Iraqi Dinar
Is anyone investing in the Iraqi Dinar?
Right now, the U.S. lists it as "worthless". It is less than 1/10th of a penny. Before the Gulf War in 1991, the exchange rate was $3US for $1Dinar.
Obviously this is a extremely risky investment. You can purchase $1M Dinar for less the $1,000/US, but the rewards are enormous.
Let's say you purchased $1M Dinar, if it goes up 1 cent, you make $10,000/US.
Is it worth the risk is the question. I have been waiting to see how the Dinar reacts to the U.S. Presidential election and the upcoming showdown in Fallujah with Zarqawi's group. Any thoughts?
[addsig]
Before the Gulf War the Iraqi Dinar was not a freely convertable currency. The exchange rate of $3 US to 1 Dinar was artificial. Now that it's out on the open market, there's no telling which way it'll go.
Let me give you an example, when the Soviet Union existed. the exhange rate of US Dollars to Rubles was 4 to 1. After the Ruble was released the exchage rate shot up to several hundred to one. Now, after devaluations numerous other things, the Ruble is worth just over 28 to the dollar.
The Dinar is a huge gamble. Any money you put into it should be considered lost rather than invested. That way, if 10 or 20 years down the road you come out on the good side this thing, it'll be a pleasant surprise rather than the disappointment it could so easily become. Good luck.
Another possible scenerio is that the new government will at some point decide that the economic baggage of the old regime is simply too great and issue a new currency. That would make the dinar valuable only as a curiosity, sort of like dollars issued by the confederacy during the American civil war. Only there are so many dinars in circulation that it would take a couple hundred years for that value to amount to anything.
I have some of the new dinar. I used to sell them on Ebay! I made a ton of money selling the old Saddam Dinars. I even bought $175k of the new issue post-war dinars. If Bush gets re-elected, the dinar will have a better chance, because Bush is pushing for business and commerce in Iraq. He doesn't want to pull out like Kerry, that MIGHT cut them off from international commerce; hurting them.
If the new dinar goes to just $.01 for every dollar, i'll be like... :-o If it doesn't i might be :-x either way at least i'm not sitting on the sidelines