Iraqi Dinar investment risks exist without a doubt. Whoever tries to tell you that investing in dinars is a sure way of becoming rich are not being entirely honest with you. However, investors must remember that risks and rewards always move hand in hand. Investments with high potential rewards also carry high potential risks. To make your judgement you need to understand what the existing situation in Iraq is, what it was before the war, and how it could change in the future. This website will help you find some of these answers. Before I introduce you to more sources of useful information there are a couple of very important things you should ask yourself before you move any further.
What is YOUR risk tolerance? Do you have the financial assets and investment needs to go ahead with this investment? If you pay 50 US dollars you can purchase a minimum of 25,000 new iraqi dinars. Speculators say that in the following years the value of the dinar might appreciate anywhere from 3000 to 8000%. If those speculations are true, would you risk your 50 dollars? Remember, investment risks are worth taking ONLY if you invest as much as you can afford to loose.
Do you think that Iraq has already reached its economic potential? Maybe the answer is not as difficult as it may appear to be. Remember when you were little and your parents or teachers sometimes complained that you were not reaching your potential, i.e. your natural ability to perform? Countries are more or less the same but those who worry about their potential are the economists. Briefly, what the economists say about Iraq is that it has enormous potential but a long way to go until it is able to reach it.
Are you willing to wait long enough to see the currency appreciate?There is no doubt that you could make thousands or even millions of dollars with a properly timed entry and exit in the New Iraqi Dinar. However, since Iraq's future faces so many uncertainties you could loose all your money! So.. let me say it again: NEVER invest more than you can afford to loose!
Here are the investment risks which you need to consider before deciding to become an investor:
Diminished support by the US and International Community.
If the USA pulls out from Iraq prematurely, the problems are likely to increase dramatically inside Iraq. It is certain that without proper support from the United States, there will be severe issues in maintaining order if the Iraqi government fails to maintain secure conditions and restore a system of judicial governance. Before purchasing New Iraqi Dinars, investors should feel optimistic about how the new iraqi government and security forces will be handling problems in the future. One of the main issues is the constant threat of terrorist activities which could grow even more if the iraqi government and people of Iraq do not demonstrate the capacity or will to act against it.
The biggest risk right now is that if a civil war breaks out, the elected government may not survive and this might make the New Iraqi Dinar worthless. There are fears of possible Sunni-Shia clashes across the Islamic world which if it happens it could open a Pandora's box of problems. One of these would be a decrease in oil production, which would lead to a sharp increase in oil price harming the global community. For this reason and many more, it is highly likely that the support by the US and international community will increase dramatically to prevent this from happening. In this case, investment risks maybe worth taking.
Another risk which is of less severe consequences is that the Central Bank of Iraq might decide to increase money supply i.e. print "funny money" to balance the government's books. This would result in significant inflation which in turn would cause the value of the New Iraqi Dinar to decline.
Devaluation of Dinar.
Right now the New Iraqi Dinar is not traded on an open market foreign currency exchange. As soon as Iraq becomes able to defend itself and once the new government shows more stability the Central Bank of Iraq might decide to release the New Iraqi Dinar onto the foreign currency exchange market. When this happens, investors will want to see some positive signs of security and economic improvement in Iraq. If they don't, the New Iraqi Dinar could be instantly devalued. Therefore the timing of the listing of the New Iraqi Dinar into the foreign exchange market is of great importance.
Investment Risks related to buying and owning the dinar.
Iraqi Dinar investment risks also exist when it comes to physically being in possession of the currency itself. You can order dinars on-line from a number or dealers who set up shops on the net or through e-bay. You can pay them in different ways and once they receive your payment they send you the actual notes through the mail. Now, the obvious risks regarding such transactions are not too different to anything else that you buy through the net. Questions you need to ask are:
How reputable is the dealer?
It's important to know the individuals or company you are dealing with. If you are not sure whether or not you can trust them you should try to contact them by phone with your queries.
There are many ways to determine the reputation of iraqi dinar dealers. First it is by getting direct feedback from previous customers and this is very easy if the dealer sells dinars through ebay. On ebay, every shop has a feedback section where customers can add comments. This can give you an indication of how good the seller is.
Some dealers are registered with the US Treasury and others are not. It is said that by being registered you are also a company that can be trusted. Actually, I found out that this is not the case at all, as there have been incidents where registered dealers did not provide a good service as they should. Being registered simply means that a company can legally trade currency within the US but the quality of their service is not guaranteed.
Can the dealer guarantee the quality and authenticity of the dinars they are about to send you?
Only buy dinars from dealers that can provide you with a guarantee regarding the condition and authenticity of the notes they are about to send you. If you don't, you might end up with damaged or counterfeit notes. Prefer the dealers who sell uncirculated notes or notes that are in mint condition to avoid any problems when the time comes to exchange your dinars to a bank. Some dealers have a Da La Rue machine used to authenticate the dinars. Others rely on their suppliers to do the authentication. No matter what the case may be, as long as they provide you with a guarantee, there should be no problem.
Are there any shipping risks?
In some cases, there could be problems during delivery similar to those of any other items that are delivered through the post. Dinars can be sent in different ways, including registered mail or courier. Check to see what the dealer's policy is regarding shipping.
Are there any risks regarding payments?
Avoid personal checks because anyone can remove the ink with a simple solution and write a different amount on the check. Prefer a cashier's check or money order instead. Also be careful of international wire transfers if the seller operates out of the Middle East and requires payment in advance. This is because the chances of recovering the funds if anything goes wrong are very slim. Prefer payments by credit card through a secure server as some credit card companies might offer a 30-day return against any purchases with problems.
Below is an article featuring the problems faced by investors when choosing the wrong dealer. These type of investment risks can be reduced when caution is applied.
Taking the investment risks into consideration there is a lot an investor can do to minimise them before buying Iraqi Dinars. Through this website you will be able to weigh the benefits against the risks and you might be surprised to find that in many cases the risks are worth taking.
To compare the dinar investment risks against the benefits click on the link below:
If you are looking for a more in-depth analysis of the investment risks and facts regarding the new iraqi currency or seeking further investment advice on this subject, a useful resource I recommend for you is a book by M. Stathis called the New Iraqi Dinar Investment guide. You can purchase it through the link below.
There is plenty of free information on the net describing the history and current situation in Iraq. By reading it you will be able to understand more about the investment risks and opportunities regarding the new iraqi dinar. Below are some useful links.
You can search Amazon for more literature on currency investments and investment risks vs opportunities, Iraq or anything else that might be of interest to you. To do so please use the search option below.