and capital inflows to Iran in 2016, and perhaps another $10 billion in 2017, which it predicts will counteract falling oil prices. It also reckons the 8% annual average target of the government’s 2016-21 five-year plan might be achievable. Mostaque predicts the Iranian rial will remain stable, in contrast to neighbouring oil-producing countries whose currencies have come under pressure as the price of oil plunges to new lows. Iran has a diversified economy and is capable of exporting a wide category of goods, from steel, petrochemicals and fertilizers to pistachios, saffron and, of course, Persian rugs. However, market participants agree the rial's appreciation prospects are poor, and it might even fall in value.
Ramin Rabii, chief executive officer at Turquoise Partners, believes it will take a few years before there is significant foreign direct investment in Iran, due to years of sanctions and local bureaucracy. "Demand for local currency from foreigners will not be that significant," he says. "There will be some demand, but not to the point that [it can appreciate] in the next few months or years." The drop in commodity prices is putting Iran's budget under pressure, despite its diversified economy, and it might even be in the interest of the government to devalue the rial, predicts Rabii.
Clean up exchange rate
Years of punishing sanctions put pressure on the rial, and led to a black-market exchange rate. The official exchange rate, as set by the Central Bank of Iran, is approximately 30,000 rials to the dollar, but the black-market rate is closer to 36,000. The next step for Iran is to eliminate this dual system, says Rabii. "Now, the official policy of the central bank is to once again have a single rate after sanctions are lifted," he says. "In the first six months post-sanction, [it wants to] try to bring the two rates together. Whether the official rate moves up or the free rate move down, nobody knows." Charlie Robertson, EM specialist at Renaissance Capital and head of the macro-strategy unit, estimates they could align at 32,000 to 33,000. Furthermore, there is talk of the central bank developing a currency forward market. A well-functioning derivatives market can have a stabilizing effect on a currency and attract foreign investors, but Rabii says this has been in the works for a while. "They have been talking about it for years – as long as I can remember," he says. "If you ask me how optimistic I am [about this happening] in the next year, I am very pessimistic. This is more of a longer-term trend. It's not going to happen in the short term"
Despite the country's recent progress, investors remain cautious on Iran for a multitude of reasons, says Hasnain Malik, head of frontier markets strategy for MENA and South Asia research at boutique investment bank Exotix. Exotix does not market Iranian securities to its clients. "US sanctions are still there – they are just suspended – and there are significant restrictions from the US institutional investor standpoint from either travelling to Iran or getting through the hurdles to invest in Iran," he says. The threat of Iran breaching the terms of its nuclear agreement and being hit with a "sanction snapback" is a concern. The upcoming US election adds to the uncertainty facing investors – a win for Republican candidate Donald Trump would almost certainly be a loss for US-Iranian relations. Furthermore, it is not yet possible to have sub-custodian arrangements in Iran. Investors have to make do with Iran's Central Securities Depository, but international investors are accustomed to dealing with the local branch of global custodian banks such as HSBC or State Street. It is unlikely there will be a sugar rush of international money flowing into Iran, but market participants estimate between $500 million to $2 billion of foreign money finding its way into Iran over the next year.
Update: Fighting ISIS
I bring you today an article finally openly telling about the USA “boots on the ground in Iraq”. The author of the article is desperately trying to mislead the readers. If it obvious he does not want any USA troops on the ground as he know this is the only way to defeat ISIS. Why does he speak out this way?
I will assure you the US forces now in Iraq have full support for the Abadi government and were ask to return to help with ISIS. A decision had been made that “boots on the ground” was the only way to clean up ISIS in the final push on Mosul. Of course many politicians will try to criticize and lecture the people in the media about not ever letting occupation forces on Iraq soil again. But these same people did nothing to speak out about the 25,000 ghost soldiers or the lack of training or discipline in the Iraqi army (so they can defend themselves). So you see these kind of words are meaningless and there will always be critics no matter how good intended are the acts of kindness and efforts for freedom.
I believe totally that a presence of the USA and coalition forces is needed in the Middle East and should stay as long as needed until the day these people can learn to live peacefully. Oh- living in peace means taking control of your governments and running governments against these would be tyrants. The people must be stronger and have enforceable penalties that apply to every level of politics. I am referring of course to Iraq and their long hesitation to deal with Maliki and his goons. I truly believe that once the laws are in place and enforced over time the examples of these past prosecutions of tyrants will set the example for future leaders to tote the line.
They must learn not to trust so much these individuals who make grand promises and can’t deliver. They must always find ways through their democratic process to ensure they can weed them out. We see this a still a problem in Lebanon, Syria, Iran and we almost witnessed a huge disaster in Iraq (if the USA did not have the control it had).
Remember the Maliki administration refused to sign a status of forces agreement in 2011 to continue US and coalition support for providing security in Iraq and so a pull out of ground forces resulted. Of course now we know the true reason why Maliki refused and we witnessed his pursuit for total control and dictatorship over Iraq in the coming years. He wanted the USA out of the way. His ultimate goal - disunity and fractionalization.
Remember “United We Stand Divided We Fall” are not just patriotic words applicable to the USA on the forth of July. These are words of wisdom applicable to any nation that wants freedom. Iraq is no different. Maliki knew this and so he knew he could never achieve his lofty goals of dictatorship if the people were united against their common enemy. Oh – a common enemy? This too is another tactic. If you can’t identify the enemy then who can you unite to fight against? This too was Maliki’s propaganda. Just who was the enemy? Who was causing all the problems in Iraq? I can go on and on but do you get my point?
So we see these Abadi reform laws sorting out all this mess left behind by Maliki. Abadi has been counseled very well on what to do. He must sort out the bad guys, and let the people come to know who their enemies really are. However he must do it in a way that the people come to see the truth and not by means of public rhetoric criticizing since it would then look like pure politics on Abadi’s part.
His job is kind of like Pearly Harbor and the Japanese bombing when the American public finally woke up to their common enemy. Not that the government did not already know what had to be done and who the enemy was. It was the act of convincing the people to get them united against one common enemy. It is all well and good to look in retrospect what happened in WWII and many of do not want to remember and think that human nature has changed so much. We convince ourselves that we are such a modern and humanitarian society. We say “surely this can’t ever happen in today’s world”. We are wrong, dead wrong. People back in the early 1940’s said the same thing. It is nothing new.
If you took a census you would probably find the majority of people really do not want war. These are the average citizens. They want to go to work, make money, raise families and live peacefully.
So who starts these war? Who has to then fight them?
Maybe its time all nations take a careful look at who they are putting in the seats of power and what is their true lofty goals while they have the power. This must be our constant vigilance. So when we say “freedom is not cheep and there is a price to pay for freedom” what does this really (or should mean).
I think perhaps we all got it backwards. What this should mean is to sacrifice lives and fill body bags is not a first resort, but rather a last resort. Our first priority and obligation to protecting freedom is a very strong vigilance over the selection process and later the controlling process of the leaders we select and give the sacred power to lead our nations.
Yes – Mnt Goat is on her soap box today preaching. I am doing this because these USA elections are going to be one of the most critical elections in a very long time. Literally the future fate of the USA rides on this next leader. Will you chose him/her wisely? Remember too this does not only apply to the presidential office but to congress, senate leaders and judicial judges too.
Remember these words “United We Stand Divided We Fall” are not just patriotic words applicable to the USA on the forth of July.
BAHAA AL-ARAJI REVEALS THE PRESENCE OF 30 THOUSAND US TROOPS IN IRAQ AND CONFIRMS: THE GOVERNMENT CAN NOT RESIST
BAGHDAD / Sky Press: a CE Revealed the former deputy prime minister, Bahaa al-Araji, Wednesday, for the presence of 30,000 US troops in Iraq, as he emphasized that the government could not resist the US administration.
They said in an interview I followed "Sky Press," that "there are large files overthrow Bechtel and the leaders of the parties want to postpone the elections," stressing that "the responsibility of everyone, without exception, with the same bearing part of that responsibility."
He added that "there are large files ousted Bechtel and leaders, but there is no real will to open it, such as oil and gas file and the purchase of weapons, which was investigated formally," stressing that "everyone knows where the files of corruption and that he will re-open again."
And on the US troops and the possibility of their participation in ground fighting al-Araji said, "he said the Iraqi government can not resist the will and the US soldiers who are in Iraq, body and arm them do not indicate that they were present only for their counseling and training."
He said al-Araji, that "there has been within the power of the US embassy and a small power base in the country, but today the more than 30,000 troops," noting that "in the eye of the lion base 17,000 troops, and the rest at the base of a country."
He continued, "While the F-16 came to Iraq came with a large force," pointing out that "the US and the defense minister said more than once to send troops to Iraq and 101 days the band replaced with another."
He stressed that "when you see the soldier who ascends to the next plane to Iraq you see carrying weapons body does not show that a coach or work in the Air Force, but a fighter on the ground," noting that he "did not participate so far I do not think they came away from the approval of the Iraqi government.
The movement accused the League of the Righteous, on Wednesday, Prime Minister Haider al-Abadi of giving into US pressure, particularly Mai_khas weakening the role of the popular crowd, calling on him to step down.
One more item today:
Let’s not forget to keep praying for the success of THESE IRAQI AND COALITION SOLDIERS. I believe their success is in part some of the acceleration of the process we are now witnessing.
Remember too to pray to the princess of peace – Our Blessed Virgin Mary. She has the ear of Christ and she can intercede in heaven and bring us the peace we all desire here on earth. We can not do it alone. I believe that if we all make this our daily prayer you will see change. It is already working even in the short time since I have been publishing this prayer section. It does not matter what religion you believe, if you pray then to your oven beliefs entity it is still the same powers and good for all of mankind. Ultimately it is all the same God anyhow.
“Lord, protect Abadi and all who stand with him in righteousness, the Iraq and Coalition Soldiers who are fighting the good fight against terrorism, that they would be shielded from the enemy and would be Victorious against them! We ask that the Victory comes swiftly and healing of the Iraqi peoples and all whom have been effected by these evil doers can begin!
We pray for the process of the currency reform, the full implementation of the Iraqi economy to full international status and the bringing of prosperity and wealth to its people“ Amen!
Till next time…. Auf Wiedersehen!
Peace and Luv To Ya All,