Taking Stock: Dinars to dollars

Dear Mr. Berko:
An investment man in our church is selling Iraq dinars and wants me to invest $13,260 to buy 10 million dinars. He says if the dinar goes to a penny, I will make $100,000 and if it goes to a dime, I will make $1 million. Iraq, with all that oil and a growing economy, makes the dinar look like a very great opportunity for me. He said there are many banks and dealers who will buy the dinars back anytime. This is my chance to make it big.
S.L., Fort Walton Beach, Fla.

Dear S.L.:
You have to be industrial-strength dumb to buy 10 million dinars for $13,260 from your church “investment man.” He is doing a good job of promoting a worthless currency with the pitch “Now is your chance to become a millionaire.” Is he also telling you that you must buy now because “my inventory is limited and the dinars are becoming scarce?” Is he also telling you that when the Iraqi government becomes solvent, “the dinar will increase to $1, and you will have $10 million?” Then in the next breath, is he telling you he only has a limited amount of dinars and will have to return some investors checks because he will “run out of dinars?” Do you recognize any of these comments?

Holy Mary, Moses and Molly, even though this smells like a bucket of night soil, a lot of good folks have fallen for this tommyrot. Look at the numbers – $1 will buy 1,200 dinars so the value of one dinar is .0833 cents, which is a lot less than a penny. Now $10 U.S. will buy 12,000 dinars, $1,000 U.S. will purchase 1.2 million dinars, and $10,000 will get you 12 million dinars. And this is the official exchange rate, which should tell you that your church “investment man” will net a cool $5,000 if you give him $13,260 for 10 million of those silly things. 

Now, for your 10,000 dinars to be worth $100,000, the value would have to increase from 12 to the penny to one dinar to a penny, which is a 1,200 percent, increase. That is highly unlikely. And for your 10 million cache to be worth $1 million U.S., each dinar would have to be worth a dime, and that’s a 12,000 percent increase, which is even unlikelier!

That “investment man” is going take you for $5,000 because you want to believe that Goldilocks will marry Humpty Dumpty and you’ll be invited to the wedding. And with billions of fake dinars sold over the Internet, you’ll have no idea if you’re getting the real McCoy ... though their values are probably identical. But investigate before you invest. Call some of those bank/dealers and tell them you have 10 million dinars to sell. I suspect that price they will pay will knock your socks off. 

This dinar thing is a scam, meaning “to cheat or swindle as in a confidence game.” You are relying on hope that a growing Iraqi economy will result in a stronger currency. Consider Mexico and Venezuela, both of which have strong economies and major oil producers. However both are experiencing gut wrenching inflation, and both are deflating their currencies. It’s economic suicide for the Iraqi government to pursue a policy of currency appreciation. An appreciating dinar makes funding a new government and paying off debts expensive. And Iraq, regardless of its oil reserves, is likely to experience an international devaluation or a currency crash. Don’t let your emotion and greed trump your common sense. And don’t be the fool who eagerly parts with his money. 

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate Web site at www.creators.com.
© 2010 Creators Syndicate Inc.

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