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Adam Montana

Adam Montana Weekly 25 March 2020

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18 hours ago, Pitcher said:

I’m not going to post everyday like I have been.  As I stated my main purpose was to hopefully keep some of you from losing 20-40% of your retirement accounts.  Some of us don’t have years to recoup those losses.  In the future I will probably give you my thoughts once or twice a week

 

Whatever works for you is good by me, bud! I appreciate your efforts and commentary.

 

:tiphat: 

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14 hours ago, DinarThug said:

Brent barrel down by 6%

 

Goldman: The Oil Industry Will Never Be The Same After Coronavirus

By Tsvetana Paraskova - Mar 30, 2020, 12:00 PM CDT

The unprecedented oil demand plunge in the COVID-19 pandemic is poised to change the oil sector forever, as fewer companies holding high-quality assets emerge after the downturn, Goldman Sachs said on Monday.

 

Despite another round of ‘leaner and meaner’ industry consolidation after the one from the previous price downturn in 2015-2016, the firms that make it through this price crash will still see capital expenditure constrained, the Wall Street bank warned.  

 

“Big Oils will consolidate the best assets in the industry and will shed the worst ... when the industry emerges from this downturn, there will be fewer companies of higher asset quality, but the capital constraints will remain,” Goldman Sachs analysts wrote in a note on Monday, as carried by Reuters.

 

According to the investment bank, the Saudi-Russian oil price war has been rendered irrelevant in the face of enormous demand destruction as major economies remain in lockdown, and demand for gasoline and jet fuel continues to tumble.

 

“The oil price war is made irrelevant by the large decline in demand and has made a coordinated supply response impossible to achieve in time,” Goldman Sachs said.

 

The bank said last week that global oil demand could plummet by 18.7 million bpd in April, which could deepen an expected demand plunge of 10.5 million bpd for March while the coronavirus pandemic continues to claim thousands of lives and keep major economies in lockdown.  

 

This week, Goldman sees the world’s oil consumption down by 26 million bpd, or down 25 percent compared to the typical global demand, as lockdowns and social-distancing and travel advisories now affect 92 percent of the world’s gross domestic product (GDP), Bloomberg quoted Goldman Sachs as saying.

 

According to the investment bank, global oil demand from the airline sector and commuters may never return to the pre-coronavirus demand levels of around 16 million bpd.

 

But the current drop in demand, refinery run cuts, and well-head shut-ins could result in an oil shortage in the next few years, Goldman Sachs said.

 

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5 hours ago, Adam Montana said:

 

Whatever works for you is good by me, bud! I appreciate your efforts and commentary.

 

:tiphat: 

So do I 

let’s talk pm 

I love to Learn

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Is Oil Heading To $10?

By Ag Metal Miner - Mar 30, 2020, 1:00 PM CDT

Popular investor inclination may be that after such a dramatic fall, the oil price has to bounce back, that investor sentiment on the downside was an overreaction. That inclination might also say after a chance for reflection has been allowed, prices will recover.

But the reality is all we can reliably expect is a period of intense volatility.

A price recovery will only come if the price war between Saudi Arabia and Russia comes to an end.

Both sides have substantial financial reserves. Russia, in particular, is benefitting from a collapse in the ruble against the dollar, making its oil receipts not much different from before hostilities broke out.

Russia can weather this storm for some time to come and seems ill-disposed to reach an agreement for substantial cutbacks any time soon.

Saudi Arabia’s policy, on the other hand, seems to be set largely by the young Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud (or MBS, as his name is sometimes abbreviated by the media).

The crown prince has shown he is willing for Saudi Arabia to make considerable sacrifices if he believes he is in the right — witness the ruinous ongoing war in Yemen the kingdom has been waging for nearly five years (and realistically achieved little in the process).

Earlier this month, the U.S. appointed an energy envoy to Saudi Arabia, raising hopes that the U.S. might broker a truce between the Kingdom and Russia.

But so far, no progress has been made.

An announcement by the U.S. that it would add 77 million barrels to its strategic reserve to support prices will do little now that the coronavirus is decimating demand.

As The Economist notes, the vast salt caverns along America’s Gulf Coast that contain the strategic reserve are already about 90 percent full, so they cannot store enough excess supply even if that were a viable option to impact prices. Not only are national strategic and producer reserves rapidly filling up, but so are consumers. Oilprice.com reports refiners in Baton Rougecould begin to slow deliveries as their own storage facilities max out, further depressing prices.

Related: Oil Hits $20 For The First Time In 18 Years
The article quotes Bernstein, a research firm, which estimates demand in the first half of the year will be maybe 10 percent, or even 20 percent, below what it was in 2019.

In the past 35 years, demand has only twice been lower than in the preceding year — in 2008 and 2009.

Yet shale oil continues to flow, adding to OPEC+ excess supply.

Many shale drillers are hedged for now and the outlook for output cuts in the short term is limited. Added to this is a potential 1 million barrels a day of output that some analysts fear could come back onto the market from Libya gradually this year.

Oilprice.com reports global oil demand could plummet by 18.7 million barrels per day (bpd) in April, deepening an expected demand plunge of 10.5 million bpd for March, citing Goldman Sachs advice, overwhelming any possible cutbacks Saudi Arabia and Russia could now make.

Talk of sub-$20 per barrel oil that seemed excessively pessimistic just a week or so back is now a reality. CBC reported Friday that Western Canadian Select (WCS) was selling for $6.45 U.S. a barrel Thursday, down U.S. $2.84 from a day earlier.

Related: Refiners Are Having To Pay To Produce Gasoline

As a result, it opened the very real possibility that producers, at least in the short term, may have to pay companies to take oil — effectively creating negative oil prices.

 

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Source: Standard Chartered Research

Such chaos will decimate investment and idle exploration, opening up the probability that prices could surge in the years ahead as the industry is unable to meet a return in demand.

For now, though, producers and consumers are going to face a volatile pricing environment, with prices driven as much by sentiment as the appalling underlying fundamentals.

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Oil Markets Are On The Brink Of Armageddon

 - Mar 30, 2020, 7:00 PM CDT

 

“Two boys are in a closed garage with several inches of gasoline on the floor. One has six large matches, the other has seven smaller ones. They debate as to who is strategically superior”.  J.K. Galbraith

The world’s oil markets are at a crisis point arguably not seen in its history. 

Since the last meeting of OPEC/OPEC+ concluded, global oil prices have collapsed to close Friday at 53.14% down for WTI and 51.14% down for Brent. These prices are the lowest seen in almost twenty years. Oil prices have tumbled as the fallout of that meeting compounded the unprecedented hit to consumption from the coronavirus pandemic.

As we remember all too well, Russian Energy Minister Alexander Novak told reporters leaving the meetings in Vienna that without reaching an agreement on production, members could now pump what they liked starting April 1st. Taking this as a declaration of war, Saudi Arabia has since raised the stakes with its plan to flood the global oil market with increased oil volumes.

With global oil demand curtailed by an estimated twenty million barrels per day due to the coronavirus led shutdown in the world’s economy, the oil war would turn an already dire economic outlook for global energy demand into a catastrophe that could change the energy landscape forever. An increasing number of producers are now losing money on production, wells are being shut-in and in certain areas (e.g. Canada) the oil industry may never recover – a generational destruction of personal livelihoods and the end of a reliable source of national wealth and revenue.

Yes, the economic crisis caused by the coronavirus has severely affected the global oil markets but, the actions of the participants in reaction to this crisis have shown an industry in the grips of a mass suicide.

The question has to be asked, in starting an oil war during a global pandemic that has already seen demand fall by twenty million barrels per day in a matter of weeks, have we all forgotten about the theory of Mutually Assured Destruction? 

Related: How COVID-19 Could Spark The Next Recession
In 1962, the concept of Mutually Assured Destruction started to play a major part in the defence policy of the United States. President Kennedy’s Secretary of Defence, Robert McNamara, set out in a speech to the American Bar Foundation in Chicago, Illinois, the beginnings of the US policy on nuclear deterrence, that would remain US policy throughout the Cold War.

Thus, the true philosophy of nuclear deterrence became to be established. If the other side knew that by initiating a nuclear strike it would lead to a response that would be so massive that they would inevitably suffer ‘assured destruction’, they would be irrational to press the button.

In the past, wars had been fought by defeating your opponent on the battlefield by superior use of force. But MAD was a radical departure that trumped the conventional view of war. As governments around the world have worked to quickly commit trillions upon trillions of dollars to shore up the global economy, efforts have been short-lived as more and more of the global economy succumbs to the coronavirus led shutdown. 

Yet, in what can only be described as a strict adherence to the theory behind MAD, Russia, Saudi Arabia and others have given no signal that they are slowing down in their attempts to flood the world with oil and grab market share at the expense of each other. Saudi Arabia has also turned OPEC into a ‘you’re on your own now’ proposition. While Saudi Arabia, with arguably the lowest cost of production and deepest pockets in OPEC, will offset some of the collapse in oil prices with the boost in volumes, almost all of its fellow OPEC members are much less fortunate. 

 

1585608457-o_1e4mq1slg1tv71btka7d7nqjih8

It is clear, that with the enormity of the current (and projected) overhang in global oil supply, only a globally co-ordinated attempt that includes all major producers, would help address this attempt at energy market MAD. 

It is also clear that any co-ordinated attempt would have to include the United States.

Whilst Trump believes that lower oil prices is a positive message for domestic US voters, members of the US Administration have started to appreciate the dangers posed to the US energy industry and the theory of ‘energy independence’. Only last week the US began the public pressuring of Saudi Arabia. The State Department reported on Wednesday that Secretary of State Pompeo in a call with Mohammed Bin Salman “stressed that as a leader of the G20 and an important energy leader, Saudi Arabia has a real opportunity to rise to the occasion and reassure global energy and financial markets when the world faces uncertainty”.

As often the case since 2017, the US is looking for others to do the ‘heavy lifting’ when it comes to the supporting of the global energy market. OPEC and OPEC+ have legitimate gripes that their support of the global oil price through production cuts has directly led to continuance the US shale industry’s exponential production growth.

US shale production has grown to such an extent that it has helped the US eclipse both Russia and Saudi Arabia in becoming the world’s largest oil producer. This has been trumpeted by the US President as the US achieving energy independence. 

To the often-made complaints by OPEC and OPEC+, the US has always cited ‘free market’ forces. How ironic now that there are calls by domestic US shale producers for tariffs, duties and even limits on foreign oil to provide an ‘artificial’ oil price floor.

Related: Russia’s Plan To Bankrupt U.S. Shale Could Send Oil To $60

Saudi Arabia’s position is that only a collective effort by all producing nations to put in place significant output cuts, rather than unilateral cuts by Saudi Arabia, can address the oil price destruction. 

No doubt there have been many ‘behind-the-scenes’ discussions between all major oil market participants to address the obvious problems. But, to this date all calls have gone unheeded and all participants seem to be hell bent on the path to energy market Armageddon. 

Eight months after Robert McNamara’s speech, the Cuban Missile Crisis was in full swing. Thankfully, after a number of crisis flashpoints, we know that the participants reached a solution that backed away from the mutually assured destruction that seemed destined at the time.

As we approach the 1st of April, we are at an energy market crisis point, where oil producers are free to produce and sell as much oil as they like. Saudi Arabia has talked of offering 12.3 million barrels per day to the market. We do know that Saudi Aramco has never before produced those amounts of oil (even at full production) thus implying that it will draw down crude stored at home and in tanks in Japan, the Netherlands and on Egypt’s Mediterranean coast. If true, it will signal to the market its strength of commitment to the destruction of the theory of oil market balance.

Even then it may be that no matter what the price, there isn’t enough of a market (or storage capacity) to absorb all the barrels purportedly on offer. Refineries have started to close, even in the US and analysts at Rystad Energy estimate that the world is likely to run out of storage at current production rates by April, estimating that 76% of the world’s storage is already full. In some regions, like Western Canada, where Western Canada Select is trading sub-$5 storage could be full by the end of this month – that is tomorrow. IHS Markit forecasts that by the end of June 2020, surplus oil will have already reached 1.8 billion barrels, exceeding their estimate of current available storage of just 1.6 billion barrels. 

In seemingly echoing the course of events of October 1962, when the world seemed on the inescapable path to nuclear Armageddon, it seems that all participants are staring into the abyss ready to jump and the global oil market is spinning out of control.

But, looking back to the lessons learned from October 1962, there is a small window of opportunity for the ‘combatants’ to come together in a co-ordinated effort to share the responsibility of reassuring the global market and pull back from the brink of energy market Armageddon. 

If this does not happen the world will be entitled to exclaim “the global energy markets really have gone MAD”.

 

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The problem with the CV is the fact that it has shut down the world economy.  Couple that loss of oil demand with the SA/Russia Oil War, and you have 2 major problems for the US Oil Producers.  From some friends I have talked to about this they think half of the US Shale Producers will be forced into bankruptcy or be bought out for pennies on the dollar.  Many in the Houston area believe it is almost an act of war on a vital industry for our country.  My daughter who owns a Real Estate firm has had many requests to sell homes that she had sold to these clients in the last 2-3 years.  You can get a hell of a nice house in Houston these days for a great price.  

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Here is some Breaking News,  This just came across the wires.

 

 

Relief On The Horizon? Trump And Putin Discuss Oil Markets

By Julianne Geiger - Mar 30, 2020, 7:30 PM CDT

US President Donald Trump and Russian President Vladimir Putin agreed on Monday to have energy officials from both countries discuss the dire state of the global oil market, the Kremlin said, according to Reuters.

Trump and Putin discussed the matter over the phone on Monday.

“Opinions on the current state of the global oil markets were exchanged. It was agreed there would be Russo-American consultations about this through the ministers of energy,” the Kremlin said.

Neither President detailed what specific issues or possibilities they would discuss.

Saudi Arabia and Russia have undertaken a furious battle over market share, with both threatening to ramp up production come April 1, when the current OPEC+ deal will expire. U.S. oil producers now find themselves stuck in the middle of this oil price war, and then COVID-19 kicked U.S. producers—and the rest of the world—in the head by pushing down demand for crude.

The result has elicited a somewhat atypical response from the United States oil industry and government officials, who favor free markets and never miss a beat to chastise OPEC for its price-meddling ways. But desperation is sinking in, with oil industry professionals and U.S. lawmakers calling on the Trump administration to do something about the current oil price war that OPEC and Russia have created.

While the U.S. is planning on sitting down with Russia to discuss the matter, it is also applying pressure to Saudi Arabia to rectify the mess it has helped to create. It would take—at a minimum—both Saudi Arabia and Russia to effect any real change. Even if all of OPEC were to get on board with further production cuts, it is doubtful at this point that even aggressive action will have enough oomph to trim the oil glut and boost prices at a time when the coronavirus continues to shrink demand.

If the United States somehow managed to jump on board the price-fixing cartel, however, it might be enough to move the needle.

 

 

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Today is the end of the first quarter and the big boys are rebalancing their portfolios and I was there to take advantage of their buys. When those big Funds buy they go in big and it’s hard to hide.  I played Msft for a Day Trade and left some shares as a Swing. Other stocks I’m seeing getting a bid are BA, DIS, CVX, XOM, SWKS, DG, FB, PXD, URI, ABBV, EXPE, QRVO, ROKU, DOCU, EA, PYPL BMY, and some beaten up stocks like RCL, MAR, and LUV.  There are many many more. Those are some of the leaders on my scans.  With rebalancing you get a peak at what the Big Boys like and think are at decent enough risk levels to buy.  They are thinking longer term, 3-5 years.  Watch some of these and hope for a retest of the Lows on the S&P 500.  That is what I’m counting on.  That list is a pretty good cross section of the overall Market with a number of sectors represented.

 

 Please do not rush out and buy these now.  Sit on them and wait for a pullback or a retest of the lows. 

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C70CB5EB-3086-41A2-9CF6-E796F524C062.thumb.jpeg.9772625d1f453b283724725c92436193.jpeg

 

 

I said I wouldn’t do this everyday but I wanted to show you my Daily chart of the S&P-500 and give you some thoughts. The last six days of Market action have been very good and even rational.  With all the bad unemployment news, the economy shut down, and the unspeakable infection and death rates from the Coronavirus, I have to say all is not horrible.  To understand Market Action you have to understand that the Market does not care about the Past.  It is Forward Looking and the people who trade it for the most part are very rational people. (Unfortunately some of the people they represent are not so rational). 

 

When I look at the last six days I see that the absolute sheer panic has been replaced with, ok stuff just happened,  how do we trade it.  Do we see  the light at the end of the tunnel with this Pandemic, is our Government going to help us get through this mess, and are the Healthcare Professionals and Drug Companies going to come up with quick reliable testing, better Therapies, and Vaccines to solve this horrible crisis.  Most of the people who needed to sell are out, the portfolios have been rebalanced and now we are at a place on the chart where we can go either way.  The action the last three days is basically telling me the Market needs more Data (news).   

 

We we are basically parked just below the ema 20.  If we break above the ema 20 then the rally continues for a few more days. We are also sitting on the 38.2 Fibonacci line.  The Ema 20 and Fib 38.2 are huge resistance points. If we don’t break through and instead break below the Ema 8 ( Purple)nd Hull 15  ( light bllue line) then we will probably be heading down to retest the lows.  ( I circled the area of the current Price and also the corresponding number of resistance which is 2650ish on the S&P 500)

 

I also circled my Indicators which look to be running out of steam for this rally but it could go higher on good news or plain old momo.

 

1.  Starting at the top Indicator ( it is an Indicator I put together with a trading friend).  you should be able to see it has gone from a bigger green bar to a half green bar to a zero bar.  That tells me it can go either way but not a time to go into a Long Investment or a Swing.

 

2.   The second  from the top Indicator is the Williams Accumulation/Distribution Indicator.  It’s above the Red line but not over the Teal line and trending slightly down on today’s action.  I don’t get too excited until it gets over the light green line. 

 

3.  The last Indicator is the Stocastic overlayed on a MACD Histogram.  Yes some of my Indicators are unusual but they work for me.  This one is kind of topped out but that doesn’t mean to much as the Williams can burst up through that 50 line ( light green) and then its game on.  The Stochs are telling me to watch the top 2 Indicators and my interpretation with the chart is we are ready to burst up through the Ema20 and Fib 38.2 or reject those lines and head south.  We are waiting for Data or some Big Boys to lead the way 

 

I personally believe we will retest the lows but I’ve heard from some Fund managers who believe the bottom is in.  As I’ve said a number of times, I’m going to be patient for a Long Term buy but I will Swing and Day Trade this Market as I see fit.   Today’s close was disappointing but again the market isn’t ready to push higher yet.  We might be in for some sideways trading, some consolidation, or a narrow trading range while we wait for more Data.  This is all normal activity and I have to say the markets are trading in a controlled manner which is GREAT!!!  Especially, when you consider we just finished the worst Quarter in Market History and had the quickest Decline in History.  The Market with a huge assist by the Fed and our Government is still working and functioning well from what I can see.  We will have more bad news and maybe retest but that will be a good thing for a new sustained uptrend.  It is a process and we will get through it.   The culprit is still the CV, the duration of this Pandemic, and what it does to our economy past Q2.  The Fed and US Government solved the Financial part of this problem but the Medical aspect still weighs heavy on future Market direction. 

 

 

 

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Brutal action today.  Premarket sell off on Trump saying 100-200k people would die.  

The Price of the S&P 500 rejected the 20 ema and broke down through 2 support lines, the 8ema and the Hull15.  I’ve made zero trades.  Not seeing anything that I want to trade yet.  I’m hoping for a mid morning rally. We’ll see.  

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When I read that 4000 plus Americans have died from CV and they are still going up the mountain I just wonder why I’m even talking about stocks. The Market is selling off again and I’m just not in the mood.  President Trump said the next 2 weeks would be very tough.  I need to turn off the TV and the Computer and pray for humanity.   

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2 hours ago, Pitcher said:

When I read that 4000 plus Americans have died from CV and they are still going up the mountain

My Friend, ask yourself a simple question, where are all the media videos of the disposal of so many bodies?

I don't doubt that people are dying from this flu, but people die every year from the flu. One thing I know without a smidgen of doubt is that the Lame Stream Media would be blasting us with non stop pictures of the dead if there were that many. But we've not seen even one. 

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the media has shown a few refrigerated box trailers parked beside the hospitals that are said to be used as morgues but that's all I've seen. I do believe the numbers are very inflated but time will tell. I only hope the country and for that matter the world can recover economically.

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2 hours ago, ladyGrace'sDaddy said:

My Friend, ask yourself a simple question, where are all the media videos of the disposal of so many bodies?

I don't doubt that people are dying from this flu, but people die every year from the flu. One thing I know without a smidgen of doubt is that the Lame Stream Media would be blasting us with non stop pictures of the

 

Thanks LGD.  You have to be on guard 24/7 with the lying Media.

 

There is no doubt that the Media plan to use the CV in this Coming Election.  Take a look at the Boston Globe in the Politics Section.  The Dems want to form a Commission to Study the Pandemic Response.   That’s code for, “ Let’s get Trump Part 186”. Of course it is being instigated by Schiff.   CNN and MSNBC ran with the story.  It’s more divisive crap from our Dems.  

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On 3/27/2020 at 6:30 PM, DinarThug said:

 

Lol ! That’s Awesome Map1 - Ur Brother Morgan Is Obviously An Incredibly Talented World Class Artist ! ;) 

 

olden-days.jpg

 

Btw - Do U Think That He Can Help Me With My Makeup ...

 

:D  :D  :D 

I’d ask him but he’s busy working on his one man show for a gallery in Wyoming in September 

Hope the pandemic is over by then 🤞😊

 

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17 hours ago, NAKS said:


 

 

Think about this the next time you pay your cable bill. That's how the Lame Stream Media get their 

money to create such lies and panic.

 

I posted a lot of these vids here directly from You Tube. But the format that you bring is much better and well worth the watch. What makes me so mad is that no one will be held accountable. Unless we 

have a real revolution these demonic lying scum in the media not only are going to get away with this but they will continue to do it again. 

Personally, I don't waste my valuable time with anything that comes from MSM, EVERYTHING they 

spew is lies. 

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SA and Russia to cut oil production. Stock market spikes and I DT’ed CVX for 4 bucks plus.  This is why I Day Trade. Wow. That was exciting. Come on RV

 

wti up 20%

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Trump Tweet Sends Oil Soaring 25%

By Tsvetana Paraskova - Apr 02, 2020, 10:30 AM CDT

Oil prices spiked on Thursday morning after U.S. President Donald Trump said that he spoke with the Saudi Crown Prince, and hoped and expected that Saudi Arabia and Russia would “cut back approximately 10 Million Barrels, and maybe substantially more,” sending oil prices soaring by 20%.

“Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!” President Trump tweeted on Thursday.

Oil prices soared immediately after the tweet, with WTI Crude soaring 25.90% at $25.51 as of 11:04 a.m. EDTand Brent Crude surging

20.57% at $29.83.

According to the Saudi’s official news agency, SPA, Saudi Arabia is calling for an urgent meeting for OPEC+ states “and another group of countries”.

Making no mention of specific numbers.

The press agency later went on to make mention of the relationship with the United States.

Earlier today, prices were already gaining more than 8% after the market began to tentatively hope that former allies Russia and Saudi Arabia could re-launch talks on propping up oil prices, which are too low for both of those economies, regardless of their claims of ‘resilience’ even at these prices. Related: $1 Oil: Saudi Arabia's Attempt To Crush U.S. Shale

After weeks of ‘no-backing-down’ in the oil price war, the former allies Saudi Arabia and Russia have started hinting at readiness to re-launch cooperation to save oil prices from sliding further amid the massive demand loss in the coronavirus pandemic.

“Saudi Arabia has always welcomed and supported cooperation among oil producers in their efforts to stabilize the oil market during the current crisis, based on the principles of fairness and equity,” a Gulf source familiar with Saudi Arabia’s thinking told Reuters on Thursday, but said that the OPEC+ break-up was Russia’s fault.

Russia, for its part, has decided it’s economically unfeasible for its producers to boost oil production right now, so Moscow called off an earlier promise to also increase supply, albeit at a much lower rate than Saudi Arabia.

With U.S. shale producers suffering the first immediate blow from the Saudi-Russian oil price war, U.S. President Trump discussed the situation on the oil market with Russia’s President Vladimir Putin earlier this week, and said he held a separate phone call with Saudi Arabia’s Crown Prince Mohammed bin Salman.

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      Day 534,691 of the CoronaVirus lockdown... how is everyone doing? I ask out of real concern. As humans, we are a social species. Social distancing is something we are currently doing to control the spread of a virus that should burn out on it's own if we don't find a cure, but it's still a scary situation. Verizon reports that phone calls are double what they are on a normal Mother's Day, which is proof enough that we need human interaction... the Butterfly Effect is real, my friends, and it applies to more than butterflies and typhoons on the other side of the world. Stay strong and healthy through this, both mentally and physically! Wash your hands and don't be afraid to phone a friend that you haven't talked to in ages - you're stuck in the house, how many more times can you organize the pantry or clean the garage?! 
       
      Whatever you do, be sure to show extra love and patience and kindness to the people you're stuck with right now. That's good advice on any day, and it goes double right now. 
       
      On to the Weekly! The markets are a jungle, cryptos seem stable, OIL may have stopped the plunge but that's still uncertain, unemployment levels are and continuing that way indefinitely... is there any hope?
       
      There is always hope.
       
      There is also always truth to be found in adages, for example:
       
      Better late than never. Nothing ventured, nothing gained.  
      As dinar holders, we are most certainly living by those two! One day, soon, these will be things that we look back on and smile about.
       
      The world is being shaken up like never before. There has never been a better time to watch things - unprecedented things - unfold right in front of us.
       
      These are wild and crazy times. 
       
      Here's an example: Politicians rarely agree on anything, but a recent (historic) stimulus passed, unanimously. If you read my recent Budget and Auctions post, I described an equally possible scenario that would turn the Iraqi Dinar around overnight.
       
      Many thought the Stimulus bill passing like that just could not happen, just like many would deny the possibility of the Iraqi Dinar increasing in value.
       
      It's not just a "possibility". This is something that is going to happen.
       
      The only question is, when will it be and how prepared are you?
       
      This is going to be the “I told you so” group. 
       
      When the world is crying about unfairness and how the rich get richer and a hundred other things, you can join them... or you can think back to that time you could have spent $100 on Amazon stock at $1.73 (currently $1,949.72), $75 on btc at less than 10 cents per coin, or $50 on VIP at DinarVets when the IQD was undervalued and represented an incredible opportunity.
       

       
      Quick forum PSA: I'm all for diversity and contrary opinions and intelligent discussions. This thread is a great example of intelligent people politely discussing something they don't fully agree on. I could also link to some examples of how not to have an intelligent and respectful debate, but I won't - I'm just going to issue a warning to anyone that comes here just to antagonize members, hit the "dislike" icon, or click that annoying "report" link on anything that you personally don't like. 
       
      Warning issued.
       

       
      On a lighter note... @tjokie shared a new crypto with us in the VIP section. Might be worth taking a sWipe at this one.  
       
      https://blog.coinmarketcap.com/2020/04/01/toilet-paper-token-wipe-paper/ 
       
       
      Before I head out - I mean stay in - this morning, I want to give a quick shout out to the hard working women and men out there still taking care of us... truckers on the roads, people working in the schools to prepare meals for the kids that need them, teachers improvising and doing the best they can with online classes and connections, health care workers, the people in the grocery stores, and more... I appreciate you all. 
       
      And last but not least - get in the Powerball Pool!
       
      Keep your heads up, stay safe, wash your hands, and GOOOO RRRVVVV!!!!
       
       
       
      - Adam
    • By Adam Montana
      Goooooood morning DinarVets!
       
      What a week... I don't have to tell you the markets crashed, Oil is down, and half the world is now zombies.
       
      But I will tell you anyway!  
       
      Before I get into the "doom and gloom" portion, here's a name for you: Adnan Al Zurfi. That's the name of the person just appointed to the Iraqi Prime Minister position. 
       
      Truthfully, my friends, it's too soon right now to know if he will be the one to ring the bell for us. Let's be patient and give it a few days for some news to come out, and I'll be back with a formal Prime Minister post in a couple days.
       

       
      Back to the "gloom and doom" - the world is screwed. It was nice to know you all!
       
      Ok, I'm kidding... mostly. 
       
      I believe education is key in most things, including the Dinar, and Coronavirus is no exception. 
       
      COVID 19 / CoronaVirus / CoronApocalypse / "the end of the world as we know it" is a big deal, and it's going to have an impact on the Iraqi Dinar. My official stance on the pandemic is this: I believe it will run it's course, we will survive as a species, and you should (please) try not to be Patient 31 . 
       
      We're going to get through this. It's going to hurt a little, but with some education and common sense - we will get through it.
       
      For anyone looking for education on CoronaVirus and how a Quarantine helps, this is probably the best visual I've found. A major goal in quarantine is to "flatten the curve". 
       
      Wash your hands, everyone, and just stay home if you can. If you can't, well... screw it. Be sure to lick everything you see in public, including the elderly, especially if you're not sick. You're helping by spreading strong saliva.
       
       
       
       
       
      I7zrqzYpoVcXg-nlANxu8Kuk46o4lQf0d9OuSD2TQrM.mp4
    • By Adam Montana
      Good morning, DinarVets!
       
      This one took me a bit to write up, and I'll be candid here - it was the most fun I've had writing an update in quite some time!
       
      Like many of you, I do fairly frequent "check ins" on my feelings about this investment... and I have questions, just like everyone else. "Is this still worth waiting on? Did the bus turn around and it's time to get off?" 
       
      An Iraqi RV is not a guarantee, so these are fair questions any sane and intelligent person should ask themselves once in a while.
       
      I'm happy to state that today is not the day I'm getting off the bus. In fact, I'm pulling the seatbelt tighter!
       
      There was a question posed a couple weeks back about "sterilization". The CBI employs a procedure called "sterilization" as a monetary policy, but that is different than what may have been being asked... which is why I asked for clarification on it.
       
      I wanted to go deeper into the topic, but my post on CBI Auctions and the Iraqi Budget was already getting a bit lengthy. As of this morning (Friday 13 March 2020), there is a lot of "sterilization" talk - and most of it is not related to monetary policy, but actual disinfecting. The CoronaVirus is currently causing chaos in the markets, creating instability and fear that is likely to last a bit longer (but not forever), and it's always good to "get back to the basics".
       
      You know - a "check in". In these crazy times, are we the crazy ones? Are we crazy for sitting this ride out a little longer? Should we be throwing in the towel, selling all our dinar, and spending all of our money on toilet paper and hand sanitizer?
       
      I think the answer lies at least partly in the following subjects, so let's get into it! 
       
      The topics today are as follows: CBI Auctions, and the Iraqi Budget.
       
      Before we do a little bit of a deep dive, I have a couple of opinions that may seem contrary - namely, the Budget and the Auctions, while important to Iraq, will probably never have a significant impact on (when or if) the RV.
       
      In spite of that, the seatbelt just got tighter, and my smile got bigger.  These are complex topics, I'm going to simplify a little and I'm only covering a few of the aspects, but these are major parts of the topics and therefore a major factor in the size of my current smile.  The summary, which you'll understand if you can make it through this entire post, is simple. Despite these scary and crazy times we are living in, Iraq and the Iraqi Dinar still have incredible potential.
       
      The rate of a currency is generally set by the countries Central Bank, not the IMF or anyone else. Iraq's rate is set by the CBI (Central Bank of Iraq).
       
      Ready? Here we go!
       
      CBI Auctions. These are used by the CBI to regulate the money, control the money, maintain the money - specifically, the rate and the amount in circulation. Actually, the CBI is selling USD at the auctions... but this will turn into a 7 hour read if I go too deep into that!
       
      It's helpful to understand where Iraq comes up with the USD to sell at the CBI auctions. The short version is this: Iraq's primary source of revenue is OIL. Payments are made in US Dollars, paid to the DFI (Development Fund For Iraq). The USD is then transferred to the Ministry of Finance (MoF), and the MoF sells it to the CBI in exchange for Dinars - the same Dinars that the CBI collected through the Auctions of USD.
       

      image source
       
      See how that all came full circle? Money in, money out, easy peasy. (This will take us to the Budget later.)
       
      (Fun fact! Dollars go to the DFI account rather than directly to the MoF to prevent the money from immediately being confiscated to pay reparation debts... kind of like using an IBC to protect assets.)
       
      We can expect the auctions to continue while the Dinar is pegged to the dollar, undervalued, and the circulation needs to be controlled.
       
      There are some people who believe the Auctions in Iraq need to stop, and there's good reason for that - few countries have had success with them. For example, South Sudan (who knows where that is?) tried it four times after they devalued. South Sudan, which is known as one of the most underdeveloped nations in the world, and who's primary export is timber. That's no knock on wood, the world needs wood... but wood isn't oil, and South Sudan isn't Iraq. (Sudan and South Sudan don't even make the top 100 in the world for oil reserves.) Iraq is obviously different, both in potential here and in the successful practice of having auctions.
       
      Other countries to do currency auctions include Jamaica, Uganda and Sierra Leone. Like South Sudan - none of them are Iraq, and none of them carried Auctions as long as Iraq... in fact, the auctions in those cases were failures.
       
      With those examples in mind, of course we'd like to see the currency options stop.
       
      And they probably will, at some point. But most likely not until after the RV.
       
      Since the auctions aren't stopping, and Iraq is not the same as the countries that failed at auctions... what can we expect during a major rate change?
       
      Fantastic question! I'll take a stab at it, using examples to make the point.
       
      At the auctions, the CBI operates buy/sell at about a 2% difference, which is an effective start of the spread that will affect every single one of us.
       
      If the rate were changed today to 1IQD per 1USD and the IQD returns to the global market (it will, at any significant increase in rate), then we will be trading in at the rate stated by the CBI minus middlemen fees - what it costs to actually get the money through the various institutions and into your account. (This isn't Bitcoin, you know!)
       
      If the CBI is using a 2% spread, they will "buy" at .98 and "sell" at 1 per US dollar. I fully expect that to fluctuate, perhaps wildly. They may pay .99 at first to show their confidence, and then lower it to .90 or further. (The bigger the differential, the more beneficial it is to them for the day profits.) They may quickly move to a flat 1:1 "Auction rate" simply to reinforce the rate and show that they are going to ditch the auctions soon - a lot of this is going to depend on the market. It is a business, after all.
       
      A 2 cent difference may not seem like much, but bear with me... It is important to understand the spread!
       
      I'll keep using the 1:1 number. For example, Iraq announces that the dinar is equal to the US dollar, the CBI is backing it, the IQD goes on the global market, and the rate sustains itself after a short time due to market demand. At this point, a lot changes, but those are different (and much longer) conversations. When we exchange, we are not going to the CBI - we are going to a bank that will trade IQD for dollars (or any currency). That bank will rely on the CBI buy rate first, which means they are getting a max of .98 USD per 1 IQD. Then they have to pay tellers and all their other expenses, so they add their spread on top of that - and this is assuming the bank you use is buying (selling) direct with the CBI. (They won't be.) By the time it gets to you, the CBI may have an advertised rate of $1, but you're only putting .70 in your pocket (before taxes).
       
      That "spread", or "cost", is unavoidable. We are not going to get the full "rate".
       
      Of course, you will get a better rate (money in your pocket) if you're VIP here at DinarVets, but that's not the point of this. The point is the Auctions will continue, and looking at past auctions - even yesterday's or today's auction - will not give us clues to if Iraq will RV today or tomorrow. (If we could see tomorrow's auction, that would be a different story!)
       
      The Auctions are good to see, in Iraq, because they are proof that Iraq is stable, still in business, and functioning. But the CBI Auctions will not give us the RV date until after you get my text message.
       

       
       
      The Iraqi Budget. The Iraqi Budget is important to Iraq because it defines how they spend money - and yes, it's the same money that was mentioned above, which comes mostly from oil sales. The MoF distributes IQD to each department according to the Budget. The Budget allocates resources to specific departments, based on a percentage of revenue or a fixed amount, and the individual departments spend their portion accordingly - just like giving your kid an allowance.
       
      A Budget works the same way in most places, and Iraq is no different. Politicians lobby for their departments, asking for more money always, and this is why a "tripartisan" government is so important and mentioned so much in the current Prime Minister debacle. If a Prime Minister came in and seated all members of one political group, it would be like the US having only Democrats or only Republicans in power. The reason we hear about the Iraqi Budget so much is simple - they are all fighting for money. (Or power, but it's really the same thing.)
       
      The reasons I say the Iraqi Budget doesn't matter are pretty simple. You've made it this far, stick with me just a little further!
       
      1.  Whether a specific Department (Defense, Education, etc) is on the Iraqi Budget for a percentage or a fixed money amount, there is a dollar/dinar amount that can be assigned to it based on the current price of oil x demand for oil = projected income / department allocation = $ for Department. This is a simple calculation that can be done in 2 minutes on a 1 page presentation. It's literally 2nd grade math.
       
      2. Regardless of any rate change, that dollar amount can be estimated and stay the same with a simple Amendment. Imagine a late night Parliament meeting - called at the last minute after 8PM one night, emergency, mandatory! One item on the agenda - doors are locked, cell phones left outside - the ONE ITEM is this: We are going to raise the rate at midnight provided everyone signs this Budget Amendment.
       
      The Budget Amendment, in this case, states that the previous passed Budget is fixed at the old rate and all Departments receive an immediate 10% bonus due to the CBI exchange rate adjustment. The rest of the money that becomes available is held in reserve until further modification of the Budget... EVERY SINGLE POLITICIAN is a hero and has almost unlimited job security at that point.
       
      Not one of them loses. It's the biggest slam dunk in Parliament history.
       
      Of course they wouldn't magically start to get along, but that's an offer even that bunch of hooligans couldn't screw up.
       
      OR:
       
      3. Bypass the late night meeting and just pass a Presidential declaration stating the same. It accomplishes the same thing, and by the time anyone could complain, the rate would have been in effect long enough that it wouldn't matter. The President knows this. The CBI knows it. You know it. I know it.
       
      The bottom line here? It doesn't matter what the Budget says, because all the Budget really does is allocate money to departments. The rate, based on the global fiat currency exchange program, controls how many wing dings and knick knacks they can buy with their money because of it's international status... but the Department of Wing Dings is still going to have $X of the Budget, the Department of Knick Knacks still has $X, regardless of the rate, and that's the way it works. Fiat currency isn't an "Iraq" thing - it's a WORLD thing. OIL isn't an Iraq thing. Budgets aren't an Iraq thing. Currency manipulation isn't an Iraq thing. NONE of this is unique to Iraq - all of this is "business as usual", and when Iraq changes their rate, that's what it is - business as usual.
       
      Conclusion:
       
      There are plenty of good reasons for intelligent people to discuss the Budget and the Auctions. It's important that Iraq continue to be successful in the Auctions, pass their Budget, and continue doing business. While the world demands OIL, those who have it will always have credit. Iraq has proven itself capable of utilizing Auctions as a form of monetary control, and I don't believe their Auctions or Budget are a hindrance to increasing the value of the Dinar.
       
      In fact, it looks quite the opposite. And on that note, I say...
       
       
      GOOOOO RRRRVVVVV!!!!!
       

       
    • By Adam Montana
      Hey hey DinarVets!
       
      I was out yesterday and most of the day before with a bit of a bug - I didn't die, so I assume it's not Corona.
       
      Or maybe it was, and I beat it. Wouldn't surprise me.  
       
      This is just going to be a brief post for today. I spent the weekend (before I was attacked by that bug) working on a deep-dive post regarding Iraq's Budget and CBI Auctions. I'll get that posted by tomorrow morning.  
       
      To the present moment... we are looking at one of the craziest times in world news that we have ever seen.
       
      We may not have an actual health emergency on our hands - the plain old flu is more dangerous to the population, strictly by the numbers - but we certainly do have a financial crisis on our hands. The world, and the world markets, are treating the Corona Virus as if it were a full blown pandemic - so, whether it deserves to be treated that way or not - that's what we are dealing with.
       
      OIL is down to about $30. BTC leapt off the cliff and plummeted to $6000, wiping out all the recent gains. Stocks... don't even get me started on the markets, I'm just thankful @Pitcher has been willing to share thoughts over the last few updates! It hasn't been pretty.
       
      Iraq is vulnerable to all of these things, just like the rest of the world - and on top of that, they are dealing with a Prime Minister issue. 
       
      In spite of all that... guess who's not going anywhere?
       
      Iraq, you, and me. We aren't going anywhere.
       
      Especially not in public without some kind of contraption on our faces  
       
      I'm really short on time today, so I'm going to get this posted for now.
       
      Stay tuned for the update on the Auctions and the Budget - I just need to proof it once more and it will be up.  
       
      OSI members, I'm a day behind regarding that last notice we were discussing. I'll be following up on that one shortly as well. Thanks for your patience!
       
      Talk soon!
       

       
      - Adam
    • By Adam Montana
      Hey hey good morning DinarVets!
       
      This is one of those "holy MOLY" spots in history - so much is going on right now!
       
      Coronovirus is shaking the stock markets - if you didn't catch @Pitcher's posts in my chat last week, they are worth a look!
       
      Super Tuesday was yesterday, and it looks like the Dem race is officially Old White Guy #1 vs Old White Guy #2. (I have nothing against old white guys, I just think it's funny  ). Mike Bloomberg bought American Samoa, apparently.
       
      Speaking of politics... 'tis almost full tilt political season, according to the drama-meter we run in the background. I'll take a second to gently remind everyone that this is a nice place to visit, we won't all agree on everything, and we like to keep things calm, cool, and collected. And nice. Just be nice to each other, please.  
       
      BTC is hovering around the 8700 mark, despite the political and health topics and markets. Solid.
       
      On to the dinar, which is of course the heart of these updates!
       
      We also have some member questions that I'll get to shortly.
       
      Sitting (temporary?) PM Allawi has threatened resignation - rather, he has "withdrawn his candidacy". 
       
      I said from the start that he wasn't my top choice for the spot, but he certainly impressed me! The man went in and started kicking things around like an Iraqi Jack Welch, which is exactly what needed to happen in Iraq. I get the feeling that he is an "all or nothing" kind of guy and didn't feel comfortable with what could have been a solid 80% win. 
       
      So, what's next? 
       
       
      The Iraqi President can simply appoint someone (again), but it's not necessary to take drastic action. Maybe Mahdi steps back up (he was never really gone), but that doesn't make a difference either. As mentioned in a recent post:
       
       
       
      The good news for us, and Iraq? 
       
      No matter who steps into the Prime Minister role next, Allawi was able to get some wood chopped. Iran lost a LOT of power over the last month, for one. I think that may have more to do with Allawi's current decision than anything - he seems to want them completely gone, not just 80% reduced. 
       
      Most importantly, and this is the crux of the matter, Allawi wasn't elected to this position in the first place - yet, things got done. In my opinion, the raise in the value of the Dinar is going to happen regardless of who is sitting in the Prime Minister chair. 
       
      All of the things that need to happen in Iraq continue to happen, and "who" is sitting "where" does not seem to matter. 
       
       
       
      EDIT: As I was wrapping up this post, @tigergorzow posted this:
       
       
      My thoughts on it were stated above, and remain the same - the name doesn't matter, as long as it's not Maliki! Someone will be in that seat, soon, and the train will continue to chug along.
       
      We are getting close.  
       
      ====== Member questions below =====
       
       
       
      This is a very reasonable question - it is based on logic and a thoughtful approach to the issue...
       
      ... unlike fiat currency, which is based on nothing of the sort, and actually throws reason out the window. The Iraqi Dinar is a fiat currency, just like the US dollar, and logical rules utilizing responsible financial principals simply do not apply.
       
      For this reason alone, it simply does not need to make financial sense to RV. Check out @ladyGrace'sDaddy's post below:
       
       
      Nicely stated, LGD.
       
      The summary is this: Iraq doesn't need a 1:1 reserve:cash ratio to have a 1:1 parity with the US dollar, or any other ratio to the dollar. The only thing that matters is "will it sell" - and, it will.
       

       
       
      There's always one in the group!  
       
       
      This is a great question as well! I don't think "massive" is the correct term. "Significant" - definitely, but it's not "massive".
       
      Nonetheless - I would only be concerned if OIL was suddenly no longer in demand. Any dips or peaks in the price of oil are temporary until the global demand for oil is eliminated.
       
      While OIL is a necessary product in the global economy, the price can fluctuate all it wants - Iraq still has a majority of it, and they will be able to bank on that.
       
      If the entire world switched to solar overnight, then it would be "game over". Until that happens, I am not too concerned about the price of oil.
       
       
       
       
      1 - I'll need more info on "1,000,000 IQD is forbidden". The rule is $10,000 (USD) and up must be declared in most countries. 
       
      2 - I still remember my first trip to Dubai, where there was a security checkpoint that required removing our shoes and they sprayed everyone's feet with disinfectant on the way through... but regarding your question, I'm going to need a link to be sure we are discussing the same thing  
       
       
      Great post, Synopsis
      The forum software will collapse your comment, but I'd encourage anyone interested to click on it to expand and read it. 
       
      My answer: I agree with your closing statement:
       
       

       
       
      Auctions... I'm not sure what you mean about the auctions. The auctions don't matter - if they sell at 1160 today but sell at 12 tomorrow, do we care what the rate was yesterday or if they did an auction yesterday? 
       
      The auctions will continue after the rate is changed. It's how they do business.
       
       
       
      Iran's influence was a major factor, but it is greatly reduced already and looks to be shrinking more by the day.
       
      All is well in my opinion!  
       
       
      ========= / end Member Q's =======
       
      WHEW! That was a fun update, I really appreciate the feedback and questions from the members! I'll do that again soon, or not, depending on Iraq.
       
      Don't forget to chuck your numbers in the Weekly Pool, and GOOOOO RRRRVVVVVV!!!!
       
       
       
      - Adam 
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