BondLady Chat 01/30/2015
[BondLady] gm everyone. lets go over some of the things Iraq still needs to do now that the budget has been passed
[BondLady] the economic laws are most important as they need to protect and support the reform we are witnessing
[cat] Bondlady do you think we will see the investment law ?
[BondLady] cat yes, they are working on the amendments to it now. I posted an article about it this a.m.
[tlm724] there are several laws ready for parliament, the COM passed the Islamic Banking Act yesterday and we know the new CBI Law and the amendments to the Banking law are ready
[BondLady] right timmy and with the auctions being low that could be very telling as to what the CBI is doing, dedollarizing and capping the daily auctions at $75 million
[therealbubbie] back in 2012 the auctions were low.. so I'm not getting excited yet
[tlm724] yes bubbies BUT this is the first time they have ever capped the auctions!
[Shredd] the CBI capping the auctions which have the primary role of stabilizing the dinar means a great amount of stability has been realized with the dinar
[therealbubbie] tlm724 true but thats why I said we wait ... they can cap and still be at 1166 !!
[BondLady] that would be the beginning of monetary change to me
[BondLady] is that right shredd?
[Shredd] that's the point I'm trying to make, I totally think so
[BondLady] me too, we never saw that before ever
[Shredd] locking down what was so instable just a year ago
[BondLady] some of us been in this so long we remember when the auctions always ran in billons an not millons nor would they ever pay for any thing in dinars either an they pay almost every thing in dinars now
[Shredd] this is also a huge step with the project to delete the zeros, very very telling imo
[BondLady] all IMF, World Bank and UN requirements not to mention the WTO
[therealbubbie] Shredd do you think .. if they move the rate to lets say 1000 to 1 that it would stay there for awhile or it will still move !!
[Shredd] I mean the average auction was 3-4 times as much daily and now the supply in circulation is going to change
[Shredd] therealbubbie no, I think the change, if via a managed float, would move as much as quarterly, perhaps quicker
[therealbubbie] how many pips would you consider a major move !
[BondLady] if it moved a 100 pip's bubbies
then we would know a change came taking it off a programmed rate to a float possibilities myself I think a good move would be to take it about 500 to 1000 pips that would make it about 33 dinars to a dollar or somewhere around that
[BondLady] when we saw the articles the other day I posted saying the CBI reserves are the best in the world and they could cover the dinar 1 and a half
[BondLady] but I think that would come about towards the end I just don't know if they could pull off and support a reinstatement of the old rate 15 years ago
[oldbarbie] BondLady I think imo it has to be around kuwaits
[BondLady] I just don't know if they could pull that off yet, if they would have done what Shabibi told them to do years ago instead of beginning it now then I'd say yes but now at the early stages I can't see it
[BondLady] but I'm not a CBI gov either nor am I an economist pro either, I go by my own common sense
[oldbarbie] they have that shared port and I would think they would be the same or I would buy on the other side
[BondLady] they have to be able to sustain whatever the rate is
[therealbubbie] you would think that they would want to be better than the dollar ... so people would use the dinar !!
[oldbarbie] therealbubbie *hallelujah*
[BondLady] and I don't think with the economy and infrastrutcure they have going on, I can't see how they could sustain an RI at this point
[BondLady] I think to get back to those rates it would take a few years longer but thats me like I said I don't know and no one will or does either, we can guess and eliminate things but we will not know till the CBI shows us their intent
[therealbubbie] 1-1!! that'll work !
[oldbarbie] BondLady do you think they can handle a 1.00 rate ?
[BondLady] I feel they could barb or come really close to it if in fact they are trying to dedollarize like I'm assuming they are trying to do with the capping of the auctions at 75 million per auction and paying everything in dinars
[oldbarbie] BondLady thank you
[BondLady] they need to finish up the investment and banking laws
[cat] BondLady thanks for coming on this morning
[BondLady] infrastructure laws, HCL and any thing else that pertains to Iraq's economic growth and also protect the wealth of Iraq and product production as far as getting all the industries back up and running that will give jobs and paychecks to the people to start rebuilding their lives and their country
[BondLady] Abadi is definatly on the right track for everything we wanna see and the majority government I have talked about for years which by saying that I'm meaning majority voting and not the quotah system they can never move Iraq forward with the quotah system Biden had them do, they fight too much for that
[BondLady] but by moving to majority voting we see them making great strides and moving the country forward instead of the stagnation we and they have become used to in the last 5 years
[BondLady] this is the very 1st budget in probably 15 years they passed in record time, why ? Because Abadi ran every where making committees to work on the problems, fix them and come up with a plan that most *MOST* could accept
not all because we know it's Iraq and no one will ever agree 100%, so majority gets the laws, budgets, taxes and everything else we need to see happen, finally !
[BondLady] so next the budget goes into the gazette and if no one contests it for I think 15 days then it'll open and funds will go out and Iraq can start to spend money from the budget and do projects and pay salaries
[BondLady] not having a 2014 budget hurt them big time and spending from the new before it was passed crippled them thanks to Maliki but like all broken things at some point the glue holds and things can move forward despite the cracks and tough things they can succeed, better days coming too
[Shredd] I have a thought about the pip movement strategy
[Shredd] what's the lowest denom for coins?
[Shredd] well anyways.....I think it would make sense for the CBI to make the first move to where the lowest denom would be usable on the street
[BondLady] they don't get much use from the 50 as it stands now, bringing on taxes though they need lowers imo
[Shredd] right also, thinking of the 25k note, if the rate were .10 to a dollar, the 25k note would be worth what?
[Shredd] if the rate moved to a .10 Dinar to One USD, the 25k note would be worth 2,500 USD
[Shredd] today the 25k note is worth about 21 USD sooooooooo a 50 dinar coin would only be useful at a rate of 100 to 1 to be worth .50 Dinar
[Shredd] thats the point I was trying slowly to calculate if they moved to 1000 to 1, the smallest denom for coins would be worth .05 Dinar or the equivalent of a Nickel for us
but and heres the big but on the streets now, the Dollar is the unit most used along with the 5 small denoms less than a 1 denomination really has no value on the streets
so, to me, that tells us a bit how a managed move by the CBI would affect the project to remove the zeros, gradual moves below this would not impact the project
[Shredd] see what I mean?
[BondLady] so it would really need to basically at least drop 1 zero off the notes rate to be able to be any kind of signifinance ? or is that not right?
[Shredd] I would agree
[BondLady] so if you do that to the 1166 making that 116 dinars to 1 dollar right?
[BondLady] k getting it and ty, so that would be a huge move by the CBI and a telling future for the dinar too
[Shredd] right.....it would make the smallest coin useful and begin to make the 25k note less useful
[BondLady] yes because as of now theres no need for a 1 dinar or a coin of 25, 10 and 5 cents, you couldn't use them
[BondLady] thats why they pulled the lil coins in the 1st place
[Shredd] they gotta make the case to start using dinar on the streets to dedollarize
[BondLady] you can't buy a thing with 1 dinar only about 10 of those
[Shredd] I mean, if the CBI moved to 1000 to 1, it would not impact Iraq
[BondLady] and the taxes once applied to everyday things they would need the coins and lower denoms just to make change
[Shredd] the people would continue to use the dollar
[BondLady] agree, I think we would have to see a big bump of at least a 1000 an earlier I did say a 500-1000 pip movement
[Shredd] I just wish we had an idea of the denoms volume in circulation
[BondLady] to be of any kind of signifinance and then to allow demand to make it rise quickly
[Shredd] that would be telling
[BondLady] the more the rate moves the more supply and demand enters into force right?
[Shredd] currency supply, yes
[Shredd] I also remember an article talking about the risk of abuse while the rate changed so the CBI will want to mitigate the criminals taking advantage of a constantly changing rate
[BondLady] so I'm sure everyone is watching the CBI to see what it'll do as investors wait for the right minute to pounce
[Shredd] that's why a free float right away is concerning regarding how the cbi would not be able to protect the local market from being taken advantage of if the rate is fluid....if the purchasing power is fluid
[BondLady] they need to see where the CBI is gonna go before they will take the plunge as well as the investment laws cutting waiting time and red tape plu tax breaks
[Shredd] right, my guess is the CBI knows exactly what rate CAN be supported
[BondLady] I agree
[Shredd] and my opinion is they will incrementally change the rate as the true value surpasses key points
[BondLady] when they said they had more in reserves than what they needed to cover the dinar in circulation spoke volumes to me
[BondLady] moving the economy forward and the government and CBI working together to build the economy is key too, laws getting done that both needed, CBI helping fund the budget
[BondLady] why? because they are finally taking the CBI's advice, pass the laws, start the taxes, power to provinces bring in more countries to invest, everything plays a part in the dinar growth not just a rate change
[Shredd] yes, I really feel we are on the verge of the rate changing, beginning to change that is
[BondLady] me too shredd
[BondLady] doesn't matter how rich Iraq's country is if you can't get all the different kinds of wealth out of the ground
[BondLady] everything has finally started falling into place where Iraq can finally breathe a lil bit and feel like the time was right for a monetary balance and change with everybody presumably becoming more of a team Iraq instead of division, jealousy and corruption
[BondLady] maybe they are finally growing up and they saw what it was like to fight now let them see what it's like to have their dreams come true...