Thousands of speculators are calling the new Iraqi Dinar a sure-fire investment that’s nearly guaranteed to make you a millionaire, but what these people never seem to mention is that most of them are actually working as dealers, and are trying to pump up the Dinar’s value or to close a quick sale. I challenge you to run a quick Google search for Iraqi Dinar and see what you come up with. You'll find any number of websites that rave about what a great investment the dinar is going to be, but chances are good that all of these sites are owned and maintained by currency dealers!
Recent exchange rates estimate that one US Dollar might fetch you somewhere around 1170 Iraqi Dinar. “Investment experts” recommend buying Iraqi Dinar in blocks of at least one million, costing somewhere $1,200 USD. The pipe dream these dealers are all touting is that the Dinar will someday be revalued to a 1:1 ratio with the Dollar, much like Kuwait’s currency was revalued following Operation Desert Storm, based largely on the future prospect of oil revenues.
These websites hail the future value of Iraq's large oil reserves and their estimated future market worth. This argument fails to consider that fact that worldwide oil markets are extremely volatile, and that any national economy which is based primarily on oil is bound to be just as precarious. Chew on this: oil revenues account for nearly ninety percent of Iraq's gross domestic product, and several other countries with similar economic situations have equally weak currency values.
Most of the websites which sell Iraqi Dinars always mention the previous exchange rate of the Iraqi Dinar. These “experts” are referring to the currency rates established in 1982, when a young Saddam Hussein artificially fixed the Dinar’s exchange rate to 1:3.22 US Dollars! What these websites don't tell you is that the Saddam-era Dinar was never allowed to be traded on the world’s open currency markets! This “baseline” value that the dealers expect the modern Dinar to return to was never valid!
Ever since the Coalition Provisional Authority issued the new Iraqi Dinar (IQD) in October 2003, it has been seen as nearly worthless by most serious currency traders, and even by most Iraqi nationals. At present, it would take almost 1200 Iraqi Dinars to trade for US Dollar, which is a dismal exchange rate for any country. The Saddam-era Dinar has absolutely no value now, except possibly as a collectible sold on Ebay.
The Iraqi Dinar is only traded in a limited number of banks, and it has never been used in any significant international business transactions. The everyday person will be hard-pressed to find any reputable bank or currency exchange service that will accept Iraqi Dinars for exchange, and this includes banks inside of Iraq! The only people profiting from selling Iraqi Dinars are individual webmasters who promote the Dinar!
It’s hard for me to view any investment as a serious choice when the brokers claim ridiculous numbers such as the potential for a 400,000% profit margin! I’d be willing to bet that these dealers are the only ones who have seen a decent return on their investment, and that’s only because they’ve grossly inflated their shipping and handling charges.
Buying Iraqi Dinars for their investment value has about the same chance of making you an instant millionaire as if you had just bought a local lottery ticket. I’d be lying if I said that I hadn’t come back from my contracts with a fistful of dinar, but I only spent what I could afford to lose. I picked up about a hundred thousand Dinar during my travels, which are now tucked away in my safe deposit box. If their value blows up eventually, sweet! If not, well, I’m out about a hundred bucks and I’ve got some neat souvenirs to pass down to my kids.