New Treasury guidelines for cashing in dinar
Mar 10, 2011
It is being reported that the US Treasury has issued new regulations and guidelines for cashing in foreign currency. They singled out DinarTrade by sending them a special memo informing them of those changes, showing that the US Treasury is thinking specifically about people cashing in their Iraqi dinars soon.
The new rules show that only US citizens will be able to cash in dinars in the US. Others will have to cash theirs in their own country, or any other country that will allow them.
Secondly, ledger-to-ledger transactions will not be allowed, in case some people might be able to cash in without the Fed and IRS being notified. Since DinarTrade is a currency exchange that uses Wells Fargo and Bank of America, some people might cash in at DinarTrade and then simply transfer the money from ledger to ledger at their bank account at Wells Fargo or B of A. Such ledger-to-ledger transfers might be done without IRS notification, and so they have closed up that possible tax loophole.
Normal wire transfers are not affected by this ruling. It is only a very few that might be affected by the new rule.
Third, when cashing in dinars, some have planned to exchange dinars for gold or silver, rather than for US dollars, in order to avoid paying tax on the capital gains. The new Treasury ruling says that one cannot directly buy gold or silver with dinars. People will have to cash them in for dollars FIRST, in order for it to be considered taxable income. Of course, once it has been listed in a bank account in dollars, then one can use those dollars to purchase gold or silver or whatever else is desired.
Fourth, each person must come to the cash-in location to fill out the form and do the cash-in. No one can get a signed statement and do it for someone else. In the case of a Trust, the Trust administrator (trustee) must be present to do the cash-in. This regulation will not affect my own plan, which some of you know about. In going through a Trust, we have already made plans to have the Trustee present for the cash-in. Once the cash-in and wire transfer has taken place, and the money is in the Trust's bank account, then the trustees are free to distribute and/or spend it according to their plans.
It seems that the US Treasury has now plugged all possible loopholes in order to obtain the greatest possible tax windfall when the Iraqi dinar revalues. It is quite obvious that THEY know it will revalue shortly, and they are feverishly making preparations to get their fair share of the capital gains.
Keep in mind that the capital gains tax is 35%, but any dinar investment that was made at least a year ago is only taxed at a rate of 15%. (Money going into Trusts or other non-profit organizations is not taxed.) Some of you may be planning to give to your Church or charity. If so, you would be better off giving the Church dinar and let them cash it in tax free, rather than sending US dollars AFTER the cash-in. There are fewer tax liabilities doing it that way.
Consequences of a Significant Revaluation
In my view, the US Treasury is trying to save itself through the Iraqi dinar. With all the deficits and deficit spending going on, it is open news that both federal and state governments are broke. They intend to refinance the government in this way.
If their plan succeeds, it will indeed give a tremendous boost to the US economy--and to the economies of the entire world. The dollar will strengthen at first, because so many people will be buying dollars with their dinars as they cash in. It will look like the dollar will once again be the stable "world currency." There will be euphoria, and confidence will rise rapidly. The price of gold and silver will probably fall dramatically--at first.
What is less clear is this: How many people will then use those dollars to buy silver and gold at such cheap prices as they fall in value? Their puchases would have the effect of "dumping dollars."
If a lot of new multi-millionaires take advantage of the low prices for metals, the effect upon the dollar would be significant. It really depends on how many people will remain confident in the dollar and the economy in general. If I read people correctly, I think that they will take advantage of the cheap silver and gold by purchasing a lot of it. This will have a greater effect upon silver than upon gold, because there is much less silver in the world, and it is already vastly underpriced.
The difference is that a whole new set of people with a whole new mindset will suddenly have extra money to put into some sort of savings for the future. Many, of course, will use the traditional route of buying savings bonds or a 2% savings account in the bank. But a lot of people will use their left-over millions to buy silver and gold. I think that at some point this will result in the greatest price volatility in history, going from a drastic low to a record high in the matter of days or weeks.
From a prophetic standpoint, we are in the time of the collapse of Babylon at the hands of Medo-Persia. To put it in terms of Daniel 2, the arms of SILVER are going to beat the head of GOLD. The Babylonian system of the past has been prophesied in terms of gold; what we are coming into now is the next phase--the arms of silver. In my view, silver will trump gold and may even surpass it in price.
For this reason, I prefer silver to gold, although I believe that both will do well in the long run.
In my way of thinking, the revaluation of the dinar is the modern version of diverting the Euphrates River (current, or "currency") to prepare the way for the fall of Babylon (Rev. 16:12). I see Prime Minister Maliki as the "King of Babylon" today, and I believe that when he is removed from office (either by political vote or by violence), this will signal the collapse of Iraq itself, splitting the nation into three pieces as per Revelation 16:19.
Such a split would collapse the dinar, so that anyone holding dinar at that point would be in danger of losing their investment. I think the Fed and the banks will be caught with their pants down holding a lot of dinar at the wrong time; but the public will already have cashed in their dinar for dollars and moved into other forms of wealth. To me, those who invest their extra cash in silver will see the best return on their investment in the long run.
In my view, it all begins with the revaluation of the Iraqi dinar. Prophetically speaking, it is the first step in the final collapse of the Babylonian system in the modern world. From then on, we will have to watch closely to see the order of events occur as indicated in Scripture.
Realize, of course, that I have limited this discussion to the dinar and Iraq as a type of Babylon. The other, more positive side to the story is what God will be doing to pour out His Spirit upon all flesh. That will prove to be the real blessing, one that will last forever and not rise and fall with the economies of the world.
I am writing this from the DoubleTree hotel just outside of San Francisco, where we are about to start our week end conference. This will be my primary focus in the next few days. And my primary long-term focus will always be on the descent of God's glory upon all flesh, which will prepare the world for the Kingdom of God and the Good News of the true gospel.
Dr. Stephen Jones