Popular Post RonSkilbeck Posted April 20, 2011 Popular Post Report Share Posted April 20, 2011 April 20, 2011 Because the Ultimate Guru on all things IQD is the Governor of the Central Bank, I wanted to get a transcript posted of the two most pressing questions we have: 1) The prospective RV, & 2) Removal of the Three Zeros – and Shabibi’s complete (word for word) answer to those questions. I am offering this without analysis and with few closing remarks. This took several hours of listening and correcting in longhand. In those instances where I could not understand what was being said I clearly marked them with ?? – I am offering this for our deaf and hard of hearing friends and to forestall any additional spin (pump or negativity) of his remarks. Governor Shabibi sounded like a kind and gentle man – a college professor you would rather take a class with early in the morning rather than late in the afternoon (naptime). He had a soft and measured voice and was more articulate with what is clearly his second language (English) than listening to Alan Greenspan with his “Greenspeak”. I encourage you to also listen to him on YouTube. Shabibi in D.C. (transcript) 4-19-2011 Q & A (from YouTube by frothbucket) Q: (This was the first question by an unknown man) “With respect to the ongoing need for stability in Iraq and it’s “Exchange Rate” would it not follow that there’s a direct need for a potential revaluation of the currency to induce both domestic and foreign investment in Iraq and with regard to that , how far do you believe we are to that in regards to a potential Revaluation of Iraq Currency?” Shabibi: We, we, collect the questions or do we respond to one by…?” Moderator: “We…Yea..” Shabibi: “Okay, we respond, just there – okay, well, thank you very much for this question and ah., aumh… (pause) Well even if I know then, Sir, I cannot tell you.” (laughter from the crowd – Shabibi has a nice giggle too) “Well the thing is, no (Shabibi laughs) I think the question is all… You cannot have an economist saying without the answer is… depends. You know? So the question here is actually a revaluation or…el…which really is going to depend on…, on to what extent we are going to continue a… let us say controlling inflation. As you know, I don’t know, if you go to the … to the – Central Bank law you will see, it’s on the website, you will see the first objective is maintaining a price stability. So… ah… there is a little bit of inflation, in Iraq. I mean it is now, it use to be 2% or 3%, now it is about 5%. What we are watching, that, very carefully. Ah… If this inflation continues we’ll have to revisit, more revisit, more than revisit that, I cannot say. We are going to revisit the question of exchange rate because I mean, eh… Revaluation, I mean, depends on inflation. Of course I mean, you know, eh… the other factors that determine the movement in currencies are a lot, I mean sometimes we look at trade exports and imports, and all your obligations, and then the balance of payments, and all these things… Definitely, no doubt, you look at those. But…, ah… those… are problems relating with ah.. more with the… the… development part of the economy. The question of maintaining the price stability is really something, you see the inflation, and all these things; because nobody else in the economy is concerned with inflation. I mean the government won’t put its budget, ahh… I mean the government is a spender and the Central Bank is a saver. So… ah… they… it’s not very important for them to mention and to concentrate on, on, on inflation – so actually the question here; that we are going to track, and follows, the development in inflation. First; and of course other factors that I have mentioned; and second, and then we will determine our exchange rate movement.” Question: “Thank you Governor, this maybe is the same question, so I can understand if you can’t answer it; but I’ve heard a report that…” Moderator: “Can we have your name please?” Question: “ Oh, my name is Bob Kelly, I am an investor in Iraq, the Summit Hotel in the International Zone, with the OPEC financing. But, we have heard a report, I mean I have heard a report, in the last couple of days, that Iraq is about to Cut three zeros off the currency, and they call that redenomination, that may be the same question you just received, but I wonder if you have any information about that?” Shabibi: “Well I mean, I don’t know whether it’s the same question. I think this cutting of the three zeros is a … is a.. it has of course… eh… shouldn’t be exaggerated actually, the problem; I mean, the question is just redenomination and ah… the people of course, and you see a lot of people that are writing a lot of articles and the, the newspapers. Ah… I mean, criticizing the Central Bank that is going to ah… to the, the value of Iraqi Dinar is going to depreciate; all kind of talk. I mean this is a question or just, actually facilitate ease of payment, facilitate ease of counting; and all these things – and of course, when, I mean, you see now about these figures you see trillions or, or huge figures actually, if you want that, I mean if you want to be precise you put about twelve figures or for fifteen figures on all these things, fifteen digits, or something. So I think, I think, we have a plan on that. And ah, you remember why, there was not actually a government decree to add these zeros. They happened actually because over the course of the development of the economy, at the beginning of the 80’s, the I mean the inflation was very high. Inflation was rampant. And therefore, I mean, er… small, small (??north ??enough??) I mean and these things were actually not, were certain not to be used, out of these things. So, ah.. (pause) government started to add three zeros, and these things, at the time. And of course, ahh… conditions are different now. Inflation under control. Exchange rate is managed by the Central Bank. All these things. When you had actually added the zeros you could not manage, not of course because, the fault of the government or Central Bank, which I think there was; but I think the question is that because there were a lot of ? exaggerations ? factors. I mean, I am not saying that we are champions now. I mean, there were actually a lot of external factors which effected actually the behavior of all, if known, stakeholders. And therefore actually a lot of people didn’t know, actually, what to do, they had to start to add three zeros and all these things. So now, actually, the situation is completely different, from that time. You had to high inflation, you have now a low inflation. You had actually something which is a stable micro-economics situation, I mean at the time, actually, the situation was not stable. So, er…I… (pause) the only way to combat all of these things at the time is to increase the denomination and put three zeros. I think, I think, ah… to bring back the Iraqi Dinar, where to actually, the three zeros have (to be) removed; and of course you have to - this will have gone, hand-in-hand and with monitoring of the exchange rate, and all these things, and ah… and, and, you’ll see; I think now, is, it is probably, eh… I mean we are, we are studying that – NOT studying, we have decided actually on that, but when to implement that, to removal these three zeros is very soon. But of course it requires, not only the Central Bank activity; it requires, because I mean something you have to make a lot of propaganda, a lot of a… a… advertisement and all these things, and you have of course to go, probably to some company, to, to…to a… get a lot of people these things; so I think, I think it needs a lot of help from the government from many people in the government – especially the security forces, and we hope that the security forces, become less busy with other violence issues so they can devote time for us.” After listening to this 25 + times, transcribing it in long hand then typing it, I want to add a few very brief comments. This is not a LOP debate!!! 1) Shabibi very explicitly said “remove the zeros” (not raise) and explained why. 2) Shabibi, while getting a laugh and initially saying he couldn’t talk about the revaluation, did in fact, allude to a revaluation of the Iraqi currency in conjunction with removing the three zeros. 3) These thing will happen soon, but security issues are more important, and for some reason he needs a lot of manpower (government) to help. 4) The order that these things will happen is in question (Remove the zeros and then revalue? Revalue and then remove the zeros?) Shabibi knows but isn’t telling. Take your time and review this – I hope it helps. – RS Disclaimer: I bought IQD. I DO NOT sell IQD. Do not purchase IQD because of this post. 19 Link to comment Share on other sites More sharing options...
CaptainRon Posted April 20, 2011 Report Share Posted April 20, 2011 Thanks for all of your effort 1 Link to comment Share on other sites More sharing options...
caz1104 Posted April 20, 2011 Report Share Posted April 20, 2011 (edited) Thanks so much for transcribing this, Ron! I look forward to hearing what our experts have to say. We have experts?really..............really?..........................hmmmmmmmmmmmmmm Edited April 20, 2011 by caz1104 1 2 Link to comment Share on other sites More sharing options...
blue horseshoe Posted April 20, 2011 Report Share Posted April 20, 2011 With the way you wrote it out, I believe you can understand what he said a lot better. Thank you for doing that. A +1 for you... Link to comment Share on other sites More sharing options...
rsskelton Posted April 20, 2011 Report Share Posted April 20, 2011 Ron, hey buddy thanks for putting it in print. I have listened to this like, a bajillion times, but actually having it transcribed in print makes it much easier to study and digest. Much appreciated! +1 RSS 1 Link to comment Share on other sites More sharing options...
jeepguy Posted April 20, 2011 Report Share Posted April 20, 2011 good job ron----i will say --it really takes about 25 times too decipher--a lot of inbetween thinking on shabbis side----so taking off zero`s not raise--{ lop} ? = 1000. =3000 u s d { thinking} ------------still thinking------ naaaaaaa that isn`t enough for all the money that is about to fall into there hands . another 1.5 billion from the oil emerates today---almost a billion from w t o last week or so------not too mention the foreign investments now hitting with housing and hotel industry { from oil company } other countries. the infrasture is about tooo EXPLODE with activity not saying your wrong but if it is a lop{hoping not} then an r v after at 2.00 will have to be justtoo stay competitive on the mideastern currency front--{ ron not bashing you at all buddy i`m just trying to make sense of this as a whole} thanks for the post Link to comment Share on other sites More sharing options...
debratzz Posted April 20, 2011 Report Share Posted April 20, 2011 Thank you, you don't miss anything when you can read it word for word! Link to comment Share on other sites More sharing options...
RonSkilbeck Posted April 20, 2011 Author Report Share Posted April 20, 2011 Ron, hey buddy thanks for putting it in print. I have listened to this like, a bajillion times, but actually having it transcribed in print makes it much easier to study and digest. Much appreciated! +1 RSS You are welcome RS!!! Yeah, I listened and listened to it - tried to make heads or tails - then decided to write it down and think about what he was saying and how he said it. It made it tons easier for me. While all the Gurus/speculation is fun to listen to actually having Shabs talk was so much more informative. I'm sitting at my local Starbucks now - coffee time - then off to get Mama - THE GRANDKIDS ARE FLYING IN FOR EASTER WEEKEND! REALLY BIG AND IMPORTANT HAPPENINGS - (smiling!) I know I'll see you on here before then, but if not - Have a blessed Easter RS! 1 Link to comment Share on other sites More sharing options...
dinarck Posted April 20, 2011 Report Share Posted April 20, 2011 Agreed. This now a redenomination debate on how they are going to implement it. You could make the case that they will redenominate after RV. If that were the case I don't think Shabbs would have even mentioned this........and of course, when, I mean, you see now about these figures you see trillions or, or huge figures actually, if you want that, I mean if you want to be precise you put about twelve figures or for fifteen figures on all these things, fifteen digits, or something. So I think, I think, we have a plan on that. I think it is clear he speaks of the dinar in circulation. They have a plan alright and in my opinion that plan is to redenominate pre RV. Also it just seems to be a given that a redeomination would occur post RV without one pre RV if that makes sense. Why would he not just say that the old notes will be phased out when the exchange rate is manipulated. Instead he talks of how the zeros were put there during an unstable time and that they are no longer needed on the notes and then says...............I think, ah… to bring back the Iraqi Dinar, where to actually, the three zeros have (to be) removed; and of course you have to - this will have gone, hand-in-hand and with monitoring of the exchange rate In other words 25,000IQD becomes 25IQD and 1USD=.00085IQD becomes 1USD=1IQD. This plan he mention he also said would be soon. The revaluation and revisting the exchange rate would only occur after monitoring inflation. So it sounds to me that they are going to redenominate and bring the exchange rate in line with the USD. Afterwards they will monitor inflation and raise the exchange rate further if inflation seems to not be an issue. This also co-insides with the past articles saying that the redenomination will not improve purchasing power meaning a redenomination and manipulation of the exchange rate to match the USD would come out basically equal. Link to comment Share on other sites More sharing options...
RonSkilbeck Posted April 20, 2011 Author Report Share Posted April 20, 2011 good job ron----i will say --it really takes about 25 times too decipher--a lot of inbetween thinking on shabbis side----so taking off zero`s not raise--{ lop} ? = 1000. =3000 u s d { thinking} ------------still thinking------ naaaaaaa that isn`t enough for all the money that is about to fall into there hands . another 1.5 billion from the oil emerates today---almost a billion from w t o last week or so------not too mention the foreign investments now hitting with housing and hotel industry { from oil company } other countries. the infrasture is about tooo EXPLODE with activity not saying your wrong but if it is a lop{hoping not} then an r v after at 2.00 will have to be justtoo stay competitive on the mideastern currency front--{ ron not bashing you at all buddy i`m just trying to make sense of this as a whole} thanks for the post Thanks Bro, I didn't say they would LOP and then RV/ or RV and then remove zeros - I just wrote down, word for word, what Shabs said. One thing I do know, cause I took this past week to learn it, it how an emerging country values it's currency and what the reserves in the Central Bank equate to - also, what Gross National Product does to a currency valuation - it took a lot of reading and phone calls to work these ole brain cells - but it was worth it. With reserves, minus debt, and before adding in the GDP of Iraq their currency is actually worth 10 times more (about a penny per dinar instead of 1/10th) that they are actually auctioning it for at the CBI. A cheap currency makes their one major import extremely cheap - but from their in-country report and other articles I found they really don't completely control their oil until July/2011; but everything is in place. Anyway, all my best! Happy Easter! RS Agreed. This now a redenomination debate on how they are going to implement it. You could make the case that they will redenominate after RV. If that were the case I don't think Shabbs would have even mentioned this........and of course, when, I mean, you see now about these figures you see trillions or, or huge figures actually, if you want that, I mean if you want to be precise you put about twelve figures or for fifteen figures on all these things, fifteen digits, or something. So I think, I think, we have a plan on that. I think it is clear he speaks of the dinar in circulation. They have a plan alright and in my opinion that plan is to redenominate pre RV. Also it just seems to be a given that a redeomination would occur post RV without one pre RV if that makes sense. Why would he not just say that the old notes will be phased out when the exchange rate is manipulated. Instead he talks of how the zeros were put there during an unstable time and that they are no longer needed on the notes and then says...............I think, ah… to bring back the Iraqi Dinar, where to actually, the three zeros have (to be) removed; and of course you have to - this will have gone, hand-in-hand and with monitoring of the exchange rate In other words 25,000IQD becomes 25IQD and 1USD=.00085IQD becomes 1USD=1IQD. This plan he mention he also said would be soon. The revaluation and revisting the exchange rate would only occur after monitoring inflation. So it sounds to me that they are going to redenominate and bring the exchange rate in line with the USD. Afterwards they will monitor inflation and raise the exchange rate further if inflation seems to not be an issue. This also co-insides with the past articles saying that the redenomination will not improve purchasing power meaning a redenomination and manipulation of the exchange rate to match the USD would come out basically equal. This is a good point - one thing about the auction is that it has kept the existing IQD extremely low - with present reserves it is worth about 10 times more (not counting GDP after it starts to trade and they are no longer an emerging country) or IQD = $.01 (instead of 1/10th of a penny) - It should also be noted from the In Country report that the CBI plans to expand their reserves by 18% to $59 Billion USD by end 2011. Link to comment Share on other sites More sharing options...
k98nights Posted April 20, 2011 Report Share Posted April 20, 2011 Appreciate the post Ron... thanks! Link to comment Share on other sites More sharing options...
RonSkilbeck Posted April 20, 2011 Author Report Share Posted April 20, 2011 Appreciate the post Ron... thanks! With the amount of news you post, I should be saying thank-you to you!!! You do a great job! 1 Link to comment Share on other sites More sharing options...
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