Today, 10:41 AM
As you’ve heard, repeatedly, almost all of the Dinarian Guru’s are claiming an RV in the time window of “last week” and /or this week. Many of the Gurus were even more specific and stated a time window of Sunday – Wednesday of this week.
Let me share my thoughts on this first… IF this is our week then would it make more sense for it to happen Sunday, Monday, Tuesday or Wednesday…. OR…
Wait a few days… like Friday, this Friday… but why this Friday?
1. It is “technically” the end of the Month…
2. It is technically the end of the Quarter…
3. It is technically the end of ½ of 2011…
4. I say these things because banking is close from Friday at 5:00 all the way through Tuesday at 8:00 or 9:00 am EST Tuesday.
5. From an accounting standpoint this makes significantly more sense.
6. In addition to that, the United Nations is set to adjust the values of currencies from May 27th – June 1st (My link)
7. Shabibbi has, repeatedly been quoted as saying, when he RV’s he would much prefer to do it over a Holiday (This weekend is of course Memorial Day weekend, a 3 day weekend where ALL US BANKS ARE CLOSED!)
8. Why would that be important to Shabibbi and Iraq?
a. Here are my thoughts…
i. Iraq has a State of the Art, yet untested under pressure, Banking System.
ii. So, if You are going to RV, a world-wide event, then why not space out the “cash in” event why positioning themselves to be at the head of the line?
1. If they were to RV, let’s say, Friday Night (our time) / Saturday Morning (their time).
2. What does that accomplish? The ONLY world-wide banks that are open are Middles Eastern Banks (such as Iraq) that means that they get to “cash in” first.
3. Then the following day, Europe, Australia, and the Orient get to cash in.
4. The US, however, can’t “cash in” until Tuesday morning, when our banks open.
a. Many Iraqis love Americans, after all, we liberated them from a dictator.
b. Many Iraqis do not like Anericans. After all, we invaded their country, declared war, etc. etc. etc.
i. Both groups of Iraqis are happy. Those who love us are happy we get paid. Those who don’t like us are happy because, out of the whole world, we get paid last.
To me from a logical standpoint, all of those reason feel valid to me. Based upon that information, IF this is our week, then it would make the most sense to me that our window would be Friday, May 27th – June 1st, over the long Holiday Weekend.
Now, we have established that IF this is our week, then this weekend is our BEST window for it to happen.
Now, let’s move onto the next burning question… IS this a good window?
Let’s look at the facts and articles that suggest that this may be an incredible window for the RV…
•1. PEACE TREATY with KUWAIT: Power Players from Kuwait showed up in Iraq TODAY with a PEACE TREATY and asked Iraq if they were ready to sign it. (My link) THIS IS HUGE!!!!
•a. If Iraq signs the treaty it marks the END of Chapter VII Sanctions.
•i. This means that INNEDIATELY are a completely sovereign nation and can 100% govern themselves. Which also means that they regain complete control of their OIL and NATURAL GAS resources, so they can buy, sell and trade as THYE SEE FIT. It also means that they AUTOMATICALLY gain access to the DFI (Development Fund Iraq) funds that have been accumulating since the Sanctions were imposed in 2003. It basically means that even thing that was scheduled for expiration on June 30th. That means that they June 30th expiration is automatically moved up to the date that Iraq signs a Peace Treaty with Kuwait.
•2. UN Sanctions: IF Iraq signs the Peace Treaty with Kuwait, that is the LAST thing that they have to do to end the Chapter VII Sanctions. But, who has to actually remove the sanctions once the treaty is signed? The United Nations of course. Where is the UN you ask… Well, they are in IRAQ right now for a 3 day conference on “The Economic Future of Iraq”, how convenient? ()
•3. Government in Iraq – GOI: First and foremost the core to it all is power sharing. NO ONE wants a “Mini Saddam”. Right now Maliki has too much power, everyone but Maliki agrees on that one…lol. The GOI has recently according to numerous articles “Activated the Ebril Agreement” that agreement is all about sharing the power in the Iraqi Government. Secondly, with the confidence of the activated Ebril Agreement all political parties involved can nominate, vote and seat the remaining Security Ministers. We have seen numerous articles talking about the Ministers, this process, and updates on the progress. The bottom line is… It IS being talked about, discussed & negotiated right now! There are NUMEROUS Articles that back this up & My link)
•4. Follow the Money: There have been numerous article stating that the CBI has been “Sterilizing” the Iraqi Currency. That means that they have been removing large amounts of IQD Currency from circulation. Some estimates report that there is as little as 4 trillion Iraqi Dinar left in circulation (of the 27 trillion originally minted and in circulation). This is HUGE because, you have to have the resources to back up the value of your currency. What backs up Iraq’s currency? OIL. Iraq is now hitting record levels of Oil Production, the HIGEST levels since before the Iraqi War in 2003. Some estimates and articles suggest that Iraq is currently producing 2.7 Million Barrels Per Day (BPD), take that times an average price over the last several months of about $100 (USD) per barrel and you get a DAILY INCOME of $270,000,000. At the current value of 1170 Iraqi Dinar per US Dollar, that would be equal to 315,900,000,000 (well over Three Hundred BILLION Dinar per day.) Multiply that times 30 days in a month and Iraq would have a monthly income of 9,477,000,000,000 IQD (that is almost 9 and a half TRILLION Dinar income per month).
•5. The PROBLEM with that: Iraq needs things that Iraq does not have. It needs to purchase those things from other countries in the rest of the world, right? How much purchasing power is 9.5 Trillion Iraq Dinar worth in the world markets? 9.5 Trillion divided by 1170 IQD = 1 USD only equals $8,100,000,000 ($8.1 Billion US Dollars) per month that they can exchange with the rest of the world for Food, Materials, Technology, Military Equipment, Medical Supplies, Infrastructure projects, etc. With that extremely low purchasing power, $8.5 Billion a month just doesn’t go very far.
•6. Solution: Re-Value the currency of course! All that means is to change the value or purchasing power of their local currency. On one hand, yes they would still be only “making” the same 2.7 Million (BPD) of oil and yes that Oil would still be being sold at approximately $100 (USD) per barrel, so, Iraq would still being making the same $270,000,000 ($ Two Hundred and Seventy Million Dollars per day or $8,100,000,000 ($8.1 Billion USD per month). However if the IDQ were to Re-Value at (for round numbers let’s just say $3.00 USD = 1 IQD). That $8.1 Billion USD per month would be equal to 2,700,000,000 Iraqi Dinar (2.7 Billion Iraqi Dinar). How you might think, hold on a second that’s a lot less, how does that help Iraq? Well first on the purchasing power end in the World Markets, it hasn’t changed a penny. It is still worth $8.1 Billion USD. What is does accomplish is several things. First, it requires far less IQD for any transaction (which is one thing that Shabibbi has stated repeatedly as a goal of the CBI, Less physical currency & more value to that currency. This makes every transaction easier because the numbers are smaller and more in line with the values of the currencies of other countries that they do daily business with.) BUT, what else does it do? Through the sterilization process, Iraq has only (estimated) 4 Trillion IDQ in circulation, which would suddenly be worth and have the purchasing power of $12 Trillion USD. In addition to that, Iraq would also still have (however much IQD that it took out of circulation and has not destroyed and that would also have a value or purchasing power of three times the US Dollar).
•7. Can Iraq sustain the value of the Revalued Currency? OF COURSE! The IDQ has, historically always maintained a tradable value on the world stage ranging between $2.50 USD - $3.50 USD per Iraqi Dinar, throughout its history of being created in 1932 all the way through the Invasion of Iraq and the harshest possible UN Sanctions imposed in 2003 and remaining through December 15th, 2010 (for the most part) with the last couple of sanctions set to expire on June 30th, unless a treaty is signed with Kuwait, which would lift the sanctions completely and immediately!
•8. What Revalued Rate can Iraq sustain? Iraq has always had OIL and NATURAL GAS make up 90% of its Gross National Product, basically its MAIN export. So their currency’s value since 1932 when the IQD was created, its value has always been based on OIL. That is also why the value of the currency fell so dramatically in 2003 when the UN Sanctions we imposed. Because without the ability to sell oil, there was nothing propping up the value of their currency. Now let’s look historically at the $2.50 - $3.50 USD per IQD that was based on oil. FIRST and most importantly that was based upon a market price of about $40 USD per barrel of oil (just before the invasion of Iraq) and oil is now being traded at what? Around $100 USD per barrel! So, just doing the math. If they could maintain an (on average) value of $3.00 USD per IQD based upon 90% of their GDP being Oil and Oil was worth only $40 USD per barrel. Then, it would only stand to reason that if Iraq’s currency’s value is still based upon oil still equating to 90% of their GNP, but Oil’s value has increased TWO AND A HALF TIMES, then their currency could, in theory also support an increase equal TWO AND A HALF TIMES its previous value of (on average $3.00 USD per IQD. That being said, for the Iraqi IDQ to simply return to its old value of $3.00 USD per IQD wouldn’t even make sense, nor would it even allow for an increase based upon inflation since 2003, nor would that amount even cover the amount of money that they have allocated to their 2011 budget. So, the REVALUED RATE would almost HAVE TO BE OOVER $3.00 USD per IQD.
So, based upon all of that information backed by published facts and articles, I feel as though we are in a VERY SWEET Window for our investment to come to fruition very soon and if May is our month, then everything suggests that this is our weekend! This has me, personally, VERY EXCITED!!!! However, that is tempered with the reality and reminder, that there may be more facts that come into play than we are aware of and historically we have the governments of the world, including the GOI, repeatedly stalling and passing over sweet windows in the past to take action. So, I am cautiously optimistic with regards to our investment and THIS WEEKEND!