Dinar Daddy: Do You Have Your RV Facts Straight?

All, Now is the time to be really solid on your RV facts. Don’t get mislead any more by rumors and hearsay. Do the research yourself and make your own decisions.

I know there’s a lot of information out there about the RV and sometimes it’s hard to know even where to start. If you’re looking to get the facts on the RV, I highly recommend purchasing Daniel Carlson’s ebook: Make Money on the Iraqi Dinar by [clicking here]

Daniel is a dinar specialist and a Dinar Daddy contributor. He sent me an advanced copy and it is THE textbook for the future of the Iraqi dinar.

Here’s a free preview that he has allowed me to publish:

Section 3: How Can I Profit Off the Dinar?

It’s a pretty simple concept – you sell your dinars for more than you paid for – but there are some complex components involved as the price of a dinar depends on the exchange rate or relative value against the U.S. dollar.

Let’s get a handle on how exchange rates work with the Iraqi dinar. Currently, the Iraqi dinar is under a managed float system. This means that the value of the dinar fluctuates according to the foreign exchange market for the dinar, but the government of Iraq and the Central Bank of Iraq have the authority to intervene and set rates to change the value of the dinar (revalue).

The foreign exchange market refers to the world-wide financial market of trading currency. It is a huge large market as the daily trading volume is near $4 trillion. It is also a very concentrated market as over 95% of all trades are between the seven most liquid currency pairs:

EUR/USD (euro/dollar

USD/JPY (dollar/Japanese yen)

GBP/USD (British pound/dollar)

USD/CHF (dollar/Swiss franc)

AUD/USD (Australian dollar/dollar)

USD/CAD (dollar/Canadian dollar)

NZD/USD (New Zealand dollar/dollar)

The primary purpose of the foreign exchange market is to facilitate international trade and foreign investment by enabling businesses to convert one currency to another currency. For instance, a US business is able to pay for Japanese imports by converting US dollars into Japanese yen in the foreign exchange market. Investors also take positions on foreign currency and use the foreign exchange market to carry out their trades. The primary way trades are made is between large commercial banks, securities dealers, international businesses and national central banks.

Right now, the foreign exchange markets for the dinar are the daily auctions held by the Central Bank of Iraq (CBI). Every day, banks buy and sell dinars from the CBI and the supply and demand from this process determines the exchange rate for the dinar. However, the volume of trades in these auctions pales in comparison to the volume of any of the seven major currency pairs. On any given day, the trade volume between the Iraqi dinar and the US dollar may be around $150 million. However, trade between the Euro and the US dollar is about $4 billion! It’s not even close! As a result, large commercial banks really have no incentive to deal with the dinar right now, because it is such a small market! That’s why you can’t go to your local Bank of America to buy and sell dinar and have to purchase from private dealers.

Naturally, the next question is, when will banks start buying and selling dinars? There is no way anyone could time such an event, however, there are some key factors that need to be in place for the Iraqi dinar to become a majorly traded world currency. The foreign currency exchange is primarily based on global trade. As countries import and export products from different countries, they need foreign currency to pay for foreign goods. Iraq is not a major global trade partner, yet. Iraq is poised to become a huge player in the global economy with its oil trade. In addition, new industries are developing, attracting more foreign investment and diversifying Iraq’s economy. For more in depth analysis of the Iraqi economy, go to Section 7].

In order for Iraq to build strong economic trade partnerships, Iraq must first have a stable political environment domestically. Second, it is essential for Iraq to form strong political relationships to foster beneficial trade terms. Iraq must prove itself politically to attract foreign investment. Foreign investors must feel secure enough that their investments will be protected and that the Iraqi government will pass laws and regulations to make it easy to do business in Iraq. It is the government’s responsibility to rebuild Iraq’s infrastructure to create a business climate that allows both domestic and foreign businesses to thrive. For specific insights, go to Section 7 learn about how Iraqi politics can move the country forward.

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