Original article:
http://www.forbes.com/sites/robertlaura/2015/03/24/retire-on-the-iraqi-dinar-and-vietnamese-dong/
| Retire On The Iraqi Dinar And Vietnamese Dong (Forbes Hit Piece) |
| http://www.forbes.com/sites/robertlaura/2015/03/24/retire-on-the-iraqi-dinar-and-vietnamese-dong/2/It’s a 3 page article so you have to click the link above to see the restI often get calls asking about the Iraqi dinar. Initially, I just dismissed the questions and put-off the requests, informing clients and other investors that we don’t employ or recommend currency-based strategies. At the time, this was the result of only superficial research. However, after a recent question about another foreign currency, the Vietnamese dong, I felt it was time to truly dig into what’s going on and write the definitive article on where these currency strategies fit into both retirement and overall investment portfolios.In my opinion, they don’t fit anywhere! Let me reiterate that; the Iraqi dinar and the Vietnamese dong do not fit into a retirement portfolio in any way, shape, or form. Both monetary units are often referred to as “scam” currencies for good reason. Countless warnings and blood soaked war stories are prevalent online, but to my surprise investors continue to fall for it, throwing good money at a very bad idea.
A street money exchange (RAMZI HAIDAR/AFP/Getty Images) As it turns out, the scams success is based on a powerful combination of greed, apparent inside information, and the ability to see, feel, and touch the currency. In fact, the most compelling part of situation is that both the Iraqi and Vietnamese currencies are legitimate and tangible. Investors can not only hold them, but also show their spouse, friends and even fold them up and put them in their wallets. Furthermore, they are part of a regulated industry and available for purchase at a few major US Banks. All factors that seem to make investing in either of them a very credible and enticing opportunity to outsmart Wall Street, best fellow investors, and get rich quick by uncovering secrets the government doesn’t want us to know. Yet, as you already know, if it sounds too good to be true…investors should run like heck. I reached out to several currency exerts to help me explain the ins and outs of this ridiculous business in an effort to help retirees and other investors avoid falling victim to this and similar currency scams going forward. Reid Kirchenbauer of InvestAsian.com says, “The dinar and dong, along with many other thinly traded currencies, are hard to get at a fair price in the United States.” One US bank Kirchenbauer called was offering one million Vietnamese dong for $56.90, which works out to 17,574 VND per dollar. However, he found the exchange rate much higher at Vietnam’s Agribank. It will sell 21,420 dong per U.S. dollar (not including ordinary fees). Right off the bat, then, there’s a discrepancy representing a more than a 20% decrease in value. Kirchenbauer goes on to say, “It’s difficult for most people to receive the actual value that these currencies trade at. If banks in the US choose to trade them, they make the spreads very wide so that they can make a large enough profit to justify the potential holding period.” Scott Smith, Senior Market Analyst for Cambridge Global Payments highlighted another reality facing investors in these currencies. “The biggest challenge to recouping your initial investment is finding someone to buy those currencies back. It’s like shopping for a house cat, but buying a tiger instead, and then finding out you are allergic to cats. It might be easy to find someone to buy your house cat, but finding a suitable home for a tiger would be much more difficult.” |
