Iraqi Dinars: Smart Investment or Smoke and Mirrors?
|November 13, 2011||Filled under Featured Article|
Some people looking to cushion their retirement savings are getting tips about potential profits in foreign currency investments. One of the hottest currencies right now is the Iraqi dinar.
Before the Iran-Iraq war broke out in 1980, one Iraqi dinar was worth more than $3 in U.S. currency. Today, one dinar is worth mere pennies. The investment theory is that once Iraq is stable, the dinar value will skyrocket, turning some people into instant millionaires.
Type in the word “dinar” into an Internet search, and you’ll find endless websites jumping at the chance to sell you any quantity of uncirculated dinar notes. Many brokers who sell the notes promote the huge profit you can make when the value of the dinar is eventually increased by as much as a thousand percent, or much more.
But state and federal regulators warn dinar investment scams are pervasive. Many of the sellers are not registered as required. There’s no official dinar value, so sellers set the price. Counterfeit dinars are a common problem. And you can only redeem dinars in Iraq. Then, there’s the fact that revaluation may never happen.
The state Department of Financial Institutions and the Commodity Futures Trading Commission say they get complaints from investors who lost their money. In some case, scam victims have discovered the real looking notes they paid for are fake.
Brokers, financial advisors and economists warn that despite all protests to the contrary, investing in foreign currency – in this case devalued dinars – is highly speculative and extremely risky. If anyone promotes an Iraqi dinar investment (or any investment for that matter), as a having a guaranteed high return, you must accept the fact that there’s a high probability you will never see your money again. There is no guarantee. And in the case of fraud or loss, you have no recourse. Bottom line: if you can’t afford to lose it all, don’t do it.
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