Morale: <b>October 18, 2004</b>

October 18, 2004

Troops in Iraq, denied access to sex and booze, and fallen back on another American vice that the army has not yet outlawed; currency speculation. Troops are buying a few hundred dollars worth of Iraqi dinars (now worth about .07 cents each), and holding on to them. Before the 1991 war, the Iraqi dinar was worth over three dollars. The UN sanctions caused the dinar to plunge in value until, just before the United States invaded, a dinar was worth .025 cents. Today, you can buy a million dinars for $700. This currency speculation stuff all began back in 1991, at the end of the Gulf War. The Kuwaiti dinar was worth ten cents at the end of the war, but had been worth $3.40 a year earlier, before the war. Some troops looked around, noted that Kuwait was pretty well run, the Kuwaitis hustled and there was still lots of oil. So some troops bought a few hundred dollars worth of Kuwaiti dinars. By 1997, the Kuwaiti dinar was back up to $3.30. Naturally, word of this fantastic investment got around. So when American troops entered Iraq in 2003, many began thinking of getting a big, and perfectly legal, payoff.

Theres one catch to this sure thing, however. Countries like Iraq, which are larger and less well run than Kuwait, tend to crank up the printing presses and just print more money to satisfy the demands of a deprived population. This causes inflation, which cancels out all, or most, of the gain from the appreciating currency. Then again, the troops are not very likely to loss all, or even most, of their money. So overall, its not a bad bet. And its legal. And a lot of American civilians are getting into the act as well. But the troops get the best prices for dinars. It's one of the few advantages of being there.