I have recently been introduced to the idea that the Iraqi Dinar is supposedly going to increase by a dramatic rate in the near future. I have done limited research on the topic, and I have frequently come across news articles that are claiming it is a scam and the currency is a terrible investment. I didn't know who to trust, so I thought I would ask some intelligent Austrians. What are your thoughts about this currencies future, and would you take the time to invest in it? Some of my colleagues are planning on making tens to hundreds of thousands by just investing $1000 American. Thoughts?
Lol, better invest into monopoly money and make tens into billions.
I think there was a brief period of time following the war when the currency appreciated partly because Saddam's government wasn't printing more while the Americans have of course been exploding the number of dollars which also became a currency within Iraq. According to some news articles I just googled the currency's allegedly been appreciating, but can't say you could be sure about anything since you'd essentially be gambling on Iraq's central bank's policy.
"When the King is far the people are happy." Chinese proverb
For Alexander Zinoviev and the free market there is a shared delight:
"Where there are problems there is life."
The Iraqi dinar is nor traded nor listed on any foreign exchange, not even Dubai. At the moment there are various dealers of widely variable reputation (going from spotless to shady) promoting the Iraqi dinar as a future great investment.
Forbes run a vitriolic piece on the Iraqi dinar fever (which they call a scam: you can read it here: http://www.forbes.com/sites/jayadkisson/2012/07/30/you-cant-fix-stupid-the-iraqi-dinar-scam-lives/
I tend to agree with them (for once). Three of the main problems (also highlighted in the article) are these:
1)There are literally tons of dinars in existence. Bernanke is probably green with envy at the quantity of money printed by the government in Baghdad.
2)Despite its oil wealth, Iraq has to borrow money just to provide the most basic services.
3)In spite of the billions spent to date the country is in shambles: it lacks the most basic infrastructures (like a reliable water supply network) and people are still butchering each other in the streets.
I may add on top of that apart from oil industry (whose benefits are mostly reaped by a selected few families and clans) the country has little to nothing of value.
Think of buying Iraqi dinas as buying stocks in Iraq "as a company", a country torn apart by ethnic and religious violence, whose sole source of income is tightly controlled by a few powerful groups which reap all the benefits, an unstable and quarrelling leadership and "plenty of rubble to deal with".
Lol, perhaps I was being very naive taking the initial post seriously if these are just ponzi schemes. Somalia's shilling is probably the thinking man's failed state currency until the central bank was re-established in 2009.