7-10-2012 Kaperoni: Its been an amazing week with all the CBI articles. Iraqi citizens will be forced to turn their dinar into the banks which will not only force them to get bank accounts but also address counterfeiting. Don't listen to these guys talking about bank screens or high rates. This is a process, not a single event. It's a collection of events. In order for the dinar to have value a series of events have to take place that complement eachother. For example: The IQD cannot simply RV when they want to, it's not that simple. The CBI needs to accept article 8 in the IMF to make the currency internationally recognized. In order for Shabibi to do that, he has to have a plan for the dinar. He knows what was sold out of Iraq and again that's another process. The CBI stated months ago that they want the Central Banks to hold it as a reserve currency, which solves that problem. He has to know that there is a desire for the IQD to be held by those central banks, to trade it, create a market for it and cause the dinar to rise in value. They will create a market themselves by using equity capital markets (ECMs).
A large account of electronic dinar will be sold to the central banks around the world. The central banks will buy and sell amongst themselves and Shabibi will set the price based on demand. That daily buying and selling will drive the price up. He has to create an initial (staging) rate. A rate that not only accomplishes what he want to do within Iraq but will be substancial enough to convince dinar holders to cash out our dinar into this dinar pool. When we cash out it will go into an electronic format and back to these ECMs, which will then sell it to these central banks. That is why they could NEVER Lop this currency. If they did, there would be no motivation and nothing to encourage us, as dinar holders, to cash out. A Lop would also make that pool only worth about 10 billion because the rumor is there's about 10 trillion dinar outside of Iraq that needs to be drawn in and sold. If you Lop it, that's not enough for it to become a reserve currency around the world. The CBI's own foreign reserves are 60 billion so it doesn't make sense. Shabibi needs to know who will create this dinar pool, from a company standpoint. It's not going to be through US banks or the Fed. Shabibi has a responsibility to develop his own country's banking sector, stimulate his own banks within Iraq and get Iraqis to participate in the banking system.
Deposit their dinar and get involved with the current technology such as cash cards etc. So, Shabibi has a lot on his plate. He also needs the GOI to be stable. That stability will help him raise the value of the dinar over time by pricing the dinar for the central banks as demand changes. There are many things of concern and not one single event but many events tied together to get to the point where the RV can take place. I can tell you that they have been preparing this for 11 months. Last September the CBI announced that they wanted to make the dinar a reserve currency and that was the first time we'd ever heard that. They have been getting everything set up to support the IQD that is outside of Iraq. The RV can NOT come out at 3+. I don't care who you like listening to, I don't care what explanation he gives you, there's no chance it can come out at 3+ because the central banks are going to be buying and selling it and Shabibi is going to be pricing it and therefore it has to come out at a stage rate, at which there is room to grow. The rate will rise over time as Iraq proves to the world they can accomplish what is expected of them. They need to get into the WTO, they need to privatize their companies, they need to get the ISX on an international level, increase employment, decrease poverty, then the dinar will become a more attractive currency and the value will improve.
The CBI has been working for years behind the scenes to restructure the banks. The World Bank has been funding the reforms and has been orchestrating the process including the RV. Iraq is trying to pass new economic laws, including the new ISX law and preparing for custodial banking which means anyone in the world can invest in the ISX through these custodial banks. Now here's where it gets exciting, the CBI has stated in the last couple weeks that all preparations are done. That is awesome. Now all this stuff you hear on these sites about lining up banks or "bank packages" is just all CRAP!! THERE ARE NO BANK PACKAGES!! Even if they are in Article 8 and accepted internationally, they are still an exotic currency. They first have to create demand and we do not yet know who will even be participating. Until there is momentum for the IQD because it's an exotic currency what banks will be involved is stil to be determined. We have 10 days before Ramadan and I just don't think there is enough time for Parliament to pass the economic laws and the financial law Shabibi needs to RV the currency before then. I think they will get this done in September. Nothing will happen during Ramadan but we have a good shot at this in September.
I'm always with you except the fact that you keep claiming the RV rate to be under or at $1.00. I promise you, this is about the only thing I don't see eye to eye with you on (The exchange rate). Other than that, good information. The only reason I don't agree to a under $1.00 RV is what I've stated in your previous thread. No investors will be interested in anything in Iraq and companies such as GE will not do work there for a currency lower or around the same as the USD. I believe you are very credible and I enjoy your posts. I just have a different view when it comes to the exchange rate. But if what you're saying on the exchange rate is the absolute truth, then I expect no work or re-infrastructural projects to take place until over time as you say until the rate will become attractive. Otherwise of course, these companies would need to be paid in USD including Asiacell (who is Iraq's Verizon) and that's not going to happen. Now I'm not claiming a $3+ rate but I'm also not believing a $1.00- either. For those who would wonder if I did have a rate in mind? I would say from $1.13 to $2.47 with $1.13 barely cutt'n it for this to even be attractive. Now I could be wrong just like everyone else has thus far because noone has been right as of yet lol. But to me, I believe this makes a lot of sense.
First of all, it's not me. This is from Kaperoni today. Please explain to me how a 100,000% rv is small when the largest ever accomplished in history was China at 30%. Why have the SIGR report and countless articles said around 1 to 1. Show me evidence that it will be higher initially and not guru talk. Finally, both Kaperoni and I think the IQD will eventually be the strongest (which doesn't just mean highest) currency in the M.E. but first they need to establish credibility and drive the rate up.