Wells Fargo Tells Investors to Stay Away From IQD.
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Thread: Wells Fargo Tells Investors to Stay Away From IQD.

  1. #1

    Wells Fargo Tells Investors to Stay Away From IQD.

    While most investors realize Iraq is still a dangerous place to travel to, they may not fully grasp the financial risks tied to trading in the nation’s currency, the dinar.

    Worried about the dinar’s illiquidity, the threat of currency fraud and still-unstable situation in Iraq, Wells Fargo (WFC: 34.07, +0.04, +0.12%) issued a warning this week urging investors to steer clear of the currency.

    “Considering that Iraq remains a dangerous place with an uncertain future, we strongly advise investors against taking the risk of buying Iraqi dinar as an investment,” Paul Christopher, chief international investment strategist at Wells Fargo Advisors, wrote in a note in response to investor curiosity about the currency.

    Introduced as Iraq’s new currency in 2004 after the fall of Saddam Hussein’s regime, the dinar, which recently traded at about 1,165 dinar per U.S. dollar, is still only available in paper form because most U.S. banks decline to deal it.

    That means the dinar is still very much a part of the Wild West of the currency world, an area most investors should probably avoid funneling money to.

    Yet investors are clearly curious about the dinar, largely because of yet-to-be-realized hopes that the Iraqi Central Bank will revalue the currency by resetting its exchange rate at a more favorable value. They point to similar economic rebounds and currency revaluations in West Germany after World War II and in Kuwait after Saddam’s 1991 invasion.

    Yet Christopher spells out four main risks to buying into the dinar now: the threat of future violence in Iraq, illiquidity, risk of fraud and historical precedent.

    While Iraq has clearly made great political strides in recent years, the political unity between Iraq's three competing ethnic groups remains extremely fragile. Plus, foreign influence, especially from that of Iran, threatens to further inflame political tensions.

    “Iraq’s post-war experience shows much stronger ethnic divisions than was the case in Germany or Kuwait, prior to their currency revaluation,” Christopher wrote. “While the economy grapples with violence, the prospect of a currency revaluation seems remote.”

    But even if the political and violence situations didn’t cast a pall over the dinar, the illiquid nature of the currency makes investment impractical.

    Because few of the world’s banks outside the Middle East work with Iraqi banks, most investors are forced to buy actual physical dinar banknotes (rather than the electronic form of the currency like a euro investor would). Dealers in banknotes charge customers for the cost of shipping, handling and buying/selling the dinar in a wholesale market, Christopher said.

    “The costs for buying or selling the dinar may absorb most or even all of an investor’s return,” Christopher said.

    Without any banks to work with, investors in the Iraqi dinar are often forced to work with Internet trading companies and potentially shady dinar dealers that aren’t closely regulated by the U.S. government. That leaves investors open to the risk of fraud.

    Christopher pointed to the fact that the Iraqi dinar trade ranked No. 6 on the Utah Department of Commerce’s list of top 10 frauds of 2006.

    “We suggest many [currency] recommendations that we believe have much less liquidity, fraud and principal risk,” Christopher said.

    Read more: http://www.foxbusiness.com/markets/2...#ixzz24B8A9Hda
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  2. #2
    Does anyone else see the many problems with this article that I see? This man might know a lot about other things, but he is woefully uninformed about where Iraq is today. The three factions he's worried about have made great strides in working together. Iraq's biggest problem today is that too much power is held by one man who has an agenda all his own, and that is about to be dealt with one way or the other. He totally ignores how very wealthy Iraq is. He totally ignores what even Secretary of State Hillary Clinton said about Iraq overtaking China as a place to invest in, and businesses are flocking there, including luxury car companies. And even if the Utah Department of Commerce was somehow correct in believing that the IQD will not revalue any time soon, the fact still remains that the IQD is a currency of a country! It is not a fraud, unless a person receives counterfeit notes, which won't happen if received from a reputable dealer. They can still be traded in for cash, even if at a small loss compared to purchase! By that definition, no one should EVER invest in the stock market, because you can literally put your money there and lose every penny, depending on where and when you invested. Our investment is so much different than that.

    It burns me up a little that a rep for Wells Fargo would make such harsh statements regarding our investment. I have been a customer of Chase, but was considering a change to Wells Fargo after the RV. Now I am thinking, if they can be this uninformed about our investment, what else are they totally clueless about? They have shaken my confidence, not in the IQD, but in Wells Fargo.

  3. #3
    Seems like a re-circulated article...

  4. #4
    It's just a thought, but my original understanding of this whole deal, is that the American general public was not supposed to have information about the reval. Possibly, this article was injected into the public mindset so as not to have the entire USA investing in the currency? Perfect timing for this article, which was last February 2012, to keep others from investing.

  5. #5
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    It IS the same old song and dance...
    it just resurfaces every once in a while.

    If you read it.. it is carefully worded..
    so that WF does not have any liability one way or the other..
    they are not saying it will never revalue..
    it is designed to discourage, though..

    For one thing.. they do NOT want every Wells Fargo employee to
    own a bunch of dinar and suddenly quit on the day of the RV.

    They dont want Okies gang calling them every 3 hours.

    Look at the facts, however.

    They are correct.

    it HAS been 9 years. Anyone who bought thinking it will hapen right now is sadly mistaken.

    "Right now".. is only going to happen once in this investment then it is over.
    "Right now"... has been said many times and has burned many people.
    "Right now".. is one big unkown... even though we feel this is close.

    And you are right, DG, WE know more about Iraq's politics than most of America.
    We know more than ABC, CBS, NBC.. all of Obama's media outlets.

    I knew the moment I saw the title.. what it would say.


    But.. big but....

    this thing aint over yet, either.

    We may have to wait until after the elections in 2014..
    that is a STRONG possibility.

    I WANT this to happen soon..
    but it may or may not be this year.

    All signs point to this year...
    BUT.. Maliki is slippery as an ice cube on a hot stove.

    It aint over till it's over.

    It is like a pregnancy.
    The woman is VERY pregnant...
    but the baby has not been born.. yet.

    The baby will only be born ONCE...
    and then everything will immediatly change..
    but we are still waiting.

    TRUE FACT.

    My ma carried my brother for 10 MONTHS!
    He came out with long hair...
    face all clawed up from his long fingernails..
    but it took 10 months and everybody was freaking out.

    I truly believe this WILL happen.

    it is a matter of WHEN.. not IF.

    But the baby will only be born when it is born.

  6. #6
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    Quote Originally Posted by Diana.Yows View Post
    It's just a thought, but my original understanding of this whole deal, is that the American general public was not supposed to have information about the reval. Possibly, this article was injected into the public mindset so as not to have the entire USA investing in the currency? Perfect timing for this article, which was last February 2012, to keep others from investing.

    This article was prompted by the internal memo that Wells fargo released to their employees.
    I think they have re-released the memo 2 or 3 times since then.

    on a slow news day.. or with a re-release of the memo..
    this article gets recycled.

  7. #7
    Wells Fargo is telling everyone not to invest in the IQD but once it does RV they will be kissing our feet to come in and use their services to cash in.

  8. #8
    And, here's what Wells Fargo Really Thinks Original Link: http://www.forbes.com/sites/greatspe...he-ultra-rich/

    Article reads:


    Investing

    |

    4/04/2012 @ 3:35PM |3,056 views

    Wells Fargo Launches Abbot Downing To Serve The Ultra Rich

    Trefis Team, Contributor

    OAKLAND, CA - JULY 19: A sign is posted in front of a Wells Fargo Bank branch on July 19, 2011 in Oakland, California. San Francisco-based Wells Fargo & Co. reported a 30 percent surge in quarterly profits with earnings of $3.73 billion, or 70 cents per share compared to $2.88 billion, or 55 cents per share one year ago. (Image credit: Getty Images via @daylife)

    Wells Fargo announced the launch of its Abbot Downing brand this Monday. [1] The new division was created by the merger of former Wells Fargo Family Wealth and Lowry Hill businesses which had $32.9 billion in combined client assets.

    The newly formed divisionwill focus on the country’s crème de la crème, catering to the needs of individuals and families having assets to invest in excess of $50 million. Although wealth management services for the ultra rich is a notably fragmented market, notable competitors are the other big banks Bank of America, Citigroup, Goldman Sachs and JPMorgan who have also been aggressively pursuing the ultra rich.

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