Doc: Just when we thought it was safe to get back into the water the fantasy rate prognosticators have popped back up stating rates anywhere from mid $3 to $8. We would have thought the SIGR report would have ended the debate. We find it almost humorous at this speculation when the news out of Iraq continues to state around $1. Just yesterday Mahma Khalil, decision-maker of the parliament's Economic and Finance Committee, said "The zeros are removed for the purpose of increasing the value of Iraqi Dinars in a way that one Iraqi Dinar will be equal to one US Dollar," We have SIGR, 2008 five year plan, Shabibi, Shibibi's deputy, multiple members of Parliament and now Finance committee members all saying the same thing which is the initial rate will be around $1. With all the people in the true know stating the same $1 rate we find it impossible to give any creditability to these reported high rates.
Doc: We suggest everyone needs to be ecstatic with the $1 rate. We only see these high rates as possible with a true LOP first and then a RV. The reason for this is the economic impact of these high rates on Iraq. We should remember that fiat currency is nothing more than debt instruments of a particular government and only backed by that government's ability to honor it. Shabibi obviously understands this and is why he is looking for things like a seated government, HCL and chapter 7 issues to be resolved. Besides if it RVs to $1 we all make 1000 times our investment, however if it LOPs and then RVs to say $5 we would only make about 5 times our investment. We vote for the 1000 times scenario, how about you?