Some family members are getting excited about investing in Iraqi Dinars. I'm pretty sure it's not a great idea. What are the best online resources for or against this idea?

  • 2
    Just a nit pick - It is speculation, not investing. – MrChrister Nov 26 '10 at 20:14
  • I have concerns about this question being no different than a stock tips question. I would generalize the question to currency investing and use the Iragi Dinar as a specific example. – George Marian Nov 26 '10 at 21:11
  • That is some speculation. If the oil starts flowing then money money money or else if it remains like it is now, forget about your investment. – DumbCoder Dec 1 '10 at 10:10

Iraq is a US vassal/puppet state. I'm not sure what 500 South Vietnamese Dong were worth in 1972, but today the paper currency is worth $10 in mint condition.

I'd suggest blackjack or craps as an alternate "investment".

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Currency, like gold and other commodities, isn't really much of an investment at all. It doesn't actually generate any return. Its value might fluctuate at a different rate than that of the US dollar or Euro, but that's about it. It might have a place as a very small slice of a basket of global currencies, but most US / European households don't actually need that sort of basket; it's really more of a risk-management strategy than an investment strategy and it doesn't really reflect the risks faced by an ordinary family in the US (or Europe or similar).

Investments shouldn't generally be particularly "exciting". Generally, "exciting" opportunities mean that you're speculating on the market, not really investing in it. If you have a few thousand dollars you don't need and don't mind losing, you can make some good money speculating some of the time, but you can also just lose it all too. (Maybe there's a little room for excitement if you find amazing deals on ordinary investments at the very bottom of a stock market crash when decent, solid companies are on sale much cheaper than they ordinarily are.)

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Once a currency loses value, it never regains it. Period. Granted there have been short term periods of deflation, as well as periods where, due to relative value fluctuation, a currency may temporarily gain value against the U.S. dollar (or Euro, Franc, whatever) but the prospect of a currency that's lost 99.99% of its value will reclaim any of that value is an impossibility.

Currency is paper. It's not stock. It's not a hard commodity. It has no intrinsic value, and no government in history has ever been motivated to "re-value" its currency. Mind you, there have been plenty of "reverse splits" where a government will knock off the extraneous zeroes to make handling units of the currency more practical.

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