Invest in the Iraqi dinar and watch your dollars disappear

Invest in the Iraqi dinar and watch your dollars disappear

Sep 2, 2011, 12:00am HST

Neil Rose Investment Strategies


In the age of the Internet, I’m shocked how many scams still succeed in luring victims and their cash.

I’ve received three calls in a week from reasonably smart people asking for my take on investing in the Iraqi dinar. The Iraqi dinar? For some reason this latest get-rich-quick scheme is finding a relatively receptive audience in Hawaii.

The Iraqi dinar pitch incorporates the standard enticement of making a lot of money fast with a new and creative appeal to investors’ general dismay with an ever-weakening U.S. dollar.

The “investment opportunity” goes something like this: A huge profit (some claim up to 10,000 percent) will be made once the Iraqi dinar is officially revalued versus the U.S. dollar. A prospective investor is to believe a massive revaluation is imminent due to general post-war nation building and Iraq’s large and untapped oil reserves.

Some websites offer additional reasons, including meticulous details about exactly how and when the currency will appreciate. Some go as far as to claim that the dinar “will be the next major currency.”

Forget about it, and if you know someone who’s buying, or thinking about buying, the dinar, please urge them to spend two minutes on Google and Wikipedia.

Sure, Iraq has a local currency, the dinar. The latest version of the dinar was established in early 2004. It has “officially” strengthened after the currency was re-pegged to about 1,170 dinar per dollar. And, sure, Iraq has oil, lots of it that’s just below the surface and easy to get.

But that doesn’t mean there is easy “investment” in the dinar. Quite the contrary.

The first and most important reason to forget about the dinar is liquidity. You simply can’t buy and sell dinars. You can’t walk into a bank or brokerage and trade this small and rather irrelevant currency. It seems the only way to trade dinars is through one of many unregulated (and some fraudulent) online providers that will sell to you at a 50 percent markup or more.

http://www.bizjournals.com/pacific/print-edition/2011/09/02/invest-in-the-iraqi-dinar-and-watch.html