Tuesday, December 28, 2004

Invest (or gamble) on the Iraqi Dinar

Surely I make no claims as a financial advisor, but people have asked me about buying Iraqi dinar, and I thought I'd share what I've found out.

As with any investment, sites trying to sell you dinar make a pretty convincing pitch. Here's the bottom line from Bet on Iraq:

If things go well in Iraq's future, they will also go well for anyone who bought Iraqi currency at today's prices.

That statement is hard to argue. To get a more in-depth understanding, check out this CNN piece, but also consider the source:

My view is that if you want to spend a few bucks to acquire Iraqi dinar as a novelty item or you want to gamble with money you can well afford to lose, that's fine. Enjoy yourself. But you shouldn't even think of making something this iffy a part of your investment portfolio.

Also this FAQ.

The main thing you'll want to know is if your exchange rate is fair. Check the Central Bank of Iraq site, but keep in mind that any company will have to charge more to cover their expenses.

I've invested some, and dealt with a man who currently charges $800 USD for 1M Iraqi dinar. He buys them for about $700 USD, and I think his mark up is fair, considering his risks.

For those of you without the advantage of being in Baghdad, you'll probably have to make a deal on the internet, and you'll probably have to put up the money a few days before actually getting your dinar, but the exchange rate is roughly the same.

We'll see how it plays out, but I'm thinking that getting in before the election could be a smart move. Who knows . . .