DC: So, here is what I got, guys. Bottom line, I believe Iraq is immensely ready. I believe they are getting ready for celebrations and frankly have been on the edge of ready celebrations for many days now, at least the 15th if not before.
In terms of things like being physically leaked (???) those kinds of things, like ready. A lot of the banks continue to distribute the lower denominations and/or a… those have been pushed out throughout most of the country right now.
There are some parts of the country, they do not have it still and so it’s really confusing for the poor guys out there, causing regular trouble.
They are mainly preparing for their elections. Remember, their elections are kind of a rolling cycle and those elections are starting to occur and the really big ones are starting to crank up tomorrow and through the 30th, and those again, moving on and being successfully monitored by everybody out there.
All the politicians, not just Maliki, but all the other politicians want this as well, except one specific guy and the folks that follow him, very much want to get this done now because they believe it will reinforce the status quo.
It’s just like here in the US, or for those international, everybody wants to look as good as he/she can right before the election so this is a good time for that, and they’re very much striving for that.
My understanding is that a great deal of paperwork has been submitted to all the right amount of people that put everybody on pretty much definite watch where they’re getting… there’s not a lot of wiggle room, let’s put it that way.
There are people here in the US that are working on Good Friday. Regardless of your religious preferences, we typically don’t work on a day like today and they’re not doing it because they want to. They’re doing it because they believe… the high level believe that this should be going on.
I would believe that a weekend is a very nice place -- and we’ve talked about in the past and I’ll bring it up again – a lot of senior politicians, especially if they’re real strategists, have always wanted this to occur on a weekend because all the initial rush and all the initial crazy during a time when there is very light news coverage,
and the lines (???) and all that kinds of stuff can be easily confused, they won’t be on there.
All the banks that we know and talk to are very ready and are on call and are very ready to go.
My personal opinion, kinda extract from the level of details is that the … is that they were supposed to go down the last couple of nights, but there were deals to buy a little more time – we’re talking like hours, with a maximum of 24 hours at a time of these last-minute deals and movement occurring almost every night.
Puts us a couple of days, again, which is a good thing. If we’re getting down to where you’re playing for hours, in essence that’s what it is, if you’re playing for hours, there’s not a hell lot of time left on the clock, it’s just not, to get that done.
So, I strongly think that we’re very much ready and ready to go.
I think the rest of the world is pushing toward this harder than the US, but the US doesn’t have any more timeouts left and we’re trying to get this done right now, and are prepared to do so. So, I kind of think that’s where we’re at, guys.
DC: I was just saying the delay, we’re talking hour to hour, a few hours at a time. I’m not saying, “Hey, we’re within an hour.” I’m saying when they’re talking about the delays, they’re talking about the hour timeline, not days.
Q: My big question was, seeing Okie with this thing and some of the other folks talking about the IMF and the US coming to terms, was that basically the hold-up or was it something else and they’re just using that as an excuse?
DC: So, the IMF and this agreement that came about… the agreement has to be ratified by Congress, so… just nothing is really done until it’s ratify by Congress. How this affects the actual revaluation? It is a little more complicated, a little different than what everybody is expecting.
In terms of does it help, does it assist, does it play into this? The answer is, yes, absolutely it does. But it’s, at least all my people, and also when it fully *** situation, this was nice to have not a must have. This is a “Hey, while we’re here, let’s get it done.
We got everybody meeting and this is basically a wonderful thing on there.” It wasn’t the IMF is holding this over the US head and vice versa. They were in the middle of trying to do this.
The other things we can talk about were the must-haves and those have already occurred. And this meeting, they can help proceed and help push things along. But, again, I believe they can modify and adjust, because the US isn’t going to give up a veto vote, but they can be a lot more flexible, they can be a lot more easy to work with than maybe we have in the past.
Q: So, on 13303, if that expires on May 22nd, is that correct? (DC: Correct.) So, if we go past that day, does the RV automatically just kicks in?
DC: No. So, 13303 is mainly for – and I say mainly because some parts of 13303 are classified and are held confidential – but, the other part that we’re reading basically said a US citizen can operate just like Iraqi citizen when it comes to the Iraqi currency.
And so, it’s just for US citizens for the ability to invest in, send money in, do whatever we want to with the currency. If we, God forbid, for some unknown reason go past that, then … and they don’t renew it – which they always renewed it every time – basically we could have some complications with buying and selling dinar, mainly buying from currency dealers.
But, if you’re already have it, then it’s yours, it’s theirs.
The way this has to go is Iraq basically has to ask, or has to request of the BIS and the IMF, “hey, we’re ready, let’s go.” And they have to accept that, and once it’s accepted, they go around to make sure everybody is okay with the acceptance of the rate.
And they believe, yes, Iraq can justify a $3-whatever rate, then everything is fine. That is determined based on the homework the central bank has done, as well as the prime minister of the country saying, “yes, we’re okay,” or the central bank director saying, “yes, we can work this. We’re ready to go.” That’s how that process works; they’re independent of each other.
DC: When people get to 13303, there are many different pieces of it, and the important piece that Tony mentioned was the DFI fund. That was basically the reconstruction money for the country. We bombed them to hell, so now they’re trying to rebuild all their infrastructure, all their electricity, sewer, water, everything else.
And so, that was the $190 billion 1.5 weeks ago, and that was actually released and what the DFI fund did was it basically said, “Listen, I’m going to protect these funds against the creditors of Iraq.” Like, people would try to sue Iraq or contracts that don’t go through because somebody disagrees with it, and they try to sue the country for it, etc.
Those are protected from everybody because they’re development funds and they’re part of the UN and part of… a few other agencies have their fingers in it. Those are protected from any creditors, etc. Then we’re releasing it, it’s a major win, cuz it’s saying, “you’re grown enough to start rebuilding your own country. You’re grown up enough to stand on your own and defend against your own liabilities that you might created or might not created.”
Guys, ff the RV was not happening, if we’re not this close, it would have not been released last week, I promise you that.
Iraq actually wants to keep that, like anybody, “Hey, I can keep my money super protected until I want to use it.” Obviously they’re going to keep it well protected. They have asked for and got permission from the DFI funds which again triggers a lot of part of the DFI funds.
And part of the release of the DFI fund, remember, it was online, anybody can look into it if they want to is that it has to have the revaluation of the Iraqi dinar.
Q: Taxes. I’ve done some extensive research and I have an accounting background and from all evidence, you’re talking about people being able to use this as capital gains and if they were a business that would have been true, otherwise this would be considered ordinary income. I would just like your thoughts on that.
DC: I know that there are still proposals in the different taxing committees that they are waiting on. They are continually debating and going back and forth, to put in writing, this bill or whatever. It’s very much in play right now.
Frankly, I don’t believe it’s settled at all. I believe there are some specific exchanges due to who the last buyer is, those exchanges will maybe be held under foreign income, credits and those kinds of those things; they have specifically stated. But I think most of the tax situation is not solved.
So, all I can really tell you is what I’m going to do and that is set aside 50% for taxes until they figure it out.
C: Was just curious. Spent about 3 months investigating this. So, unless they change this and put it in halfway plain English, it’s going to be very difficult for anybody including tax preparers to be able to muddle through it halfway knowledgeable.
DC: Agree. It is not clear at all.
C: The tax codes are not clear to begin with.
DC: Guys, things again look quite good. Apologize again for not being on much. My normal work schedule has been way too burdensome and I apologize for not being on here. I hope everybody is doing great.
Bottom line, there have been some agreements that they agreed to that put things on a very, very tight timeline. If you want to go to the pessimistic side and say, “what does it take to get those agreements mess up?” It takes a lot to screw these agreements up. It takes a whole lot for something to go wrong on this.
The delays now are being measured in very short periods of time and they’re also getting harder and harder to justify, to get it done.
Why do we go to the negative? Because they had so many delays that’s why this make this different than the time before.
But I am very optimistic about the next few days and I think everybody else is. I also believe that the education process will be less scary and more helpful to the banks than we had originally were worried about, that’s a wonderful thing.
And we understand that we’ll be here to help further along than maybe we would have in the past. So, good luck and keep the positive thoughts and prayers going.