Steve Foran headed to Iraq in January for risky but lucrative work as a truck driver, running a fuel tanker on dangerous highways with a soldier riding shotgun and hopes of banking $60,000 or more for the year.
But now he thinks he has found an Iraqi payday that could dwarf his Halliburton contract.
Like thousands of other U.S. contractors and troops -- and stateside Americans drawn by Web pitches from newborn businesses with names like BetOnIraq.com -- Foran is taking a chance on the new Iraqi dinar.
Today, the colorful currency that replaced banknotes bearing the portrait of Saddam Hussein isn't worth much. A dollar will buy about 1,000 dinars -- more if you're in Iraq, fewer if you're sitting safely in the United States.
But next month? Next year? Once Iraq is a stable democracy pumping oil like nobody's business? Who can say what the payoff might be?
"They expect it to hit really big," said Foran, 29, speaking in the confidential tone of the military-base rumor mill working overtime on the future of the dinar. Home in New Jersey for a 10-day rest break, he said he has bought 6 million dinar for "a few grand" and that nearly all his contractor buddies in Iraq have similarly invested.
"If it does like they're saying," Foran said, "there's a lot of people who will leave there as millionaires."
Currency experts are less enthusiastic. The Iraq war has produced its share of desert mirages -- the absence of hoped-for Iraqi masses grateful for liberation, the missing weapons of mass destruction, the oil revenues that were to pay for reconstruction but have not materialized. The dinar boom so eagerly anticipated by Americans in Iraq and at home may be next in line, experts say.
Hitting the wall
"The only thing the Iraqi dinar is likely to hit is a wall," said Steve H. Hanke, professor of applied economics at the Johns Hopkins University and an international authority on currencies and a currency trader.
He said he has been bombarded in recent months with e-mails from people -- many of them contractors or soldiers in Iraq -- seeking his advice on what the dinar will do. For a while, he replied with polite discouragement, but the volume grew too great to bother.
It's impossible to predict the dinar's course with certainty, Hanke said. But the most likely outcome is that a new Iraqi government, faced with crushing debt and ballooning demands, will finance the budget the old-fashioned way: by printing money. That would threaten the currency with collapse, he said.
Foran, like others who are betting on the dinar, is not deterred by such naysaying. He speaks of Iraq's enormous oil reserves, of foreign companies bringing American billions to Iraq and trading them for dinars, of the Bush administration's commitment to supporting the new government.
According to what he is hearing, if the dinar "hits" -- and Foran is thinking that the June 30 date for limited Iraqi sovereignty might be the moment -- he'll be practically a tycoon.
Foran said the word in Iraq is that a dinar could be worth as little as $1 or as much as $4. That's $6 million to $24 million for Stephen Christopher Foran, future man of leisure.
So many contractors in Iraq have joined the dinar chase that Foran is anticipating an unusual complication for Iraqi rebuilding -- an exodus of Americans with newfound dinar-trading fortunes.
"If [contractors] are millionaires, why are they going to stay in a war zone?" he asked, logically enough.
The lure of Iraqi currency might not be obvious when news dispatches from Iraq are replete with accounts of bombs and body counts.
But the dinar craze is not limited to Americans. In Pakistan, the ministry of finance has warned the public against buying dinars, and Pakistani newspapers have carried accounts of unsophisticated purchasers duped by slick traders.
Egyptian authorities have cautioned the public against hoarding what Egyptians call "Bremer dinars," for interim U.S. Administrator L. Paul Bremer III, to distinguish them from the "Saddam dinars" that they replaced starting last fall.
In the first months after U.S. forces took control of Iraq last year, the Coalition Provisional Authority was forced to take the politically embarrassing step of printing more of the old-style banknotes bearing the portrait of the dictator who had just been overthrown.
From September to January, handsome new banknotes, printed in England with the latest anti-counterfeiting features at a cost of $130 million, were flown into the country and distributed to 250 bank branches throughout Iraq. About 10,000 tons of the Hussein-adorned cash was collected and burned.
Bush administration officials promoting their achievements in Iraq often mention the currency swap.
"By all accounts," Treasury Secretary John W. Snow told a congressional committee in March, "the Iraqis have wholeheartedly embraced their new dinars, and confidence in the new currency remains strong."
In a May 5 speech in Philadelphia, Deputy Defense Secretary Paul Wolfowitz boasted of the new currency as a victory for the new order. "More than 4.5 trillion Iraqi dinars have been exchanged, making it the most heavily traded currency in the Middle East," he said.
Wolfowitz did not add that the trade is also booming on U.S. Web sites. Put "Iraqi dinar" into Google and advertisements from a dozen traders appear alongside the search results.
At dinarbrothers.com, the slogan is: "We're so crazy, we're giving it away!" (The fine print says that although 1 million dinars are free, "all you pay is $1,500.00 dollars for next-day shipping and handling.") BetOnIraq.com has a more patriotic come-on: "You say a free Iraq could thrive? Put their money where your mouth is."
Nearly all the traders are small-time operators who order their dinars from suppliers in Jordan and add whatever mark-up the market will bear. Few have previous experience trading currency.
Call the phone number on investindinar.com and proprietor Marshall Donnerbauer answers his cell phone in Kenosha, Wis., where he is busy with his day job building swimming pools.
His Web site is upbeat on prospects for dinar appreciation. "Due to the war, the Iraq Dinar is at an all time low," the site says. "Due to the rebuilding of Iraq led by the United States, the Dinar is set to spike in price."
But on the phone, Donnerbauer, 26, who said he left the University of Minnesota three courses short of a degree in kinesiology, was more circumspect. He acknowledged that because the dinar is not a freely convertible currency, U.S. banks won't take it in return for dollars.
"Here's the problem with this investment," Donnerbauer said. "You can't exchange it in an American bank. So we have to see after June 30 what happens. Maybe the banks will start accepting it. Otherwise, somebody is going to have to go to Iraq to exchange it."
Told of the professional economists' skepticism concerning the dinar, Donnerbauer replied, "The economists have to be realistic. We have to be hopeful."
Katja Morgenstern, who works for Dinar Trading Co. in Charleston, S.C., said she got her optimism about the dinar from studying the resources of Iraq on the Web. "Not only are they sitting on untapped oil, Iraq is an exporter of figs," she said.
Jeff Pasquarella, who runs BetOnIraq.com from his home in Danbury, Conn., wrote on his Web site that "some experts say" the dinar might stabilize at 10 cents, 100 times its current value. Asked which experts he consulted, he said that in the scramble to get the business operating, "I really can't remember where I saw that."
But business is great. "It's been incredible," Pasquarella said. "I've sold 20 million dinars in the last three days."
Most of the dinar dealers are uncertain about what state and federal licensing and reporting rules apply to their businesses. But two said they have recently been cut off by PayPal, the online payment system owned by Internet auctioneer eBay.
PayPal spokeswoman Amanda Pires confirmed that the company has cut off service to some dinar traders who could not show that they were licensed as financial institutions, registered with the federal Financial Crimes Enforcement Network and in compliance with other regulations.
Hanke, the currency expert, said the dinar purchasers are playing at a highly risky enterprise that is not for amateurs.
But Foran, the Halliburton contractor, clearly has a high tolerance for risk.
He said more than a dozen acquaintances among the contractors and soldiers he has met in Iraq this year have been killed. He described driving past the wreckage of vehicles just destroyed by bombs and sitting outside his shared trailer at Camp Anaconda north of Baghdad at sunset, watching a U.S. helicopter blasting away at insurgents outside the gate.
If he loses a few thousand dollars in his dinar venture, it won't be the end of the world. But he doesn't expect to.
"My brother's a trainee broker, and he wants me to pick him up a mill" (a million dinars), Foran said. "It's not often that there's new money created."