inmarc

carlablum, Unfortunately this refers only to the Kurdistan budget, and has you know they are a semi-autonomous region with their own parliment and prime minister. That being said it would be interesting to see their 2010 budget, it could probably give us some good intelligence as to the 2010 national budget.

carlablum, thanks got it, just looked at the old link we were using and it was a google machine translation of the same site in Arabic from the summer of 2009. They have gotten modern on us and we can obviously go in direct. Will have to nose around and see if there are any other pieces of the puzzle hiding in there.

bahtman, I'll try to do that but interestingly enough I went to search for a English translation link and the one I found now works, hasn't for 2 months. Here's the Ministry Of Planning - The Exchange Rate of Foreign Currency in Economic Feasibility Studies in English.

bahtman, Thanks for your kind words and especially your prayers. We're just a messenger passing on what comes our way, regarding the "IQD perfect economic storm."

carlablum, the budget was supposed to be effective 1/1/2010. IRAQ internally is currently being run on drawdowns from their IMF SBA (Stand By Agreement), budget surpluses from 2009 and reportedly a loan from Japan. The CBI is taking care of external activities through auctions, physical currency sales, DFI payments etc. Not a very good gameplan for establishing a stable economy.

carlablum, Thank you for your well wishes and especially your prayers. My grandson had his bible study class pray for me too, since he said it worked when his dog Diesel was sick. Obviously you guys have some pull with "the boss." I don't think it will be an RI since that means re-establishing the $3.208 rate, but there will be an RV within the $.86 - $1.17 range. This will have to happen just before or at the same time the 2010 budget is released. The overriding question, which nobody I know really has the answer to, is when will that be?

bahtman, Thanks for taking some of your valuable time to answer Racer X's question. I apologize for not being in the forum much to answer questions about our post. We were hospitalized for awhile with Atrial Fibrillation and are still battling with an elevated pulse. Then came tax crunch time and our day job got to be 24/7. After April 15th passed we have been spending most of our time building the Wealth Management Group Forum which is designed to assist the affluent (5 million+IQD) investor maximize the investment opportunity presented by what has been described as "the perfect economic storm." We also want to thank the nice folks here for their many get well wishes, believe me "we felt the love." Here's an article that has been in our research stack for some time, please note the comments at the bottom. Because we can't verify the original, it has to be labeled interesting rumor: Iraq Minister Of Planning Estimates The Exchange Rate Of The IQD For The 5 Year Plan (Released in 2010)! The Exchange Rate of Foreign Currency in Economic Feasibility Studies Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted present value standard and the internal return on investments in economic analysis that governs investment projects that costs excess one million dinars. Estimate the shadow price of foreign currency: 1. It is necessary to put central controls to amend the official exchange rate* to reflect the shadow price of the foreign currency, and that is considered one of the necessary requirements to implement the net discounted present value standard and the internal return rate on investment in the economic calculation stated in the instructions, paragraph nine. The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs. * What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar. In particular the following outputs and inputs of foreign currency were distinguished: * Export-outputs * Outputs marketed locally that substitute imports. * Imported inputs. * Inputs produced locally that usually go to exports. * Foreign labor. According to the pricing rules, the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules. In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency .... etc.). In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency. 2. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports... etc. The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:

ronscarpa, the methods described had a target rv rate of 1 IQD = $1 USD. We have no real information what the real rate will be. There is no double standard inside & outside IRAQ, the exchange rate will be the same. What is different is the method of completing the exchange depending on whether it's physical or electronic currency. The general description is that in-country is considered physical and out-of-country is considered electronic. There are obvious exceptions, the accounts held in banks like Warka are exchanged using the electronic method, that is if an account is 100,000 IQD before the exchange it will be 100,000 IQD after the exchange. If the account is also stated in USD, it should read $100,000 USD. With respect to actual currency held by us, it will be exchanged as if it were electronic money. The difference will be that the crediting of the account is in the banking system where the exchange is made instead of the Iraqi banking system.

I'm the original author of this piece and let me see if I can answer the questions raised. If the answer wanders, please forgive me as I am hospitalized being treated for atrial fibrillation with some pretty powerful drugs flowing into my arm. The plan that was described originated in 2003 and there have been many changes. A point that I also had a problem with was understanding that the re-valuation in-country is to facilitate purchase of goods & services and is concerned primarily with physical currency. A re-valuation of out of country is concerned primarily with facilitating trade, imports etc. using digital currency. The methodology used in each case will be different but the underlying revalued exchange rate is designed to be the same worldwide. The reason there is a good deal of physical currency outside of IRAQ is because of the effectiveness of the CBI's physical currency sale efforts, which I think got most of us involved. That effort was probably helped quite a lot by Shabbi's reputation among central bankers. The educated conjecture is that it only took one phone call to the Federal Reserve who is the US Central Banker (i.e. Allan Greenspan) to get Money Service Licenses issued to US locations who started Internet based sales operations to streamline IQD purchasing. We remember our first purchases were through Jordan, via the US customs in New York labeled "Numismatic Documents" and delivery via the Post Office to our office. They were also accompanied once by a visit from Homeland Security to inquire about the purpose of our shipments from Jordan. Specifically to the points raised: (1) The treatment of Warka or other commercial bank accounts is not addressed directly because initially these accounts were not going to be available outside of Iraq. The development of their internal banking systems, plus the expansion of their in-country ISP backbone have allowed the expansion of banking services, plus brokerage input into the ISX. Because the accounts are electronic, they would not have to be involved in a physical exchange of currency and just should be credited with the equivalent exchange rate value. (i.e. if an account had 100,000IQD pre RV, it would still have a 100,000IQD account post RV, but with a 1 IQD to $1.00 USD exchange rate the account exchange value would be increased) (2) The physical exchange of bills in-country does not establish different rates, it's just a method of affecting the exchange. They would be implementing the re-valuation by making the exchange of bills that would then be used to purchase goods and services in-country. A person walks in with currency valued at $25 and walks out with a different currency valued at $25. The equivalent exchange rate is the controlling factor, not the currency denomination. The implementation of the currency revaluation can be done in as many stages as the plan adopted by the CBI specifies, and the method described is only one of those at their disposal that allows for a removal of the big bills (3 zeros). Even though the in-country currency is the smallest component of outstanding currency, they still want to change from a currency oriented economy where they currently are, to a more modern digital based economy with people using banks, smart cards etc. A currency intensive economy is expensive to maintain because of the relative short lifetime of currency, plus the problems of counterfeiting and other illegal activity. (3) The discussion that was summarized was intended to explain a broad outline of the process, not relate it to specific current metrics (i.e. oil output, oil price, actual M2 etc.) The numbers used were for example purposes only. Also the time frames offered were for implementation of the basic objective which was to eliminate the existing dual currency system (i.e. IQD & USD), by elevating the value of the IQD to a parity with the USD and have it approved/accepted as an internationally recognized currency that could be exchanged on the world market. An analysis of the current economic situation in Iraq would obviously generate different metrics and to many peoples thinking a higher re-valuation rate than 1 IQD = $1.00 USD which was a basic target. Hope that answers your questions and wasn't too rambling. I tried to proof read but the eyes aren't really focusing all that well right now. Sorry.

It has been said that more things would get done, if everybody would stop worrying about who gets to take the credit. If anybody should be upset, it's me since I am the sole source of the material. My intent was to share it with DV and circumstances intervened. I'm glad for the help provided in achieving the ultimate objective. Please chill out, I'm the guy in the hospital with heart problems and this whining over who should do what, and who should get the credit isn't making my day any better.

carlablum, thank you for bringing this over from the other forum to post at DV. I had planned on posting it in VIP last night, but unfortunately I was admitted to the hospital for treatment of atrial fibrillation. I had a similar situation in 2002. At my age (70) you can't fool around with an irregular heartbeat because the risk of stroke is very high. Appreciate the assistance.

djw that's good advice, you can also buy IQD through a self directed Solo 401(k) Roth Account or a Corporate 401(k) participant directed Roth Account which is the route we took. You're right you have to wait until your 59 1/2 and the account also has to be at least five years old to take qualified tax free ROTH distributions. We've been in the Retirement Consulting business for 40+ years (ouch) and here's a site we use for reference material on ROTH IRA's. IRS Circular 230 requires that when giving general information, we state that it is "NOT TO BE TAKEN AS PROFESSIONAL ADVICE" and we strongly recommend that all investors consult with their personal financial team.

fDyer, your summation is right on and if you think this part of the IRS code is hard to read, follow me to the parts about retirement plans for the really good stuff (LOL). The decision to allocate IQD with different holding periods is strictly up to the donor. Myself, yes I do have a CRUT (no shoemakers kid here), I want to contribute those IQD with the highest tax consequence depending upon how the IRS comes down on taxing the IQD. The one thing we can probably be sure of is the tax treatment will have to be contained in existing law, because with their current workload the IRS doesn't have time to get new regulations passed. Would you believe in the retirement plan area, we don't have 2009 reporting forms for a particular type of plan and the IRS says they won't be available until summer, the're due 07/31. To compensate we can use 2008 forms with 2009 dates. So we will be looking at capital gains tax treatment (short / long) or Section 988 Foreign exchange contract treatment which is ordinary income or collectible tax treatment which is 28% or some arcane procedure nobody has ever heard of. Don't know whether you got to see it but this CRT Q & A might be a little easier to digest. GT ACE, you councilor friend sounds like he has got a good handle on risk management techniques inside of a CRT. One of the biggest planning advantages in a CRT, IMHO, is the ability to manage the investment portfolio to determine the ultimate tax rate the income beneficiary will pay on their distributions. In a time of uncertain tax treatments we like to have that arrow in the quiver. Ask your friend to show you how the 4-tiered trust accounting system works and how it uses "WIFO" (worst in - first out). If I looked around the office real hard I bet I could find some EIA-GP's in the client asset files. Interestingly enough if you have a 6% guarantee in your CRT investment account and your payout is 5%, you will never empty the bucket, in fact the water will rise and you will need another bucket. Circular 230 requires that we state that this is not to be considered "PROFESSIONAL ADVICE" and IQD should consult with their personal financial advisors.

dayda13, the payout amount in a Charitable Remainder Unitrust (CRUT) can go up and down depending upon the performance of the asset values. The payout in a Charitable Remainder Annuity Trust (CRAT) is a fixed percentage (i.e. using your example: $1,000,000 x 5%= $50,000) and will remain there regardless of the performance of the asset value, unless the trust doesn't have sufficient assets to pay the prescribed amount. Circular 230 demands that we state this "SHOULD NOT BE CONSIDERED PROFESSIONAL ADVICE" and we strongly encourage all IQD investors to consult with their own professional financial team.

Dean is giving a goods heads up about CRT's, we are Retirement Consultants with 40+ years of experience and are enrolled to practice before the IRS. Our firm administers (documents, asset management, annual tax reporting, etc.) self-trusteed CRT's (of which a CRUT is one type). We call that Supplementary Retirement Plans and you can get more information at this Charitable Remainder Trust Q & A. Our CRT administration team consists of an ERPA (documents), CFP (asset management) and EA (tax reporting). If you plan on using a CRT, which in our experience is a powerful tax planning, charitable planning, estate planning and asset protection vehicle, you want it in place before you exchange any IQD, because you want the CRT to be the entity making the exchange. There are also some other important details that have to be met, to ensure the validity of the trust particularly when established using foreign currency assets. Circular 230 demands that we state this "SHOULD NOT BE CONSIDERED PROFESSIONAL ADVICE' and we strongly encourage all IQD investors to consult with their own professional financial team.