SWFG (5-10-13)

[SWFloridaGuy]

5-10-13 SWFloridaGuy: I'd like to address a couple topics relating to both Iraq's current political and economic situation which seem to be generating a sense of imbroglio among researchers. There have been many questions concerning the recent elections and the confusion that the results has incurred. The IHEC press conference announced the results of the local elections was a readout of the names of the winning candidates and their political affiliations which provided the numbers achieved by each candidate, which has now been published.

 

In my opinion the electoral process leaves the door open for abuse and further corruption. The Iraqi electorate uses the personal vote option, where voters can indicate their candidate of choice. When the votes are counted, the pre-set ranking of the candidates done by the party leadership is completely ignored and only specific personal votes aggregated in the election count as the ordering of candidates on a particular list is repeated.

Iraqi voters do not actually receive ballot papers that include the names of the candidates. They receive names and numbers and they are required to know their candidates number beforehand and remember to check the party box or render their vote invalid. Imagine how the state of Florida would fair in these conditions.

In total there were 8,138 candidates competed for 447 seats in provincial councils.

 

This will be an influential factor down the road because local candidates are affiliated with the national parties and control provincial governments and deepen their power bases. So, it's politics as usual. Most likely there is a direct correlation where alliances are formed and what has transpired of late will directly affect/determine what transpires next year. Unless the citizens, political opposition, foreign intervention, civil war etc., come into play.

 

Having said that, I don't believe for a second that is how this will play out. I'm simply stating where I think his head is at. In time, I believe he will suffer the same fate as all the other dictators of late and this latest chimera of his will lead to his demise. I would venture to say this system is by design and will hinder the political process. Maliki is well aware that this election (although it does not determine the PM) could have far-reaching implications for Iraq’s political direction because it is a test of support for him and his Shiite Islamist party.

 

Maliki has lost some seats in some governorates but is still the biggest seat winner. The Sadrists won back Maysan but still a far cry from the amelioration they are striving for. However, the Shiite parties that ran together in Diyala won 12 seats. Surprisingly, the Mutahiddun list headed by the Nujayfi has emerged as the most formidable force nationwide, with more votes than their competitors. There was a less than mediocre showing by Allawi's Iraqiyya list, which has now only 2 seats south of Baghdad.

 

Also, the Kurds lost a few seats in the two governorates Salahaddin and Diyala. Maliki may have to make an alliance with the ISCI rather than the Sadrists. Maliki has maintained that he will not run for a third term. Unfortunately, I'd put less faith in his ability to be forthright than I would in Gary Busey's ability to cure a leper colony recovering from the bubonic plague.

 

If his party has the intrepidity to support this dictator they could further alienate his Sunni Muslim rivals by moving toward a majority government dominated by fellow Shiites and propel him to a third term as prime minister next year. Unfortunately, I do maintain that until these issues are resolved and we have a somewhat stable GOI where the CBI can operate with proper over site and instruction from the IMF; this will put a temporary hold on any said economic reform projects, especially considering it's possibly the most vital financial development in history.

 

In total there were 8,138 candidates competed for 447 seats in provincial councils. This will be an influential factor down the road because local candidates are affiliated with the national parties and control provincial governments and deepen their power bases.

 

So, it's politics as usual. Most likely there is a direct correlation where alliances are formed and what has transpired of late will directly affect/determine what transpires next year. Unless the citizens, political opposition, foreign intervention, civil war etc., come into play.

 

All of this is purely speculation on my part and while I'm obviously frustrated by the political turmoil and corruption. I'm extremely encouraged by the progress Iraq is making on the economic front along with other improvements concerning long standing issues that have impeded forward progress and international integration.

Promoting economic/political reform, finalizing Erbil terms, debts forgiven, sanctions removed, HCL amendments that reportedly will satisfy all parties and end the ongoing dispute and last but not least U.N.'s continued support for Chapter VII release, among other things.

 

If you remember back a couple months ago Regulation 1210 was just amended to favor Iraq and further promote trade. A provision which will free up economic resources. There are many aspects that come into play when you are dealing with a currency reform project of this magnitude. More than we could ever possibly imagine.

 

There are many pieces to this puzzle, which is why it frustrates me to no end to hear "intel providers" try to simplify it with dates, rates, blessings, aviation analogies and insinuating that if you disagree with these absurdities, you are somehow diminishing your religious beliefs.My latitudinal range of topic discussion is my way of demonstrating the complexity of what we are trying to decipher and the humility it should require. I'll be the first to tell you I don't have a clue what the CBI is going to do but I do recognize that there is no other country that presents an opportunity like that of Iraq.

 

Whether it's long term with steady gains (like we have already witnessed), or a historic large currency appreciation shock that will not only shock the world but serve as a global stimulant in during this economic crisis. I believe we have some exciting times ahead and if we remain sagacious, avoiding daily Reno scams, double digit rates, anything that suggests it's tied to the VND and anyone who claims to know the date or rate, I believe we can pass our prudent optimistic attitude onto to the newbies and possibly turn this community around for the better. Yeah... I know, wishful thinking right.

 

I believe EU amended those sanctions to promote economic and financial relations between the European Community and Iraq. These sanctions also included specific restrictions applying to the proceeds from all export sales of petroleum, petroleum products, and natural gas from Iraq. It mentioned that "this will permit the transfer of frozen funds to the successor arrangements to the DFI put in place by the GOI under the conditions set out in UNSC." The Official Journal of the EU transferred frozen funds. Unfreezing these economic resources also helped Iraq obtain funds.

 

With all the news we've seen recently regarding economic sanctions being lifted, plans to alleviate debt, reports that Iraq is the fastest growing economy in the world, funds being unfrozen etc., I'd say they're in good shape moving forward. No one can dispute that Iraq is emerging as an economic leader and which is why for every investor who bails due to the turbulent atmosphere there are hundreds with the foresight to take their place.

 

The IEA recently reported that Iraq will lead OPEC oil production growth over the next two decades. The private sector has made huge contributions toward economic recovery with oil companies driving growth and boosting infrastructure development. When they pass the HCL (hopefully soon), resolving their dispute with the KRG will also encourage foreign investors who will be even more encouraged to fund Iraq's growth.

 

So, it's politics as usual. Most likely there is a direct correlation and what has transpired of late will directly affect/determine what transpires next year. Unless the citizens, political opposition, foreign intervention, civil war etc., come into play. All of this is purely speculation obviously and while I'm obviously frustrated by the political turmoil and corruption, I'm extremely encouraged by the progress Iraq is making on an economic front, reform, Erbil talks, HCL progress among other things. So, for the remaining investors I haven't induced into a deep REM nap session, I will list a few:

 

1. Iraq’s energy sector holds the key to the country’s future prosperity and can make a major contribution to the stability and security of global energy markets. Iraq is already the world’s third‐largest oil exporter and has the resources and plans to increase rapidly its oil and natural gas production as it recovers from three decades punctuated by conflict and instability.

 

2. Success in developing the HCL's potential and effective management of the resulting revenues can fuel Iraq’s social and economic development. Failure will hinder Iraq’s recovery and put global energy markets on course for troubled waters. This landmark special report, in the World Energy Outlook series, provides a comprehensive study of the opportunities and risks facing Iraq’s energy sector.

 

3. Iraq’s ambition to expand its oil and gas output need not be limited by the size of its hydrocarbon resources or by the costs of producing them. Contracts already in place with international companies imply an extraordinary increase in oil production capacity, to a level almost five times higher than today’s 3 million barrels per day (mb/d), over the current decade. How this works out in practice will be determined by the speed at which impediments to investment are removed, clarity on how Iraq plans to derive long‐term value from its hydrocarbon wealth, international market conditions and Iraq’s success in consolidating political stability and developing its human resource base.

 

4. Reaching output in excess of 9 mb/d by 2020 would equal the highest sustained growth in the history of the global oil industry and this report anticipates movement towards possible trajectories for oil output lower than that implied by current contracts. In our Central Scenario, Iraq’s oil production more than doubles to 6.1 mb/d by 2020 and reaches 8.3 mb/d in 2035. The largest increase in production comes from the concentration of super‐giant fields in the south around Basrah.

 

5. A resolution of differences over governance of the hydrocarbon sector would open up the possibility for substantial growth also from the north of Iraq, where contracts awarded by the Kurdistan Regional Government, though contested by the federal authorities, have made this one of the most actively explored hydrocarbon regions in the world. Iraq stands to gain almost $5 trillion in revenues from oil export over the period to 2035, an annual average of $200 billion and an opportunity to transform the country’s future prospects.

 

6. Achieving the required level of oil production and export will require rapid, co‐ordinated progress all along the energy supply chain. Adequate rigs will need to be available at the right time. Early investment in a challenging project to bring up to 8 mb/d of water inland from the Gulf to Iraq’s southern fields will be essential to support oil production and to reduce potential stress on scarce freshwater resources. Sufficient oil storage and transportation capacity will be needed to accommodate the expansion in output and diminish the risk of over‐reliance on the southern sea‐borne route. The infrastructure and investment requirements in our High Case, which anticipates oil.

 

Just to be clear, I am no expert on these matters and have only been researching these matters for just shy of 3 years and am by no means someone who should be considered an authority on these matters. I have contacted quite a few professional macroeconomic experts well versed is these matters and for whatever reason they have been less than willing to comment on this matter despite my offers to compensate them for their research.

 

In a couple months I will be attending a convention as a honorary guest member at the Oxford Club where I have found an individual who is well versed on the subject and claims to insight into this matter. I will record his thoughts on the matter and relay the conversation whether it is a consummate affirmation or a more pessimistic outlook. However, the last message I received was similar to that of Doug Casey, where he implied that countries such as Iraq are the greatest opportunity for growth due to natural resources and lack of debt. I apologize for such a long post and hope my next report will offer something of more significance.  Thanks.

 

[automag]

Thanks SWFG.....At least you try to use reason and not Okie's zen moment in life. I like your thoughts. Thanks for your efforts. Auto.

[jobug38]

Thanks always enjoy reading your analogies.

[respectron]

Thanks SWFG. You are amazing with your analysis and breakdown of information.

 

[SWFloridaGuy]

haha dude you rock.   You always find the best clips.  We're not worthy, we're not worthy.  

 

Screw the dinar, lets hit Sunset Blvd. stop by the Viper Room and jam with Jonny Depp and Motley Crue...  Deal?

[Annastasia]

Nothing is being said as to when it will RV.

[respectron]

 

  

haha dude you rock.   You always find the best clips.  We're not worthy, we're not worthy.  

 

 

Screw the dinar, lets hit Sunset Blvd. stop by the Viper Room and jam with Jonny Depp and Motley Crue...  Deal?

 

 

Deal! A lot more fun

Edited May 10, 2013 by respectron

[SWFloridaGuy]

Nothing is being said as to when it will RV.

 

Hard to address the timing of the RV when there is no guarantee that there will ever be one.  Over time will Iraq's currency appreciate.... I can't imagine why it wouldn't but there's many different avenues they could choose to acheive such that level. Personally, I'm hoping for a more gradual approach that promotes long term stability.  If you've ever studied large currency appreciations, a sudden drastic increase can have negative long term effects and lead to the collapse of the system.  However, if any country has a prayer of an appreciation shock (by that I mean something around 75%+ initially), it is Iraq. 

 

Over time they will recover it is inevitable in my opinionn unless they resort to civil war which I doubt the US/Russia/China/UN etc. would allow.  So I tend to think we will prosper but it will take time.  This opportunity is far from a scam.  The real scam is these imbeciles who post for either adulation or personal gain, who claim to be prophets with divine knowledge of prosperity.

 

We shouldn't be to harsh on the newbies though.  These are tough economic times and it's understandable that a little hope, no matter how absurd, can overshadow common sense.  Bottome line - we're all on the same team and I hope we all prosper whether that be next week or ten years from now.  I also hope that those false prophets catch a sever case of sudden leg syndrome so they can truck their way back to Reno.  

Edited May 10, 2013 by SWFloridaGuy

[TomRiddle]

Thanks SWFG.

[OZmosis]

Thank you SWFG.  Top notch post and great analysis of pertinent factors.  In particular, thanks for caring about us all and taking the time to share your thoughts.

[SWFloridaGuy]

Thanks everyone.  Sorry I haven't posted in a while.  Honestly, I've just been so burnt out on the whole thing and neglecting my real life.  However, the tide seems to turned in our favor which has gained my interest.  Mainly I just come here to read Yota and K98's articles and read everyone else's opinons.  I've learned so much just from reading what others more experienced than myself have to say.  But thanks anyway.

[Noni]

I look for you all the time. You never disappoint me and I read every word, no matter how long the post. You make the perfect sense I can count on. Thank you so much.

[umbertino]

Thanks SWFG. You are amazing with your analysis and breakdown of information.

 

LOL.

[yota691]

Thanks SWFG

[Elixirbaby]

Thanks SWFG. You are amazing with your analysis and breakdown of information.

 

I second that. Thank you for your post

[rockfl9]

Hard to address the timing of the RV when there is no guarantee that there will ever be one.  Over time will Iraq's currency appreciate.... I can't imagine why it wouldn't but there's many different avenues they could choose to acheive such that level. Personally, I'm hoping for a more gradual approach that promotes long term stability.  If you've ever studied large currency appreciations, a sudden drastic increase can have negative long term effects and lead to the collapse of the system.  However, if any country has a prayer of an appreciation shock (by that I mean something around 75%+ initially), it is Iraq. 

 

I agree, realistic appraisal of our situation

[zigmeister]

Great post SWFG!  Still I am hoping soon as in any day.  The one question I have always wondered, if this is really a scam who began it?  It had to start from somewhere.

[umbertino]

haha dude you rock.   You always find the best clips.  We're not worthy, we're not worthy.  

 

Screw the dinar, lets hit Sunset Blvd. stop by the Viper Room and jam with Jonny Depp and Motley Crue...  Deal?

Deal. Even though the Viper Room brings back memories of River Phoenix in the last minutes of his short life ( extraordinary actor he was and would have accomplished awesome achievements in acting should he  have kept living ...JMHO.)

Edited May 10, 2013 by umbertino

[hame55]

 

Hard to address the timing of the RV when there is no guarantee that there will ever be one.  Over time will Iraq's currency appreciate.... I can't imagine why it wouldn't but there's many different avenues they could choose to acheive such that level. Personally, I'm hoping for a more gradual approach that promotes long term stability.  If you've ever studied large currency appreciations, a sudden drastic increase can have negative long term effects and lead to the collapse of the system.  However, if any country has a prayer of an appreciation shock (by that I mean something around 75%+ initially), it is Iraq. 

 

I agree, realistic appraisal of our situation

 

Yeah, this could take a LOT longer than we think. Of course, if we base our expectations on a resolved GOI and political stability - hell, who has that? That may never happen in Iraq, and if the GOI stands to make money off this RV, it will happen sooner than later.

 

And yet a niggling point resurfaces all the time - if these crooks in the GOI (and every government is rife with crooks) stand to make a killing off this, as well as the UST, the World Bank, and every other foreign investor, why hasn't it happened?

[zigmeister]

Yeah, this could take a LOT longer than we think. Of course, if we base our expectations on a resolved GOI and political stability - hell, who has that? That may never happen in Iraq, and if the GOI stands to make money off this RV, it will happen sooner than later.

 

And yet a niggling point resurfaces all the time - if these crooks in the GOI (and every government is rife with crooks) stand to make a killing off this, as well as the UST, the World Bank, and every other foreign investor, why hasn't it happened?

Because they want to a pick a day Okie hasn't?

[sandstorm]

Hard to address the timing of the RV when there is no guarantee that there will ever be one.  Over time will Iraq's currency appreciate.... I can't imagine why it wouldn't but there's many different avenues they could choose to acheive such that level. Personally, I'm hoping for a more gradual approach that promotes long term stability.  If you've ever studied large currency appreciations, a sudden drastic increase can have negative long term effects and lead to the collapse of the system.  However, if any country has a prayer of an appreciation shock (by that I mean something around 75%+ initially), it is Iraq. 

 

Over time they will recover it is inevitable in my opinionn unless they resort to civil war which I doubt the US/Russia/China/UN etc. would allow.  So I tend to think we will prosper but it will take time.  This opportunity is far from a scam.  The real scam is these imbeciles who post for either adulation or personal gain, who claim to be prophets with divine knowledge of prosperity.

 

We shouldn't be to harsh on the newbies though.  These are tough economic times and it's understandable that a little hope, no matter how absurd, can overshadow common sense.  Bottome line - we're all on the same team and I hope we all prosper whether that be next week or ten years from now.  I also hope that those false prophets catch a sever case of sudden leg syndrome so they can truck their way back to Reno.

thanks swfg. Your opening line is classic. i wish everyone would understand that.

[Patty B]

Thank you SWFG!

I get excited when I see

that you have posted.

You only give us truth!

You ROCk!!!    

[Silverdinar]

Soon has been a long time waiting. Will soon ever get here. It 's taking forever. Come on already. Just show up somewhere. Get the RV started.

[umbertino]

thanks swfg. Your opening line is classic. i wish everyone would understand that.

Agreed.

[bigwave]

My favorite words: sagacious, amelioration and imbroglio.

 

After reading your post my mental state went through that of amelioration from that of an imbroglio state because I had the sagaciousness to read your post.

 

Thank you SWFG.