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Tuesday, February 5, 2013

DINAR GURUS UPDATE, 5 FEB


2-5-2013  Newshound/Intel Guru BGG   I think if all the political pieces fall in place for us correctly that we are 30 - 45 days away from the politics to be in place for this to happen.  Do we have to wait this long?  No, not even close.  If things go well for us in the next few days & the pieces fit together properly, they could be positioned politically for us for this thing to happen.  On the Maliki situation, I think Maliki has to be dealt with in some way, shape or form.  The CBI, UN and the IMF just will not put up with that kind of dictator.  Anything is possible on the RV/float perspective.  Deep down, I think it's going to be an RV.  Poppy3 thinks it will come out between $3.22 and $3.86.    [post 2 of 2]

2-5-2013  Newshound/Intel Guru BGG  There is an extraordinary amount of attention being placed on the budget, the Federal Courts Law and the Amnesty Law.  We have a lot to be thankful for right now.  The demonstrations and the clerics are behind this movement forward on the budget, the Federal courts law & getting these politicians ready to rock and roll.  I don't think we would be here without the demonstrations.  They said they would demonstrate until Maliki resigns. I doubt that Maliki resigns on his own.  [post 1 of 2....stay tuned]

2-5-2013  Newshound Guru Doc    So which scenario is correct? Actually we could at this point believe either.  We would prefer the first for obvious reasons and it makes sense as we've discussed in length to RV at a lower initial rate and let the market take it upward as Iraq actually produces more wealth.  At $0.69 it would definitely start the ball rolling.  We continue with our opinion the goal is to get the dinar to its pre gulf war levels of $3+ but it appears this is out several years as has been documented over and over again.  Let just hope the 138 billion number was not a misprint.  We report, you decide.  [post 3 of 3]

2-5-2013  Newshound Guru Doc    Another possibility here is the 138 billion dinar number was a misprint and it should have read 138 trillion.  This happens quite often in Iraqi news reports.  Doing the same math as previously this suggests the assumed exchange rate was 1448 dinar per USD which we know isn't right since the current program rate is 1166.  However, if 1166 is assumed the budget should be 111 trillion dinar and not 138 trillion dinar. This is possible if the 138 trillion number include budget shortfall of 27 trillion dinar ($23 billion) of which was not reported in the article.  We have to remember the 2012 budget included about 15 trillion dinar in shortfall.  Unfortunately we will not know until more information is made public.  The article also stated the vote would not be until Thursday while several articles said Tuesday.  So as usual we have conflicting information.  [post 2 of 3....stay tuned]

2-5-2013  Newshound Guru Doc   We just came across an article quoting some preliminary 2013 budget numbers.  The reports is quoted as the 2013 budget will be 138 billion dinar based on 2.9 million barrels per day export at $90 per barrel.  Lets assume the 138 billion dinar number is not a misprint and do the math.  First remember oil is sold in USD and not dinar so Iraq is assuming its revenue will be $95.3 billion USD (2.9 billion barrels times 365 days times $90).  To convert this to dinar we have to apply the exchange rate they assumed. To convert from $95.3 billion USD to 138 billion dinar they would have had to assume an exchange rate of 1.45 dinar per USD (138/95.3).  Another way of saying this is $0.69 USD per dinar which is around the 1 to 1 ratio.  It also supports the lower initial rate and float upward strategy which we believe is their goal.   [post 1 of 3....stay tuned]

2-5-2013  Newshound/Intel Guru BGG    The lower denoms are already printed.  They are just not released to the public.  This is confirmed.  They are only using about half of the denominations, not the full family of currencies just yet.  The IQD will be a reserve currency.  If you get a couple of countries like the U.S. and China holding it in their treasuries and trading it for oil, it's a reserve currency not matter what label you put on it.  There is not much paper currency within the borders of Iraq, what is there is torn and used up.  They are in a squeeze play right now and have to do something about it.  They need to get fresh money into the market place.  What we are seeing right now is the final struggles in this thing.  I don't see anything horribly bad for us. 

2-5-2013  Intel/Newshound Guru Poppy3    MANY QUESTIONS ABOUT IRAQ STABILITY AND IF STABLE ENOUGH TO SATISFY THE UNITED NATIONS AND IMF.  LOOK, FINANCIALLY AND RESOURCE GROWTH, AND THE DEATH RATE IN IRAQ IS MUCH BETTER THAN THE USA RIGHT NOW.   I THINK THE UN AND IMF WILL APPROVE THEM QUICK IF THEY NULLIFY MALIKI’S POWER OR REMOVE HIM VERY QUICK.  

2-5-2013  Newshound Guru Shredd   Here's another big point: Without an international currency, you cannot manage your risks in the efficient ways that have become the standard in countries with internationally tradable currencies. The lack of international stability is also a problem in trade.  Lastly, companies in the developing countries would have to enter the global competition with a crucial disadvantage.  While their competitors would be able to hedge, swap, and obtain financing wherever it is cheaper and most convenient, they would be forced to rely on the credits and services provided in their weak, shallow financial systems.  So, hopefully this brings a little more light to WHY it is important for Iraq to move to an internationally tradable currency.   [post 2 of 2]

2-5-2013  Newshound Guru Shredd   [new guru]   It’s been coming up for quite some time whether or not Iraq really NEEDS to revalue their currency and get it to a place where it is internationally tradable. The question goes something like this; "Can't Iraq just keep on going like they have been and do all business in US Dollars?"  
First of all, without an internationally tradable currency, Iraq is walled off from the globalized financial system, thus raising the cost of business and increasing risk and uncertainty in the economy.  This problem is that the CBI will not be able to provide a currency that people can use throughout the world.

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