{"id":28847,"date":"2012-04-04T11:03:41","date_gmt":"2012-04-04T15:03:41","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/04\/is-the-iraqi-dinar-a-good-investment\/"},"modified":"2012-04-04T11:03:41","modified_gmt":"2012-04-04T15:03:41","slug":"is-the-iraqi-dinar-a-good-investment","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/04\/04\/is-the-iraqi-dinar-a-good-investment\/","title":{"rendered":"Is the Iraqi Dinar a Good Investment?"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

\"Is<\/p>\n

The State of Washington, among other responsible parties, is sick of folks getting burned on the Iraqi Dinar and other foreign exchange scams. So are we…<\/p>\n<\/div>\n

Amman, Jordan has some of the worst traffic I\u2019ve ever seen. Swarms of cars zoom around traffic circles that were meant to create a street scene like London\u2019s and, maybe, a sense of order.<\/p>\n

The funny thing about this Middle Eastern capital\u2019s hustle and bustle is how much of the movement is dominated by cars with Iraqi license plates. Land Cruisers, Infinitis, Benzes\u2026<\/p>\n

They’re nice cars – the cars of the people who could afford to get the heck out of Dodge at a time when even sitting on the world\u2019s fifth-largest oil reserves couldn\u2019t make staying worthwhile. Things have gotten awfully hairy over the past decade in Mesopotamia, and even with improvements, it\u2019s one of the most dangerous places in the world.<\/p>\n

Nevertheless, you may have heard or seen some recent hype surrounding Iraq\u2019s currency, the dinar. Some heavy spenders are bullish on the dinar, considering it a bet on a young democracy with a major natural resource bounty. These loud voices in the online forex world claim to be riding a wave only a fool would miss.<\/p>\n

Well, to paraphrase an old American saying, if you\u2019ll buy the dinar, I\u2019ve got a bridge in Baghdad to sell you!<\/p>\n

The Sad Truth About Iraq\u2019s Growth Prospects<\/strong><\/h2>\n

Those heavy spenders are in fact shelling out big money to grab your attention on Google and other search engines as you check to see what\u2019s up with Iraq.<\/p>\n

They want to catch you at the door of the digital library before you read too much, because there\u2019s a sad truth that undermines Iraq\u2019s growth prospects.<\/p>\n

That activity created by Iraqi refugees isn\u2019t limited to Amman. Political and commercial centers around the region still buzz with Iraqi professionals, nearly a decade after the U.S.-led invasion that toppled Saddam Hussein\u2019s dictatorship.<\/p>\n

More than half a million Iraqis sought refuge in Jordan since 2003, and over twice that number fled to Syria. They\u2019re shopkeepers and accountants, doctors and janitors. They\u2019re also pieces of the economy that\u2019s supposed to profit enough to make the Iraqi dinar a good investment. The U.N. reports that Iraqi refugees who returned home aren\u2019t happy about it.<\/p>\n

They\u2019ve got some decent points to make, these forex hype artists: Iraq\u2019s Central Bank recently cut the dinar loose from its peg of 1170 to the U.S. dollar. After being locked there since January of 2009, it\u2019s risen a tidbit to 1160 per USD.<\/p>\n

Iraq\u2019s oil production is also back to pre-war levels, according to the CIA World Factbook<\/em>. However the snoops\u2019 encyclopedia doesn\u2019t say whether those pre-war levels account for sanctions on Saddam before his ouster.<\/p>\n

Iraqi petroleum output, essentially dormant because of danger these many years, is set to rise to 2.6 million barrels a day in 2012. Great news!<\/p>\n

False Logic\u2026<\/strong><\/h2>\n

The salesmen have these points to make\u2026 but they often don\u2019t make them. Instead, they lead with generalities and investment logic that isn\u2019t logical at all.<\/p>\n

\u201cDon\u2019t miss this opportunity to profit from Iraq\u2019s developing democracy!\u201d one insists.<\/p>\n

Is that enough for you? Why don\u2019t you invest in the island nation of Vanuatu? Its sandalwood-backed currency is the vatu and it\u2019s a blossoming parliamentary democracy. To boot, its name isn\u2019t synonymous with military disaster, horrific civil war and economic disorder.<\/p>\n

Foreign exchange opportunists will gladly give you dinars for dollars\u2026 and some of them are so willing to do this deal, they\u2019ll trade it to you in person.<\/p>\n

In person! As in cash-on-delivery! Have you paid for anything at all COD in the past 20 years, much less a stack of money from a mess of a country?<\/p>\n

Take a look at this chart:<\/p>\n

\"Iraqi<\/p>\n

Would this excite you if it were a stock? Granted, the downward movement here shows that the dinar is gaining strength against the dollar. And you\u2019re right to note that it\u2019s trading sideways, which can be a sign of a breakout.<\/p>\n

But buying dinars really can be thought of as buying stock in Iraq, and Iraq\u2019s a \u201ccompany\u201d with unstable leadership, no clear economic policy and plenty of rubble to deal with.<\/p>\n

The State of Washington, among other responsible parties, is sick of folks getting burned on the dinar and other foreign exchange scams.<\/p>\n

So are we\u2026<\/p>\n

Buyers of these dinars don\u2019t know what they\u2019re getting, even when the dealer has an easy-to-obtain U.S. Treasury Money Services Business certificate. What\u2019s worse is that there\u2019s no way you\u2019ll be made whole if you get burned.<\/p>\n

Foreign exchange means \u201cexchange\u201d in two ways: First, you\u2019re exchanging one currency for another in hopes that the one you buy will appreciate in value against the one you sell. You can also bet the opposite way, of course.<\/p>\n

Exchange is also a big word because currency moves on exchanges just like stocks do. You can trade some euros at the local bank for dollars when you come back from a nice trip, but you can\u2019t do the same in dinars.<\/p>\n

In fact, you have to be in Iraq to redeem dinars. Needless to say, we wouldn\u2019t advise showing up in Baghdad with a suitcase of precious paper.<\/p>\n

Instead, we advise looking into the many thousands of opportunities to make money from the world\u2019s most dynamic economies that won\u2019t leave you broke or dead.<\/p>\n

Go long on fast-growing economies by investing money you know, in investments you know even better.<\/p>\n

We\u2019ll help you get around the obstacles along the way, in whatever form they take.<\/p>\n

Good Investing,<\/p>\n

Sam Hopkins<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Investment U The State of Washington, among other responsible parties, is sick of folks getting burned on the Iraqi Dinar and other foreign exchange scams. So are we… Amman, Jordan has some of the worst traffic I\u2019ve ever seen. Swarms of cars zoom around traffic circles that were meant to create a street … <\/p>\n

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