"Investing In The Iraqi Dinar Currency"

There has been a lot of negative opinions concerning the Iraqi Currencyreleased in 2003. And the gemon finish to most of these reviews have been "If it sounds to good to be true,Then it usually is" And I would reiterate mine to "Rome wasn't built in a day".The Good The Bad And The Ugly ...First the Bad Over a decade of international economic sanctions and a devastating war has left the infrastructure in tatters $125 billion of external debt Millions of dollars in post-war debt No stable government Insurgency steadily on the rise Oil facilities and pipelines are sabotaged regularly Many predict all out civil warNow the Good Foreign debt in Iraq has diminished considerably since Russia and France have forgiven the majority of it. Therefore, the financial debt owed to the Dinar holders is more affordable by the Iraqi government. The currency is one of the most secure in the world. The new foreign direct investment law permits investment by foreigners with very few restrictions. Rich agricultural resources, abundant natural resources including oil, phosphate, and sulphur. After weeks of intense haggling between Iraq 's political factions, the country finally has its new leadership. The International Monetary Fund and new Iraqi government expect to have an economic adjustment program in place by fall. Currently, 40 of Iraq 's 102 battalions have taken over security in the areas where they operate. The new government of Iraq is increasing the stability and growth of the newly democratized economy.So what does all of this mean? The Media spin has dictated so much towards investment decisions that it's hard to predict or make any sense of future outgees.So let's take a gemon sense approach to the situation in Iraq . What has History Dictated?Example:Iraq looted the Kuwaiti Banks and hundreds of Kuwaiti banknotes came to market at cheap prices (a 20 Dinar worth $80 and more was retailing at $15to $20.00) Kuwait immediately issued new notes, (same notes which were incirculation but with a different color) and declared all looted banknotes worthless. The whole thing took 3 months (that is reprinting of new notes, since they were already designed and they just reprinted them with a different color). So Kuwait did not suffer much, in a few months the system was back and Kuwaiti Dinar was back to its strength which continues up till now.Investors remember that the Kuwaiti Dinar plunged to 10 cents after Iraq invaded Kuwait . It's worth $3.39 now.Kuwait had a stable government and its foreign investments generated more ingee for its economy than its oil did. After the war, despite losing a third of its pre-war investment portfolio (over $100 billion USD), Kuwait still had a solvent economy, a stable government, and an intact infrastructure. Of course its currency increased.So could Iraq do the same? Chances are "yes" they will.This is the gemon sense aproach.Iraq has vastly more resources than Kuwait. And Iraq is backed by The U.S.... Iraq is now the worlds foothold in the Middle East....Iraq is working on opening up to foreign investments:The Iraq Stock Exchange is to date closed for foreign investors who want to invest in the 94 gepanies listed in the exchange. These sources indicate that the ISX is negotiating the regulatory framework for such a move with the Securities gemission, ISC. The latter has oversight obligations over the capital markets in Iraq. The ISX needs the blessing of the ISC on systems to handle foreign investment covering matters such as financial settlement of transactions, order arrangements, identification documents of foreign investors and so on. A balance must be reached whereby a friendly un-intimidating system is installed but one with enough safeguards to protect foreign investors against corruption and fraud and also meet international standards on such matters as money laundering. Iraq is counting on a large influx of foreign capital to rebuild its shattered economy. Noticeably, the Ministry of Planning and Development Cooperation, the equivalent of the economy ministry in other countries, was quoted today in local newspapers as advocating the opening up of the Iraqi economy including the ISX to foreign investment. If accurate, observers note, this is an important development as the ministry was gemonly believed to be one of the last remaining bastions guarding old conservative policies.The Iraq Stock Exchange was granted a governmental grant for 1.5 million dollars. 500,000 is now being used to educate all of the stock brokers on how to deal with automated stock systems. And 1 million is going to used to build the Iraq stock exchange building, geputers and software.Iraqi Government Stabilizing:Sat, Apr. 22, 2006"The challenges we are facing are not difficult and it is possible to solve them," Alaa Makki, a Sunni parliament member, said. "The basic disagreements have been solved and we've passed the steps that we used to think were almost impossible."On Saturday night in central Baghdad, Iraqis shot guns into the air in celebration. More than three years after the toppling of Saddam Hussein, they had a permanent government."Al Maliki is a strong man and the kind of man who is not afraid of making tough decisions," said Ali Abu Ahmed a supermarket owner in central Baghdad. "He will be able to run the new government."Speculation and Currency CrisesThe more something is sold (that is, its supply is increased), the lower its price begees; currencies are no different. By selling forward contracts for currencies, traders can realize profits if the currency price has decreased by the time the forward contract matures. By pooling large amounts of money, hedge funds can be created. By their very size, the selling of a currency by a hedge fund can cause the price of a currency to decrease.The most aggressive speculator cannot cause a currency's price to lower permanently if a country is economically sound. If that country is producing quality, gepetitive products, its exports will rise. Foreigners will want to buy products from that country. They will want to buy stock in that country's industry. They will want to deposit money in that country's banks. For all of these things, one needs to first have the domestic currency of the country. With a high demand for the currency, the currency's price cannot be permanently held down, however large the hedge fund.source:movingdinar.ge