Idiot question re: currency investing

Hi Tim, I also speak fluent Lara so I will be your translator today.

Lara concurred with me and added:

"A fool and his money are soon parted."

Two words:

Iraqi Dinars.

When democracy fourishes over there (and we all know it will--how could it not?), the dinar will skyrocket. You can get 1000 dinar for a buck right now on e-bay. There is no way to possibly lose!

I was thinking more in terms of Liras - it used to be about 10,000 liras to a penny - and I gots myself a whole bunch of pennies.

Sell the other currency and buy dollars. When dollars go up you sell them and buy (more of ) the foreign currency (which has at least technically declined) than you initially sold thus generating a profit.

Yes it's complex and since most traders heavily rely on margin you can really stand to take a beating. If I was a betting man (but I'm not) I would be very concerned that you are picking dollars to appreciate over any currency. The dollar strength and or weakness all depends on demand and I am not quite sure why the dollar will be in stronger demand over the next year with Iran (and Russia) looking to price oil in currencies other than dollars and our amazing trade deficit. There are obviously many other issues at play but with the economic woes here I wouldn't invest my money in dollars against foreign currencies.

On Iraqi dinar I would like to short them and buy ... anything. in case of the likely event that our new president decides to simply remove all troops and allow the country to collapse into chaos. The new government might be kind enough to cancel all the old currency and issue new Muslim currency making the gain stellar. (yes I recognized the use of sarcasm Run4).  :-)