7/31/2011 - FIVE YEARS AGO In DINARLAND

Guru Seeker:   Ramadan will NOT cause a delay in the RV.  I'm sure there are hidden things that could possibly screw with the timing, but Ramadan is NOT one of them!


Guru OkieOilman:    LET'S SEE WHAT TONIGHT BRINGS AND WHETHER OR NOT THE DEBT CEILING VOTE IS SETTLED AND THAT WILL BE A INDICATOR OR NOT AS TO WHETHER IT HAS BEEN AN INTERVENEING FACTOR IN THE R/V HOLDUP OR NOT. IF THEY CAN COME TO SOME AGREEMENT THAT MAY BE THE TRIGGER THIS GUN HAS NOT HAD UP UNTIL NOW TO BE PULLED--WE SHALL SEE--I WAS TOLD LAST WEEK THAT TONIGHT WOULD BE ANOTHER WINDOW OF OPORTUNITY AND PROBABLY THE BEST OPORTUNITY WE WOULD EVER HAVE. ONLY TIME WILL TELL. I HAVE BEEN TOLD NUMEROUS TIMES ABOUT WHAT A PRIME EXAMPLE CERTAIN DAYS WERE AND THEY NEVER CAME TO FRUITION BUT THIS TIME THERE IS SOMETHING IN THE AIR THAT IS DIFFERENT----KINDA LIKE SENSEING A STORM WHEN THE CLOUDS GATHER---MAYBE IT'S ALL THE PRAYERS BECOMING TO COME TOGETHER TO BRING THIS EVENT TO FRUITION. WE SHALL SEE

THE DOCUMENT WAS IMBEDDED DEEPLY IN A ARTICLE OUT OF THE U.N. EXACTLY A YEAR AGO AND JUST NOW BECOMING RELEVANT

HEY BGG--THAT DOC SUPPOSEDLY TAKES EFFECT AFTER MID-NIGHT TONIGHT---WE SHALL SEE

I AM CONVERSING WITH BGG AND CAN'T TALK WITH EVERYONE AT THE SAME TIME-----SORRY

HEARD THE SAME THING AGAIN TODAY SEVERAL TIMES---THE LAST TIME IT WAS COMMENTED THE DEBT CEILING VOTE WAS HOLDING UP THE INNER WORKINGS OF THE R//V------I STILL DON'T SEE IT THAT WAY---BUT----WHO KNOWS---WE WILL KNOW AFTER MID NITE IF IT HAS LEGS OR NOT

I WOULD LIKE TO PERSONALLY ADDRESS OUR LEGISLATURE, OUR SENATE AND THE PERSON IN THE WHITE HOUSE AND READ THEM THE RIOT ACT ABOUT WHERE THEY ARE TAKING THIS COUNTRY

OK GONE TO FOX TO WATCH """YOUR"""" PRESIDENT SPEAK----MINE DIED SEVERAL YEARS AGO (RONNIE)

WELL NOW WE WILL SEE IF BOTH PARTIES CAN TAKE THE POISON PILL AND PROCEED WITH ACTUALLY SIGNING OFF ON AN AGREEMENT THAT EACH DIDN'T WANT BUT WAS FORCED TO AGREE TO

NOTHING IS SOLIDIFIED UNTIL SIGNED---AN AGREEMENT IS ONLY VERBAL AT THIS TIME AND A POLITICIAN LIE?? Y NEVER (YEAH--RIGHT)

DOWNGRADE COULD STILL OCCUR---STANDARD AND POORS RATING AGENCY TOLD US GOV THAT A 4 TRILLION DOLLAR REDUCTION PROJECTION WAS NECESSARY TO PREVENT A DOWN-GRADE BUT AS I UNDERSTAND THE NEW AGREEMENT ONLY 3 TRILLION DOLLARS IS THE EXPECTED NUMBER----SO A DOWN GRADE MAY BE INEVITABLE. IF SO IT WILL BE THIS COUNTRY'S 1ST AND ONLY DOWN-GRADE AND MAY MAKE OUR CREDITORS LIKE CHINA WANT TO CASH IN THEIR US CHIPS SO TO SPEAK---

??  OKIE OIL MAN If we are downgraded, doesn't that mean we will have a higher interest rate, which would actually put more money into the pockets of our creditors?

THE LESS OUR MONEY IS WORTH THE CHEAPER IT IS FOR THE US TO REDEAM IT'S T-BILLS AND BONDS FROM FOREIGN CREDITORS---IN OTHER WORDS---THE PURCHASING POWER EVEN THO LESS TO US WOULD MAKE OUR DEBT IN ESSENCE LESS TO CREDITORS

?? OKIE OIL MAN Could this downgrade be a managed strategy to devalue the dollar just long enough for all the politicians to milk maximum dollars out of a Dinar exchange? And, then - a miracle would occur and bring the value of the dollar back up to par?
 
NOT EVERYTHING IN THE WORLD IS CONNECTED WITH THE IRAQI DINAR. THAT IS THE MYOPIC VIEW SO MANY HAVE

?? Okie Oil Man how soon do you think the RV will be now? And at what rate range?
 
LET ME PURCHASE A CRYSTAL BALL AND READ THE OPERATIONAL MANUAL THEN I WILL GET BACK WITH YOU


Guru BGG:  I heard from a very good contact that they would take another run at this tonite...we'll see.

SIMPLE MATH - IRAQ WALKS OUT OF THIS THING WITH VERY LITTLE OUT OF POCKET EXPENSE AND BUYING POWER....THE REST OF THE WORLD GETS OIL.  MY CBI CONTACT SAID THEY [Lower denoms] WERE BEING READIED FOR DISTRIBUTION ABOUT A WEEK AGO.  I FEEL WE ARE CLOSE.  I DIDN'T SAY AUG 2


Phoenix3333:   If we see Monday morning come and we don't have a debt ceiling agreement, all bets are off, the markets will be a thing to behold.  The markets will go down, if they devalue the rating from AAA to AA, the value of the dollar will go down.  Some people are saying when Ramadan begins, put everything away, I disagree. Don't see how we can go much further, don't see how the U.S. can go much further, how much further Europe can go and the poor people of Iraq, how much more can they put up with, how long can this be prolonged.  That is one of the reasons I do not think that we will have to wait for the drop of the artificial rate of the Iraqi dinar until after Ramadan.  Be ready for anything, expect the unexpected...this can happen at any time.  This is going to be one heck of a week.

 
Guru Patriot:   this position is done! Allawi is part of Maliki’s cabinet.  Everyone says this is not done, but it is now done, Allawi has an executive position in Maliki’s cabinet, this is the position he wanted, the President of National Council is part of Maliki’s cabinet, and they have voted upon it.


Guru Joey:  the last piece of Erbil was to know whether or not the Allawi position would be an Executive position. IT IS EXECUTIVE... that position also makes Allawi also a Prime Minister. They had told us that this was the only holdup delay with Erbil, to decide where will Allawi’s position be structured for oversight in the government, which branch? Bingo, done, the last piece of the puzzle got snapped in. ERBIL IS DONE!

the guidelines if UNAMI [United Nations Assistance Mission of Iraq] is to stay, calls upon Iraq to continue to provide security... isn’t that a good way to ‘package the idea’ of our troops staying.   the Iraqi Minister of Foreign Affairs to the Secretary General of UNSC, requested that the UNAMI please stay.  Many think the UNAMI extension may delay the RV, WHICH IS NOT THE CASE.


Guru Patriot:    No where does UNAMI [United Nations Assistance Mission of Iraq]  affect the economics of the county, the banking or finance of Iraq, or the ongoing political organization...they requested the extension, and it is by Iraq’s consent.  This is a positive thing...will help make sure it is smooth and stable there. This extension really makes the RV possible for a variety of positive interface reasons.


Guru Bluwolf:   watch wacovia these next few days, thats a hint.  we are tier 3 and we are just waiting to cashin.  no more issues with Iraq, Iraq no longer has control of the international part of the rv, bis has it, when you see a new tax bill then the UST will release the rv by excecutive order(president). their will not be any announcements it will just pop up


Guru FreewayBill:  This is not totally documented, but just got word from the Bank in U.S. Territory that they have been notified that the RV is in the process of going through and that they will be getting the go anytime. They gave me a rate which makes total sense and their bank is going to have a huge spread between the CBI rate and the Bank rate. Almost 3.25 per dinar difference. TREAT THIS AS RUMOR but this is what the guy just told me. Because of all the “WE ARE THERE” times we have endured, I hesitated to post this, but maybe someone else has heard the same thing. Will see what Dan and Tony have to say tonight….
GOD BLESS THE USA


Neno's Place:  In our 40+ year career as a Retirement Consultant we have been blessed to meet some very talented professionals. One of them is a retired State Dept. economist who introduced us to the IQD investment in 2005. He had worked on the original plan to install a new monetary system for Iraq after the 2003 invasion.

He had originally indicated that the plan was for the IQD to achieve financial parity with the USD over a 7-10 year period from the introduction of the new system. At that time the USDs use would be completely discontinued and it would be replaced by the IQD for in-country use and international exchange. The variable factor in the timetable would be the political environment.

I visited with him recently and got an update on several issues:

(1) He indicated the original time table was proceeding on a fast track due to the financial management skills exhibited by the CBI and the Finance Ministry in (1) controlling the rate of inflation, (2) controlling the value of the IQD in a declining economic environment and (3) implementing a digital banking system both internally and externally, but the variable was still the political environment. Like most economist he doesn�t talk in absolutes (i.e. rate/date) but in probabilities. His knowledge base is pretty current since he is still part of a subsection of the original group that Iraq, State Department and IMF financial people bounce things off of.

(2) We raised the issue of the large number of IQD reported as being in circulation (current estimates are at 25 Trillion). He indicated this was mostly made up of (1) in country physical currency, (2) the foreign currency reserves of the central banks around the world which are electronic, (3) currency that had been printed but not released (i.e. small denomination bills) and (4) privately held physical currency sold to increase the foreign currency reserves.

The export oil revenues are still under the control of the UN supervised DFI, and Iraq only gets roughly 30% of the fair market value of the oil they are selling, which is to be used only for budgetary expenditures. Since Shabbi, the head of the CBI, knew he couldn�t get anymore cash flow out of the controlled revenue system the IMF/UN had him under, he opened a currency sales window at the daily auctions to tap into the wallets of the worlds speculators. Worked pretty good, since hes built his foreign currency reserves to over $50 billion USD.

(3) We then moved to the removal of big bills (the ones with the 3 zeros on them) and he said that this activity was always built into the plan. The activity was to begin as soon as Iraq had implemented a modern digital financial system (i.e. bank branches, credit/debit cards, ATM�s, direct wire transfers etc.). The removal of the large bills in-country would be the reverse of the process that was used to remove the pre-2003 currency with Saddams picture on it. The example was a 25,000 IQD=$25USD/pre-rv note would be brought into the bank and exchanged for a 25 IQD note=$25 USD post/rv. The 25,000 IQD note would then be destroyed removing it from the currency in circulation account. I told him a lot of people would call that a LOP and he laughed, saying they are partially right, because 25,000 IQD was being lopped from the currency in circulation account, but the only reason for this process was to improve money handling ability at all organization levels, and reduce the actual physical currency in use in all areas of the Iraq economy.

Interestingly enough, he said this activity could happen in-country without an approved RV rate being released to the International financial system. I asked how much physical IQD did he estimated was in circulation in-country, and he said probably less than had been originally introduced in 2003 which was about $4.5 billion USD worth at an exchange rate of 2000 IQD = $1 USD, because there has been a continuous process of not replacing the larger bills as they wore out. In fact this has resulted in currency shortages in some areas.

(4) The next obvious question was how would the removal of the large bills with the three zeros work outside of Iraq, because of the number of world speculators holding IQD. He indicated, the amount of IQD held by speculators was relatively minor (less than 10%) compared to the IQD held as foreign currency reserve by the central banks of a number of major countries (US, China, England & France were the largest) with major financial interest in Iraq. He didnt have an exact estimate of speculator holdings but ventured an educated guess of 750,000 individuals worldwide with the majority in the US. Estimated value of their holdings $1.5 Trillion $1.7 trillion IQD.

(5) Before discussing the planned process of how currency exchange would take plan after the IQD was released as an international tradeable currency, he asked if I remembered my economics 101 and what the real purpose of currency is? Yes teacher I replied, it�s a medium of exchange that facilitates the orderly distribution of goods and services among individuals, companies, country�s etc. The often used example, is the use of currency allows an automobile dealer to exchange a new mustang GT (composed of many diverse parts each with its own individual market value) for the cash down payment + bank financing check of a proud new owner, and each has received equal market value at the moment of exchange. This is an important concept because the value of a particular currency may be defined by the value of what the currency can be exchanged for, instead of the usual underlying economic indicators. The complete discussion was rather lengthy so here�s the executive summary of how the exchange should work with IQD owned by a US speculator: (1) IQD is released internationally with an exchange rate of $1 USD = 1 IQD

(2) IQD is exchanged by Mr. & Mrs. X at Bank Y. Their exchange value is credited to their designated financial account, Bank Y forwards the IQD currency to the Federal Reserve and Bank Ys account is credited at the bank private exchange rate. Yes, the banks will have a private rate and then they will add their profit spread to come up with their public rate. By law this bank spread could be as high as 8%, but it will be a competitive marketplace and the banks know investors will shop around. There is a possibility that there might even be a three rate structure (i.e. Treasury Rate Bank Private Rate Bank Public Rate) imposed, but he had no input on that subject. 3) The Federal Reserve adds the value of the exchanged IQD to their foreign currency reserve accounts and destroys the actual physical currency under agreement with the CBI, which serves to reduce the total IQD physical currency in circulation. This build up of the foreign currency reserve accounts serves to strengthen the USD in the marketplace, because heretofore the US has never held significant foreign currency reserves, because there wasnt any country whose currency was perceived as being equal to or stronger than the USD. The IQD with its commodity (oil+others) base, potential for agriculture growth and aggressive private development growth, has the capability to become the most valuable currency in the world in the 10 years after its revaluation and approval as an internationally recognized currency. Other countries have lots of oil, but they cant feed themselves, they operate under a monarchy or religious tribunal and they have no private development system in place. (4) Mr. & Mrs. X tithe to their church, local charity etc. which stimulates activity in that sector. They pay off their debts, making currency available for re-lending by their creditors. They buy a new house and car which stimulates their local economy and set up a conservative investment portfolio which adds capital to the investment markets. They also pay their estimated taxes which increases the cash flow to the US Treasury. (5) The Federal Reserve under a controlled redemption plan supervised by the IMF, will use its foreign currency reserve IQD account to buy oil for the national strategic reserve, DOD reserves, other country reserves as part of international support agreements or resell it to private oil companies etc. This gives the Federal Reserve a powerful market force capability to control the supply/price of imported oil which has far-reaching economic and national security implications. The economics of this scenario look like this, using the exchange of a 10,000 IQD Note with a two-tier 2% bank exchange spread as an example: (1) Mr. & Mrs. X get $9,800 credited to their non-interest bearing checking account. 2) Bank Y gets a $10,000 credit to its Federal Reserve account, and by adding the $200 profit to their capital account, allows them to increase their lending cap by $2,000 under the 10% fractional banking model. (3) The Treasury gets $3,500 in estimated taxes in the quarter after the exchange, because Mr. & Mrs. X are now in the rich category and get to enjoy the 35% tax bracket. This lowers the net cost of the IQD exchange to the US financial system to $6,500 USD (i.e. $10,000 out $3,500 in). (4) The Feds designated agent, at some point, orders $10,000 worth of oil from Iraq. Payment will consist of a 10,000 transfer from the Feds foreign currency reserve IQD account to the IRAQ Oil payment account at the CBI. Even though the world spot price of oil is defined in terms of USD, the actual transaction may take place in any internationally recognized currency agreed to by the parties. For example, Iran only accepts Yen from Japan for their oil orders, because they don�t want USD in their foreign currency reserves. (5) The $10,000 order is filled with 200 barrels of oil based on the spot price on the date of the sale (for this example we used a $50 USD spot price). What does it cost Iraq to produce the oil to fill this order? Well they have negotiated productions agreements for $1.50 USD/barrel. From that price $.50 USD goes to the national Iraqi oil company who is the partner in the field the oil came from. Out of the remaining $1.00 the other oil field partners have to pay the Iraq government a profit tax of $.35 USD (35%). The net cost to Iraq to produce a barrel of oil used in this scenario is $.65 USD. (i.e. $1.50 .50 .35) (6) The transaction is completed with the Federal Reserve exchanging foreign reserve credits which are equal to 10,000 IQD (which had a net acquisition cost of $6,500 USD) for 200 barrels of oil (which has a net cost to produce of $130 USD. Simply put, it cost Iraq $130 USD from their foreign currency reserve accounts to redeem the value of 10,000 IQD, which goes into their operating accounts. At the same time the US got $10,000 worth of oil for a net cost of $6,500. That�s how it was originally planned for Iraq to RV at 1 IQD = 1 USD, with the variable being the political element (i.e. UN Sanctions, GOI actions, IMF actions, World Bank actions etc.) Now lets really stir the pot by: (a) Having the DFI ($280+ Billion USD) plus other frozen assets (estimated at $100 billion) turned back to Iraq and added to their foreign currency reserve, bringing it up to $430+ billion USD. (B) Then change the current fractional IQD reserve requirements of 100% to 15%. That just raised the total potential money supply value to $2.8 Trillion (430 billion/ 15), while at the same time the total physical IQD in circulation is being reduced by removing the large bills with the 3 zeros. Also execute the plan Iraq announced to increase oil production from 2+ million barrels/day to 10 million barrels/day with the resulting revenues flowing directly to the Iraq treasury. (d) To add a little more intrigue have the CBI continue to use its sales window to market oil futures and forex contracts. They have shown they can generate significant cash flow in the private market, think of their impact in public markets. We leave it to your analytical ability to determine how high of an RV exchange rate IRAQ can really support. There is strong political pressure to set the initial rate at $3.22 USD = 1 IQD, so it can be proclaimed that IRAQ has moved back into the International community of nations and has re-established its currency at the internationally traded rate in effect before Saddam invaded Kuwait in 1990.

Frank26 zip code is $3.21+ as I remember, which is suggested is the same exchange rates cabinet ministers reportedly used to project the 2010 budget.......GO RV>>>>>


Senator's Response re: IQD:  Dear Mr. Raxxxxx:

Thank you for getting in touch with me about investing in Iraqi Dinars.

Unfortunately, there is misinformation circulating about this issue. The United States Department of the Treasury is not invested in Iraqi Dinars.

Iraq is a fully sovereign country now and has full control of its accounts. While Iraq may redenominate its currency to create smaller denominations, to my knowledge, Iraq is not currently planning to appreciate the value of its currency.

Should this matter come before the Senate, I will keep your concerns in mind. Thank you again for being in touch with me.

Sincerely,
Sherrod Brown
United States Senator