Dinar revaluation

From RationalWiki
Jump to: navigation, search
I, the crown prince of Nigeria, offering you
Icon scam.svg

Dinar revaluation is an investment scam that appeared in the mid 2000's.[1] The scam is based on the rapid devaluation of the Iraqi dinar in the years after the Iraq War.[2] In the early 1990's the Iraqi dinar was worth over three dollars.[3] Year of sanctions, warfare, social collapse and "peacekeeping actions" have reduced its price to 1/1500th of an American dollar.

People with alleged "inside sources" have told legions of pigeons investors that the USA is planning to revalue the dinar at some point in the future, either pinning it directly to the U.S. dollar or restoring it to it's former 1990's value. They then proceed to sell dinars, either in cash or in a questionable holding account with a markup of up to 25%. These hopeful investors hold on to their barely-worth-the-paper-it's-printed-on currency and look forward to Uncle Sam giving them a miracle 100,000% return on their investment.[4]

Dinar scammers can be difficult to prosecute since it is not illegal to sell foreign currencies as a numismatic collectible. Other scammers register as broadly defined "money service businesses."[5]

Reasons to believe[edit]

The Iraq War was an absolute quagmire that required occupation and the fighting of various insurgent groups for years after America and its allies had officially declared victory. If someone deeply held the belief that America was fixing Iraq and that nothing America did there was wrong or a bad idea, then Iraq's recovery seem highly feasible. The scam relies on the idea that there's just a few things wrong and that the moment X infrastructure is rebuilt or Y terrorist organization is defeated the country will mend right up and its economy will go off like a rocket.

Iraq is still Iraq. That means the land sits atop one of the finest oil reserves in the world. It has the potential for an economic comeback.

Neither of these facts leads to any reason why or how an overinflated, overprinted currency could have its buying power increased by orders of magnitude, but such things could be implied to the right sort of person in the right mindset.

The Trump bump[edit]

Dinar revaluation scams received a boost during the Trump presidency. His February 19th, 2017 speech mentioned that currencies would be on a "level playing field."[6] He was almost certainly talking about devaluations in the Chinese yuan following U.S./Chinese trade wars and tariffs but if one had a pocket full of dying dinars and a running start they might make that leap of logic.[7]

President Trump's questionable claims[8] of defeating ISIS could be seen to fulfill the condition of the one final piece of the puzzle to set the Iraqi economy right.

There was also an ongoing rumor that Donald Trump was heavily invested in Iraqi dinars and would initiate revaluation to enrich himself. It would not be off brand for him, but it was just another rumor about some miracle that President Trump might pull off but ultimately wouldn't.[9]

Reasons to disbelieve[edit]

The most visible problem is that the revaluation of the dinar shows all the earmarks of a failed prophetic movement. The promises are huge, the time of fulfillment is forthcoming and the failed due dates will just keep coming, only to be replaced by later dates which will themselves fail to produce results.

The three dollar price of the old dinar came from a different political climate under a different dictator. The price was arbitrarily pegged before the invasion of Kuwait.

The government of Iraq is not too stable and its debt is very high compared to its GDP. If the country's debt is valued in its own currency a hyper-deflationary currency would make their debt unpayable. This would extend to any debts calculated in Iraqi dinars. It would simply be a risky and thoughtless maneuver for the government of Iraq to accept such a deal.

The Iraqi Dinar is not a ForexWikipedia listed currency, major banks won't touch it and the best way to get a major currency for your dinars is to sell it at a modest loss to the shady dealers who sold you those dinars.

A 2020 devaluation of the dinar by Iraq's Central Bank in the wake of a year of very low oil prices puts yet another nail in the coffin of potential dinar millionaires.[10]