What Dinar Traders Won’t Tell You!

So you are thinking about buying some Iraqi Dinars in the hopes it will revalue making you rich? There is so much speculation behind the Iraqi Dinar you must have all the facts before you invest in any type of currency.

There is so much hype around the Iraqi dinar and so many cheerleaders all saying the revalue will be any day now (same line for the past several years) it’s hard to know what is true.

The article will separate fact from fiction giving you the correct information so you make a better decision.

1) The same happened in Kuwait and Germany after WWII. This is not exactly true, there was no free-floating currency at the time in either country and so the value was mostly a function of policy making and official currency management. In addition Kuwait was a strong economy before the first gulf war and made most of its money with foreign investment.

2) The Dinar was worth 3.22 before the war. This is actually true but what they fail to mention is that Saddam Hussein himself set that value. If he felt like it he could have set the value at $5 dinars to $1 USD. Dinar traders also fail to mention was the inflation rate in Iraq during the 1980’s. It was over 25% so that 3.22 value was much less.

3) Iraq’s oil fields may prove to be the largest. Actually there is data and evidence to show that Iraq’s oil fields may be larger than those in Saudi Arabia. However any oil based economy is an unstable economy. The 2nd biggest Iraqi export are dates.

Is there anything positive pointing toward the Iraqi dinar?

There is some very interesting news about the dinar that can’t be ignored. With any developing economy it’s usually in their best interest to keep their money cheap. That way they can pay back their debts with cheaper money.

1) China forgives 8.5 billion USD debt it had with Iraq. It’s very important to note that China and Iraq just recently signed a $3 billion oil contract to develop one of its fields for 20 years.

2) The Trade Bank of Iraq joins FOREX. This is a major step for Iraq to modernize its banking process allowing TBI to widen its financial services. It will help Iraqi businesses to trade internationally and grow. This is further evidence that Iraq is gradually returning to the international financial markets.

3) Featured by Jim Cramer on Mad Money. I may not be his biggest fan but he did give further validity to the Iraqi dinar by featuring it on his show.

As you can see Iraq has made improvements by leaps and bounds in its reconstruction hosting the Baghdad Trade Fair and there is talk that Iraq may join the World Trade Organization by 2011.

There is a ton of data coming out of Iraq that point to a positive revaluation of the dinar. Does this mean you will become rich by investing? Of course not, just because there is some good news this is not a sure bet by any means. At last the best advice is to never invest more money than you can afford to lose.

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