Post By Memphis » January 2nd, 2014, Emailed To Recaps
Looking back into the events of 2012 I believe that the CBI had every intention to re-price the dinar at the start of 2013. The evidence to support this is compelling.
But that means nothing to us now. Or does it....
Let's dig a little and see if we can find something tangible from 2012 that we can point to NOW. This post is a bit wordy but not by accident. I simply want to convey clearly some of the significance that surrounds this week...
Society wrote on January 1st, 2014, 9:55 pm: .....Hopeful for tomorrow but not expectant.....my window extends to the 7th...... ...No matter what, these next few days should be interesting.....
I agree with Society's above mention of Jan07. Getting the cart before the horse here, I would further define three (3) windows that I look at.
Read More Link On Right
The near term, medium term and long term. If we define "long term" as more than 6mo then I would suggest that the news does not support such a window and so there is no profit in discussing it.
There is however a lot of expectation for what I define as "near term" and this is the purpose for making this post, to bring some focus to exactly WHAT is pointing so strongly to the present.
I suspect that Society's date of Jan07 was not just plucked out of thin air. This is the day that we will see the ISX re-opened for 2014 business and as such it is a date of importance. A few days ago I verbalized this to Nova like this:
"If we are going to be intellectually honest then IMO we must concede that if Jan07 comes and goes without a rate change then our near term speculation was flawed and we must go back to the 'white board' and begin again."
THIS is what Society is stating but he always manages to do it with fewer words. :thug:
BEYOND Jan07 we regroup and watch for further markers but make no mistake [please remember what I am about to type here] the fundamentals, the markers, the evidence that has carried us into 2014 are quite solid. We ARE in the "season"...
Having placed the horse last in this post, let's look at him a bit....
There is an elephant in the room that we must continue to point to. This elephant is quite large (as one might expect of an elephant analogy) and it daily becomes more exciting to me as it grows even larger with the passage of time! I have pointed to it on a few occasions lately but perhaps not loudly enough...
Iraq's COM (council of ministers) has yet to release the 2014 budget draft to the parliament to allow them to begin debating and amending. Folks, this is exactly the type of thing that we want to see, it is a change (delta) from their normal pattern and it truly makes no sense to me outside of the context for the re-pricing of the dinar.
For six months there has been much talk (by dinarians) about the 2014 budget and none of it mattered. It was all noise (IMO) and I carefully avoided it BUT...
Once we passed the 1st week of December without it's release from the COM THAT is when it became relevant to us and with each passing day....the elephant grows exponentially.... larger.
My perspective (vantage point) of this is heavily influenced by the past and THAT it what I wish to impart to others with this post....
There have been many statements made inside Iraq from all quarters that speak to a special significance in the beginning of the year.
Not only is it a new calendar year but it is also the start of their BUSINESS year and until Jan07 and/or until the 2014 budget is released to the parliament (who cannot be trusted to keep a confidence) then we have reason to be looking at the "near term".
To digress briefly let me point to a common error that we all are subject to making. When studying a thing (such as the dinar) we tend to over complicate it and make it much more difficult than it truly is.
When we see clear evidence that something is logical, simple and easily the best course, we do not fully appreciate this and continue deeper into the weeds without considering that we ought to have stopped digging!
The following portion is a good example of this. If we do not acknowledge that changing the numbers in Iraq at the start of their business year is logical then we risk driving right by it and not stopping to point at it... :thug:
Now, does this PROVE our point? No but we must make certain base assumptions or we will never know what to point at and wander aimlessly without any focus and so my aim here today is to hopefully bring something of value. Something that we can all point to!
Let's take a short trip back in time and re-examine some statements that were made 18mo ago that spoke to the significance of the start of the year in the context of the CBI's strategic project, the monetary reform.
PLEASE do not focus on the dates that you are going to see as that is not what I wish to point to here! The significance is fully contained in their pointing to the start of a year (any year) as it is the most ideal time to "change the numbers".
The following is part of a post that I made here on July09, 2012. It addresses two news articles that were released on July03 and July04, 2012 and the subject matter revolves around members of parliament discussing their recent meeting [June26, 2012] with the [then present] Gov. CBI, Dr. Shabibi.
Here we go and please note that everything that follows is from 18mo ago so be kind! :thug:
Central Bank is looking forward to the adoption of the new currency in the budget of 2013
On: Tuesday 7/3/2012 0:45
[Saleh of the CBI said]...calling [for] the cooperation of everyone all of his [at all levels of gov't] for the success of the project as [it is of] a national [interest] and for [the benefit of] all [Iraq].
note: This is key to what we are studying. The CBI met with the finance committee on tuesday June26 and issued a call for them to rally. To rally around the CBI's project as it is of national interest and national importance.
Parliamentary Finance: the next budget will be free of zeros
Baghdad - The World
Announced that the parliamentary finance committee, said Tuesday that the 2013 budget next year will be [expressed in] the new currency after deleting three zeros from the current currency, arguing that the reluctance of traders and companies from trading in Iraqi currency [is the primary motivation] behind the adoption of the Central Bank of the project to delete the zeros.
note: Two points here:
1) Prior to this press release the CBI stated twice that they "hope" to see the project in place Jan2013. Notice here tho that there is no question on that point. She states clearly that the 2013 budget [being hashed out right now in committee] WILL be denominated [expressed] in the new currency.
2) her point that traders/businesses trade using USD and not IQD is SO IMPORTANT. She even hints that it is so untenable that it is a present motivator for the CBI in it's timetable for implementation. Continuing:
Said committee member Najia Najib said in an interview for "Alsumaria News" that "the budget next year will handle the new currency after deleting three zeros from the current currency,"
stating that "the process of switching the currency and delete zeros will take approximately two years after the preparations for the process that began more than a year [ago]".
note: The gov't has been asked to prepare the 2013 budget by Sept2012 to give ample time for amendment in order for it's passage by years end. Consider this in light of her above comment and it certainly can be read that the re-pricing of the IQD will precede the year 2013. Continuing:
She stressed that "the Finance Committee and the Central Bank had agreed at its last meeting to be next year's date for the start delete the zeros and the balance [the budget] of 2013 [to use] the new currency..." Blessings, Memphis