Investing in the Iraqi Dinar
One of the most interesting items I have come across as a buyer on eBay, is the Iraqi Dinar. The new series Iraqi Dinar, circa 2003, is the latest currency for Iraq and very very cheap, but just because it is cheap, does that make it a sound investment? In this article I will explain the reasoning behind this investment, ways to purchase (if so inclined), and how to monitor its value (current exchange rate).
History of the Iraqi Dinar
The Iraqi Dinar first came into circulation in 1932, replacing the Indian Rupee. For 27 years (until 1959) the Iraqi Dinar stayed pegged to the British Pound at even par. Then, without losing value, the Dinar was pegged to the US dollar at a rate of 1 Dinar = 2.8 dollars. The Dinar rose to over 3 dollars per Iraqi Dinar and remained there until the Gulf War.
In 1991 when the Gulf War was over, a new, inferior quality Dinar was produced. Excessive printing by the government, along with US sanctions made the Dinar devalue quickly, and in the mid 90's the Iraqi Dinar was valued at 3,000 Dinar per 1 US Dollar. NOTE -- pictured right above is the OLD Iraqi Dinar and not in circulation (Saddam era). When on eBay be sure to look for the new Iraqi Dinar (with no pics of Saddam). The old dinar still sells on eBay, why I have no idea....
The newest Dinar series started circulating in 2003 (post Saddam). It's been in circulation for 9 years and despite the War, has not gone down in value.
The Iraqi Dinar a scam?
There are many articles from credible sources calling the Iraqi Dinar as an investment a scam, foolhardy or waste of time and money. Perhaps. I myself do not claim to be any kind of professional and am not going to make any kind of recommendation either way. I am just presenting some pretty interesting facts. You can google the Iraqi Dinar for yourself and come to your own conclusions. I will say that the Iraqi Dinar is still very very cheap, and although it hasn't risen in the 9 years since it has been in circulation, it also has not gone down.
You can check the exchange rate here.
At the time this hub was published, the dinar was approx. 1166 dinar per 1 US dollar, or 858 dollars per million dinar. If the Iraqi Dinar were to rise to say just .01 per US dollar, your 25 dollar investment in the 25,000 Iraqi note would then be worth 250.00.
Future of the Dinar?
Now that US troops are back home, what could be the future of the Iraqi Dinar? The Kuwait Dinar is currently valued over 3 US dollars to 1 Kuwait Dinar. Obviously, Iraq has some serious stabalization to go through, but they are officially listed as sitting on the third largest oil reserve in the world. Some speculate that they in fact may be sitting on THE largest oil reserve in the world and that the current statistical data being used is outdated. Either way, they are sitting on a fairly large amount of oil. Prior to the Gulf war, the Iraqi Dinar was trading at 3 US dollars per 1 Iraqi Dinar.
Where can you buy the Dinar?
One of the easiest ways to buy a small amount of Dinar is on eBay. There are many credible sources (sellers with a solid history) and you can test one of them by buying a single 25,000 note for approx. 25 dollars. You can also buy 1 million Dinar at a time, but if you do, you may wish to buy directly from one of the online dealers. Just do some comparative shopping. Keep in mind that you may save a buck or two on the purchase, but be sure you choose a legitimate source, even if it costs you an extra 50 bucks.
How to tell if an Iraqi Dinar is Counterfeit
I found a great little website here that illustrates the six ways to tell if your Dinar is real or not. I will say that the Iraqi Dinar I have purchased off of eBay have all been legitimate, and the Iraqi notes actually feel pretty impressive, They have some weight and the watermarks and color detail look sharp.
I'm not going to bet the Farm
For me personally, the verdict is still out as to the legitimacy of this investment. There are many credible sources that say it is a waste of time, and they are professionals. But doesn't the fact that Iraq is sitting on such a large amount of oil, and the hope that the region may actually stabilize someday, warrant a little more research? Sure, the post Saddam Iraqi Dinar has not risen in value since its inception in 2003, but it hasn't gone down in value either. And now, US troops are back home. I'm going to continue to monitor the value of the Iraqi Dinar and wait and see. I'm certainly not going to put my retirement into this, but my coworkers may get some interesting stocking stuffers this year at the very least!
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