Gold & Silver Forum - Iraq Dinars?

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Anyone buying Iraq dinars?
Selling on Ebay for about $880 for 1 million I think. They are using the Kuwait example as to what could happen in Iraq. In Kuwait, the dinar had been as low as $.10/dinar and is now 3.40/dinar.

Ok, maybe I'm answering my own question here....but

http://www.xe.com/iqd.php

Quote:

Overview

A number of people have begun touting so-called "investment" opportunities in the Iraq Dinar as a "sure way" to make a lot of money with little or no risk. Many of our clients have asked our opinion on the legitimacy of this.

Is "investing" in the Iraq Dinar a sure way to profit? We don't think so. In our opinion, buying the Iraq Dinar is a high risk investment with a poor outlook.

A Little History

The official rate of the old Iraq Dinar, $3.22 USD (U.S. Dollars), was set in 1982 by Saddam Hussein. The old Iraq Dinar could not be freely traded, so this rate was never tested or upheld on the world market.

The current Iraq Dinar (IQD) was introduced between October 2003 and January 2004 by the Coalition Provisional Authority in close consultation with financial experts from Iraq and the international community. The IQD is currently valued at a little less than seven hundredths of a US cent. (1 USD = 1460 IQD). The old "Saddam" Dinar has no current value and is worth only what a collector is willing to pay for it.

What's Happening Now?

The IQD is not freely traded, and is not being used in any significant international transactions. We are unaware of any official bank or foreign exchange office outside of the middle east that will exchange the IQD.

The IQD trades on a very small, tightly controlled exchange. The total volume of IQD traded by the Central Bank of Iraq is in the thousands of dollars, compared to the $1,900 billion dollars traded on the Foreign exchange market every day. This small number of trades makes the IQD's value effectively immaterial.

The Central Bank of Iraq's stated objective is not to promote the free trade of IQD, as is the case in a true free market economy, but rather to keep the value of the IQD stable. The only way the Bank can ensure the semblance of stability is by tightly controlling the exchange of IQD on the market, and by ensuring that the currency cannot freely trade on the open market. They evidently fear that open trading of the IQD would lead to a rout in which the value of the IQD would sink to practically nothing.

Consider the situation. Why tightly control the trading of the IQD if it is likely to appreciate in value? If the value of the IQD were to surge, this could be held out as evidence of a surge of confidence in Iraq's economy. So why not open the IQD to free trading? Why would this be done unless the Iraqi Central Bank itself feels that the IQD would decline in value in a free market?

A Snapshot of Iraq Today

The current situation in Iraq is pretty grim:

Over a decade of international economic sanctions and a devastating war has left the infrastructure in tatters
$125 billion of external debt
Millions of dollars in post-war debt
No stable government
Insurgency steadily on the rise
Oil facilities and pipelines are sabotaged regularly
Many predict out-and-out civil war, such as the former Prime Minister of Iraq and the outgoing UK abmassador in Baghdad
These aren't the kind of conditions typically conducive to the creation of booming economies. More to the point -- a 450,000% increase in the value of the IQD (as predicted by some of its promoters) seems ridiculous in the face of these challenges.

But Surely There's Oil Under Those Dunes?

A lot of the hype over the IQD centers around Iraq's vast oil reserves and their supposed economic value. The oil market is extremely unpredictable. An economy based on oil alone (oil makes up 95% of Iraq's foreign exchange earnings), will mirror that unpredictability. Let's look at a real-world example: Venezuela.

Oil accounts for 80% of Venezuela's national exports and 50% of its government revenues. The country is one of the world's top five oil producers. In the last four years, Venezuela has experienced intense political instability, including an oil strike and an attempted coup d'�tat. The resulting economic chaos has led to the extreme devaluation of the Venezuelan Bolivar -- today, it is worth only about a third of its US Dollar value from January 2000, and only about a quarter of its Euro value from January 2000.

Investing in a country's currency is tantamount to investing in that country's economy as a whole, not in any single commodity. Investing in the Iraq Dinar is not the same as investing in Iraq's oil.

But What About Kuwait?

Promoters of the IQD like to compare Iraq now to post-Gulf War Kuwait -- but this is comparing apples to oranges.

Before the Gulf War, Kuwait had a stable government and its foreign investments generated more income for its economy than its oil did. After the war, despite losing a third of its pre-war investment portfolio (over $100 billion USD), Kuwait still had a solvent economy, a stable government, and an intact infrastructure. It is not difficult to see why a currency's value might increase in these circumstances.

In comparison, Iraq entered the war with a $125 billion USD debt, has almost no infrastructure, no stable government, and no other foreign income except its oil -- the vulnerability and unpredictability of which we have already pointed out. The outlook for its economy and the IQD is grim for the foreseeable future.

In late 2004, the US was successful in convincing some foreign creditors to "forgive" some of Iraq's debt. However, debt forgiveness is seldom a blessing, and generally comes at a very heavy price. Other countries whose foreign debts have been "forgiven" have found it nearly impossible to generate any foreign investment afterwards. Think about it: how would you feel about investing in Iraq again if you lost your entire investment (i.e. you "forgave" it) last time?

If it Sounds Too Good to be True...

Ask yourself one question: if the Iraq Dinar is such a hot commodity, why would anyone in the know be willing to sell it to you? If you thought that the IQD was going to multiply in worth by hundreds of thousands of percent, would you sell it? Of course not -- you'd be too busy buying as much of it as you could.

But if you thought that the IQD was going to go down in value over time, well, then you might start trying to convince people that it was a "great deal" so that you could get rid of all of yours as soon as possible.

Remember the old saying: if it sounds too good to be true, it probably is. Be careful!

Re: Iraq Dinars?

If you want some, save yourself the trouble and have a Soldier bring some back to you for face value.

The Great Ag

Re: Iraq Dinars?

I bought some 2 years ago. $880 is not a bad price. The exchage rate is close to that number. Iraq is not letting anyone out of the country with Dinars in hand. I don't think Kuwait is selling it anymore.

The kuwait example is an example of very poor economic thinking.

Kuwait was nationless for 3-4 months. The have an established gov't, infrastructure and economic policy before and after the invastion.

Iraq has nothing. The puppet gov't they have now is just that. They are starting from pretty much nothing. The U.S. probably didn't give them a copy of our Constitution to give them some idea on what to do.

Money backed by oil big deal venezquela has oil too look whats happening there. Talk about coruption they invented in Iraq. Unless iraq is converted to christian there is not much hope for there money either.

Re: Iraq Dinars?

Don't be foolish.Besides many other problems with this scheme the major problem is they are worthless outside of Iraq.Can not find the article(2-3 years old) that states once Dinars leave the country, they have no value(and are not allowed back in).They can not be converted to any other currency-maybe true, maybe not-but that is what I remember reading.You do the research.

http://www.dinartrade.com/iraqmonetaryhistory.htm

"Old dinars ceased being legal tender on 15 January 2004.The central bank of Iraq has issued licenses to Western Banks to operate in Iraq these are the three banks: National Bank of Kuwait, HSBC Bank and Charter bank of England. Once these banks are operational in Iraq you could exchange the dinars trough their branches anywhere in the world..."

Do not be caught with old worthless paper(how many times have they changed the design in 4 years?)

"Although the value of the dinar appreciated following the introduction of the new banknotes from 4000 dinars per U.S. dollar, at the time of their introduction, to a high of 980 dinars per dollar, it is now held at a "program" exchange rate, as specified by the International Monetary Fund[citation needed], of 1449 dinars per US dollar at the Central Bank of Iraq. However, there is not yet a set international exchange rate and so international banks do not yet exchange Iraqi dinar. The exchange rate available on the streets of Iraq is currently around 1500 dinars per US dollar (April 2006)."
Iraqi dinar speculation
Immediately after the issue of the new Iraqi notes, many schemes appeared promoting speculation in the new Iraqi dinar. These sites advertise heavily on conservative websites and magazines, and sell the Iraqi currency at a huge mark up. The websites promise profits of up to 1000%, but in fact no currency in history has ever appreciated 1000% against the United States dollar and a currency swing that severe would have negative consequences for Iraq's economy. Investment experts strongly oppose speculation in the Iraqi dinar.[2]

http://en.wikipedia.org/wiki/Iraqi_Dinar

Re: Iraq Dinars?

Quote:

Originally Posted by 917601 (Post 539533)

Your Sources are out of date.

The dinar has changed only once. The old Saddam dinars are just good for show. The new dinars have gone up against the dollar only because the dollar is falling. The new dinar can be brought back in the country. If they find it on you, at the airport, they'll just take it from you when your leaving Iraq. You might want to do some more searching the powers that be can manipulate it enough make things happen.

The closer you are to the source the better your intell

Iraqi Dinar Bank Account

I opened an Iraqi Dinar bank account with an Iraqi bank (Warka Bank) in June, 2005. Since that time, the Dinar has appreciated from 1470/dollar to 1277/dollar, giving me a gain of over 13%. I also obtain interest on the money in the Dinar savings account.

If you are interested in speculating on the Iraqi Dinar, you may wish to visit this Iraqi Dinar Forum:
http://www.investorsiraq.com/index.php?

Re: Iraqi Dinar Bank Account

Quote:

Originally Posted by ppius13 (Post 540715)

Always good to have people with experience to balance out naysayers. Thanks for sharing. Not sure if I'll "invest" yet but thanks.
TG