July 8, 2014 | Posted in: The Randomness of Publishing
I recently learned some of my extended family and their friends invested tens of thousands of dollars buying Iraqi Dinar (IRQ) in the hopes the currency will appreciate in value or will be “revalued” leading to a ridiculous return on investment, for example, one million Iraqi Dinar purchased for around $1,000 US Dollars could hypothetically lead to $3,000,000 if the Iraqi Dinar returned to its 1990 value of around $3 US per dinar. I’m very sorry if you personally gave your hard earned money in exchange for Iraqi Dinar, you have indeed been scammed and are in possession of worthless paper that CANNOT be turned into USD at ANY bank in the United States of America. You can’t bring a single one of your IQD notes to any bank and leave with USD. Even if the currency is magically revalued, the dreams and hopes of the infinitely unwise, you still will not be able to turn them into USD at any bank in the United States of America. Valuation of a countries currency is complicated to say the least and there is certainly an opportunity to profit from the trading of currencies, just not the Iraqi Dinar, because as far as the global market is concerned, it isn’t real money. You would be better off with the notes from a game of Monopoly, at least people around the world will recognize the game money and it is equally as valuable in the United States of America as the Iraqi Dinar.
Here are 5 things you should know about Iraqi Dinar:
1. You can’t buy or sell them to a bank in the United States.
The Iraqi Dinar is not a currency listed on the Foreign Exchange Market, or Forex, for short. Don’t believe me? Take a single note from your Iraqi Dinar stash to your bank or any bank in the United States and try to walk out with US Dollars. Most people are in possession of the 25,000 denomination note which, according to current exchange rates, available on google, should be about $20. I dare you, take your 25,000 dinar note and try to get $20, you might be surprised, confused, and feel a bit foolish because this exchange rate is set by the Central Bank of Iraq and not recognized by any financial institution outside of Iraq.
2. Are you in possession of the actual dinar bank notes or do you have some type of “statement” saying you own X amount of Iraqi Dinar?
You didn’t get scammed as hard if you’re in possession of physical Iraqi Dinar bank notes. If you have a statement, try to get your hands on the actual dinar. What’s the process? When your ship comes in, and the currency is revalued, and suddenly your statement is worth $3M dollars, aren’t you going to want to get the actual dinar in your hands so you can take it to the bank and deposit it into your checking account? There’s dumb and there is infinitely dumb.
3. The Iraqi Dinar is suddenly revalued at a 1 for 1 exchange rate, meaning 1 IRQ = 1 USD.
Your ship has come in!!!!! Suddenly, your 25,000 Iraqi Dinar note is worth $25,000 USD right?
Wrong. Your 25,000 Iraqi Dinar note, that you hopefully have in hand or you’re the real sucker born every minute, is now considered “Old Dinar” and “New Dinar” at the new exchange rate is going to be a new note issued by the Central Bank of Iraq. What does this mean? I understand you’re a bit slow, after all, you invested thousands of dollars in this scheme, so I will try to explain it as simple as possible.
There be an exchange period for “old” dinar to “new” dinar meaning when you walk into a bank in Baghdad with your 25,000 “old” note, it will be honored at the “old” price, roughly $20, meaning you would walk out of the Iraqi Bank with 20 IRQ in the new notes. You walked into the bank with $20 USD in old dinar and you’ll walk out with $20 USD in new dinar.
In the entire history of traded currency, there has NEVER been a revaluation of a country’s currency in a manner that would allow people who purchased Iraqi Dinar to profit instantly.
4. Iraq is an emerging economy with the massive oil reserves, surely there is a chance for it to increase in value, maybe even to 1990 levels of $3.71 for 1 Iraqi Dinar.
Iraq is a country not a company. And, oil is purchased in US Dollars globally, meaning if you want to buy a barrel of oil, you need roughly $100 USD. You must convert your currency into USD at the going rate then purchase your oil. There is no correlation between quantity of natural resources and currency valuation, it’s currency, countries and governments, NOT a company with stock. In addition, Saddam Hussein is the one who set this price and it certainly was not a price honored on the open market.
5. Currency has value because the countries central bank says so and the market agrees.
The Central Bank of Iraq sets the currency exchange rate for the Iraqi Dinar. I haven’t read the news today, I’m not sure who currently controls the Central Bank of Iraq, The Sunni or Shiite? Iraq is engulfed in Civil War less than 3 years after the last American troops departed the country. Does this really sound like a situation where some currency magic is going to happen and suddenly you have $3M dollars sitting in an envelope in your closet?
There’s stupid, infinitely stupid, and then there’s the people who purchased Iraqi Dinar thinking millions are waiting just around the bend. It’s a whole new level of stupid, but hey, this is America and apparently the internet and google are not as widely used by my family and friends who were taken by this scam.
And the proof is in the pudding … take your massive amount of Iraqi Dinar to any bank in the United States of America and try to convert it to USD. You can’t because this money has NO VALUE OUTSIDE OF IRAQ. And in Iraq, they use USD because it’s easier and people can’t carry around 1,000,000 IQD, the equivalent of a 20 dollar bill in Iraq, its just easier to carry around a $20.