[Scooter-EG] Well I have to tell you -- I'm way behind on the news this week --
Has there been anything good juicy rumors outlandish behaviour
[helend] Scooter-EG if you are ready, got one coming out the gate at you
[helend] Hey, I don't know if I'll be on tonight so I'd like to pass this question on for Scooter. Scooter, sorry this is long but concise: In previous conversations with you and Enoch, you guys explained how through MOF and IMF docs among other things, how some other dinar people can state that there will be a 5-6-8-10 dollar RV.
Can you explain to the good people here how that is "plausible" though we know not likely. If I recall testing of various rates has been done and based on oil, natural gas, minerals, gems, agriculture etc....showed how a high exchange rate could be attained. Sorry it's long, but people should know that it's not probable it will happen but more to the potential strength of Iraq and how it fosters a positive outcome for this investment. Thanks, ThePhantomRider (AKA MrRockett)
Read More Link On Right
[Scooter-EG] I had to read that one and think about it from the "top of my head"
[Scooter-EG] ok -- first and foremost I need to state this ANYTHING can happen ] Why because we don't have all the data points Now, with that said There are documents which show, based on GDP strenght and using REAL values ] in current prices how some of those numbers can float out there at those higher levels
However, based on the numbers provided by the CBI and knowing some basic and partial data particularly for the Iraqi economy and eventually would roll down to the Iraqi People so -- in terms of those documents -- let me get some links for you
[Scooter-EG] The first one comes from the Ministry of Planning The National development plan now known as Iraq's Five year Plan
Which by the way has been altered already and they now have another five year plan
The other document that Rockett was referring to was the IMF CR from March of last year There's some references there ] and also in the Letter of Intent
But please remember the IMF or World Bank will never ever ever refer to the words REVALUATION They will use words like Structural Changes CAPACITY Sustainability
[Scooter-EG] Nevertheless let me give you an example from the five year plan from the MOP give me one minute as I need to get the data http://i1217.photobucket ··· Plan.png
[Scooter-EG] I'll wait one minute as people load that up ] but what you'll see is a normal calculation of exchange rates
[priscilla927] Scooter-EG Some folks may not be able to load it...just an fyi.....
[Scooter-EG] ok no problem That's why we will do this manually but please PLEASE don't tell people that this is what Scooter thinks because these are projections from the government of Iraq
[Scooter-EG] ok with that said let's run some of these numbers now some of these numbers would require a spreadsheet to run particularly since a calculator won't go that high
[Scooter-EG] but based on the MOP Five Year Plan -- pages 27 - 302012 projected GDP in Current Prices is projected at $921,517,746.50
[Scooter-EG] Now this number is divided by the last base year, which was 1988 and in 1988
[Scooter-EG] sorry clumsy today
[Scooter-EG] so based on using 1988 prices for 2012 that number is $71,521.60 Now when you divide that number into the first number you get $12.884.47
[Scooter-EG] See what the economist of the world have to do is find the last base year and they need to determine the DEFLATOR Now the deflator number is something that I'll explain in just a second
[Scooter-EG] p to: navigation, search In economics, the GDP deflator (implicit price deflator for GDP) is a measure of the level of prices of all new, domestically produced, final goods and services in an economy. GDP stands for gross domestic product, the total value of all final goods and services produced within that economy during a specified period. That's from wikipedia
[Scooter-EG] now when I divided these numbers ] we came up with a Deflated GDP It essentially puts everything into the same plane ] so were now comparing apples to apples
[Scooter-EG] so once we calculate this number and get the deflated amount we multiply that number by the current nominal value Then divide it by the $3.22 number from 198 to come up with the projected rate
[Scooter-EG] I know I know long winded but this has to be understood because all those numbers that the MOP provided were projections and those projections were calculating or estimating that certain events would have already occurred and they haven't
[Scooter-EG] so ] long winded – Yes but when you view the image from the link you'll see how that gets calculated now to the tricky part of that question Is Iraq anywhere near meeting those numbers that were projected
[Scooter-EG] NO nor have they fulfilled at least the major ones that were due December 31 so what we had to do was take a look at the numbers that were real and published
[Scooter-EG] Hence, the reason there's such a divergence between the numbers in the MOP document and the explanations from Enoch and myself Sorry for the long winded answer --I'll be shorter next time
[Scooter-EG] next ?
[helend] [luckyintx] In ur opinion...have u seen movement reguarding the two gov banks merging together, since last week? And also, how big of an impact is June 30th restructuring of "the books" on Iraq's economy?
[Scooter-EG] nice question and thanks for asking
[Scooter-EG] In terms of movement I did see a recent article that was somewhat puzzling and it came from Zawya and the reason it was odd was that the CBI was essentially praising the work of Rasheed ] but lambasting the work of Rafadain
[Scooter-EG] now remember, the Rasheed bank is in discussion with another bank or merger acquisition discussions ] so --- what's odd is the CBI typically never is this vocal so I'm thinking that Rafadain is still not completed
[Scooter-EG] but that's a gut feel ] and Rasheed is fully completed -- just a gut feel now in terms of the June30th restrucuturing ] I can only hope that gets done because it's my ferverent belief that nothing will get completed in Iraq ] until those Balance sheets are properly reflecting the REAL values of the assetts of those banks
[Scooter-EG] let's hope the 30th of June brings better luck this year than years past I hope that helps lucky next ?
[helend] [grashopa] ............so Scooter........do you think the books are already cooked, and we are just getting the smell??
[Scooter-EG] I think the boooks are in much better shape than three years ago
[helend] [jab] scooter a couple of years ago you thought the rv would come in around 2.70 have you since changed your mind if so what you think it will come out at ty scooter
[Scooter-EG] however, I will hold my comment until I see this years independent audit
[helend] Scooter-EG sorry thot you were done
[Scooter-EG] Ummm -- I don't think I ever thought it would come out that high -- what I did say was this there's three ceilings a low a mid ] and a high all three have benefits to Iraq but the real question comes about in my mind is which one plays the best to satisfy the ultimate goals which is to provide and increased purchasing powe to the people of iraq
[Scooter-EG] At this point in time, I can see a stronger probability to come out at the lower ceiling and allow for the economy to grow organically
[Scooter-EG] now please don't tell the world Scooter said it's coming out low because I don't know what's happening behind the scenes nor does anybody else around the net remember there could be 30 plus proxy countries and those monies aren't being accounted for on the CBI books or the Ministry of Finance numbers
[Scooter-EG] but based on the fact that there Bond Market is in it's embryonic stages the lower ceiling would make sense also, please remember, if the number comes out in the lower quadrant the time it takes to increase in strength in the FOREX market is very short
[Scooter-EG] in fact, I can see them limiting the amount of daily increases or decreases to 1.5% to 2.5% a day and those would be huge leaps if we were to see that occur but they would do this to control the volatility
[Scooter-EG] remember -- 90% of Iraq's income is generated from Oil when Oil prices drop dramatically so does their income In essense that's what occurred in 2008 perhaps 2009 as well -- oil prices dropped significantly and the government went immediately into deficit spending and had to borrow that 3.5 Billion from the IMF
[Scooter-EG] ok -- another long winded answer ] but warming up next
[helend] [luckyintx] Scooter, can u give us ur take on what this art means per our investment... how significant to our investment is this? http://www.bondladyscorn ··· -of-iraq
[Scooter-EG] WIOW WOW um -- I don't see anything in there that's surprising They sounded like the standard answer when they don't have an answer to several contentious issues no ] I just re-read it again I don't see anything out of the ordinary -- they did pay special attention to the Banking Reform
[Scooter-EG] That reform is due for completion in October 2013 remember -- there's two phases of that World Bank project and the first phase deals with the structural changes I hope that helps Lucky
[Scooter-EG] next ?
[helend] Scooter-EG No more questions scooter