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 M2 does it really matter

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Kevind53
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PostSubject: M2 does it really matter   Tue Apr 24, 2012 6:38 pm

Many have made the argument that an RV can not happen because of the size of it's M2. Yet as I have been studying M2, I have noted something. Some rich countries have a much larger M2, some a much smaller, likewise some poor countries have larger M2 and some smaller. http://search.worldbank.org/data?qterm=M2&language=EN&format=

For example Japan's M2 is 1,092,434,300,000,000, Indonesia 2,471,205,870,900,000 Lebanon 138,694,683,000,000, while Saudi Arabia's M2 is 1,092,760,050,000 clearly, M2 is NOT an indicator of a nations wealth.

The data comes up as a popup that I can't link here but if you go to http://search.worldbank.org/data?qterm=M2&language=EN&format= and click on the second topic you can view it on line or download the spreadsheet. Comments?

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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 7:30 pm

Vic put:


vic1 to dinarmama7:
So, Barzani...COMES to the US meets ALL the USUAL People...However ..who threw the Party? EXXON/MOBIL CEO....MR.REX TILLERSON

vic1 to dinarmama7:
WOW...Where was he last MONDAY?

dinarmama7 to vic1:
In the US?

vic1 to dinarmama7:
IN RUSSIA....CLOSING a BIG DEAL....so WE through EXXON....KEEP a GOOD EYE on RUSSIA....PUTIN..Is NO FOOL...HOWEVER HE also....MARCHES to OUR ....MUSIC!

vic1 to dinarmama7:
SO, Anyone that tells YOU this Will NOT RV, or .10 cents or ANY BS....Tell them to Listen to Mrs. CLINTON....HECK she spending 6 Billion ayear to GIVE SECURITY LESSONS....SHE said That IRAQs INCOME and ECONOMY would pass CHINS in 2 YEARS....Go see how much GROWTH IRAQ had...and What china DID? YOU WILL BE SURPRIZED!!!

vic1 to dinarmama7:
Oh, Maliki...TELL the BOYZ to BRING the DOWNED DRONE to BAGHDAD...May 23rd!
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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 7:40 pm

Let's get it done, already-Twisted Evil Rolling Eyes
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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 7:42 pm

And not one of the countries mentioned has a rate more than $.26 (Saudi)

http://www.oanda.com/

Indonesian Rupiah USD value = $0.00011
Japenese Yen = $0.01231
Saudi Riyal = $0.26662
Lebanese Pound = $0.00066

So how can a country raise their rate 100,000%+ with so much money to back?

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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 7:47 pm

@therealbutterfly wrote:
And not one of the countries mentioned has a rate more than $.26 (Saudi)

http://www.oanda.com/

Indonesian Rupiah USD value = $0.00011
Japenese Yen = $0.01231
Saudi Riyal = $0.26662
Lebanese Pound = $0.00066

So how can a country raise their rate 100,000%+ with so much money to back?



The original plan was oil, at it hovering around $100 per barrel and the Iraqi's finding more (new) everyday, maybe, just maybe.......

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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 7:50 pm

@Kevind53 wrote:
Many have made the argument that an RV can not happen because of the size of it's M2. Yet as I have been studying M2, I have noted something. Some rich countries have a much larger M2, some a much smaller, likewise some poor countries have larger M2 and some smaller. http://search.worldbank.org/data?qterm=M2&language=EN&format=

For example Japan's M2 is 1,092,434,300,000,000, Indonesia 2,471,205,870,900,000 Lebanon 138,694,683,000,000, while Saudi Arabia's M2 is 1,092,760,050,000 clearly, M2 is NOT an indicator of a nations wealth.

The data comes up as a popup that I can't link here but if you go to http://search.worldbank.org/data?qterm=M2&language=EN&format= and click on the second topic you can view it on line or download the spreadsheet. Comments?

Kevin,
You are 100% correct in the idea that M2 is NOT an indicator of a nations wealth, but it is a major factor when you add the actual value of the currency to the M2 number, it puts that number into perspective... That's been the whole argument when talking about the idea of Iraq even considering a straight RV of their currency to being equal to the USD...

CJ

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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 8:03 pm

@1alaskan wrote:
@therealbutterfly wrote:
And not one of the countries mentioned has a rate more than $.26 (Saudi)

http://www.oanda.com/

Indonesian Rupiah USD value = $0.00011
Japenese Yen = $0.01231
Saudi Riyal = $0.26662
Lebanese Pound = $0.00066

So how can a country raise their rate 100,000%+ with so much money to back?



The original plan was oil, (I agree that was the plan to pay for the war) at it hovering around $100 per barrel and the Iraqi's finding more (new) everyday, maybe, just maybe.......

The problem with that logic to me is that the US has more oil reserves, more natural resources and not to mention infrastructure to get to our resources to market than Iraq, but yet they will have over twice the value of currency than the USA if they were to RV at a 1 to 1 rate with no re-denomination $35 trillion to USA's $16 trillion... That just makes no sense to me what so ever...

CJ

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Inspired by Splovengates "Be ready between sunday and monday night, or maybe tuesday or wednesday, could also be thursday but definitely by friday.... probably next week, monday or late tuesday night, wednesday morning to hear the rv and should be cashing in on the following tuesday the 1st part of january or february. Sooner more than later. But no later than the beginning of 2013. Certainly not before then. Until then, let's enjoy the ride!


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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 8:09 pm

You could be right on the money issues,

The US may have more resources, but the world knows under the current climate in the US, everytime any company wants to drill, dig, or build something to help make the US more independent, some group sues to stop, ties it up for years, so, odds of it coming to market anytime soon, slim to none. No way to invest your dollars when you can put them in another projects, like in Iraq that will come on line much sooner.

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Yesterday would have been better, but today is a good day

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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 11:03 pm

Yes, I just chose a few examples in USD. My point is that there are a number of countries with much higher M2 that have significantly higher currency values then the Dinar, and likely some with a lower M2 with lower values and vice versa. There for to use that as an argument of what can and can not be supported may not be valid.

Further, since M2 only measures actual currency in circulation and not total debt is it even a valid comparison? Who has more money the person with 100K in cash and no debt, of the person with 400K and 500K of debt? M3 might be a better measure but it is not available for most countries.

Taken as a percentage of GDP Iraq's is far lower than most developed or comparable countries. So there would appear to be plenty of room for growth especially as their GDP has no place to go but up. Not saying how big an RV, too many other factors we have no way of factoring IMO, just saying the M2 does not rule it out in and of itself.

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PostSubject: Re: M2 does it really matter   Tue Apr 24, 2012 11:30 pm

I just realized on re reading some of the WB info that they give the figures in currency in circulation not USD. So that would put Japan's at approx 13T USD and Saudi Arabia's M2 at 29B, and Iraq at 52B USD. The US M2 is about 12T ... gonna have to sleep on this, but still it makes me question the validity of the M2 as a factor in the RV/RD debate.

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PostSubject: Re: M2 does it really matter   Wed May 09, 2012 4:39 pm

Respectfully, this is ridiculously elementary. It’s like people saying Kuwait is $3.50 therefore Iraq must be $3.50. You have to take into account money supply, exchange rate and GDP to get any real comparison. I copied these four post made years ago on a dinar board. The numbers are all old, from 2007 time frame. Sorry, but I’m not about to take the time to update them. The numbers would obviously be higher, but the ratios would be almost identical. They paint a VERY CLEAR picture. The lowest valued currencies in the world all have MASSIVE money supplies. The highest valued currencies in the world all had very low money supplies… With the exception of economic super powers like the United States and the United Kingdom. When comparing Iraq and many other countries money supply to GDPs, Iraq was perfectly in line with where they should be.
If Iraq wants to move from the lowest valued list to the highest valued list it is clear as can be that they have to reduce their money supply by a factor of 1000. They have to go from 30 Trillion currency in circ and 70 Trillion M2 back to 30 Billion in circ and 70 Billion M2…. Which is exactly what they have said they will do with the delete 3 zero plan… which is a lop and not some fantasy RV made up and pushed only on dinar forums.

Lowest Valued Currencies



Country, Rate, Money Supply(m2), $Value, GDP
Korea, 931, 1,800 Trillion, $1.93T, $1.18 Trillion
Mongolia, 1163, 1.2 Trillion, $1.0B, $5.78 Billion
Tanzania, 1247, 2.8 Trillion, $2.25B, $29.2 Billion
Iraq, 1238, 20 Trillion, $16.2B, $88 Billion
Lebanon, 1512, 80 Trillion, $52.9B, $21.4 Billion
Uganda, 1692, 3 Trillion, $1.8B $52, Billion
Colombia, 1935, 104 Trillion, $53.7B, $336 Billion
Belarus, 2144, 16.5 Trillion, $7.7B, $80.7 Billion
Venezuela, 2147, 66.5 Trillion, (05) $31B, $176 Billion
Sierra Leone, 2935, 687 Billion, $.23B, $5.3 Billion
Indonesia, 8839, 1,200 Trillion, $136B, $935 Billion
Iran, 9252, 950 Trillion, $102B, $610 Billion
Vietnam, 16075, 810 Trillion, $50.4B, $258 Billion


Highest Value Currencies


Country, Rate, Money Supply (m2), $Value, GDP
Kuwait, $3.46, 16 Billion, $55.4B, $52 Billion
Malta, $3.15, 3.2 Billion, $10.1B, $8.1 Billion
Bahrain, $2.66, 4.3 Billion, $11.4B, $17.7 Billion
Oman, $2.60, 4.4 Billion, $11.4B, $43.8 Billion
Cyprus, $2.33, 11.8 Billion, $27.5B, $17.8 Billion
U.K., $1.98, 1.4 Trillion, $729B, $2 Trillion
Latvia, $1.92, 5.6 Billion, $10.7B, $35.1 Billion
Jordan, $1.41, 13.9 Billion, $19.6B, $28.9 Billion
Cayman, Island, $1.23 5.1 billion, $6.3B, $1.9 Billion
United States, $1 $7.2 Trillion, $7.2T, $13 Trillion

Now compare the $value of the money supply to the countries GDP. Notice that…
Korea (1.6 times)
Lebanon (2.5 times)
Kuwait (just barely more than)
Malta (1.2 times)
Cyprus (1.5 times)
Cayman Island (3.3 times)
Are the only countries on the list that have more money supply than they have GDP
2 are from the low list and 4 are from the high list. Most of the countries have a a money supply much much less than their GDP.
If Iraq was to raise their exchange rate so that their money supply equaled their GDP, which would put them higher than all but 6 of the countries on these lists. The dinar would be valued at .0044 or 227 dinar per dollar.
If Iraq was to revalue at 1:1 like some claim will happen, they would suddenly have a money supply 227 times higher than their GDP. That would put them SLIGHTLY out of line with the rest of the world. Slightly obviously isn’t the word to best describe how out of line they would be.


Money supply to GDP ratio.
When I was invested in this I compared numerous countries in many different ways. One of them was money supply to GDP ratio.
These numbers are about a year old, so they may have changed a bit, but they haven't changed enough to really make a difference in the point they make.


(high value currencies)

Kuwait has a money supply that is 106% of it's GDP
Malta is 125%
Bahrain 64%
Oman 154%
UK 36%
Latvia 30%
Jordan 68%
USA 55%



(low valued currencies)

Korea 163%
Mongolia 17%
Tanzania 8%
Columbia 16%
Belarus 10%
Venezuela 41%
Indonesia 15%
Iran 17%
Vietnam 20%

Saudi Arabia is 41%

Iraq is currently about 20%... which is pretty much right in line with all these other countries.
If they were to revalue to 1:1 their money supply to GDP ratio would be 21600%. That would put them slightly out of line with the rest of the world.
Even 30 cents per dinar would leave them with a ratio of about 8700%... still a bit out of whack.

If they went to 200%, which is still higher than any other country on the list. The rate would still be less than a penny... about .7 cents per dinar or .007

A 100% ratio would be about .3 cents per dinar or .003


Here’s something I find quite entertaining lately. There have been dozens of articles out of Iraq lately where officials and such are complaining about the amount of dollars being smuggled out of Iraq. Is that not funny as all get out?
People have been smuggling trillions upon trillions of Iraqi dinar out of Iraq for years selling it on the internet in a massive scam. I haven’t seen too many Iraqi officials complaining about that.

Just so some understand why that is:


If Iraq has allowed 5, 6, 7 trillion dinar to leave Iraq and be held by speculators around the world. That’s 5, 6, or 7 Billion dollars that have filled their FX reserves for FREE. That’s a pretty substantial amount. That’s roughly 10% of their entire reserves. It’s no wonder they canceled the redenomination. They probably don’t want to have to give this money back and are probably planning more on how to trap the money outside of the country once they do redenominate.



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PostSubject: Re: M2 does it really matter   Wed May 09, 2012 5:01 pm



That is some very interesting stuff right there!!! I don't have the time or the brains to come up with credible information to refute this..

Anybody care to take a stab at this one??? Any thoughts??
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PostSubject: Re: M2 does it really matter   Wed May 09, 2012 6:04 pm

Well I am no expert, but dcj1 sent ths to me in a PM, and here is my reply:

I have looked a lot at this as well ... it's really hard to say what the correct scenario is. Some of the numbers are contradictory, If you look at per-capita income vs GDP, they are way too low, lower than any other ME country. Even resource pour countries have two and even three times higher income than Iraq. M2 may be deceptive, as much may be held by countries like the US and GB with the intent of buying oil with it over an extended period. The dollarization of Iraq itself has likely taken a lot of it out of circulation as well. I suspect that much of the supposed M2 supply is sitting in various central banks.

Even from Iraq there have been conflicting articles, some indicating that a LOP would happen, some indicating otherwise. There have also been many reports indicating their goal is to have the dinar at least at par with the USD. Personally, if they want to reestablish the dinar as currency of choice in Iraq, the Dinar will have to be worth significantly more than the USD in order to pull the USD in.

People have not been smuggling trillions of Dinar out of Iraq. Most have been sold and traded legitimately, while the smuggling of USD is having a significant impact as it is taking money out of circulation. Remember, at the moment the primary currency in use in Iraq is the USD so that is money effective removed from their economy.

I am certainly not an economist, nor have I ever played one on TV, but based on my research, I believe the IQD should realistically be in the 3 to 4 dollar range. It might come in lower, but I would be amazed if it were to come in higher. That's just my personal opinion, and I would not go out and buy dinar based on that. This is a speculative investment, and as such caries a fair amount of risk, but IMO the risk is worth it, and in our case, we invested after much prayer and study so I am confident we will make money eventually.

Last but not least, this is not a scam, you can always get out, you may lose a little bit due to spread, but you can sell your dinar back at any time. It is a purchase of a foreign currency. Best case you will see a profit, worst case, you will see a small loss. Oh one other thing you have to be careful with ... I have found that most often M2 is in the countries currency, while GDP etc is often is USD, so you can end up comparing apples to oranges. I know that tripped me up a couple of times when I first started looking at the numbers.

As I said, I don't pretend to be an expert, but this is my take on it ... and I have spent more than a few hours puzzling out the numbers the best I could.

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PostSubject: Re: M2 does it really matter   Wed May 09, 2012 6:31 pm



Thanks Kev.......................... That is a great synopsis and is plausible as far as your explaination.

I appreciate and respect you and the time you have invested in doing your homework and sharing it here on O@?! O** @!# oh what ta heck is our name now??

Anyway, thank you for your insight:)
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PostSubject: Re: M2 does it really matter   Thu May 10, 2012 12:47 am

Kevin,

Respectfully, just a few things.

“If you look at per-capita income vs GDP, they are way too low”


Iraqs 100 billion dollar GDP is 80 to 90 percent oil sales which are done in dollars and goes directly to the Gov. That only leaves about 10 to 20 billion a year as Iraq’s dinar GDP. That’s pathetically low. Iraq practically has no economy other than oil. They are an oil rich country with dirt poor people. They can not just RV their currency to make everyone's income higher. Every country in the world would do that if possible.

“M2 may be deceptive, as much may be held by countries like the US and GB with the intent of buying oil with it over an extended period. The dollarization of Iraq itself has likely taken a lot of it out of circulation as well. I suspect that much of the supposed M2 supply is sitting in various central banks.”


I simply don't believe this. There is zero proof that any country has one single dinar. It is also a distortion to tell people that Iraq has taken a lot out circulation. While it is true that Iraq has removed dinar through the auctions, they have put an even higher amount into circulation through government spending, salaries and such. The CBI of Iraq keeps a tally of all dinar put out and all dinar bought back and that’s the number they report. That number has grown almost every month for the last 7 years.

“Even from Iraq there have been conflicting articles”

I don't believe this either. All of the articles have meant the exact same thing. A redenomination. There have been multiple articles that have been misinterpreted by dinar dealers and/or gurus. There has never been an article that talked about an RV of such magnificent proportions… to believe a country would openly talk about a 100,000% RV is simply ignorance at it’s peak.

“People have not been smuggling trillions of Dinar out of Iraq”


Iraq has laws in place that limit the amount of dinar that can leave the country. The few times they have referred to the dinar outside of the country they have referred to it as smuggled.
The dollars being removed are not being removed from the Iraqi economy. They are being removed from the FX reserves of the Central Bank.

“I believe the IQD should realistically be in the 3 to 4 dollar range”


Let's see, Iraq has 30 Trillion dinar in circulation. $3 would give Iraq $90 Trillion dollars worth of dinar in circulation. The entire world right now, add all countries together, have about $6 Trillion dollars worth of currency in circ. So your low end estimate would have Iraq with 15 times more currency than the rest of the world combined… while they have less than 1% of the worlds GDP. I might have to strongly agree with you, Kevin. I don't think that you're an economist either.

“Last but not least, this is not a scam,”

If I sell you something worth $850… and I charge you $1200 (or $3500 if you are stupid enough to fall for the small denomination lies) and I do this by making up lies to make you think you will be a millionaire, when in reality there is absolutely ZERO chance of that happening and almost certainly you will lose about 50% of your money. Call it what you want. I think I'll call it a scam. I hate to say it because I believed it and owned dinar myself until I looked at the reality of the situation. But like you said, we are all adults in this investment and we have to make responsible decisions for ourselves and our families.


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PostSubject: Re: M2 does it really matter   Thu May 10, 2012 12:18 pm

I removed the name calling... restored to discussion Very Happy . Please express you thoughts but keep discussions free of name calling. Thanks for this great thread. Very interesting discussion going on. Differences of opinion, but good indeed

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PostSubject: Re: M2 does it really matter   Thu May 10, 2012 1:48 pm

@djc1 wrote:
Kevin,

Respectfully, just a few things.

“If you look at per-capita income vs GDP, they are way too low”


Iraqs 100 billion dollar GDP is 80 to 90 percent oil sales which are done in dollars and goes directly to the Gov. That only leaves about 10 to 20 billion a year as Iraq’s dinar GDP. That’s pathetically low. Iraq practically has no economy other than oil. They are an oil rich country with dirt poor people. They can not just RV their currency to make everyone's income higher. Every country in the world would do that if possible.

My point is their per-capita income is too low ... perhaps artificially so. Look at the comparable countries, even Iran and Jordan have per capita incomes significantly higher than Iraq. We all know about Iran, and Jordan has practically no natural resources and even less industry. The closest comparisons would be Kuwait or perhaps Saudi Arabia, and they are ridiculously higher.

“M2 may be deceptive, as much may be held by countries like the US and GB with the intent of buying oil with it over an extended period. The dollarization of Iraq itself has likely taken a lot of it out of circulation as well. I suspect that much of the supposed M2 supply is sitting in various central banks.”


I simply don't believe this. There is zero proof that any country has one single dinar. It is also a distortion to tell people that Iraq has taken a lot out circulation. While it is true that Iraq has removed dinar through the auctions, they have put an even higher amount into circulation through government spending, salaries and such. The CBI of Iraq keeps a tally of all dinar put out and all dinar bought back and that’s the number they report. That number has grown almost every month for the last 7 years.

You can believe or not, your choice. I am not going to take the time to go and look for the info, but it is out there. In addition many of the articles, as well as anecdotal information indicates that the CBI has pretty much swept the large denomination bills off the streets in favor of the USD.

“Even from Iraq there have been conflicting articles”

I don't believe this either. All of the articles have meant the exact same thing. A redenomination. There have been multiple articles that have been misinterpreted by dinar dealers and/or gurus. There has never been an article that talked about an RV of such magnificent proportions… to believe a country would openly talk about a 100,000% RV is simply ignorance at it’s peak.

There have been a number of articles that have come out that have spoken of increasing the value of the Dinar significantly against the USD. Read the original plan from the CBI it plainly states a target value of something like 2.71 USD/Dinar. Additionally, there are some articles that speak of the removal of the zeros as fait acompli. Obviously there has been no LOP, so they must have been speaking of something else.

“People have not been smuggling trillions of Dinar out of Iraq”


Iraq has laws in place that limit the amount of dinar that can leave the country. The few times they have referred to the dinar outside of the country they have referred to it as smuggled.
The dollars being removed are not being removed from the Iraqi economy. They are being removed from the FX reserves of the Central Bank.

I repeat, they have not been smuggled out. Some have no doubt been, but most have been purchased and exported legally by licensed dealers. Keep in mind that all of the articles we see have been translated by computer and they are at best, ambiguous. Some, I suspect, have also been deliberately misleading. No I can't prove it, any more than you can prove otherwise. We know what they choose for us to know, when they choose to let us know ... there is much we just don't know ...


“I believe the IQD should realistically be in the 3 to 4 dollar range”


Let's see, Iraq has 30 Trillion dinar in circulation. $3 would give Iraq $90 Trillion dollars worth of dinar in circulation. The entire world right now, add all countries together, have about $6 Trillion dollars worth of currency in circ. So your low end estimate would have Iraq with 15 times more currency than the rest of the world combined… while they have less than 1% of the worlds GDP. I might have to agree with you. I don't think that you're an economist either.

If you must quote me, at least include the whole quote. I also stated that it would certainly not be higher, but could quite possibly be lower.


“Last but not least, this is not a scam,”

If I sell you something worth $850… and I charge you $1200 (or $3500 if you are stupid enough to fall for the small denomination lies) and I do this by making up lies to make you think you will be a millionaire, when in reality there is absolutely ZERO chance of that happening and almost certainly you will lose about 50% of your money. Call it what you want. I think I'll call it a scam. I hate to say it because I believed it and owned dinar myself until I looked at the reality of the situation. But like you said, we are all adults in this investment and we have to make responsible decisions for ourselves and our families.

If you buy a car and drive it off the lot it immediately loses a couple of thousand in value. Does that make it a scam? A dealer expects and should be allowed to make a reasonable profit on any transaction. You bought currency from a dealer, and from what I have read, you apparently chose to sell it back, you agreed to a price when it was sold that allowed the dealer a profit. You also agreed to a price when you sold it back, again with some dealer making a profit. That does not constitute a scam, it's called doing business. The dealer has expenses he must meet, and possibly salaries he must pay. That necessitates a profit on every transaction. At the same time, he has to set his rates to be competitive with other dealers. It's called capitalism, welcome to life.

Even if it LOPS and then changes value, I expect to show a profit, perhaps not as much as I would like, but still, I will make a profit. Sooner or later I will sell this, could I lose money? Sure, it's called speculation for a reason. But I do expect to make, not lose money.

*****************
Trust but Verify --- R Reagan Suspect

"Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you."1 Thessalonians 5:14–18

       
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PostSubject: Re: M2 does it really matter   Sun Oct 02, 2016 2:27 pm

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