Boomyal
Supreme Mariner
- Joined
- Aug 16, 2003
- Messages
- 12,072
I have been watching the value of Iraqi currency for some time. I don't look at it every day or every month but there has been a signifigant change since the summer of '06.
For several years, the exchange rate has been about 1570 Iraqi Dinars to the dollar. Right now it stands at about 1370 to the dollar.
It would seem that with all that is going on, the value should have dropped not increased.
Why do I care you ask? A few short years after the end of the first gulf war, the value of the Kuwaiti Dinar, having been devestated by the invasion, climbed 34 times it's immediate post war value. It would be nice to ride a similar wave with the Iraqi Dinar.
Right now, the Iraqi dinar is worth about 137 to the US penny. Before Gulf War I, one Iraqi dinar was worth about $3.20 US. If the Iraqi Dinar should climb to a value of one dinar to the penny (a mere fraction of it's previous value) that would be a growth of 137 times. If it should go up to ten dinar to the dollar, that would be an increase of 1370 times.
You do the math (no, I will do it for you) If you bought one million Iraqi dinar, today, for $900.00, a future value of 10 ID to the dollar (10 cents) would net you $1, 233, 000. 00
Remember, the pre-Gulf war I value was 320 cents to one Dinar. This value was based on Iraqs oil wealth and would not climb to that today or near future (assuming current problems solved) because of the devastation of the infrastructure.
Is climbing back to 1/32 of it's previous value, (the big gamble here) assuming that Iraq returns to peace, beyond reasonable expectation?
There are such things as devaluations that could affect this scenario but keep in mind the current Dinar is a post war construct and the international financial powers would like to see it hold without interference.
For several years, the exchange rate has been about 1570 Iraqi Dinars to the dollar. Right now it stands at about 1370 to the dollar.
It would seem that with all that is going on, the value should have dropped not increased.
Why do I care you ask? A few short years after the end of the first gulf war, the value of the Kuwaiti Dinar, having been devestated by the invasion, climbed 34 times it's immediate post war value. It would be nice to ride a similar wave with the Iraqi Dinar.
Right now, the Iraqi dinar is worth about 137 to the US penny. Before Gulf War I, one Iraqi dinar was worth about $3.20 US. If the Iraqi Dinar should climb to a value of one dinar to the penny (a mere fraction of it's previous value) that would be a growth of 137 times. If it should go up to ten dinar to the dollar, that would be an increase of 1370 times.
You do the math (no, I will do it for you) If you bought one million Iraqi dinar, today, for $900.00, a future value of 10 ID to the dollar (10 cents) would net you $1, 233, 000. 00
Remember, the pre-Gulf war I value was 320 cents to one Dinar. This value was based on Iraqs oil wealth and would not climb to that today or near future (assuming current problems solved) because of the devastation of the infrastructure.
Is climbing back to 1/32 of it's previous value, (the big gamble here) assuming that Iraq returns to peace, beyond reasonable expectation?
There are such things as devaluations that could affect this scenario but keep in mind the current Dinar is a post war construct and the international financial powers would like to see it hold without interference.
