Tlar "This Is How I See It" - 08/12/2013

[ronscarpa]

Tlar "This Is How I See It" - 08/12/2013

 

Post made by BlueyesinLevis from P. D.

Tlar wrote: Comment - Again it has been an interesting couple of days in Iraq.  We have Turki, the head of the CBI, saying approximately two weeks ago that he has a surprise for Iraqi's and friends of Iraq (investors).  We also have Turki saying this will be the best Ramadan ever. 

 We now have at least three articles from three different people saying that the 2014-2016 budgets are based on 1.16 dinars per US dollar.  1.16 dinars per dollar = 86 cents.  If you move the decimal point over  3 points the present exchange rate of 1160 dinars to the dollar becomes 1.16 dinars to the dollar. 

 We have multiple articles suggesting there getting ready to delete the zeros.  We know that the CBI has been telling the Economic and Finance committees members individually that it has returned to the "Original plan" that is based on the 2008 study done on the behalf of the CBI.  

That 2008 plan found that the CBI could support the dinar at 1.13 per dollar and went on to suggest they support this rate under a controlled float for up to two years.  This might be the reason that Finance committee just finished the 2014 budget through the 2016 budget and reported that all were figured on 1.16 dinars per US dollar.

 We also know that the bank has declared its Independence over and over since January choosing not to engage the government or debate the government as Shabibi did.   

Shabibi had made a fatal mistake debating Maliki's minions hoping to get them on board only to find that they became vicious in their attacks and they had a personal agenda that did not include Iraq's best interests.  Maliki had fought the bank under Shabibi at every turn.  

He has attempted to scare, threaten and intimidate Turki, but Turki stayed his course and has all but ignored trying to get Maliki's government to endorse deleting the zeros.  

He has not publically engaged these guys or debated the pros and cons as did Shabibi.  It has been a smart move.   How do you argue with someone that refuses to engage in the conversation.  

Maliki tried to fire Turki a few months back but was made to understand he did not have that constitutional power. Next he accused Turki of stealing ten tons of gold and wanted him arrested.  

Parliament, the IMF and our own US Treasury jumped to his aid, proving to all that Turki did not steal any gold.  Within days the matter was dropped and Turki had won another battle with Maliki.

 Turki held a breakfast meeting about a week and a half ago whereby he invited all the heads of the independent banks plus a few members of the Finance Committee and the Economic Committee.  

No one knows exactly what was said at this meeting, but what came out of this meeting the next day was a pledge that the Association of Independent banks would sell the dollar across their counters at no profit.  

The banks were paying 1179 to buy a US dollar at action and had just pledged starting the next day to sell that same dollar to Iraqi's at 1179.  The banks had just given up their biggest area of profit.  

In fact they were loosing money because they still had to pay their employees to service the lines of Iraqi's buying dollars.  The question remains, what did Turki promise them in return for their pledge to make no money and how long could they do this loosing money?  

One of the goals of the "original plan" as seen by Shabibi was to get Iraqi's using the banks again.  Shabibi had envisioned Iraqi's marching into the banks to swap their old dinars for new dinars.  

He had instructed the banks to take their time with each Iraqi in explaining banking services available and then set up deposits and accounts.  This would also serve to capitalize these banks as Iraqi's left some of there new found money in these banks. 

One thing we do know for sure.  Turki had been meeting individually with those most involved and was showing them the 2008 study saying that they had returned to it.  

We could assume this was his same approach to the Independent banks and that is what their carrot is for shutting off temporarily their profits in order to close the gap on the street rate and the program rate.  

For sure this can not be a down the road project because these banks cannot do this long.

 So that leads us up to today.  Ramadan is over but we are still in Eid Al-Fitr.  Ramadan is a month long fast from morning to evening.  Eid Al-Fitr follows Ramadan and is a week of great feasting. 

 Iraqi's save their nickels and dimes for Eid in order to have plenty of food.  This next week sees the end of Eid and unless Turki has been lying to us and so has selected guys from the Economic and Finance committee, we should see Iraq delet the zeros between now and befor September first.  

Traditionally Muslim governments like to gift their citizens following Eid.  We have a promise from Turki that this will be the best Ramadan ever.  

We have the Independent banks that are operating nowc on a wing and a prayer but for how long will they sacrifice.  

We have a rate of 1.16 that has been shown to us in the 2014-2016 budgets.  No promise but to me, if it looks like a duck, quakes like a duck, well you know.  ~ TLAR

What's in it for the banks to have been selling the dollar at cost for this period of time? 

 What is their carrot?   Remember Turki was meeting with members of the Economic and Finance committees just before he met with the Association of independent banks in Iraq at that infamous breakfast at which they agreed to sell the dollar at cost.  

We can glean some sense of what he was saying to the members of the Economic and Finance committees based on articles that have come out by these members.  

The message was probably the same for the Independents but with a little twist.  He put a carrot in front of the banks  The first is he explained that the bank has gone back to the original plan, deleting the zeros. 

 So how does this effect these banks and would that be the motivator for them to give up their profits?  

In the original plan which was based on the 2008 feasibility study, Shabibi had envisioned that after they delete the zeros, Iraqi's would bring in the rest of the dinar still out to swap for the new smalls.  

He had asked that as each Iraqi came in to switch the currency, the bank take its time explaining services and attempt to set up bank accounts for them.  

Iraqi's have not used the banking system since 2003 when Saddam wiped out savings and checking accounts by robbing the banking system of its gold and it paper money, leaving most Iraqi's monetarily destroyed. 

It was the hope of Shabibi that this would kick start Iraqi's using the banking system again and at the same time capitalize the banks as Iraqi's left most of their funds from the swap in bank accounts.  

This would be worth giving up todays short term profits to gain many customers with money and recapitalizing the bank.  We know it's not loyalty of Iraq.  Russ you are correct.  

These banks are like a dam that is being pressured.  If that dam bursts without a satisfactory result Turki will come out of worse than when he started not to mention the banks won't believe anything he says after that. IMO there is only one outcome left.  Sometime this month, before September 1st, the CBI is going to delete the zeros. ~ Tlar  

This is how I see it.  If Turki lets this opportunity pass, shame on him.  He will have set Iraq's monetary policy back and have done irreparable damage to the relationships with the Association of Independent banks as their sacrifice will have been in vain.  

These banks have put their money on this as a result of something Turki told them.  

I believe he told them a date he was going to delete the zeros at that breakfast meeting,  just as he did in his individual meetings with members from the Finance committee and Economic committee.  

Two members have said that they were told by the CBI that they would delete the zeros this month, the month of August.  I suspect that Turki also told this to the Association.  

One member said he was specifically told that they had reverted back to the original plan.  One said they had been told that the smalls would be released this month.

 The finance committee built 3 budgets based on a deleted zeros dinar value.  It's hard to ignore these guys as they should be guys in the inner circle.  Turki throughout this has been quiet.  

He has purposely not courted the government, which was the mistake Shabibi made.   He has used plausible deniability when necessary to side track the government.  

In other words he has not attempted to persuade the government because he is well aware that they have their own agenda which is not what's best for Iraq.  He has learned that lesson from Shabibi's failure.  IMO they have basically given us the rate at 1.16 and the date sometime before September 1st. 

 I might be up a tree making this claim but I feel fairly certain barring no major Maliki sweep of the bank, it will go down this month.  If I'm wrong so be it. ~ Tlar

 

[eburt]

Thanks Ron - Long read but good information.  I hope this is true and this Ride will come to end - GO RV

[Dinar Buddy]

From Tlar is says we are in waiting period from 2014 - 2016.  Actually there is no date that has ever been released or actually came true.  Gurus reference multiple article.  Hey the gurus also own their own websites and write their own article.  You can always catch a bogus article.  Who is the author by name.  Also, try to call live anyone form their sites(s)... they have no phone numbers listed?

 

Also, TLAR finishes his posting with, " If I am wrong so be it.  What the heck does that mean if the entire posted info is wrong to begin with... TLAR & OAKIE DOAKIE... time to stop.

[Bunk]

 That was almost like reading a Penthouse forum.. If it was only true.

[zigmeister]

I can't help but think with all of this violence going on Iraq it has stopped some wheels turning.  I just don't see how it could not.

[sandfly]

YEP BUT WE  WAIT IT OUT AND SEE