Iraqi Dinar: Is It Your Best Retirement Option?

March 29, 2011 By Christine Jackson Leave a Comment
The Iraqi government has come a long way since the overthrow of Saddam back in 2003. Sadly, there is a long way to go before Iraq and the infrastructure is back to what it was before U.S. invasion. I’ve been keeping with progress since 2003 and have been an investor in Iraq ever since. Provided the current economic collapse worldwide, what has gotten the attention of the investment world is the stability of the Iraqi Dinar over the last six years.

As one of the main goals announced early on, Iraq has accomplished the stability of currency concerns, as well as they’ve managed to control inflation which was also a goal set by Iraqi leaders. We just hear about the negatives in Iraq, terrorist attacks, sectarian killing, no electricity or adequate fuel for vehicles or generators to power homes and businesses. It seems only the negative news was announced by the major media outlets given the liberal slant well known by everyone given the press loved attacking the Bush administration.

Politics as usual, both here in the U.S. as well as in Iraq. Politics is the same throughout the world, and given the U.S. is forcing democracy upon Iraq, it only reasons that the same dirty politics and party divisions would be adopted also by the Iraqi Parliament. All the delays we’ve witnessed are all caused by the sectarian divide between Shiite’s, Sunni’s and Kurd’s that represent the main powers in Iraq. Provided the hatred between the sectarian parties, similar to the hatred between the democrats and republicans, no wonder no one can agree on important issues in Iraq.

What we see now after 6 years is progress towards partial agreement between parties, not almost what would be hoped given the wealth of Iraq, and the need to help its citizens that are mostly poor people who’re desperate for change. If this sectarian divide didn’t exist, Iraq would be well on its way to being the wealthiest middle east country by now. Unfortunately, these parties have squandered years fighting over who gets what with regards to oil proceeds. Even after parties agreed to share equally, it wasn’t enough for a few.

With elections scheduled for January 2010, there was even a delay on the election law that was held up for months leading up to the second most important election in Iraq. Will it go off as planned, it finally looks like it’s passed, and this is one of the last issues that required to be resolved before any hope of a revaluation or restoration of the dinars value.

For those who have already invested in the Iraqi Dinar from the start, they’ve already seen more than 50% return on investment, but if you’re like most who follow this closely, 50% is a pittance to what the potential will be if you can just remain patient. With stock market collapse, markets rising and falling every day, housing collapse, banking collapse, we’ve seen it all over the past year, so considering the small amount needed for a potential retirement windfall, everyone should be researching the Iraqi Dinar for their retirement plan.

As we approach the end of the year with election law now passed, much of Iraq’s former debt forgiven, oil law passed and major companies lining up for oil contracts, I know from my contacts that Iraq has the largest oil reserves in the world. They have not been confirmed yet, but when they are, which will be early next year given the recent progress, there is no way the Iraqi Dinar will remain at these artificially low rates. With much of the infrastructure in oil and electricity still far from complete, Iraq will need to purchase billions from outside of Iraq, and it’ll not happen with an artificially depressed current value of the dinar. It must be revalued prior to these major expenditures start, so I predict it will happen early next year, perhaps even before the elections given politics as usual of paying for votes. Maliki in not assured the election given so little has been done for the bad voters, so the same as in U.S. politics, you are able to buy an election, so Maliki simply may push an interim revaluation awaiting full revaluation when GCC is enacted in middle east with new universal currency. Either way, all it takes is patience.

With current Iraqi Dinar being stable at 1170 for over a year while all other currencies have been fluctuating up and down, mainly down, as with the U.S. dollar now at lowest exchange rates in decades, you can’t ignore the fact the Iraqi Dinar has been rock solid all through the economic meltdown of banking in U.S. With major press on MSNBC and Erin Burnett and Jim Cramer speaking about it for the first time, the secret is out, there are couple of other investments that could come close the ultimate potential of the Iraqi Dinar. Of course, never invest what you cannot afford to lose, but when you do decide to not invest in the Iraqi Dinar, simply never look back or you may be sorry for the rest of your life.

If you want more information on iraqi dinars, don’t read just rehashed articles online to avoid getting ripped off. Go here: Iraqi Dinar ========================= Banking in Iraq – The Need for Change (Part II) In order for Iraq’s banking system to develop, the first steps must not come from private enterprise but from government. The majority of Iraq’s banks are privately owned businesses. There are a few government owned enterprises. Rafidain, Iraq’s largest bank which was established over seventy years ago is owned by the state. Also, Trade Bank of Iraq, a commercial bank that writes letters of credit for the central government’s purchases and setup by Paul Bremer is owned by Iraq’s Ministry of Finance. The problem that exists today is that the few state-owned banks hold over eighty percent of Iraq’s bank assets. Putting it plainly, the government controls what the banking sector looks and feels like. The government should not be in the bank-owning business but in the bank-regulating business. With the right legislation in place, Iraq could create a law which governs Iraqi banks and also international banks that operate inside Iraq. Chartered banks, rather than state-owned financial institutions could begin to operate with confidence and serve Iraqis. This law would not be complete without the creation of a deposit insurance corporation. This corporation is common in western countries and helps alleviate the fears that the public may have about depositing their funds at a financial institution. In the United States of America the deposition insurance corporation will insure an American’s deposit at a bank for up to $250,000 USD should the bank holding the funds go under. In Canada the figure is $100,000 CAD. One of the issues addressed in Part I was the need to provide Iraqis education on financial literacy. In addition to increasing their knowledge, they will also need the assurance that if they save their hard-earned money in a bank, it will not disappear should the bank fail. If the deposit insurance corporation is structured correctly and managed properly, it can also act as an independent institution with oversight responsibilities. With government oversight and deposit insurance in place, the final piece will be a couple of the most important acronyms in retail banking which are AML and KYC. Chartered banks are required by law to be on the lookout for money laundering and terrorist financing. This is why Anti Money Laundering and Know Your Customer rules are strict yet help both the financial institution and the individual complete transactions. These policies are in place to make it a straight forward process for an individual to create an account at any chartered bank. If these institutions want Iraqis to deposit their savings in accounts, they will need to make the process of creating and maintaining an account easy to understand while complying with international banking standards to avoid money laundering and terrorist financing. The last thing Iraqis need is more bureaucracy. But if these are privately owned businesses and not state owned institutions, then the problem of bureaucracy and needing an endless number of forms and stamps to do something basic like open a bank account should be diminished. Finally, Iraqis will need convenience to go along with their new financial products. As things stand, an Iraqi can only complete transactions at the branch that s/he opened the account. This includes simple transactions such as deposits and withdrawals. If Iraqis are to go from carrying wads of cash in their pockets to a single debit card that can access cash at any branch and even competing banks, then the infrastructure needs to be implemented by chartered banks that will allow such transactions to take place. Iraq is becoming an increasingly powerful economic player in the region and the global oil market. In order for Iraqis to reap the rewards of this economic relevance, they must demand change from their government and their financial institutions. With the right legislation, oversight and regulation, Iraq’s banking system can finally begin to serve the general public and not the government. Hassan Hadad is an economist and works in retail & small business banking at one of Canada’s largest financial institutions. The views expressed here are solely his own and do not reflect those of his employer. You can follow him on twitter (@Abufellah). =============================