Sometime in the 2000s, my gig with the traveling circus took me to Iraq for a couple years. It was a very interesting time to be there, when over a hundred thousand military troops stationed throughout the country were supported by an equal or greater number of private contractors. The demographics of deployment made for a unique slice of life, and people whose paths might not have ordinarily crossed in the real world now found themselves bunkmates in the dusty transit tent. Coming and going through the Baghdad International Airport was always prime time for people-watching, and one impression I took away from the experience was how many ‘self-proclaimed experts’ seemed to gravitate towards working in a war zone. Some days it seemed as it the smoke pits and shuttle bus stops were modern-day versions of the Library of Alexandria, with opinionated scholars in cargo pants and golf shirts holding court and extolling their theories on geopolitics, military strategy, and modern society as a whole.
At that point in my career I had just started to become interested in personal finance and investing, so I found myself paying close attention to any advice that my older colleagues were kind enough to hand down. In addition to their thoughts on the best strategies for dodging alimony, child support and high-interest motorcycle payments, I also found myself listening to a surprising number of get-rich-quick schemes. Honestly, it seemed as if everybody working in Iraq had already developed a detailed plan for smuggling Saddam Hussein’s legendary gold stores out of the country. And even though I never personally saw the first trace of a gold bar, I did learn of another sure-fire way to attain millionaire status: by investing in Iraqi Dinar (IQD).
If I remember the scheme correctly, the armchair investors I worked with planned to buy up all the loose Dinar they could get their hands on. The thinking was that once the newly-minted democratic government of Iraq was fully stabilized, and the country properly pacified and reconstructed, it wouldn’t be long until Iraq would resume producing and exporting an astronomical amount of crude oil. From there, it was assumed that the value of the dinar would increase exponentially, to the point where the government of Iraq would somehow miraculously re-value its currency, putting the Dinar at a 1:1 exchange rate with the US dollar. (At the time, the smallest commonly handled paper bill, the 1000 IQD note, could be exchanged for about 84 cents.) The demand for Dinar was fierce, and it seemed like every camp, base or outpost, no matter how remote, had a local contact who was happy to sell large stacks of bills to Westerners.
Of course, even the newest investor can see that there were a whole lot of “ifs” involved in this investment strategy. The rosy picture painted by speculators never took into account the poorly maintained infrastructure that propped up Iraq’s oil industry, which experts later estimated might take decades of work plus billions of dollars of investment to restore. Not to mention, there are a literally endless number of factors which have the ability to influence a country’s oil production, as well as the price per barrel a country can hope to achieve on the global market. And lastly, there’s the inherent difficulty involved with cashing in your Dinar since many banks simply won’t accept IQD, or at least not in the form of a dusty wallet full of bills. After I wrapped up that stop in the Middle East and headed back to the domestic carnival circuit, I got the impression that stacks of Iraqi currency had little value beyond souvenirs.
This past week, more out of curiosity than anything, I spent a few minutes surfing around the Internet and checking up on the Iraqi Dinar. It looks to me like the Dinar’s value hasn’t risen any since 2007, but unfortunately Dinar “investing” still seems like a thing. There’s definitely no shortage of websites which are still happy to take your money in exchange for a stack of banknotes, or expert guidebooks which will teach you how to “unlock the secrets” of foreign currency exchange.
And just in case you’re still reading and you want my opinion, I’d say that unless you’ve got some kind of background in Middle Eastern affairs, and unless you’re fully committed to learning the ins and outs of foreign currency speculation, I think it’s safe to say you should pass on investing in the Iraqi Dinar. But since I’ve been wrong before, I guess I should admit that I’ve still got about 50,000 IQD tucked away in a foot locker somewhere. Maybe I’ll make a note to check back on my “investment” in another ten years or so… who knows what the future might bring?