Rush to be dinar millionaires
From Chris Ayres in Los Angeles
American punters are rushing to turn themselves
into overnight millionaires by buying freshly-minted Iraqi
currency through the internet.
It takes an investment of $1250 (£707.49) to buy
a million Iraqi dinners, which are a reddish color, decorated
with a drawing of Hammurabi, Ruler of Babylon from the
Policemen, construction workers and students are among
those hoarding the six month old currency - even though
it could be abolished by the new Iraqi government - in
a hope that the country will recover from war to become
an economic powerhouse in the Middle East.
"I never thought of myself as a currency trader",
Bill Burbank, a fireman from San Diego, told the wall
street journal yesterday. "But I called the smartest
people I know - a corporate lawyer, a Wall Street guy
- and they said it sounds pretty viable."
Mr Burbank sells dinars via a web site and often delivers
currency personally, handing over an envelope containing
one million dinars to a customer in a local Starbucks
Other web sites are also getting in on the act. One boasts
"it is now legal for Americans to own dinar at this
100 year low price", adding that "many people
believe it's very likely for the Iraq dinar to stabilise
at $1 to 100 dinars in a few years." The current
exchange rate is 20 cents to 100 dinars.
Mr Burbank is a new breed currency trader. Because there
is no way to buy the Iraqi dinar electronically, he hires
a corporate security consultant to fly to Jordan, pick
up bags of currency and bring them through US customes.
As long as the right forms are completed there are no
problems bringing the cash into the United States.
His interest in the currency began when he made a $3000
bid for 1.25 million dinar on Ebay, and he is now one
of America's largest Iraqi currency investor, having bought
about 100 million dinar for $90,000.
He buys from middlemen, who offer about 950 dinar to the
dollar, instead of the Baghdad rate of 1,430 to the dollar.
He then sells them on his web site for an exchange rate
of about 500 dinar to the dollar, making $2 for every
$1 he invests, before costs such as transport and newspaper
The recent violence in Iraq has caused a slight fall in
the exchange rate, but speculative buying continues.
However, without a trip to Baghdad investors cannot redeem
their stake until banks create an international market
in the Iraqi currency.