Reports of New Fake Dinars in Circulation

by Cthylxx, the Renegade Sun Jul 03, 2011 12:42 pm

Reports of New Fake Dinars in Circulation

Posted on 29 June 2011. Tags: Corruption, counterfeiting, IQD, iraqi dinar
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On Wednesday a number of currency dealers in southern Iraq’s Nassirya City reported the spread of a new counterfeit 10,000-dinar notes, according to Aswat al-Iraq.

“We have noticed the existence of a false 25,000-dinar currency in the market, being cautious against it, but a new false 10,000-dinar note, with a very close print to the original currency, had been spread last week,” a shop-keeper told the news agency, saying that “this is a very serious matter and the government must stop it in every possible means.”

A petrol filling station worker said that the “number of cars trying to fill petrol in his filling station was huge, and he and his colleagues can’t easily differentiate between real and false currencies.”

Iraq Business News has also received unconfirmed reports that a judge in the Mosul area has been arrested for possession of fake Iraqi dinars.

The reports come just days after Iraq’s Central Bank announced that it would redenominate its currency.

(Source: Aswat al-Iraq) Documentation

I'm providing this information in an attempt to allay the fears of those investors concerning the news of an IQD "redenomination." The process of "redenomination" is one of many steps, and possibly just as many definitions. The objective of the CBI is to replace the current IQD denominations (50, 250, 500, 1000, 5000, 10000, and 25000) with banknotes designed more in the vein of the USD (1, 5, 10, 20, 50, and 100). In order to do this, the "3 zero" notes must be removed from circulation. That removal process, or capture, has been ongoing for some months ... or so we think. There have been multiple reports from "boots on the ground" and Iraqi citizens of the increasing scarcity of the "3 zero" notes, causing difficulties when conducting their normal day-to-day business transactions. There have also been some small protests and demonstrations bemoaning this fact in a few of the outlying provices. It's speculated that as the CBI receives a "3 zero" note in the routine of daily business, it is captured, removed from circulation, and its intrinsic value is returned via the lower denominations. The inability of the average Iraqi citizen to procure the larger banknotes have created a vacuum into which the counterfeiters have inserted themselves, thus the above referenced article.

Furethermore, the CBI has recently announced their intent to complete the recapture of the "3 zero" notes (Documentation). Of interest is a reported mistranslation of the article. The Arabic word for "implemented" can also be interpreted as "accomplished" ... it's a word whose meaning must be defined through context. Thus the last phrase might more correctly read "...the project will be accomplished by mid next year." This statement is again supported by anecdotal evidence of the growing rarity of the larger banknotes, leading one to the conclusion the collection process has be ongoing for some time. This article can lead us to further "educated" speculation that the "deadline" for exchanging ones "3 zero" notes will be on or about (in my estimation) June 30th, 2012. After that time the "3 zero" notes will devalued (yes ... lopped) and will no longer be worth their face value. Again, this is only good news.

Rather than get rattled by use of the term "redenomination" one might be better served to interpret the "impending redenomination of the IQD" as an "impending realignment of the IQD." Why would CBI officials publicly state their intention to replace the prevailing banknotes with lower denominations, especially in light of the current purchasing value of the IQD? Such a move recalls to mind the Weimar Republic where Germans were literally forced to purchase a loaf of bread with wheelbarrels of currency and the currency was actually used as wallpaper!(Documentation) Even mild speculation would lead one to the opinion that such an action by the CBI is literally worthless and meritless absent a corresponding increase in value. Iraq would join history alongside post WWI Germany and present-day Zimbabwe ... and I don't believe Iraq is excited by that prospect, nor do I believe it necessary.

Further speculation holds that the lower denominations were printed as a part of the original 2003 De La Rue order. A recent article (Documentation) stated a total sum of IQD28.5 TRILLION in circulation, reflected in 5 TRILLION physical banknotes. If one would care to "do the math" it's easy to discover the average value of a banknote would be IQD5.6 ... continue with the math and one will discover the aveage value of the notes currently in circulation is IQD5,971 (Documentation Average value of the 7 banknotes currently in circulation). My conclusion is that the average as stated by Mr. Saleh in the aforementioned article can only be realized with the addition of the lower denominated notes.

In summary, for the first time in the 4-1/2 years that I've been involved with this opportunity, ALL the news is ALL good. The compass appears to pointing in the right direction but as an event of such magnitude is a step-wise process ... we have to be patient and let it happen. Pay absolutely NO attention to "intel" as it's (at its most common denomination) only gossip after all. In fact, the wrong "intel" (such as data provided by a banking officer) might in the very near future be considered as "insider information" and lead to punitive measures. As always, do you own due diligence.

Having said that, I am neither an expert, economist nor mathematician. My opinions and conclusions are my own. Make no decisions nor take any action on the strength of my words alone. Never invest more than you can afford to lose.