THE IRAQI DINAR – The Road to Riches or The Road to Devastation?

The answer to the question over the last four years depended on who you asked. Of course those who were promoting the Iraqi Dinar were touting it as the means to untold riches.  While there were those of us who were warning people the Iraqi Dinar was not the Utopia they were led to believe it would be to cure their financial woes.  So for four years this debate has been ongoing. Before I answer what our beliefs are about the Iraqi Dinar being the road to riches or the road to devastation, a little background is necessary.

I want to provide you, the reader, with a little background about Eagle’s foray into the Iraqi Dinar debate.  When Eagle was launched online back in June of 2008, one of the first several inquiries we received was what we thought about the Iraqi Dinar, and what would we recommend regarding the purchase of the Iraqi Dinar as an investment.

It October of 2008 I wrote a commentary about our position on the Iraqi Dinar. In this commentary we pointed out that we did not see the Iraqi Dinar revaluating (the actual term for the Iraqi Dinar is redenomination) anytime soon, and we thought it would be at least 4-5 years in the future.  Needless to say that did not sit well with all the people buying the “Hype” being put out by the so-called Iraqi Dinar Gurus as well as the Dinar Gurus.  They were telling people they had to buy now as the Dinar would revalue at any moment in time.  They had their “inside” information that this was going to happen and soon.

Even though people wanted us to change our stance on our commentary, we told everyone we would not change our position.  If we were wrong in our assessment we would gladly admit it, but we did not see the Dinar revaluation happening in the near future.  We also told people that we did not see the Iraqi Dinar being a scam, as it is real currency, but as a sham. Our position was that the only ones who were going to make any money off the Iraqi Dinar were the so-called Iraqi Dinar Gurus selling the Iraqi Dinar. Needless to say we did not win any friends from the Iraqi Dinar Gurus at the time.

Then in 2010 we were again asked about the Iraqi Dinar, and if our position had changed since 2008.  So again we took another look at the Iraqi Dinar and advised people our position had not changed from our previous comments, but in fact we felt that it would be at least 2014-2016 before we thought any revaluation/redenomination would take place.  A position that again found us at odds with the Iraqi Dinar Gurus and the people who had bought into this being their road to riches.

Again we were met with derision and people claiming we didn’t know what we were talking about and not to believe us.  Now what was truly interesting is that from 2008 through 2010, all the Iraqi Dinar Gurus had been predicting the revaluation/redenomination at any time yet it had not happened.  But of course their pitch was to buy even more Iraqi Dinars because it would make anyone who did multi-millionaires.  When we pointed out that they had been 100% wrong, while we had been 100% right during these two years, it fell on deaf ears.

Now what we have found fascinating is that going on four years now, all the Iraqi Dinar Gurus have been predicting the revaluation/redenomination was going to take place at any moment.  They all claimed to have inside information that assured all the people who bought the dinar from them that this was true.  Yet absolutely none of their “inside information” was correct.  In other words, the Iraqi Dinar did not revaluate/redenominate from 2008-2010.

Now let’s fast forward to this year.  In the spring of 2012, we began monitoring the Iraqi Dinar Gurus and their claims.  What was truly amazing to us they were saying the exact same things they had been saying since 2008 and all claimed to have this “inside information” that the Iraqi Dinar was soon going to come through for everyone.  When asked what our thoughts were on the Dinar, we responded by asking how many times does a guru have to be wrong before they are no longer a guru?  Well, you would have thought we had attacked the Pope with the response we got.  Yet the bottom line is we have been right 100% of the time and they continue to be wrong 100% of the time.  In fact, they are still claiming this will happen any day now.

But now things have started to crumble for some of the Iraqi Dinar Gurus.  An 83-count indictment filed in U.S. District Court in Toledo naming Mr. Huebner, who is chairman of BH Group, which specialized in the sale of Iraqi currency; Charles Emmenecker, 65, and Michael Teadt, 66, was unsealed after the three men were arrested. All three men pleaded not guilty during their arraignments in U.S. District Court in Toledo.

Also indicted was Rudolph Coenen, 47, of Jacksonville, the owner of Bayshore Capital Investments LLC. He is charged with conspiracy to commit wire fraud, wire fraud, and money laundering.

According to the indictment, the men fraudulently marketed and sold dinars, the currency of Iraq, causing investors of the BH Group to lose nearly $23.8 million. They also are accused of selling more than $700,000 in nonexistent hedge-fund assets.

Bradford L. Huebner, 65, of 2936 Pembroke Rd., Ottawa Hills, is charged with conspiracy to commit wire fraud, wire fraud, and multiple counts of money laundering.

The sale of Iraqi dinar is not illegal. But the indictment said that beginning in August, 2010, the defendants falsely told investors and promoted through the Internet, email, and weekly telephone conferences that buying the dinar involved minimal risks because the currency was protected and regulated by the “Overseas Investment Protection Act and a presidential executive order, guaranteeing 90 percent reimbursement,” among other misrepresentations.

As reported by:  by Erica Blake and Nolan Rosenkrans, TOLEDO BLADE STAFF WRITERS, following on the heels of these indictments, a civil lawsuit was filed in Lucas County Common Pleas Court by two Texas investors against four men and their companies accused of a criminal scam involving the sale of Iraqi currency.

In the civil case, John R. Merritt and Arley G. Lee say they each purchased several thousand dollars of Iraqi dinar based on the representations of the defendants and that the defendants’ actions were in violation of the U.S. securities laws. Toledo attorney Thomas Pigott, who filed the complaint, said that he plans to ask that the lawsuit be made into a class action to cover all the investors who bought into the alleged scheme.

“Our case is different than the federal criminal allegations in that we are alleging violations of the federal securities act,” Mr. Pigott said.

In addition to the four defendants, the lawsuit specifically names Energy Savers Advisors LLC, which does business as the BH Group; Bayshore Capital Investments LLC of Jacksonville; Treasury Vault LLC of Draper, Utah; and Dinar Trade Inc., of Las Vegas.

Mr. Pigott has asked that anyone involved with any of these defendants involving the Iraqi Dinar contact him about becoming parties to the potential class action lawsuit.

So the question is, as I posited it in my title of this piece: Will the Iraqi Dinar be the road to riches or will it be the road to disappointment?

From our perspective, we believe that everyone who has fallen into the pitfall of believing the Iraqi Dinar will make all of them millionaires is not going to happen.  You see no-one knows what the true value to the dollar the Iraqi Dinar will be when it does finally redenominate/revalue.  We see this as another means that some people have taken advantage of the masses for their own financial gain, while leaving so many people devastated when the Dinar does not become the financial windfall they have been promising.  We have never believed the Iraqi Dinar was going to make millionaires out of anyone except the ones doing the selling.

We have been telling people all they have to do is go to their local bank and ask them about buying the Iraqi Dinar.  We also pointed out that the banks are not holing the amounts of the Iraqi Dinar that the Iraqi Dinar Gurus have been claiming all along. All you really had to do was read the banks 10K reports, or their annual reports. Since banks are publicly traded institutions, they have to disclose all their holdings.  The Iraqi Dinar is not one of them, no matter what bank’s annual report or 10K report you read.

We do feel sorry for all the people who bought into this hype and know there are some people who have been counting on the Dinar to get them out of debt.  Others have put themselves even deeper into debt counting on the Dinar to save them from financial ruin.  We see this as being the road to devastation, not disappointment.

Now let me clear, we have no crystal ball to know when the Dinar will actually redenominate/revaluate, nor what the rate will be.  It could happen at any time, but based on the conditions in Iraq we just do not see this happening anytime soon.  Our detailed analysis of the Iraqi Dinar can be read here:  http://www.eagleresearchassociates.org/IraqiDinar.php.

What we do know is that when the Dinar finally does its thing, there are going to be a lot of strained relationships, dissolved relationships, financial devastation to so many. We know there are people who have been ruined financially due to the false promise the Dinar was going to revaluate any day now over the last four years.

We truly hope that when the Dinar does redenominate/revaluate, that people who have invested in the Dinar will at least get back most of what they invested; or possibly make a little profit.  We do not see this making anyone who bought the Dinar becoming millionaires as hyped and promised by those selling the Iraqi Dinar.

Lynn Edgington Founder/President of Eagle Research Associates, Inc., Author, Radio and Television Subject Matter Expert on Ponzi’s/Scams, guest columnist, and blogger.

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