Dinars not worth the paper they’re printed on
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Dear Mr. Berko:
There are several dealers offering to sell Iraqi dinars for investment purposes. With the U.S. dollar declining, I think the Iraqi dinar might be a good investment. The dealer told me that Iraq is the largest economy in the Middle East and said that it will recover when Europe and the United States rebuild the infrastructure. He told me that $1,900 in dinars could be worth $1.7 million in U.S. currency. And he told me that before the United States devalued the U.S. dollar in 1973 the Iraqi dinar was worth $3.38. So I want to invest $10,000 in Iraqi dinars. If the dinar just goes to 25 cents next year, my investment would be worth at least $9 million. I know it’s risky, but the huge reward in a year could be enormous. What do you think? Or would you recommend just a $5,000 investment?
My wife and I are very excited about this possibility. We prayed for this opportunity and earnestly seek your advice.
S.A., Ann Arbor, Mich.
Dear S.A.:
My father once described a gold mine as a hole in the ground with a liar standing on top and a chump looking up from the bottom. Certainly, the bigger the lie the more likely it’s believed.
Turning a $1,900 purchase of Iraqi dinars into $1.7 million U.S. would take a miracle from God. But there are gullible Americans who believe God will momentarily stop what he’s doing, listen to their prayers, snap his fingers and temporarily alter the natural, immutable laws of the universe just for them.
It was only a couple of years ago that a bunch of scammers — who probably advertised on satellite radio — were peddling the same cockamamie miracle, hoodwinking thousands of Americans who believed it was a sure thing to turn Iraqi lead into American gold. One reader from Durham, N.C., got hooked for $19,000. Meanwhile these grifters were selling Iraqi currency at markups between 200 percent and 400 percent. They were printing their own dinars, cashing your check, posting you a dummy statement and hiding their carbon prints while moseying into the sunset.
Some of you who actually received delivery of their dinars discovered that no one on this continent wanted them or that banks would charge more to convert dinars into dollars than the dinars were worth. It was a Catch-44, which is twice as bad as a Catch-22. Then some of you discovered the packages of blue, pink, brown and green dinar notes with an engraving of Saddam Hussein were very good photocopies of Iraqi money.
A federal judge told me that a better-known U.S. senator wired $12,000 from his personal checking account in 2003 to one of those grifters. Within a week, he found out he had been scammed: “He got every penny back plus collection costs,” the judge said. Only 100 people in the world have the power of a U.S. senator. If a man who possesses almost unlimited power and can command a table for six at any restaurant in New York City can’t make a buck buying dinars, what makes you think you can?
So let’s assume that you take the bait. Are you certain that you’re writing your check to a legitimate business? Are you certain you’re paying a fair markup to the dealer when you purchase the dinars? If you do make a profit — Lord willin’ and the creek don’t rise — are you certain your dealer will sell your dinars at a fair markdown? And lastly, if you’re really a chump and the $10,000 investment you make today is worth $1,000 in six months:
1. Will the dealer be good enough to send you or your estate a quarterly statement each quarter for 27 years?
2. Will the dealer be good enough to ship the currency to you?
3. What would the shipping, handling and insurance cost be to truck 76.4 pounds of dinars to your home in Ann Arbor?
Meanwhile, don’t bet on an Iraqi economic resurgence. Neither the United States nor Europe is going to Marshall Plan Iraq. We lack the resources and money to return Iraq to the Saddam Hussein era of peace and prosperity.
Rebuilding Iraq is like putting poison back into the fangs of a cobra. The Middle East will always be dominated by Muslim extremists whose ruling guards would quickly deny interest in steel plants, high-rise office buildings or an auto factory.
Iraq has lots of potential petrodollars. But those petrodollars won’t become infrastructure dollars for years to come. Most of those dollars will become lost in Iraq, given as bribes to government officials, put in politicians’ pockets, gifted to religious leaders or paid to army generals, and what little remains will be spent internally on products produced in Iraqi factories by Iraqis.
But assume that you’re the lucky type and one of the five real people ever to win a Publishers Clearing House drawing since 1977. If so, and if your timing is impeccable, you might have an almost incalculable chance of making a profit and not nearly as incalculable a chance of getting some of your money back.
So, if you truly are the lucky type, take your $10,000 to Merrill Lynch and open a commodity trading account. Tell the Merrill man you want to purchase several contracts of Iraqi dinars. He will either have you committed to a mental hospital or take your order. Jeez, I hope you lovely folks get my drift.
Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@comcast.net. © 2008 Creators Syndicate, Inc.
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