(MONEY Magazine) – Contributing writer Borzou Daragahi was in Chamchamal, in Kurdish northern Iraq, about a mile from Iraqi forces when we chatted by e-mail in late March.

Q. Is commercial activity still happening so close to the front?

A. Trade has come to a near standstill. In certain towns, the bazaars have all but completely shut down. Maybe a few kababis open for lunch. No one is investing or buying supplies. Most stores are empty. It's complete disaster for the local economy.

Q. Are commodity prices way up? Or is it fire-sale time?

A. Gas has quintupled from about 12¢ a liter up to 60¢ or even 90¢ a liter. Cans of Pepsi have doubled. The fire sales happened long ago. My neighbor offered to rent me his television and satellite dish for $50 a week. I took him up on it.

Q. What's the local currency--presumably Visa isn't taken?

A. Trade is conducted in old Iraqi dinars--the ones not printed since 1990 and used only in the Kurdish autonomous area. Its value against the dollar has more than doubled since the summer (making it the best-performing currency in the world). The official Iraqi dinar has collapsed meanwhile. For American journalists, money comes in as Ben Franklins stuffed in our jeans--like we're drug dealers. You can trade them at dollar bazaars, usually in old dank corners of the main bazaar.

Q. Are supplies scarce?

A. I just searched for hours to find Duracell batteries, which used to be available everywhere. In Chamchamal, there's nothing in the shops to eat except stale Turkish and Iranian candy. On the other hand, I was recently in Sulaymaniyah at "MaDonal's," which bears a striking resemblance to a well-known Oak Brook, Ill.-based franchise. The owner promised a free burger and fries to American soldiers.