(thank you Don for emailing this to us)
PTR Evening Call Notes 7 21 2011
Sorry _ I didn't get too in depth with these guys!!
Please Excuse Typos!
Dan: Guest on with us. Really excited about having him. Heard about him for over a year from Gary. Impressed with not just background in the banking industry but proof of knowledge about where we sit. Had a conversation today about what he knows to be true. Good call for us to hear what is going on.
Gary: I’ll refer to him right now as Dr. Pete. I have known him for a number of years and have learned from him An international economist, a professor of economics referred to as a part of history. Was a part of the creation of the Marshall Plan. In banking community, has contacts on e very level of the banking community world wide. Has been fun learning from him.
Pete: Glad to be on with you. Some focus on the IQD revaluation would help all.
Gary: Definitely. You were part of a Marshall Plan and a part of helping other banking to stabilize economies…
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Pete: _ Following WWII it was virtually a re-development of both the far east, Europe and peripheral continents. Marshall Plan was initially to bring in construction equipment, they
RV’s have taken place at all times. After Bretton woods conference in 1944 stated that world currencies would rv from time to time and wouldn’t be necessary for them to be backed by gold. RV’s have taken place periodically as countries needed it for decades now. Not new.
Gary: Led into Basel agreements that you have been working on to move into fruition. The plan with the iqd rv is something many countries have latched on to.
Dan: You talked about the currencies and the regulations that allowed them to be rv’d. Let’s jump past the German mark, Japan dollar, Kuwait dinar rv’s to today. Have been watching the restructuring of the country, etc….
Pete: I think everyone hopeful will be done very soon. Anyplace in the northern hemisphere is a matter of timing in the year. You get through the first and 2nd quarter. Normally any financial change will take 60-90 days preparation time. Any substantial change… gnp and gdp is what you are looking at – currency would go along with the growth in gnp. When central banks decided to let in ground assets to be a base as well as what was manufactured… those things make the capability of a country and drastically impact a currency valuation.
Dan: This was brought down to where it is for a reason.
Pete: Pretty certain that Iraq is an advancing country and the GDP is going to be increasing. Before cut off as a tradable international currency over a decade ago, it was around …. Regardless… it is in the next 2 years going to go up unless a drastic curtailment of what they are going to produce. Oil. Oil next to gold with relation of what it can be. Oil as a product through a number of organizations that deal in it, will keep it within certain lines. Oil can be produced for less than $30 per barrel. In recent months has been up over 100 per barrel a good bit. The president, cause consumer prices were getting high…. Now coming back in high 90’s….. as long as oil flows regularly from Iraq, currency will stay strong. A sovereign nation.
It’s currency has been accepted by the BBIS and the Central Banks of the hard currency countries and should move up reasonably over the next several years.
Dan: We assume this will happen quickly…. As an international economist you know more than the average person….would you agree at the starting point?
Pete: unquestionably a political football here right now… cause of the lead the US has had…oil going back to the 1930;s and the initial contracts called to be denominated in US dollars… still the case today. When the IQD comes out My understanding is it will come out in comparison to the GBP. That is for reasons that the Central Bankers have agreed upon. It should come out soon,. I think that the G20 wants to increase world economic activity yet this year and if so should come out very, very soon.
If not people should start to push for that. Does have a direct connection to the discussions of the increase of the debt limit of the US, Don’t know why it hasn’t been talked about. I know that our UST and other groups are in line to take that asap.
Gary: Know Pete is being very safe in how he approaches this. #1 he is saying the iqd is playing a vital role. A number of circumstances built around it. Know Pete and others in our inner circle. …. If we go back years ago the country had a value of it currency of $3+, had embargos that crashed its economy… a good product – oil and prices are going up… debts it had at that time…. Now we see the Paris Club got together and all those countries forgave 80% of all of that debt that Iraq owed… Last June July talked about the forgiving of that debt and opened up contracts for the leasing of that oil…. Workers going into Iraq and manning those facilities to increase their output… then removing sanctions… now high production and low debt.
If this were a company – in a position for a return to whatever the original value was or even more so cause of forgiveness of the debt… Discussions about a number of country currencies to be rv’d.
Last fall talked about if something didn’t happen over here would have an impact on the European banks… then saw Spain banks… Greece… this is necessary to help stabilize a lot of banks.
Pete: Entirely true. After japan had tsunami and problems with the electrical power from the atomic energy, their gdp will be down significantly this year, the yen down significantly… you could say that Japan and certain other countries in the Far East…. Not a strong international market
The consumerism here is vitally important to the world economy. Have had a problem getting countries like Germany to agree. Not debt that is the problem if properly addressed. It is the further development of economic base in the other countries. No worry in my opinion about the increase of the value of the iqd over a period of time if further terrorism, and limited wars don’t adversely impact Iraq. Even Iran is the same thing if they would come back into the community of nations would help everyone. Some people don’t realize that. Some Soviet bloc countries there are increasing their abilities to work things out and contracts on other oil there…. Will all come up in next months…. Years…
Gary: Dr. Pete – know you made a contact with a person dealing with the high bank that does all the releases. Know we are always wondering what level this thing is at. You said you had made that contact several weeks ago.
Pete: They were ready to go as soon as they were a new sovereign nation. Yes the BIS. They indicated that as soon as the CBI was ready to say we have affirmed our sovereignty have the DFI back they were ready to go. Since then I have confirmed that. Was told All other of the banking system has agreed to it. Don’t know whether someone doesn’t have enough of the I’s and t’s crossed is the problem or if it is a political problem. I believe our president could address this in a matter of hours. My firm belief.
Gary _ I didn’t thing our president had the power… and you said that….
Pete: Truman – the buck stops here…. The office of the presidency.
Tony: Re rate and growing up over next 2 years… I do have some information things happening today… let’s go on with buck stops here… my information is that being used as political football. While we say O has the power to get this done it is not a dictatorship,…. Has to have someone on his side. But, in keeping with that, I have had this many times today… why don’t they just rv and all will be solved… the debt ceiling… would be resolved. My answer has been – then they wouldn’t have anything else to negotiate – really not about the debt ceiling it is about everything else they are trying to get. If they rv;’d it wouldn’t get what they wanted with Social Security, etc… this is just being used to get the things they want.
Pete: Absolutely correct. Remember back in 30’s the usd controlled all transactions in the ME,. US still carries a lot of international weight in terms of policies etc. Have 2 political parties and the football is being played – not necessarily on debt ceiling. When Obamacare went through now had a lot of new govt agencies that would cost more… this is type of situation we are in.
Going back further…. There are 2 political parties… who represents the good of the people? The preamble of the American constitution starts with we the people… in the UK the Queen is sovereign… here we the people are.
Before the elections next year a group will be formed with information of pros and cons about what is good for the US people and why and every citizen will be able to ? that. If we have strong currency and strong backing of our financial system… people now have the backing they didn’t in the colonial periods. Never before did we get the people as a unit. That is what is going to take place. That will bring the US back to its former leadership.
Tony: Re Iraq and developing them as consumers…
Pete: The ability to produce the oil will raise the value of the IQD. I know Iraq very well. In the 1950’s a professor of mine was to become the Agricultural attaché to Iraq. The CIA asked me to go. I had become very well informed about Iraq. That’s why we went with Iraq. That was the plan all along.
We were working closely with Saddam before he went to Kuwait.
Tony: All along. Not just a by-product. This was a plan going in. From the beginning.
Pete: That is correct. The business people of Iraq are generally pretty educated and astute. That’s why they will maintain their position.
Tony: Dan stated thought 3.22 base. The UST has told me whatever it comes out at it will go higher. As they become consumers as we are, and that’s why they set up their tariffs etc…
Pete: They will be producing things too more than the Emirates… etc.
Tony: My ? is – do you see the value going up above the 2% every 90 days?
Pete: No reason why within next 2 years it won’t double or triple. My understanding is that the CBI wants to keep it in discrete time frames that they will allow it to go up periodically and they will determine the percentages.
Gary: One of the …. I believe the IMF has already ascertained what the currency could support …
Pete: Yes – Well over $10 in a period of time.
Dan: This is what we talk about – how real this is. Very happy hearing everyone;s position.
Pete; In relation to the other counties over there, Iraq has a good strong agricultural base, Diversification of industry. The diversity of the country its ability to lead, the diversity in different jobs in the country and the people trained to come up…. Not necessarily in the academic base cause many go out of the country for that… they follow the tradesmen way – family very important and have that base better set in that than the US. Will have a good economy base mostly on oil.
Tony: Cause of where they are it is like bringing them back to the future…. How long do you see that taking…
Pete: Know they have a tendency to keep it right up there with the western world. Turkey is a part of NATO and they are right next to them.
Tony: We see what we are doing on this side. What about China and the communist countries…
Pete: China will start trying to build. If Walmart backed out of China right now would set their plan back immensely. I spent quite a bit of time in S. America. Brazil in particular gaining strength right now. Reason many Mexicans etc. coming across the desert to come here is cause they can make a good living. They like that idea.
After Korean war when people came here from there… formed big groups, built themselves up and got an education. A lot of oeople doing more than we are just with community colleges…
Tony: the way the US had a plan for Iraq Will China do tha with Vietnam and do that with the dong?
Pete: Don’t want to comment on China right now – still too up in the air… The leaders there… know they are happy with what has happened with Hong Kong… they are going strongly into Africa,…the ME etc… countries that were influence d byt the US before. They are getting the property rights to minerals and other resources.
Tony: have some information about the dong today that I think everyone will love.
Pete; Will dong be along the same lines that the US is trying to get them to revaluate? The G20 is trying to get them to.
Dan: Definitely a plan with China. Japan. They are the only counties increasing with their GDP right now. Right now looking at where iqd is going. Frustrating for us to give a picture of where this is going.
We know done as much as it can be without being completely done. Trying to do calls to keep people grounded. Not on our time line.
Appreciate you coming on here and helping us understand… not just the dinarians that know this is about to pop.
Pete: Re China – a lot of people may not believe this but I have it confirmed. A firm in Georgia that has major contracts with China to ‘produce chopsticks. US supplying to China. There is hope for all concerned. Iraq will be part of this. In a few years another addition on to the G20.
Dan: let’s just leave this the way it is… appreciate you coming on here.
Tony: Thank you everyone have a good evening.