In more detail, the basic reason for investing in the New Iraqi Dinar has to do with how optimistic one is regarding the economic recovery of Iraq. Another reason is to consider Iraq's previous economic productivity and wonder if it can exceed it.
So, as an open trade nation will Iraq gain the confidence of conservative foreign investors?
We shouldn't forget that the Iraqi Dinar has long been a strong currency, dating back to biblical times. Its decline begun after Saddam Hussein controlled Iraq. Right now, it is at a historically low rate but has gained a significant appreciation since its new launch and continues to rise.
Many have compared the situation in Iraq with that in Kuwait, but a better analogy might be the one about Japan and Germany and what happened after World War II. As their economies were rebuilding people could buy their currencies very cheaply. Once their economies recovered, anyone who took advantage of that opportunity became extremely wealthy.
Click the graph below to see in detail how the New Iraqi Dinar has been performing. The document is provided by the Central Bank of Iraq. The rates start from year 2004. Scroll down until the end of the report to view the latest NID rates.
Iraq has tremendous potential for growth and it has already seen some economic progress. If the violence is reduced and the capacity of the government improves it is possible to have significant growth. If the situation in Iraq continues to deteriorate the consequences could be severe for Iraq, the US, the region and the world. Therefore, it is only natural that the US and international community will try their best to bring stability.
The Study Report which was put together by members of the US Institute of Peace explains in detail all the consequenses should situation in Iraq continues to deteriorate. Click below to download a copy of the report.
Iraq Study Group Report
A deputy in the Iraqi Parliament, Hassan Al-Sunaid revealed that the rate of the Iraqi Dinar will have a significant growth against the dollar by the middle of 2007, reaching 1200 iraqi dinars to the dollar. Please note that in November 2006, 1 dollar was worth 1480 Iraqi Dinars and by January 2007 the dinar gained over 12%. In May of 1997 it has reached 1260 dinars per dollar so Mr Al-Sundaid's statement is proving to be accurate. Click below to view the article.
Due to global energy crises, demand for oil will accelerate. Iraq, apart from the fact that it has natural gas, water resources and fertile lands, it has the second world's largest oil reserves. It currently produces a lot less than its vast potential and therefore Iraq could become the oil reservoir of the future for 3 main reasons: Iraq's high quality of crude oil, potential for huge supplies and very low production costs.
Iraqi dinar currency reserves are stable and growing. The Iraqi government has made progress in meeting benchmarks set by the International Monetary Fund. In some areas prices are getting closer to those in neighbouring regions. Demand for the New Iraqi Dinar IS rising.
A significant amount of Iraq's government debt has been relieved through the Paris Cub agreement and this has put the
country on firmer financial footing. The US is currently working with the United Nations and other partners to provide Iraqis with greater debt relief. In return, the Iraqi government will agree to achieve certain economic reform milestones and reaching economic self-sufficiency by 2012, giving the iraqi dinar the chance to rise to its previous level.
Below is a recent article explaining the current efforts of the United Nations to bring global support in Iraq.
UN Chief urges global support for Iraq
An estimated $33 billion has been invested in Iraq by US companies such as Coca-Cola, Texaco, Chevron, and more. Once the government of Iraq demonstrates that it can defend itself from terrorism, more companies will invest.
Iraq has taken several positive steps since Saddam Hussein was overthrown: Restored full sovereignty,conducted open national elections, drafted a permanent constitution, ratified that constitution, elected a new government pursuant to that constitution.
At the moment, the iraqi government and the people of Iraq are not taking the steps necessary to prevent catastrophe through civil war and intervention by their regional neighbours. However, it is only a matter of time until they do.
Already US companies and government has invested billions of dollars in Iraq, even though the risks have been enormous. If you are in a position to accept these high risks then you have the chance to profit from this rare investment opportunity.
If you wish to learn more about the dinar or need a comprehensive guide on how to invest in it, The New Iraqi Dinar Investment Guide by Michael Stathis explains it all. Click below to order.
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