We know a few people who have some pretty paper they call Iraqi Dinar. They think it is an investment. Is it?
Prima facie, I could not figure how holding paper money would ever make you any money if even a little bit over time. Money rarely becomes *stronger* against the dollar. You *might* be able to do this with the British Pound, the Euro, the Canadian Dollar, and maybe some other major currencies that do occasionally move up and down against the US Dollar.
But if you factor in the time you might have to hold to get any kind of gain of 5% to 10%, factor in the fees to exchange the physical money at a bank or whatever, and you MIGHT break even if you are lucky.
Now you can obviously make some money in an ETF or FOREX account. People do this all the time trading currencies. But they are usually moving pretty large amounts of money for very small percentages to make their money. And that is quite different from the costs of holding physical currency. And still, you have to be pretty savvy and patient and disciplined to do well in in those markets as well.
The Iraqi Dinar is not currently traded in international exchanges AT ALL. So the only option is to get “hard” money and hold it. Can this work? Why would it or could it be a good investment?
The thing I keep hearing was, “It is going to be revalued!”. Okay… and who is going to pay for the revaluation? And why?
The two possibilities of money changing value that I could fathom were:
Revalue the demonination
So here is the story
http://www.cbi.iq/index.php?pid=Home
http://en.wikipedia.org/wiki/Iraqi_dinar
http://www.imf.org/external/country/irq/index.htm