Yesterday, DinarRecaps, posted an article of mine called "Will The Dinar Come Out At 1 To 1? I think not! And here's why..."
It was November 9th, 2019 https://dinarrecaps.com/our-blog/will-the-dinar-come-outnbsp-1-to-1nbsp
and I thank the Good folks at Recaps or it, God Bless them.
Now it may have been yesterday if you're reading this article today or it may be been some time ago, it was certainly a couple of years ago for me when I originally wrote it.
However, I had a wonderful question emailed to me by a gentleman named Tim. So here is his question and my reply below:
Hello Mr Ali,
Read your breakdown of dinar. Can you give a little more info on something that was in your article.
You said iraqis would take a 25000 dinar note to bank and get a new 25 dinar in return. But you said that everywhere else in the world you would take. 25000 dinar to the bank and multiply it by the new exchange rate. That would have drastically different values.
25000d into 25d x 3.85 = purchasing power on Amazon of 77$.
Or 25000d into 250- 100d notes x 3.85 = purchasing power on Amazon of 80000$.
Or in us: 25000d into 25 d x 3.85 = 77$
Why should it be a lop in Iraq but not everywhere else?
Ok Tim, let's put aside the numbers and look at this from a whole perspective. Because the concern here is NOT the calculations but whether the 25,000 will still remain as 25,000 whether in or out of the country.
I am not looking at this from any inside information but just a common sense and logical approach, that is how I always look at things so let's keep this in mind.
Firstly Tim, I never said it was going to be a LOP in country, you did.
If we analyze the options, we can start here: Either they will cut zeros off the note or they will not. That's the first thing.
And I said in my article, countries suffering from hyper-inflation have cut zeros. Iraq is NOT, therefore they do not need nor do I believe they will cut any zeros, therefore NO LOP. So they are not removing zeros from the note and the 25,000 will still remain as 25,000. Therefore the notes inside and outside of Iraq should still remain the same.
I hope that's clear so far. OK let's look at this a bit more further.
Next, If they maintain the note size of 25,000, and I'm talking in country, then it is only logical that ALL of Iraqis holding IQD will become extremely wealthy... 100% of the country. Again, logically they cannot have this, the consequences are too great.
So that makes us think, logically again, that there must be 2 processes. If the 25,000 in Iraq still remains as 25,000 then it means the whole of Iraq will become extremely wealthy, as I said. Now we know the project to remove 3 zeros was not to remove zeros from the notes but was to pull in the large bills, 10k 25k, 50k, from the hands of the general public and we can conclude as we have been told, the majority of these notes has already been pulled in.
So now it gets tricky. Pay close attention, I'll give you couple of scenarios that I believe may play out.
Scenario 1: So Let's assume the 25,000 will remain as is, in and outside of Iraq, how will they achieve this?
As I said in my article, inside Iraq, the citizens will take their 25,000 note to the bank for a 25 note of the new dinar, BUT what if that will not be the case since the CBI has already pulled in 90-95% of the large notes. What if, the 25,000 still stays as 25,000, in Iraq? The 5% of the notes remaining right now are most likely in the hands of the greedy politicians and big businessmen and that means the rich will get richer scenario, but what is happening now? They are going after all the corrupted politicians and taking back the money they stole and prosecuting them for crimes. The rich will not get richer. So maybe once they are done to a point they will raise the value of the Dinar and the 25,000 may still remain 25,000 in country and the citizens will exchange like us and have some wealth but not enough for the whole country to stop working. They will pay their debts, travel, enjoy life and then back to work. For all of us, outside of Iraq we'll go to the bank and exchange back to our local currencies and everyone is HAPPY! So that's one scenario.
Now, let's look at this from another logical approach, Scenario 2:
They will still go after the corrupted politicians taking back the dinars they stole but THIS TIME, they will control the wealth of the citizens and tell them, bring us your 25,000 note and we will give you a new 25 note. Notice they never said we have removed zeros, a swap for swap. So what choice do the citizens have? Everyone has a choice, right? Do the citizens know that they have choice? Have they been told, that they can take their notes to Kuwait and you'll get alot more than 25 dinars? Do you think the CBI will tell them this? The CBI is holding the trump card (NO POTUS pun intended) over the citizens. The citizens can keep their 25,000 notes and complain about it and after 10 years those notes will be demonetized and then worthless or they can just take the note to the bank as good little citizens the CBI has been programming them to be, via bill boards etc. and they change their money and move on. To me, it would be like a bait and switch technique on to the citizens but what choice do they have, they cannot just pickup and move somewhere else? Immigration is becoming and more tougher in every country. So they have no choice. What the CBI says, you follow. The Iraqis as I see it, may get the short end of the deal, but in time, they can pick themselves back up and move forward.
Another piece of evidence that points to scenarios 2 and this is something you have to think about right here right now is, why has the CBI been doing very strong banking campaigns to get the citizens to bring in their remaining IQD and deposit the money into bank accounts? WHY? Why are they bribing the citizens with Visas and Mastercards and Debit cards and gifts and such things? WHY? Actually the reason is very simple, once the citizens deposit the money into the bank, the money is no longer in their hands any more, it's in the Bank...Digital, can you see where I am going with this? So let's say I am an Iraqi and I have 500,000 Dinar in my bank account and once the CBI pulls the switch. My account now shows 500 Dinars. Presto! Did I have choice, nope! Any choice that I did have, it's too late now. So now they do not need to worry about the dinar in the hands of the citizens because alot of them have been opening bank accounts and depositing the dinars. Remember, logically as I said, there has to be a control on the wealth of the citizens. This is how I see it and if I was running the CBI, this is what I would do. I do not want the citizens to be super wealthy because the consequences will be too great.
Now, going back to our LOP scenario. If Iraq was going to LOP in country and out of Iraq, would you think they would be concerned about how much DInar was leaving Iraq and how much was entering Iraq? Now, think logically? What difference will it make? You going to cut 3 zeros from the notes, in and out of the country, so who really cares how much currency comes in and how much goes out? Is that a fair question?
OK read on, here is some very interesting evidence that tells us the CBI is and has been putting tight restrictions on the currency entering and leaving Iraq.
2016 and before, you can enter Iraq with virtually any amount of Dinar and leave with any amount of Dinar, then I noticed around July of 2017, entering Iraq you could only bring in 8 x 25K notes, leaving 4 x 25K notes. I know this for a fact because I was planning a trip to Iraq early 2017 to try and exchange out a $1.75 usd per Dinar (But that's another Dinar story) and then in July they changed the amounts of Dinar that can enter the country and that put a damper on my trip.
February 2019, that restriction changed again to "Up to 25 Dinars can be imported and sums no greater than 5 Dinars can be exported out of the country." ... Now did you pay attention to what you just read? Read it again and again. Did you catch that 25 Dinar and 5 Dinar? When the smallest note is 250 Dinars? hmmmm, interesting, isn't it?
Now here's the link that I got that information:
and that has been changed yet again to ANY Dinar entering the country must be declared. So that means if you have 1 note you must declare it. Why the BIG change, so we can assume if they are controlling the DInar coming in, they are definitely controlling the Dinar going OUT. But one may think did they let the cat out of the bag too early? By displaying 25 Dinars and 5 Dinars? And then removed it, you know what, this can actually be considered as more proof that Iraq will raise the value as in one of my previous articles. Anyway, let's continue.
Because some citizens are becoming aware that they can change their notes at higher values out of the country, the CBI needed to clamp down on this and they implemented tighter controls. And my reasoning for this, is the CBI wants to control the wealth of the citizens.
Iran is the same, my supplier that I get Rials from, is an Iranian, he said, Mr. Ali, now if they search your bags and find you leaving with Rials, they do not question you any more, they take it. 2017 he could bring back to Malaysia 1,0000 notes of 100K Rials. About 10 x 100 note bundles.. easily. last July he brought 5 bundles and hid it among things in his bags because he was scared they would find it. He did not want to risk bringing out too much. Next week, he is going back to Iran for 1 month, and he said he will try to bring back Rials but no promises, as he said now the control is even more tight.
So, it makes you wonder and think what is the purpose for the clamping down. It is and it must be for a very important reason. The only thing I can see, is they are controlling the movement of the money for a reason, the RV and to control the wealth of it's citizens.
OK Tim, so that's a couple of scenarios that I believe can play out. How it goes, I don't really care, as I see it, either way, my 25,000 will still remain as 25,000. As for the Iraqi people, well that's another story, they have survived for 1,000s of years and will continue to survive. Selfish as that may sound on my part, but life goes on as we know it.
OK my friend, take care
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