Post From Currency Chatter
Commentary by Tlar.
-We should get what ultimately will be definitive results on a preliminary release from the Election Committee on Monday. Iraq may be more democratic than the US. There was a 70% turnout of eligible voters in Abar and a 77% turned out in Basra.
Iran who tried to once again get Iraq to pick Maliki for a third term by pressuring the blocks last week to back him has found that their push has fallen on deaf ears.
They attempted to have the Quds Forces talk to the blocks in hopes of breaking one of the coalitions but have come to the conclusion that the solidarity between the opposition blocks can't be broken.
The big four in the group, the Kurds, the Shia splinter groups, the Sunnis and the Sadrists are hanging firm on their demand to see Maliki gone. So Iran has publically told Maliki they cannot go against the will of the Iraqi people because they don't want to be seen on the wrong side of this issue once the results are public.
They have stated that they are in agreement that Iraq needs a different government and told Maliki they will no longer press for a third term for him. Maliki's hopes of a third term is all but gone. Estimates of the opposition numbers on the final count could be as high as 225 out of the possible 328 MP's. That is more than enough to form a new government without Maliki.
-There is a move a foot to get the budget passed by next week. The stopper we know is the Kurds but once the votes come in next week it is my opinion that the present parliament will negotiate, read and vote on the budget quickly.
As long as the winds of change are validated through the vote tally and Hakim becomes the new power broker, I believe a deal will be made immediately with the Kurds behind the scene.
They are scheduled to have more meetings on the budget as this parliament will be active until June 14th. Nujaifi the President of Parliament (POP) has said this parliament will continue to meet until the budget is approved or the next parliament takes office.
The National Alliance will also have a meeting in the next few days to sort out the position of PM. Even the SOL will attend. I think the SOL will back whoever Hakim suggests to be PM because the party is in disarray and their leaders probably will be prosecuted or leave the country soon.
So those in the SOL, the rank and file members wishing to positions as head up committees etc. in the new parliament, IMO will be jocking for position in the next government and will most likely not want to be seen as having their back against the wall.
The heads of the SOL have already said they will nominate Maliki but they know its a futile attempt.
Iraq may be issuing arrest warrants even before the new government is seated. The call is out to close the airports and borders to corrupt politicians and it is anticipated arrest warrants issued before they can escape Iraq. That has got to make for alot of very nervous DAWA and SOL politicians.
Before the elections Maliki sent one of his people to Europe with tons of cash to try to buy/bribe votes from absentee voters. His guy took the money and disappeared and nobody can find him. Poor Maliki. He just can't get a break.
-The CBI and Turki in particular has not said much about the coming money change over the last year and a half. Most articles talking of deletion of the zeroes have been from the FC, EC or economists giving their opinions on when and how.
Since Friday Turki has talked to the press now twice. I sent you both articles. What he stated is astronomical to me for a guy who has said virtually nothing about this project for so long. The first article indicated they were waiting on the GOVERNMENT ELECTIONS TO BE SETTLED.
It also said WE ARE READY to delete the zeroes. He also said that it is imperative that Iraq be prepared BEFORE HAND (not a float) to change the accounting systems in Iraq.
The second article from Turki stated WE ARE READY and WE WILL DO THIS BY THE MIDDLE OF THIS YEAR. Recently the CBI has made some very important moves. They have reprinted the crossover notes to eliminate counterfeiting. They are replacing the existing notes as this commentary is being written.
It's a good move. My opinion is and has been that the condition of the existing notes are so poor that Iraqi's will voluntarily swap fast to the new notes. Just prior to releasing the new notes, an article came out telling Iraqi's not to destroy, write on, tear, stamp or sign the currency.
We did not know at the time but that article was talking about the new currency, not the stuff that had been circulating 10 years. Iraq is mainly dollarized and most transactions are being done in US currency but it is important to make sure "mafias planning to rig the currency" is not used as an excuse anymore.
More than that, they have to protect these notes, the 250, 500, and 1000 before they have value. The old notes are easy to counterfeit.
-The bank last week also changed the rules dealing with currency. Transfer Companies are for the first time allowed to set up accounts directly with the CBI, bypassing the middleman.
This is intended to assist in rate control removing what had been at least a two tier system and sometimes a three tier system, to now being a one tier system. We know that the CBI also changed the rules for independent banks wishing to sell USD to the public.
They now require any independent bank wishing to sell USD (their largest profit center) to deposit all dinars they are in possession of into an account at the CBI and draw out the USD against that balance.
This means that all these banks had to give every dinar they had to the CBI and continue to do this as they collect dinars from sales of USD. A very good move if you intend to substantially raise the value of the dinar.
IMO all electronic accounts will be reduced three zeroes as the currency increases. The CBI just took away the possibility of these banks benefiting a windfall from the rise in value of the dinar. The CBI has set up and electronic accounts for these dinars.
It is also my opinion that the only beneficiaries of this change will be anyone who holds the currency including Iraqi's themselves. Everything in Iraq will have to be reduced by three zeroes.
Salaries, hard good, rents, contracts, budgets, living expenses such as gas and electricity, food, debt of any kind, real assets value, stocks and yes both private and business banking accounts.
IMO you can't pick and choose. For this to be successful, as the currency goes up, everything will go down. There are no articles to support this one way or another but it is my belief that a person who has 50000 in the bank account will wake up the day after to 50 dinars.
It will have the same value as before but 3 zeroes will have been removed. The person who has 50000 under his mattress will hit a windfall bigtime.
He will be able to walk into the bank and swap for 50000 new notes orr set up an account.
Argumentatively I know it is hard understand this concept, but I feel good that this is the way will happen.
-Next week should be a good week. If as expected Maliki is out, we should see movement fast.