Special Report: Get Rich with the Iraqi Dinar

dinar bonus report

At Least That's What the Scammers Say

Several years ago, rumors started circulating around the investing world about a revaluation of the Iraqi dinar. I'm not sure where they started, but I'm hoping this is where they end.

You see, there are some unscrupulous people out there telling investors that the Iraqi dinar will eventually be on par with the U.S. dollar. And they've convinced many that this will happen overnight by action of the national bank in Iraq "revaluing" the currency.

If Iraq Was a Company

They’re trying to convince retail investors that, because of the oil reserves under Iraqi soil and the potential billions of dollars the sale of that oil could bring to the country, an investment in Iraqi dinar will make you a multimillionaire overnight.

And if Iraq was a company and the dinar was a stock, that might happen. Because if a company has great assets and is finally able to capitalize on those assets, the stock price will go up. But Iraq isn’t a company and dinars aren’t stock. And that’s just not how countries and currencies work.

In fact, exporting countries prefer to keep the value of their currencies down in relation to those of the buyers. That way the goods they export are cheaper to purchase. The more you can get with your currency, the more you’re likely to buy. It’s pretty basic economics.

Redenomination = Real Thing, Revaluation = Pipe Dream

Then there’s this whole revaluation thing. While I am not an expert in currencies and don't profess to be, I do consider myself somewhat of an expert in research. And with just a little research, you can find out that massive "revaluation" by a central bank isn't something that's going to happen to a currency.

Redenomination, however, is a real thing. Sometimes a country will call back its currency in exchange for a new one in an attempt to curb inflation and give more buying power to its citizens. It will print new notes and exchange the old ones for these new ones at a particular rate... say something like 100 old notes for one new one — sometimes more, sometimes less, depending on how badly the currency has inflated.

But, if and when Iraq revalues its dinars, pretty much the only place you’d be able to exchange the old ones for the new ones would be in Iraq. So, if you’re not planning on or able to make the trip to Baghdad, you’ll be stuck with your old, worthless currency. And dollar to dinar, your investment won’t have grown at all even if you are able to exchange old for new.

Also, while the value of a pegged currency is determined by a country's central bank, the possibility of a massive revaluation (such as what is being proposed for the dinar) is slim to none. In the history of the world, there have been several revaluations, but never large and never quick.

For example, China has revalued the yuan by around 20% over the course of about a decade. And that was a devaluation — China made its currency even cheaper in terms of U.S. dollars to boost exports.

But further on in this report you'll see why even a 20% increase in value wouldn't let you break even on an investment in the dinar.

So, dreams of making millions overnight are exactly that — dreams.

That being said, redenomination and revaluation sound similar, so it's easy to get confused. But even when a currency's value is pegged to other currencies and controlled by a central bank, it's not going to skyrocket in value overnight — likely not even over the course of many years.

Different Currency, Same Scam

The dinar isn't the first, nor is it the only currency that scammers use to part investors with their money. I've also been asked about (and seen offers myself for) other currencies.

The Vietnamese dong — another severely inflated currency — is a popular one these days.

As was the Egyptian pound a few years ago.

None seem to have gotten as much mileage as the dinar scam, but all run along the same lines. Buy this currency and make millions in profits overnight when the government magically changes it from worthless to equivalent with the U.S. dollar.

How the Scam Works

Basically, through a combination of investors' greed, alleged inside information from deep within a government, and the fact that you can accept physical delivery of the currency (touch it, hold it, show it off to friends while bragging about what a great investment you stumbled across), scammers have been able to part investors from millions (if not billions) of dollars. In fact, just recently a scamming ring that bilked investors out of $24 million here in the U.S. was broken up by the FBI.

The scammers would profess to have inside information about a revaluation that was soon to take place that would put the dinar on par with the dollar and mint instant millionaires and billionaires when it did. They regaled potential investors with statistics about Iraq's oil reserves and the money that would add to the economy when sold on the open market.

The scammers also said they had special permission from the U.S. government to deal in dinars and that they had connections within the Iraqi government that would tell them exactly when the change was about to take place so they and their clients could load up on dinars right before and get rich overnight.

And even though we all know that if it sounds too good to be true, it's likely a scam, many investors still went for the bait and invested large sums of money.

Iraq Is Not Kuwait

That may seem like an obvious statement, but the comparison is another tactic used by the scammers to sell unwitting investors on the Iraqi dinar.

You see, they compared Iraq and the dinar to Kuwait and its currency. That’s because, after Iraq invaded Kuwait, the value of that currency dropped exponentially. But then, a few months later, the U.S. helped drive out the invading army and reinstate the previous government. The Kuwaiti currency rebounded to its pre-invasion value and investors who’d accumulated it during the drop made a tidy profit.

But that was because of two major factors that aren’t present in Iraq. First, the majority of Kuwait’s wealth was held in banks. Those weren’t available for Saddam Hussein’s government in Iraq. Second, the same government was reinstated after the conflict ended. The only thing Iraq and the dinar have in common with the previous regime are the names “Iraq” and “dinar.”

Why Dinars (and Dongs) Won't Make You Rich

As I've already explained, the value of a currency is set on the open market, and a government isn't going to have much luck changing how much other people will pay for it. Even currencies like the dinar are pegged to currencies like the U.S. dollar and euro that float freely based on demand and supply.

But another point to make about these scams is that the perpetrators are taking a cut — an exchange fee — from investors, are charging for delivery of the notes, and aren’t even offering the notes at the official exchange rates.

For example, I found a site that's still offering to sell you Iraqi dinars. For $261 (that includes shipping), they'll send you 250,000 in dinars. Not bad, right? Wrong! At the current exchange rate, $261 should get you about 304,470 in dinars. So, if you take the bait and buy from that site, you're already down 22%. The dinar has to go up 22% just for you to break even! Still sound like a good idea?

It's the same with sites offering Egyptian pounds and Vietnamese dongs. You lose so much in the initial transaction that even if the currencies do increase, you'll still end up losing money.

Part of the loss is because of the spreads offered by the few banks that carry these thinly traded currencies — they keep them wide so they can make enough of a profit to make it worth carrying them.

The rest of the loss is because you're getting scammed.

What's Next?

Fortunately, many people have caught on to the dinar scam. A cursory search of the Internet yields hundreds of articles warning you against these investments. In fact, the scam became so widespread that the FBI is going after these companies.

Side note: If you feel like you've been the victim of such a scam or have been contacted by someone trying to sell you on it, you can and should report them to the FBI on the agency's website.

So, the dinar scam is coming to an end. But that's not going to stop these scammers from trying to get your money. There are still a lot of other untapped currencies for them to push.

I wouldn't be surprised to see the Iranian rial make a move to replace the Iraqi dinar as the scammer's choice.

You'll be told about the untold wealth lying under Iran's oil fields. You'll hear about the progressive moves being made by the government there. You'll be reminded that the U.S. sanctions on exporting oil have recently been lifted and that as the crude starts to flow, Iran will get rich and the currency will skyrocket.

Iran may get rich (once oil prices recover more), but the currency is not going to skyrocket. I would imagine it will see some upward momentum, but not enough to make you rich overnight, and probably not enough to recoup that 22% to 25% loss you took in the initial transaction.

So, watch out for the next round of currency scams.

Some Currencies You Can Bank On

If you really want to invest in currencies (and aren't an expert in the foreign exchange markets), pick ones that are more common and easier to get. To get you started, I'll give you a few of my favorites:

euro dinar bonus report The Euro: It trades around $1.04 for one euro. This is way lower than it's been in the recent past and is influenced by the uncertainty of investors about 1) European economies and 2) the stability of the union itself. The EU has a pretty strong economy, though, and while it's going through a tough time, it is likely to stay together. As the economy recovers and the fear abates, the exchange rate will go back up, and your euros will be worth more than what you paid.

british pound dinar bonus report

The British Pound: It's trading at about $1.22 for one GBP. Again, that is a historically low rate (not the lowest ever, but far lower than the $2 a pound it averaged for decades before the Brexit). Again, this is based on uncertainty about the British economy after its exit from the EU. But again, the United Kingdom has a pretty solid economy, and while it may not get back to the $2 per pound rate we knew in years past, it should recover from current levels

canadian dollar dinar bonus reportThe Canadian Dollar: Let's not forget our neighbors to the north. The CAD is trading around $0.75 per CAD. This is a currency that was just recently on par with the USD and a country whose economy is strong enough that it could easily get back there.

The one common thing about all these currencies is just that: they're common. Banks carry them and aren't going to charge you an arm and a leg to exchange your dollars for them. With them you're not going to start off 25% in the hole like you would with those other currencies I talked about above.

So, if you're not planning on traveling to Iraq, Vietnam, Egypt, or Iran in the near future, you're better off holding onto your dollars and investing them in the stocks we recommend in Wealth Daily and in our premium services like The Wealth Advisory.

If you are heading to any of those countries, however, by all means, get some of their currencies — it'll save you some cash when you're shopping for souvenirs over there if you can pay in dinars, dongs, pounds, or rials. Otherwise, avoid them like the plague. And pass the warning on to your friends and family. I don't want to hear about anyone else losing their money on scams like these.

Welcome to Wealth Daily

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To investing with integrity (and spotting scams a mile away),

Jason Williams
Editor, Wealth Daily

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