Wednesday, December 31, 2014


TNT Call notes 31-Dec-2014
Tony:  Good morning, TNT!  Today is Wednesday, December 31, 2014, a day I never thought we would share together, yet here we are!  This should be the very last phone call we have this year.  Actually, I expect this to be the last phone call we do like this. 
DC:  I hope you’re all enjoying your holidays.  We expect this on or before the 1st, which is tomorrow. It’s our expectation from everyone in Iraq and the US.  In Iraq, they have been publishing different articles for the budget and justifications for the RV and the economic increase. It’s coming out in the Gazette, which usually comes out on Wednesdays, and they are having a special edition tonight or tomorrow.  Abadi has been explaininr to the provinces about how this is a good deal, as well as stopping corruption and making this a better country.  Also, the ministers are doing a lot of ‘game day checks’ to make sure everything is ready to go, on or before the first.
Shabibi has been behind the scenes and is now publically acknowledged as the architect behind this RV. He is using the terms RI and RV as separate deals.  The RI is a ReInstatement at the old rate plus a bit for inflation. That gives them a little wiggle room.  We expect the rate to be about $3.58.  It’s important that they are calling that an RI because it’s an easy thing to sell – Iraq has had 20 years of hell, and now they are re-instating the currency because of all the great work by PM Abadi and Dr. Shabibi.  It makes the political and legal process more straightforward to separate the two concepts. Those wanting to delay this have already given Iraq carte blanche to do an RI, so it prevents people doing stupid stuff. It still gives Shabibi room to do an RV.  So to recap, the RI will be about $3.58, and will go at the same time as the budget, in the next 24 hours.
Shabibi has always wanted Iraq to have the highest rate in the region.  A large number of policy makers want the Gulf states onto a Gulf Currency Consortium, in which all the governments would get together to create a Euro-type currency.  That has a lot of advantages.  They are already around $4, so Shabibi wants to be in the same ballpark. However, if you look at the Greeks, Spain and Italy, there is less favor for shared currencies like the Euro.  If they DON’T do that, Shabibi wants to be at $5-6, and Iraq can support that within a couple of weeks. We don’t know how much appetite exists for that.  They do want to pull in most of the speculator’s money.  If it is announced tomorrow, then I’m out and so are most of you.  It locks in a lot of treaties and spending plans, and they suck the currency off the market. Then Shabibi can RV with a lot more flexibility. The CBI has a phenomenal balance of reserves, compared to other banks, and that has been due to Dr. Shabibi and the other bankers there.  So he can make another treaty and double it up.  Or if this comes out in Forex, he can buy up all the outstanding currency. Without that downward pressure, it will naturally go up. Most believe the GCC will not happen, and Shabibi wants a $6 rate or more – and I wouldn’t bet against the man.
Tony:  So Shabibi is going around the country explaining the new currency value and also about the new government and the need to support the miiitary against ISIL. They are 90% removed, but they need the people to rise up and support the government and this is what he will do for them. It is law and effective on the 1st of January, when it is published in the Gazette.  The people are excited about tonight or tomorrow.
The rate will come out at $3.58, and there is the possibility in the next two years for the rate to double because that is the rate Shabibi really wants. That’s why he wanted an RV, and he is now in charge of the CBI. That could happen in the next 15-30 days or up to two years.  There are no more riots, there is confidence in Iraq, and investors can move in.  The dinar can come out at $3.58, hit forex, sky-rocket for a short time, and then fall back.  This all gives us confidence in Iraq:  all the votes have been taken and so on.  Traditiaonlly they print the Gazette by noon, and it has not been printed yet.
DC: The PM can adjust that time for a bit.  We have read the budget, and it says that upon completion of the RI/RV, the rate will change.
Tony:  So it will change rates, and if it comes up on the 11pm news, then people will not rush to the bank.  If they have spent money in the morning, they don’t’ want them to demand that money back.  So announcing it at night makes sense.
DC:  Don’t hold the Arab culture to the same time sense that we have, because you’ll just get frustrated. So if it hasn’t happened by morning, don’t worry.  In the US, there are many promises to some powerful people who wanted to close this out by the end of the year. They are pretty pissed and frustrated with the US and what they have done to block it going through so far. Everyone is very ready for this to go. They are running skeleton crews, but there isn’t a big lockdown because they have done everything that they need to do. Each bank will be handling this differently.  We still don’t know if we will be doing instruction calls, or each bank will have a separate website. We hope we’ll do it, because otherwise it will be chaotic.  Don’t expect to go in on the first;  the banks are telling people not ot come in. They will take calls, though, and start appointments on the first.  They will let internet people find out slowly and let it trickle out from there.
Tony:  They could take appointments on the 2-3rd, and have the appointments starting on Monday.  They could use the same people that make appointments to actually exchange people.  Everyone is feeling pretty good apart from those who hoped to close out by the end of the year.  Now they know how we’ve been feeling for a whole year!
Q:  If I exchange some dong now, and hold some until April when I’ve had it for a year, will it still be at the same rate?  That will save me about 10% in capital gains tax.
DC:  We’re not financial advisers, but if they have just revalued the currency, they will do whatever they have to  so that it stays at about the same rate.  If you are close to the one-year limit, then it’s smart to think about those tax implications.
Tony:  Even if it spikes on Forex, and it drops down, it probably won’t go below $3.58.
Q: What about Puerto Rico? Do they have to bring their money to the mainland?
DC:  It’s going to be handled like a straight currency exchange, like euros or pesos.
Q:  What about changes to the CBI website?
DC:  That will change last. They have to make sure that everything else has changed cleanly and smoothly, then they will change the CBI webisite, and it won’t take long to do that.  I don’t expect to see this on Forex for 15-30 days.
Q:  Do we still call it an ‘exchange’?  Yes.
Q:  Why does the administration still delaying this RV, which hurts the Iraqi citizens?
DC:  Why are they nitpicking Iraq?  There are conspiracy guys who believe the US is out NOT to allow more than those who have already exchanged, Iraqi and US citizens be darned.  I don’t believe that is the case.  Even the most cynical people, the nitpickers who are most belligerent about Iraq completing everything plus having personal or political ambitions – even those who have been holding this off wanted Iraq to prove that they are able to do this.  They didn’t have to do half of what the US demanded over the last five months, but it doesn’t indicate that they have the right economic and political strategies.  They have shown this, and even the most cynical politicos are now ready to push this through.  Only a small handful still want to hold this off;  everyone else is saying “crap, Iraq got it together!”  Most people believe this should have happened in August, but at least they have shown that they have a sound government with good leaders, and that they are successfully fighting corruption. The nitpicking was partially personal desires, and the rest wanting Iraq to prove that they can hold their own.
There are also timing issues, and they wanted to wait until 1st January in any case.
Q:  So there are no exchanges or appointments in 2014, so they are not honoring their agreements with you. Will we still get contract rates in 2015?
Tony:  We made an arrangement last year that we will get the $3.58, and that ordinary citizens will get the contract rates.  About 85,000 have exchanged since October, and some at have been paid above the $3 rate.  We can say we haven’t received what we were promised, but the public exchanges haven’t happened!  But think about this: people have been on the call, by email or text, and they are glad it didn’t happen back then, because there was more time to prepare and learn.  We are happy that we are even getting the opportunity to exchange, because at one point they tried to block us from exchanging at all!  We will exchange when Iraq exchanges, and they haven’t yet.  They didn’t want to release this when Maliki was in power, and they couldn’t’ come out and say in public, “until we can get rid of Maliki and put Shabibi back in place, we’re not going to allow this RV”.  They had to get the right people in, and especially someone who could create a government for the people.  PM Abadi has done that in six months, and it’s amazing what he has done!  There is now a democracy that is closer to our own system, and it has worked out better for the people of Iraq.  They deserve it and we’ll get ours.
DC: They have exceeded expectations, blessings about, and we are ready, so everyone needs to stop fussing and get to work.
559 caller:  I do believe we will have a super-fantastic New Year, and I’m happy for the people of Iraq. Regarding zim, is that still in the basket, and what is the code for that?
DC:  I don’t know.  I like the country and the people, but haven’t followed the Zim.
Tony:  I think it’s the ZNN, but take it in and they’ll tell you.
Caller:  I’ve been in this for over ten years, so those who have just been in it a short while, I’ve been homeless for a while but always kept that currency in my pocket.  Tony, will you still have events, and when will the new websites open for registration?  We just missed getting on the forum.  And will there still be contract rates available for us?
DC:  We don’t’ have the package yet, so we don’t know anything for sure.  It’s changing all the time, and individual banks have their own deals, so we can’t really answer that.
Tony:  I still plan the events, and want to add Texas if they let us.  As soon as I read the horrendous NDA, we’ll put it up on the sites;  we’ll start from scratch and see how many people we get and then plan accordingly.  The smaller events should be only 1,000 people or so, and I have to find venues for those events and the big one in Vegas.  I want to do that as quickly as possible, before you start spending money, and with banks providing classes and celebrations in the evenings so we can meet each other.
Caller:  Please give my number to Ray because I’d like to attend his class.  Also, I intend to buy a big motorhome for Pam that she gets to be inside rather than underneath!
718 caller:  Happy New Year!  I noticed you said they intend to RI the currency.   Didn’t Maliki do that last spring?
DC:  He tried to do it in October 2013 and then last spfing, but there were a lot of documents that others didn’t sign off on, and it was a mess. Those have now been signed, so once Abadi and the CBI agree – boom – it’s done!
Tony:  Maliki tried to force it, but it was not recognized.
Caller:  If they RI it first, does that affect the GCR?   What will be the rates?
DC:  Our understanding is that the four currencies will still adjust at the same time.
Tony:  Dinar = $3.58, rupiah = $1.05, dong = $1.02, zim = 0.11 (minus six zeroes)
719 caller:  DC, when you die, could you leave some part of your brain to science?  Because your grasp of economics is amazing!
DC:  You know about Westminster Abbey, where the royal family gets married and many people are buried?  Well, they did a deep hole, 2’ x 2’, pop in the body upright and put a memorial stone.  One old lady wanted Darwin to be buried upside down because she didn’t like the way his mind worked!
Caller:  Thanks for your patience with the same questions over and over.  The lady who wants to know about the code, google it, or do a search on the forum.  Will either of you hold a small amount back to see if the rate goes up?
DC:  I won’t.  [Tony:  I have a different strategy.]
Caller:  You mentioned the other day something about taking receipts to the bank. Why?
DC:  In case some banks will require holding taxes back so it gets done, so they’ll need to know if it’s short term or long term capital gains.
Caller:  Having worked for the IRS, I’d been concerned;  we need to make sure  we have some really good documentation.
DC:  Some folks have deductions, losses carried forward, etc., so I have a hard time wrapping my head round that one. 
Tony:  They will also want a good paper trail, in case people accusing them of stealing currency or saying it’s counterfeit or whatever.
Caller:  My crazy husband wants to get the bank to sign saying they received each note…
DC:  If I were a banker, there’s not a chance in hell I’d do that.  He IS crazy.  They will have a very strong reaction to that request. 
Caller:  We think so, too, and we told him not to do that or we’ll get kicked out.  If they give him a receipt that a million dinar has been deposited, that should suffice.
DC:  Just calm down, give people a little more room, and it will all work out.
Caller:  Many WF banks don’t have Delarue machines, but they have black lights and the ‘book’, so will they still send it off?  [DC:  Yes.]  I feel for the gal who’s been in ten years!
609 caller:  With the RI, are the four currencies still going to go?  {DC:  Yes.] With everything you  know right now, which currency is the best return?
DC:  The safest is Iraqi dinar, the highest return is the zim.  The dinar is what this is based on;  it is the entire foundation for the GCR.  Several years ago they added in these other currencies because they are key countries in their regions.  But the dinar is still the foundation of the whole thing, and therefore it’s the lead, although the others will go, too.
DC:  Taxation – some banks are worried that everyone will blow through their money, so they are requiring people to put away their tax money up front.
443 caller:  I talked about a friend who exchanged on the East Coast. We’ve been friends for a long time, and he is no longer responding to my communications.  He just sends me pictures on the internet of a couple of expensive cars in his driveway.  That’s it!
[Sorry, I had to stop listening here as I had another appointment.]

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