Cskin Posted June 22, 2004 Share Posted June 22, 2004 I read an optimistic article on the economy of Iraq thanks to the liberation of it's people. The Iraqi dinar is currently worth .03 cents to the US dollar. At one time, however, it was at 3.00 USD to the US dollar before the Gulf War... under Hussein's vicious supression. Would you invest in a hundrend thousand dinars with the hopes of a rise in value? 100,000 dinars = $3000.00 USD What if the dinar went up to a .10 cents of a dollar? That's $7000.00 in profit. What if the dinar went to .50 cents of a dollar? That's $47,000.00 in profit. What if the dinar went to even with the US dollar? 1 dinar = $1.00 US. That's $97,000.00 in profit Now... what if the dinar went back to pre Gulf War value. 1 dinar = $3.00 US. :paranoid: :yikes: :yikes: :yikes: That's $300,000.00!! Hummm... Link to comment Share on other sites More sharing options...
Guest SkinsHokie Fan Posted June 22, 2004 Share Posted June 22, 2004 Will the dinar remain the currencey in the new Iraq? Link to comment Share on other sites More sharing options...
Cskin Posted June 22, 2004 Author Share Posted June 22, 2004 Yes.. it was recently redesigned to reflect the new Iraq. Hussein's picture was removed and more symbols of Iraq's culture were added. I was wrong about the value of the dinar currently. It's actually a fraction of .01 US penny. .003 or something like that. Crunch those numbers Link to comment Share on other sites More sharing options...
jpillian Posted June 22, 2004 Share Posted June 22, 2004 We just issued the "new" dinar from 15 Oct 03 - 15 Jan 04 --- combining the "Swiss" dinar of northern Iraq with the "Saddam" dinar of central and southern Iraq. So, I'd think that yes, the new dinar will be the currency of Iraq for the foreseeable future. Link to comment Share on other sites More sharing options...
Ancalagon the Black Posted June 22, 2004 Share Posted June 22, 2004 Has inflation eroded the value of the dinar in domestic markets (Iraq)? Currencies that have devalued so much rarely see such a major bounce-back. Major financial investors haven't stepped in yet (which would push the price of the dinar up). I'll ask my sister, who is a foreign-exchange trader. Link to comment Share on other sites More sharing options...
EagleSteve Posted June 25, 2004 Share Posted June 25, 2004 Originally posted by Ancalagon the Black Has inflation eroded the value of the dinar in domestic markets (Iraq)? Currencies that have devalued so much rarely see such a major bounce-back. Major financial investors haven't stepped in yet (which would push the price of the dinar up). I'll ask my sister, who is a foreign-exchange trader. Supposedly, the dinar will not be bought and sold on the open market until June 30, when the provisional government "takes charge". The best price I've seen is 1,000,000 Dinars for $1050. So I have the same question. Is it worth a $1000 investment that Iraq will stabalize over the next few years so that the currency will gain value vs. the dollar? Link to comment Share on other sites More sharing options...
Southtown Posted June 25, 2004 Share Posted June 25, 2004 From what I've read, investing in the dinar would seem to be a pretty bad idea. Also, I'm not even sure its "legal" for Americans to invest in dinars. I just checked quickly for a few articles I read and couldn't find many. Here is one off the MSN message board. Not sure of the source but it seems to give some good detail. Hope this helps: Iraqi dinar: Speculators beware By Cam McGrath CAIRO - Speculators who stashed away "Bremer dinars" earlier this year in the hope their value would skyrocket are suffering enormous losses as the official Iraqi currency plummets. Hit particularly hard are a high number of Egyptians, who had earlier raced to pick up the currency. "Many people sold anything they could to buy Iraqi dinars," Mohammed al-Abyad, chairman of the Egyptian Foreign Exchange Association told IPS. "When the dinar went down these people lost a lot of money." The Iraqi dinar was trading at one Egyptian pound (16 cents) per 50 dinars on the black market before its value dropped sharply earlier this year on news of escalating insurgency in Iraq. The pound is now worth 210 dinars on the black market. "The black market has narrowed and the currency has no liquidity now," said Shady Sharaf, head of market research at Cairo-based al-Shorouk Brokerage. "The people cannot sell the dinars they bought, which presses on demand." The new Iraqi dinar banknotes introduced by the US command last October replaced old banknotes bearing images of deposed Iraqi leader Saddam Hussein. Speculators believed the value of the "Bremer dinar" - named after the US civilian administrator of Iraq, L Paul Bremer - would rise as the economy of war-devastated Iraq recovered. But that recovery has yet to take place, with daily reports of further violence, deaths and insurgency making the headlines. In the latest, a car bombing attack hit an Iraqi police car and a civilian vehicle carrying foreigners in the city of Ramadi, some 110 kilometers west of Baghdad on Wednesday, killing at least four people. On the same day in Kirkuk, Iraqi security forces said gunmen ambushed and killed the top security official for the state-run Northern Oil Company, dealing another blow to the country's already battered oil industry. But months ago, unaware the instability would continue to plague Iraq even as the handover date draws near, thousands of investors working in the Gulf region brought bags stuffed with the new Iraqi dinars. They stashed away the currency or sold it for quick profits to other speculators on the black market. "They remembered what happened in Kuwait, and believed the same thing would happen in Iraq," al-Abyad said. The value of the Kuwaiti dinar fell to less than 10 cents during the country's occupation by Iraqi forces in 1990, but climbed steeply after its liberation by coalition forces the following year. It now trades at US$3.50. "The situation in Iraq and Kuwait is very different," said al-Abyad. "Kuwait recovered in little time because its [infrastructure] remained intact." The speculation was based on credibility, says Alaa al-Shazly, economics professor at Cairo University. "The dinar is backed by the US and people wouldn't have thought the US would get into something that would turn out to be a failure." Although many countries do not trade the Iraqi currency, Western traders have been doing so through websites. When trading began last October, a dollar bought 420. Now it buys 555 - a 32% drop. The currency has declined 11% against the dollar in the past five weeks alone, and this while the dollar itself has fallen. In downtown Baghdad, though, the exchange rate is 1,400 to the dollar. Many foreigners in Iraq are also buying up dinars in the hope that it will recover strongly. One analyst commented that the word in Iraq is that at the low end, a dinar could be worth $1. At the top end, more than $4 - many people will become very rich overnight. In its April report, the Economist Intelligence Unit forecast a 60% gross domestic product growth for 2004 and 25% for the following year. But speculators should perhaps heed the advice of another anlayst: "The only thing the Iraqi dinar is likely to hit is a wall." Perhaps he was thinking of Iraq's huge whopping $120 billion foreign debt, which few countries are interested in writing off. (Asia Times Online/Inter Press Service) http://www.atimes.com/atimes/Middle_East/FF17Ak01.html Link to comment Share on other sites More sharing options...
Cskin Posted June 25, 2004 Author Share Posted June 25, 2004 Many foreigners in Iraq are also buying up dinars in the hope that it will recover strongly. One analyst commented that the word in Iraq is that at the low end, a dinar could be worth $1. At the top end, more than $4 - many people will become very rich overnight. In its April report, the Economist Intelligence Unit forecast a 60% gross domestic product growth for 2004 and 25% for the following year. I think an investment of $1050 for $1 million dinars is a nice risk to take. I was referring to the rise in value of the dinar taking place over a few years, potentially five which would encompass the withdrawal of a significant number of US troops. Sure, we'll have troops there... probably on a large base built somewhere in the desert but centrally located. At that point I think whatever insurgents are left will not affect the infrastructure or economy of Iraq's largest cities. Hey... if the Dinar rose to the value of a $1.00 and you had bought 1,000,000 of them for $1050.00... that's like winning the lottery.....a $1 million lottery. And... if it were to rise to the high end of the spectrum the analyst talks about above... $4.00.... well... I think the risk of $1050.00 for the potential gain of $4 million is pretty reasonable. ACB...I'd like to hear what your sister says about the exchange. Link to comment Share on other sites More sharing options...
Southtown Posted June 25, 2004 Share Posted June 25, 2004 Cskin, check out Ebay too. You can currently buy 1,000,000 dinars for $875. They are also selling many smaller denominations as well. Lots of bidding going on too so you're not the only one who thinks this can be a good idea. http://search.ebay.com/IRAQI-DINAR_W0QQsokeywordredirectZ1QQfromZR8 I'm not really sold on it though. For a bad analogy it would be like putting $1000 into a penny stock. It trades that low for a reason. However, a roll of the dice for $875 may be worth it and its not "too" much to risk I suppose. Link to comment Share on other sites More sharing options...
Southtown Posted June 25, 2004 Share Posted June 25, 2004 One last piece of info for those interested. This link has lots of info on the dinar. It is a long thread, about 11 pages, but when you weed out the junk posts it gives you some pretty good information. Enjoy! http://www.fatwallet.com/forums/messageview.php?start=0&catid=52&threadid=270766 Link to comment Share on other sites More sharing options...
EagleSteve Posted June 26, 2004 Share Posted June 26, 2004 Thanks for the info Southtown. I'd agree with many in the FatWallet thread: it's more a gamble than a true investment. Still, with a huge built-in supply of oil and natural gas, Iraq's economy should be able to recover to the point of being stable which will restore some of the dinar's value. It's also in our best interests to pump up the Iraqi economy as well. All in all, I decided to take a gamble - I consider $870 for 1,000,000 dinar worth the risk. But that's the high end of my gamble - no more. If it goes up to 10 cents each in the next 5-6 years, that's a nice little profit of $99,000. So keep that oil flowing and keep the barbarians away from the pipelines. Just a little speculation. Link to comment Share on other sites More sharing options...
Cskin Posted June 26, 2004 Author Share Posted June 26, 2004 Good for you Blazer... risk means potential reward. I'm considering doubling your investment..... I'll cash out at .50 cents and pocket a cool $1 mil. Link to comment Share on other sites More sharing options...
BlitzFiftySix Posted June 26, 2004 Share Posted June 26, 2004 One question? Do they serve breakfast all day at the dinar? Because I love steak and eggs for dinner. I'd invest in a diner that serves breakfast at night. Link to comment Share on other sites More sharing options...
BlitzFiftySix Posted June 26, 2004 Share Posted June 26, 2004 I checked the link and didn't see a menu. Link to comment Share on other sites More sharing options...
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