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zerocool
Deck the Malls
|  posted 11 August, 2006 07:58 AM     
30% is very high. that would mean if you ever wanted to sell them, they would have to increase in relative value 30% just to break even.
Posts: 336 | From: Currently: Jakarta Indonesia Australia Belgium Berkeley CA > Lima Peru< | Registered: May 2002 | IP: Logged |  |
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lynnejanet
Happy Holly Days
| posted 11 August, 2006 02:25 PM
quote:
Originally posted by Publius:
Conditions in Iraq being what they are, the trade in Iraqi dinars is a wonderful piece of foreign exchange nostalgia. There's no fancy electronic transfers or anything like that. Retailers get their Iraqi dinars by knowing someone (who knows someone, who knows someone...) who has a contact in Iraq. That contact smuggles Iraqi dinars out of the country in suitcases as cold, hard cash, and passes the physical bills on down the supply chain with all the risk and markup that this implies. That's a lot of markup....
Since banks won't exchange your Iraqi dinars for real money, the idea is that you simply put the physical bills away in a vault somewhere until, one day far off in a magical future when Iraq is a shining paradise that has reached the Second Stage of Democracy, your bank decides to start exchanging your Iraqi dinars for hard currency at some rate more favorable than the outrageous price at which you bought your dinars in the first place. Right.
I understand what you are saying about the pyramid scheme, but banks do deal in Iraqi dinar. My brother bought his at his bank. He had to wait a couple of days for them to come in, but they didn't give him a hard time about it, or treat it as an unusual request.
I will caution him, though, not to get up in any private sales of dinar.
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lynne"insert appropriate punny phrase here"janet
Posts: 1460 | From: Ontario, Canada | Registered: Dec 2003 | IP: Logged | |
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Publius
Happy Holly Days
| posted 12 August, 2006 10:07 AM
quote:
Originally posted by lynnejanet:
quote:
Originally posted by Publius:
Conditions in Iraq being what they are, the trade in Iraqi dinars is a wonderful piece of foreign exchange nostalgia. There's no fancy electronic transfers or anything like that. Retailers get their Iraqi dinars by knowing someone (who knows someone, who knows someone...) who has a contact in Iraq. That contact smuggles Iraqi dinars out of the country in suitcases as cold, hard cash, and passes the physical bills on down the supply chain with all the risk and markup that this implies. That's a lot of markup....
Since banks won't exchange your Iraqi dinars for real money, the idea is that you simply put the physical bills away in a vault somewhere until, one day far off in a magical future when Iraq is a shining paradise that has reached the Second Stage of Democracy, your bank decides to start exchanging your Iraqi dinars for hard currency at some rate more favorable than the outrageous price at which you bought your dinars in the first place. Right.
I understand what you are saying about the pyramid scheme, but banks do deal in Iraqi dinar. My brother bought his at his bank. He had to wait a couple of days for them to come in, but they didn't give him a hard time about it, or treat it as an unusual request.
I will caution him, though, not to get up in any private sales of dinar.
Do you mind if I ask what bank? I actually have some I need to get rid of.
Posts: 1640 | From: New Haven, CT | Registered: Dec 2002 | IP: Logged | |
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lynnejanet
Happy Holly Days
| posted 12 August, 2006 04:07 PM
I think he went to his regular branch, which would be a TD Canada Trust. I don't think you would have one in California  I can ask him if you like.
Are you really saying that chartered banks in the US do not deal in Iraqui dinar? I can understand that small branches in small cities may not be bothered, but I would be surprised if a major bank in a large city would refuse to honour it. From what I understand, it is an official currency. I suppose there is no legal obligation for any bank to honour foreign currency, though. I can understand that some banks may consider it to risky.
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lynne"insert appropriate punny phrase here"janet
Posts: 1460 | From: Ontario, Canada | Registered: Dec 2003 | IP: Logged | |
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Publius
Happy Holly Days
| posted 12 August, 2006 11:29 PM
quote:
Originally posted by lynnejanet:
I think he went to his regular branch, which would be a TD Canada Trust. I don't think you would have one in California I can ask him if you like.
It's not a big deal: I only have like $15-20 worth, so it's not really worth a lot of trouble (or gasoline). Thanks, though.
I honestly haven't looked very hard, but I don't know of any banks or currency exchanges willing to buy Iraqi dinars with hard currency. Come to think of it, maybe banks are willing to sell it, but not willing to buy it?
The Financial Times had a good article (subscription only, unfortunately) on the Iraqi dinar trade in late March. It suggests that selling Iraqi dinars for hard currency on official exchanges is hard or impossible, but it's possible that there are other ways of doing it or that the situation's changed:
quote:
Since the currency is not yet convertible on the international market, the money is shipped as cash, in boxes, by courier services. Banks outside of Iraq will not deposit the currency, so those who purchase it must keep it in deposit boxes or other secure places.
(If it really is hard or impossible to change the Iraqi dinar back to hard currency, the dinar's not alone. It's almost impossible to exchange Syrian lira for hard currency outside of Syria, too. In fact, it can be difficult to change Syrian lira back to US dollars at official banks and exchanges even within Syria, though you can generally do it with a little coaxing and can almost always do it informally without much hassle. Even the Turkish lira is said to be worthless outside of Turkey and Turkish Cyprus, though it seems to do all right on Turkey's immediate fringe. The only other regional currency I have direct experience with, the Lebanese lira, mixes with the dollar pretty freely in its native habitat, so I don't know anyone who's ever been stuck with lira outside Lebanon under ordinary circumstances.)
Good luck to your brother.
Posts: 1640 | From: New Haven, CT | Registered: Dec 2002 | IP: Logged | |
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Delta-V
Xboxing Day
| posted 18 August, 2006 04:05 AM
I would say that such 'soft currency' is the norm, rather than the exception. Most 3rd world country's currency is rather difficult to exchange for Dollars (US, Aussie, or Canadian) or Pounds or Yen (or a few other 'hard currencies'). In some countries you aren't supposed to take currency out of the country, either. From my own experience, the old Eastern Bloc currencies were worthless outside those countries. You could buy East German Marks, but you were warned that you couldn't exchange them back. On the other hand, you could often offer someone US Dollars instead of the local currency and they'd happily take it (even if it was illegal to do so). IIRC, most trade in Cuba is done with US Dollars (and therefore, most trade is done on the black market).
A few countries just converted to using hard currency, (US dollars in the Western Hemisphere, US, Aussie or NZ dollars in the Pacific rim, and Euros elsewhere), or lock their currency to them. They give up control of their monetary situation, but gain a more stable inflation rate and currency value.
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"My neighbor asked why anyone would need a car that can go 190 mph. If the answer isn't obvious, and explaination won't help." - Csabe Csere
Posts: 1225 | From: Wichita, Kansas | Registered: Nov 2003 | IP: Logged | |
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abigsmurf
We Wish You a Merry Giftmas
| posted 18 August, 2006 07:36 PM
I would think investing in iraq currency at the moment is a huge high risk venture. If the country officially goes into civil war, it could end up being worthless.
Posts: 824 | From: England | Registered: Mar 2005 | IP: Logged | |
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Errata
Happy Xmas (Warranty Is Over)
| posted 14 September, 2006 02:33 AM
Small private investors really shouldn't trade in currency like that. Its a complex investment. But what it comes down to is that smarter, faster, richer people with better information than you are going to be one step ahead of you. Any certain trends are already factored into the price.
Its one thing to trade in businesses (or countries) that you really know inside and out better than anyone. But friend of a friend information just isn't good enough to qualify. Small time investors should stick with longer term investments and not put all their eggs in one basket. Individual currencies are generally a bad idea for them. You might try to find a mutual fund that does this sort of investing if you believe in it. You can go with a general trend you believe in by picking the fund, but you don't have to have up to the minute information to keep on top of your investment yourself.
Posts: 2018 | From: Santa Barbara, California | Registered: Aug 2005 | IP: Logged | |
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