invest in iraqi dinars?

[huber117]

i heard somewhere that right now is the time to invest in iraqi money because there down over the war. anybody know anything about this? seems to make sense to me but if its true, why wouldnt it be on the news? can anyone shed some light on this? thanks

[Shoe]

Lots of people have been saying this ever since the invasion. This is high risk/high reward. If Iraq ever stabalizes and becomes the successful country that it could be if the different factions would stop killing each other, then this will be a great investment. But how much confidence do you have of that actually happening?

[gull]

Don't bother.

[krazyace5]

I am pretty sure that they could also cancel the dinar making them worthless and come up with a new currency for the new government.

[Shoe]

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I am pretty sure that they could also cancel the dinar making them worthless and come up with a new currency for the new government.

[/ QUOTE ]

Exactly... that is part of what I meant by "high risk"

[huber117]

i have a cousin whos in iraq right now, he said its around 1,000,000 dinars for 650 dollars. when i started looking into it i found alot of bs sites and ebay listings for them at higher prices, kinda makin a scam out of the situation, with get rich quik stories and whatnot. im sure that it will be a while before iraq makes any progress if at all. but when you think about it, even if there is a 10% chance the dinar reaches $1 ten years from now, making that 650 dollar investment worth 1,000,000 or so, isnt it worth the high risk? kind of like implied odds in poker, only here the implied odds are much higher. any thoughts? anybody actually invest in them? im skeptical, but still interested since its alot better then the 10% crap that makes you money by the time you dont need it anymore.

[gull]

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but when you think about it, even if there is a 10% chance the dinar reaches $1 ten years from now, making that 650 dollar investment worth 1,000,000 or so, isnt it worth the high risk?

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Yes. But 10% and $1 are figures you made up. I'll bet my life savings that the dinar is not worth $1 ten years from now, giving 9:1 odds.

[MrFeelNothin]

[ QUOTE ]
i have a cousin whos in iraq right now, he said its around 1,000,000 dinars for 650 dollars. when i started looking into it i found alot of bs sites and ebay listings for them at higher prices, kinda makin a scam out of the situation, with get rich quik stories and whatnot. im sure that it will be a while before iraq makes any progress if at all. but when you think about it, even if there is a 10% chance the dinar reaches $1 ten years from now, making that 650 dollar investment worth 1,000,000 or so, isnt it worth the high risk? kind of like implied odds in poker, only here the implied odds are much higher. any thoughts? anybody actually invest in them? im skeptical, but still interested since its alot better then the 10% crap that makes you money by the time you dont need it anymore.

[/ QUOTE ]

Brilliant.

[scrilla]

[ QUOTE ]
[ QUOTE ]
i have a cousin whos in iraq right now, he said its around 1,000,000 dinars for 650 dollars. when i started looking into it i found alot of bs sites and ebay listings for them at higher prices, kinda makin a scam out of the situation, with get rich quik stories and whatnot. im sure that it will be a while before iraq makes any progress if at all. but when you think about it, even if there is a 10% chance the dinar reaches $1 ten years from now, making that 650 dollar investment worth 1,000,000 or so, isnt it worth the high risk? kind of like implied odds in poker, only here the implied odds are much higher. any thoughts? anybody actually invest in them? im skeptical, but still interested since its alot better then the 10% crap that makes you money by the time you dont need it anymore.

[/ QUOTE ]

Brilliant.

[/ QUOTE ]

QFT

[chrisgl83]

since you're lookin' for advice: don't do it.

now, for some qualifications. I work as a professional currency trader (market making options on 3 various exchanges in euro/dollar, yen/dollar, chf/$, sterling/$, cad/$, to be precise).

First off, to generate any meaningful returns, you wouldn't actually buy any currency with cash. If you had bought euros at $1 at their debut, you'd have made 32% (as of today), on your investment in some 6 years its been around. This is worse than equities, and one of the more pronounced currency movements seen in quite some time (okay, before you start correcting me, the icelandic krona has an outrageous vol of 40% (or some such) vs the euro in any given year--I haven't a clue what your investment timeframe is).

Anyway, you aren't going to buy dinar off ebay at a premium, and hold onto the cash under your bed. What you'd want to do is buy long-term futures on margin (whereas future-based margin is different than typical stock margin -- ask me if you want me go into details). Basically find a forex account, and with a $10k deposit, you could go long around $100k of dinars. At least that way, you'd actually generate a meaningful return, assuming your directional pick is correct.

But, as far as I can see, even if the iraqi government stabilizes, they're going to peg the currency vs the dollar (as some 100 currencies in the world currently are) to prevent speculators from absolutely gouging it all over the place (recall soros & the pound in '92?, as well as the asian financial crisis). I can't imagine the dinar being unpegged in oh, say, 50 years, at the least. China's yuan has been pegged for a significant amount of time, and over ten years, people have been building the case for its unpegging, which is only recently beginning to build clout. If you want to bet on an emerging economy and on a dollar-unpegging, I'd much prefer the yuan, as China has a robust economy replete with foreign investment (Iraq doesn't). Furthermore, the yuan is undervalued by up to a factor of ten according to various economic reports, and a stronger yuan is all but inevitable as most view it. This is far from the case from Iraq, which is currently a warzone and very unstable economically.