Iraqi Dinar Alert

In their syndicated column, Motley Fool typically includes a section where people write in to tell about their “dumbest ” investment. The idea is for readers to learn from mistakes made by others. Here’s a recent submission as it appeared in the Kansas City Star:

MY DUMBEST INVESTMENT

Last year, I spent about $1,500 for approximately 1.7 million Iraqi dinars. At the moment, one U.S. dollar is worth approximately 1,450 Iraqi dinars, making my investment worth around $1,170. Even a modest increase in the value of the dinar would result in significant gains. Time will tell if this investment is Foolish or just plain foolish. B.E., Killeen, Texas

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For what it’s worth - this piece of positive news about Iraqi Dinar up in Mona Charen’s commentary at Townhall.com:

Amir Taheri, writing in the June issue of Commentary magazine, offers a catalogue of progress in Iraq that is almost impossible to find in our principal news outlets. For example, he notes that there have been no queues of refugees streaming out of Iraq. To the contrary, 1.2 million have returned home since Saddam’s ouster. Muslim pilgrims are flocking to the holy sites in Karbala and Najaf. The Iraqi dinar, which had been in free fall during the final period of Saddam’s misrule, has risen by 17 percent against the Kuwaiti dinar and 23 percent against the Iranian rial. (bold added) Iraq’s GDP has rebounded since the invasion, and inflation has dropped from 70 percent to 25.4 percent.

Technorati Tags: Iraqi Dinar

The Wall Street Journal reports (Friday, March 17, 2006) that emerging market mutual funds are snapping up risky bonds issued by the Iraqi government earlier this year. The bonds were originally issued to banks - such as Citigroup and JP Morgan Chase - to refinance commercial debt accumulated under Saddam. The Banks began selling the bonds (about $2.8 billion in total) to investors in January.

The implications for Iraqi Dinar are not discussed in the article, but it is clear that some serious Wall Street investors believe Iraq may indeed have a bright future.