The Case for the Vietnam Dong… Could it Outperform the Iraqi Dinar?

All,

There’s been considerable and growing interest lately in the Vietnamese Dong (VND).  Supplies are low, and there very may be a good reason.

Could it be that one day the VND actually outperforms and brings a greater return to holders of that currency than those who hold the Iraqi Dinar (IQD)?  Though such a statement at one time would have been considered blasphemy, especially coming from Dinar Daddy, it’s important we take a real look at what this “other” speculative currency is all about.

So, in the spirit of keeping an open mind and sharing potential outcomes, I’m laying out my thoughts on the subject.  Take them for what they’re worth, if for nothing more than food for thought…

REASON #1 (LEVERAGE):  You can purchase far more VND for a dollar than you can IQD.  Currently, you can purchase 1163 IQD for every $1.  For the same $1, you can purchase 20,838 VND.  Leverage is always your friend when purchasing foreign currency, so long as there’s a legitimate potential behind the speculation.

REASON #2 (GROWTH)Though the country of Vietnam doesn’t have the massive oil reserves of Iraq, they do have a currency that is actually internationally traded, and an economy that is actually growing.  Vietnam poses a real threat to other countries such as China and Korea due to the value of their currency tied with their manufacturing infrastructure that is only growing.  The basic fundamentals of Vietnam far outweigh those of Iraq at present.

REASON #3 (STABILITY):  Vietnam is far more stable than Iraq.  Need I really expound?  Can anyone really disagree considering the current US administration’s decision to completely abandon security for Iraq over the past four years?

REASON #4 (GEO-POLITICAL PRESSURE):  Vietnam has a very powerful “big brother” in the region named China.  China is well known for its currency manipulation tactics in order to ensure they maintain an export edge in trading with the “West”.  Vietnam has now grown to the point that the country does pose a threat to their “big brother” offering those same services and abilities; only their currency is even lower in value.  Should the US and the “West” succeed in getting China to increase its currency, which seems to be what even Obama is pressing for recently, there is little question that China will place enough pressure on ALL countries in their Asian region to equally move their currency values to be somewhat in line (or at least within shouting distance) with their own.  Geo-political pressure is a real thing, despite it not being a fundamental reason for changing the value of a currency.

REASON #5 (RE-DENOMINATION):  Should the Iraq Dinar receive it’s much announced and anticipated “Re-denomination” wherein the three zeroes are literally “dropped” from the currency, a 25K Dinar note would become a 25 Dinar note. Some connections in Iraq have stated the Dinar would then be revalued over a period of time to up to 3 times the value, meaning the overall increase from the IQD would be approximately 3 times a person’s investment…. An excellent increase by all standards but certainly nothing compared to what many have speculated would be the eventual increase of the Dinar.  Now take the Viet Dong, at a value of 20,000 VND for every $1, it won’t take much of an increase to outdo the scenario posed above wherein the IQD is “re-denominated” then increased, giving it at most a 3 to 5 times value increase.

FYI, I personally haven’t yet abandoned the potential the IQD will increase through a straight-up revaluation without a “re-denomination” wherein the “re-denomination” means the 3 zeroes are literally taken off the currency, but instead the term is to mean that the actual currency notes are physically being taken out of circulation (i.e. dropping of the three zeroes), which of course would mean a straight up RV with significant potential for increase in value.

Please know that this post is nothing more than my logical deductions tied to known information and unverified tidbits.  Also, please know I have tremendous belief BOTH currencies will increase in value some day in the future.  At present, BOTH currencies are being artificially held low due to reasons known only to the few who control many things, but who don’t share their reasons for doing things.

Take it all for what it’s worth… and know portfolio exposure in BOTH currencies may be a wise move for those who have the means and the patience to acquire both and hold the leverage for as long as it takes.

Go Awareness… Go Dong… Go Dinar!

Dinar Daddy

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