Islandg1211: Last year, when the Iran deal was done, I posted that one indicator that needs to be closely watched is Iran's inflation rate, because it could imply the possibility of Iraq entering into the international world prior to Iran.
IMO the possibility of investing in both currencies should have been researched, especially given Iran's more stable government and obviously not being war torn. I posted before currency dealers were offering to sell Iran currency, so no one really responded to my post. But now, it should be considered.
The Central Bank of Iran has really reigned in inflation in prep for their Monetary Reform, but it's still above 10%. Going back and actually listening to Shabibi's plan for Iraq's monetary reform, lowering inflation is absolutely a requirement prior to deleting the three zeroes.
Looking solely at inflation rates, Iraq is ready to delete the three zeroes now, but Iran still has a ways to go, IMO.
The US released Iran out of almost all of their sanctions, but withheld their ability to access US banking systems and their sanctioned money.
That's interesting, because it implies the U.S. wants more out of their deal with Iran. We should question what that is.
IMO, as I've been posting for months, Iraq's targeted RV timeframe was/is April 2016, based on historical RV preference by the IMF, and the world's powers including the US military, IMF, and World Bank stepping last Fall and fully committing to Iraq.
This full scale commitment to return to Iraq includes the plan to RV. Plans have targeted or estimated timeframes. Guessing RV dates prior to the return of the U.S. into Iraq was pointless. Looking at reasonable targeted timeframes after the US committed is being wisely informed.
This timeframe also corresponds to China completing their "parallel system" to the West's IMF, WB, Swift Codes, and now gold fix, as they move towards the Oct. 1 date for inclusion into the SDR basket.
How the stability of the expected price of oil is going to be determine is another absolute key factor in the reset of the global markets. Along with a portion of oil sales being depegged from the USD is another factor in the reset to asset based value, just as a portion of the gold market being pegged to the Yuan is.
Watch the moves and negotiations with Saudi Arabia and Iran in particular as it relates to output caps and non-USD oil sales. The U.S. has been developing their oil industry, and exporting, and Russia and China have their depegging from the USD oil deal completed.
With so much completed with the reset on a global scale, the question really isn't whether there is a change going on, but just how much of it will be coordinated, or will things change as a result of being impacted by the reality of markets or "Lava Flow" as Frank puts it?
Christine LaGuarde has been beating drum for "Coordination" amongs nations for the last few years. That's been the IMF keyword that we needed to watch for.
The transition will be smoother with coordination as nations deal with the traumatic changes such as: the burst of the debt bubbles they created, cutting government spending, more intelligent tax code strategies, decline in stock returns, unemployment, bank failures, national debts, and transitioning to and/or promoting the private industry sector.
Studying the coordination between nations could be of value.
Some things will have coordination, other things will demand more negotiated deals, some countries will be completely resistant (N Korea), while some things just can't all get done at the same time.
Just for pondering:
Looking at Iran, they seem to moving very quickly back into the international market.
However, their inflation rate problem, although truly getting under control, may not be low enough to RV at the same time as Iraq, if Iraq's security and stable government is ready first. Coordination may have been the plan but both countries still have to implement the plan.
This could create a "double dipping" investment opportunity, whether intended (interesting theory) or not. If the plan is intentional coordination, than Iraq's RV may have to wait until Iran's inflation rate is low enough and they have security and stabiliy.
Another coordination timing indicator could be the Yuan's inclusion in the SDR basket. IMO Iraq is ready to RV from the CBI standpoint regardless of the GOI and ISIS, while Iran is not quite ready to RV, but getting there, because of inflation.
Perhaps Jack Lew is actually planning on double dipping with Iran which would make up for Iraq's coming out at a one to one rate?
IMO, Jack Lew knew the date and rate of Iraq's RV when he co-signed the IMF's loans and bond deal with Iraq last week. He will release the rate. Yet, Iran's inflation rate is still above 10% and the U.S. still has a hold over them in terms of US banking and their sanctioned billions.
Looks to me like the UST has a plan in mind. President Bush wanted us to invest in Iraq, but O and others may not want us double dipping too much in Iran. We'll see.