That is the secret of making many people consider various kinds of investment with the aim of having financial freedom freed by the dream that a small amount of investment could bring one a great deal of wealth. Out of these many, many have favored the Iraqi Dinar in the recent past, and many investors have speculated that it is the next big thing as far as currency investment is concerned. The idea is simple: expect that if you buy a currency today that seems to be low priced, after some time, you will have it appreciated and make your profit. But, beneath such glamour, there is a completely different story. While the promoters of the Iraqi Dinar assure that one will have a chance at fast profits, investing in it is highly speculative and steeped in failing to meet the basic principles of investing in any currency’s economy. Now, let’s look at some of the plain truth about the Iraqi Dinar and why investors should avoid buying it at all costs.
Key Drivers of the Investment Craze
The Iraqi Dinar was established in 1932 by the British with the permission of the British and the administration of Iraq. In the past, its main foreign exchange relationship was the pound sterling, which made it a relatively stable albeit rather strong currency. Following the regain of independence, the Dinar had a relatively stable status for much of the twentieth century, as it was linked to the US dollar. Regardless, the value of the Iraqi Dinar fell or rose through the influence of some political calamities such as economic sanctions, wars, and the international embargo.
Knowing the fundamentals of currency exchange rates is very important when it comes to trying to figure out why the Iraqi Dinar may not actually be the investment it is believed to be. As it concerns currency, several factors are worth bearing in mind with regard to a given economy; they include the health of the economy, political status, inflation levels, and balance of payment. In other words, the value of the currency cannot be made up, or changed by the power of the human mind or high expectation. No, it is attributable to the country’s economic situation, hence the name: economic reality.
As in the case of Iraq, there are several major impediments to a more or less serious attempt at revaluing the Dinar. This is now still a major concern, as there are always attempts at overthrowing the government, with violence often along sectarian lines and persistent levels of corruption that can interfere with the development of the economy. Thirdly, Iraq largely depends on the export of oil as the single most important source of income and export earnings, and periodically changing oil prices worldwide can exert additional pressure on the exchange rate of the Dinar.
The concept of a so-called ‘revaluation’ of a currency that could generate big returns is sheer speculation rather than intelligent evaluation. Most of the actors who called for the investment in the Dinar stated such things as ‘This is it’ – Iraq is the next big thing, or you could be a millionaire just from the investment. The health of the US economy is surprisingly portrayed in these myths in that they maintain the hope that Iraq is going to pull through on its economic woes and that the Dinar shall rise again. There are no facts or logical reasons to support such statements, while the risks dramatically exceeded the potential benefits.
Holding the Iraqi Dinar has rather been a source of scams and fraudulent businesses. Since the Dinar is traded in the international market and mostly in the form of private and B2B sales, many have been defrauded by unscrupulous dealers. Scammers take advantage of the desire of people to believe in the existence of a fast and easy way of making money by tricking people into buying a high amount of Dinar for a relatively high price. It is mainly run by these infamous scammers who tend to lure their victims into the fold through a promise of a high return on their investment, the angel’s typical lies about revaluations that are to occur anytime soon.
In the USA, the Securities and Exchange Commission, as well as the Federal Trade Commission, have released statements regarding the risks of investing in dinars. Iraq has no regulation for its currency market, which makes it very risky to invest in, and most regulatory authorities discourage anyone from engaging in currency speculation.
One of the biggest issues with dinar transactions is that they are relatively unregulated, and as such, investors cannot be protected against fraud, controlling the value of Dinar or selling fake banknotes. Without any consumer protection or likely legal remedy, anyone, including investors, can be defrauded by unscrupulous individuals and companies. Because of this, the Iraqi Dinar investment is not only dangerous but highly destructive if an investor does not know the dangers implicating this currency.
It is evident that due to the political and unstable situation in Iraq, the economy suffers. New orders, continued sectarian violence, political corruption, and other vices have made the growth of the economy slow, and the chance of a revaluation of the currency slim. Though Iraq is putting efforts into building its infrastructure, it remains an open question how sustained the growth in the country will be in the long run. Having no government authority in Iraq, the Dinar will have almost no probability of regaining its strength.
International organizations, the IMF and the World Bank have been instrumental in assisting Iraq to bring stability to the economy after the 2003 regime. Nevertheless, their role has been oriented toward the further rehabilitation and reorganization of the economy. Nonetheless, Iraq continues to depend on foreign assistance and oil dollars; in general, its economic position is still unstable. Further, the general reliance on foreign imports goes against the concept of a massive growth in the value of the Dinar.
If you are in search of an investment, why not try finding more safe and secure investments that have good sales records, instead of investing in the Iraqi Dinar? Such assets may include the shares in recognized business organizations, government securities, and real property stakes. More importantly, each of these choices is a much less risky way to create more wealth in the long run.
This means that investment risk is also reduced by maintaining a good and balanced portfolio. Some of the investment assets cover different categories like stock, bond, fixed, and real property to ensure that the poor per inning of one of the investment assets has a small effect on the portfolio as a whole. This process is better than risking money on a single, possibly doubtful, investment but on several conservative ones instead.
The term FOMO is connected with the psychological effect of the masses on buying things and the same is applied to the Iraqi Dinar. But often, reasoning that other people profit from a large trend and making money from it themselves can actually become an equally tempting proposition. This FOMO creates panic and hence destroys the rationality of an individual and an organization and gives birth to emotional buying.
If emotions are used in investment decisions instead of rationality, this always goes hand in hand with great losses. Potential for making quick bucks makes people disregard the real perspectives of the investment. Externally therefore it’s important to step back and conduct a rational evaluation of investment opportunities, as well as analyze the data that is available economically rather than a superficial crust.
Conclusion
Despite the fact that the Iraqi Dinar may sound like an excellent opportunity to become a millionaire overnight, people have to realise that investing in the Dinar is highly risky and unpredictable. The so-called long awaited fortune which will be achieved within the next few years and high profit generation is purely speculative without having any economical grounds for such claims.
As far as financial decision-making is concerned, it is recommended to recall the necessity of obtaining information, analyzing the risks, and consulting with financial experts. Rather than seeking some far-fetched get-rich quick scheme of high return, it is more productive to invest in traditional economic models that guarantee steady earnings. Overall, knowing what specific financial decision to make when investing is one of the best forms of wealth creation, rather than basing such acquisitions on trends.
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