8-28-2012

B starts off talking about how he's the only guy out there talking about economic issues and how things really work.  I assume he means how buying lower denominations or electronic currency protects you from a lop, or that stock is currency (show me that in an economics textbook), or how Iraq can reduce its money supply enough to revalue to $1 by "reverse engineering" without lopping.  (All of these claims were documented in "The Breitling Catalog".)

B cites the MOP Feasibility Study that addresses the issue of setting the value of the dinar at $1.13 instead of $3.20.  He says that Iraq's not ready for a $3.20 currency and they have to "grow into that jacket".  Okay, let's think this through.  The largest revaluation in history was China at a little over 30%.  If Iraq revalues to $1.13 that would represent an increase of over 100,000%.  Can you see how ridiculous that is?  Okay, good.  Now, if they revalue to $3.20 that would represent an increase of over 300,000%.  Even more ridiculous, right?  So are we to conlcude then that this study is recommending an absurd increase of 100,000% over an even more absurd increase of 300,000%?  Or do we maybe factor in the reduction in money supply produced by the "Delete The Zeros" project which means that the current dinar will be replaced by a more valuable dinar with a proportionate reduction in the money supply?  Bear in mind that the report states the official valuation of the dinar as $3.208, not $.000857, so they're not talking about an RV from less than a tenth of a penny to $1.13.  They're working off the old Saddam era valuation and contemplating whether or not it would be feasible to return to that in their monetary reform plan which includes a redenomination.

You see, if they remove three zeros from the nominal value the new value will be 86 cents.  Now, would an increase from 86 cents to $3.20 be feasible post RD (lop)?  This report says no, they would be better off closer to $1.13.  So according to my understanding of this report you would have to exchange your IQD for the new dinar at a ratio of 1000:1 old for new, and then hope that it will appreciate from $.86 to $1.13 which would be about a 32% increase.  After a deduction of the 20% markup that most incurred on their IQD purchase and the 20% likely markup on the exchange to the new dinar that would leave the investor at a loss of around 8%.  Not good.

Now according to B's understanding of this report you would exchange your IQD for US dollars at a ratio of 1:1.13 IQD for USD which means your 1 million IQD would be worth $1.13 million USD minus exchange fees.  (And who the hell cares about exchange fees if they just won the lottery by turning $1,000 into more than $1,000,000 right?)

At 17:45 in B says that when he first got into this investment they weren't talking about redenominating.  No, they were talking about getting rid of three zeros and coming in at about a buck.  (facepalm)  That IS a redenomination!!! 

B then wraps it up with yet another misrepresentation of my position.  "This guy got caught telling everybody he has dinar".  Caught?  I have consistently stated for the past 11 months that I still own some, but that I sold off 95% (now over 98%) of it after doing my research last summer.  "Okay, you might make 2 cents".  I said in that first post "RV Reality Check" that the most Iraq could support is a penny or two, and that is only a remote possibility.  If they reduce their money supply (which they aren't doing) and if their foreign currency reserves grow substantially (which seems to be the case) or if they go to another means of backing their currency (which they haven't, nor have they indicated any likelihood that they will) and if conditions vastly improve in Iraq (that's not the case either) ... under the most ideal of circumstances they couldn't support more than a penny or two, and even then I doubt that they would want to given their emphasis on stability.  I have never predicted an RV to a penny.  When I stated "a penny or two" in that first post that wasn't a guru prediction.  That was an assessment of the absolute maximum conceivable potential for owning dinar as opposed to the predictions of $1-$4 that we're hearing from pumpers.  Along with that assessment I included the very real possibility of losing 100% which B has never acknowledged.  Even in this video he's telling people they better buy a "shitload more" of dinar if they only expect a 2 cent RV, without any mention of the risk.  No, I have consistently stated that you're likely to make less than a 300% return if you make any profit at all.  In fact I posted about this in "A No-Brainer" in April.  B's blatant misrepresentation of my statements should tell you all you need to know about this guy.


http://www.youtube.com/watch?v=P_tGE0zXwWY&feature=plcp

http://dinardouchebags.blogspot.com/2011/10/breitling-busted.html

http://dinardouchebags.blogspot.com/2012/02/breitling-catalog.html