kaperoni: Let’s get started.
kaperoni: Tonight’s chat is a …where are we at? These chats are really a summation of recent factual articles and events that have taken place.
kaperoni: First, I want to set the stage sort of so to speak…I want to start by looking at an article that came out exactly one month ago today….
kaperoni: ”delete three parliamentary economic: zeroes of Iraqi currency would increase confidence internationally – 03/09/2011”
kaperoni: Here are a few quotes….
kaperoni: “to delete three zeros from the Iraqi currency would increase confidence and international credibility of the Iraqi currency,”
kaperoni: So what does that sentence tell you?
kaperoni: 1.. No Lop. A Lop would lose confidence and credibility
kaperoni: 2. They want a strong currency that is international and internationally recognized.
kaperoni: I think we already all knew this, but it is good to refresh.
Read More Link on Right
kaperoni: The next quote…
kaperoni: “noting that the Central Bank of Iraq has real strategy about this matter,”
kaperoni: This tells us there is a real plan here. That we need to let it play out. The Rv is not a bunch of daily failures as some represent with the Rv today and then an excuse tomorrow.
kaperoni: And another…
kaperoni: “noting that the Iraqi dinar will be strongest in the Middle East region.”
kaperoni: Pretty clear that they want the dinar at some point to have the highest exchange rate in the middle east (and I would say the world).
kaperoni: Another quote…
kaperoni: "a promising future is waiting for the new Iraqi dinar, which would be the strongest currency in the Middle East, especially that Iraq held in the next few years, balancing the fictional depends on oil refrigerators up to 6 million barrels a day."
kaperoni: This tells me that anyone who thinks the dinar is coming out at 4 to 1 is smoking something. Clearly they state, “over the next few years” here.
kaperoni: Another quote…
kaperoni: Stating that "there is complete coordination between the parliamentary Economic Committee and the Central Bank of Iraq, and enjoy the support and confidence".
kaperoni: This confirms that these are all working together to accomplish this. Again very good news.
kaperoni: And last from this article…
kaperoni: “The Central Bank of Iraq was declared on 23 June on willingness to delete the zeros of Iraqi currency”
kaperoni: This is the official day that the Cbi was ready to proceed. The Rv could happen at any point thereafter.
kaperoni: Ok, let’s move forward to last weekend. To when the IMF/WB met with the CBI in Washington.
kaperoni: Mra 1901 - September 24, 2011 - B&b Reporters Iraq Banking System Report Launch
kaperoni: We start with this quote…
kaperoni: "So when we look at Iraq's banking and financial systems and the speed of these adjustments that need to happen, it's very clear that there are some--this is not an easy road to travel because there are political and many other issues that play, "
kaperoni: This clearly tells us that these reforms are moving at a rapid pace. And they are aware that this needs to happen. And this is key…that this is “not an easy road” and they state why…
kaperoni: The next quote…
kaperoni: "And we in the Ministry of Finance, when we came back to Baghdad, me and Mr. Governor had a very extended meeting to put the time table for implementing that action plan."
kaperoni: Pretty clear! After meeting with these people, and going through the process, they have a "time table" to implement this. We just need to let it play out. And I hope tonight to hopefully give us some real sense of when that is.
kaperoni: The next quote…from Shabs himself.
kaperoni: "and we, in the Central Bank, we are actually all ready to give all the support,"
kaperoni: Shabs is stating he and his team is ready and giving full support to this process to get it done!kaperoni: Now we move on to another comment from the WB in this meeting…
kaperoni: "So we had a lot of brainstorming and with the representation with the private sector, civil society, we had the banker's association, we had Islamic banks, state-owned banks, non-banks, stock market was there, and we were happy to see ownership and commitment."
kaperoni: This is telling. Clearly this entire project is not only difficult, it is time consuming, extensive, and encompasses many areas - banks, non-banks, stock market - as stated. But the key here is…”ownership and commitment” which means all areas are on-board and working to accomplish this. This is huge and great to see our investment has this kind of support behind it to accomplish it. I am confidant we are in good hands.
kaperoni: There are many other great quotes in that transcript…to many to use tonight…but I recommend if you have not read it, it is posted and my “impromptu” chat from last week covers it in more detail.
kaperoni: I want to move into this week's articles after leaving these last two quotes from the transcript….
kaperoni: "To do so, there are some legal and regulatory framework issues that must be addressed. And supervision of the market must also be enhanced. For example, the Iraqi Securities Commission still work under a temporary law. It is a draft law, but that needs to be adopted quickly, also to allow then the operation and more detailed regulations."
kaperoni: This quote explains there were unforeseen issues that have arisen along the process of preparing to the make the dinar internationally tradeable. I am sure one of many. But this one IMO is key….and we will see I am correct in a minute.
kaperoni: This quote mentions that the ISX is operating on a temporary law ( I believe from 2004, revised in 2008). This law appears to need to be permanent as they state…”more detailed regulations” and I assume they are referring to international practices. Which puts them on the same level as other countries.
kaperoni: And this quote…
kaperoni: "underlying all this, we need to accelerate the transit to a market economy, a full functioning market economy so that we can actually have some more customers for the banks, good strong customers for the banks, and also if you start accelerating some of these state banks, you will, in a sense, bring life into the stock market as well."
kaperoni: They are clearly supporting what we stated above…that they need to move fast or “accelerate the transit” to the market economy. Again that comment supports last month's article. And once they do so, it will “bring life to the stock market”
kaperoni: Ok, moving into this week…we can see the success… the progress.
kaperoni: This article and quote…
kaperoni: Basra, Iraq: the opening of the market for securities 02/10/2011
kaperoni: http://www.microsofttranslator.com/bv.aspx?from=&to=en&a=http%3a%2f%2fwww.aknews.com%2far%2faknews%2f2%2f264667%2fkaperoni: And quote….
kaperoni: "securities concluded legal requirements, technical and administrative open securities market in Basra governorate to support investment projects and strengthening the capacity of Iraq on the development of stock markets."
kaperoni: Clearly, this is telling. We are learning that they are achieving what was known as unforeseen issues or projects are now being addressed and resolved.
kaperoni: On the same day, we see this article and quote.…
kaperoni: Iraq's Kurdistan and Nasdaq ~ Kurdistan flag on the front of the Foundation Nasdaq Finance in New York ...october 2, 2011
kaperoni: And the quote...
kaperoni: “The source said in connection with the Middle East The Foundation which raised the Kurdish flag on the screen of Times Square giant facade Foundation welcomed the arrival of the President of the Kurdistan Parliament, held a ceremony on the Friday close the presence of Kirkuki.”
kaperoni: Again more confirmation that Iraq is getting set for international investment.
kaperoni: I want to toss in this article from today…
kaperoni: Deputy Governor of the Central Bank is expected to continue high rates of inflation on: Tue 4/10/2011 9:46
kaperoni: And these two quotes….
kaperoni: “the deputy governor of the Central Bank of the appearance of Mohammed Saleh, the continuation of the increasing rates of inflation in Iraq, in the event of failure to take monetary policy and financial procedures necessary to reduce this phenomenon,”
kaperoni: “saleh said in a statement to the Agency (news) on Tuesday: Inflation in Iraq will continue to increase if it continues policies have cash and finance in Iraq through the establishment of the necessary steps and decisive action to curb this dangerous phenomenon, referring to this type of inflation, which is called (transition or importer) if it's left untreated will cause damage,”
kaperoni: Now, lets look at these…the 1st one clearly states that if they don’t take action, inflation will continue to rise. This is key and puts the timeline on our side. With 7.61% from Aug, we know it is higher today. And this statement tells us that they cannot wait.
kaperoni: Now, the next quote is also very good…they use “decisive action” and refer to this kind of inflation as “transition or importer” clearly a revaluation will improve that drastically as the price of imports will come down with the RV.
kaperoni: Almost done…
kaperoni: I want to wrap this up by moving into the GOI…we all are aware today is important as the Maliki, Allawi, Barzani and Talabani are all meeting to achieve “government of national partnership” Which includes many issues such as the Erbil Agreement.
kaperoni: Today has been a day of hope that they would resolve their differences…but like so many times before…this article surfaced late…
kaperoni: Maliki, Alawi, Hashimi withdrew from the political meeting 04/10/2011
kaperoni: So it is of my opinion that this is a critical time.
kaperoni: I am not optimistic that Maliki will agree to the power sharing he promised with the Strategic Council of Policies position for Allawi.
kaperoni: That being said, I don’t think they will let him hold the world, in essence, “hostage” but holding up the RV.
kaperoni: I believe from these articles above that the CBI is ready, or near ready, to offer up a rate to the Iraqi people making their dinar international. This rate may very well be less than expected due to these continuing political issues.
kaperoni: The issues with the GOI may have to take a backseat and be resolved at a later point. A time that I personally don’t care about, if this is in fact true. If I am wrong, we will continue to wait until there is a resolution with the GOI.