Good interpretation of articles - from Franks site
I received this in an email from a fellow investor such as myself. It appears to have come off Frank's site ... I take no credit (I thank whoever wrote it) and hope it helps someone stay in the game. It's posted just as I received it;
There is so much that could be said regarding the CBI's project but I will attempt brevity here and hit the high points....as I see them.
My aim is to show [remind] the reader that the CBI is positioned and not just waiting around for some approval. The news that is coming out of Iraq is frustrating to me in that it is misleading. I hope to follow this posting up with a 2nd one to finish making the arguement that the CBI is ready to go.
IMO the month of October has great potential and there are still two things that I am watching for with interest as I believe that either [or both] will be L@@Ked back on as a catalyst for the RV. The coming war in the middle east is looming ever closer and the gov't of Iraq is well aware that the instability of the region adds great weight to their own problems thus driving them all the more to finally hold the NC and settle some much needed issues.
Recall that early 2012 the Executive Branch asked the CBI to hold off [be patient to use their words] on the implementation of the project to delete the 3 zeros. This request came from the Council of Ministers [COM] and was 1st alluded to by them a full 12 months ago. It is [still] of great interest to me that the COM asked the CBI to delay. This request would make no sense unless the CBI had announced their intent to implement true? This is a point that I have made often and it is still an important key to keep in our minds. If the CBI recognized the need to re-price the IQD to it's true [intrinsic] value earlier in this year is it not logical to conclude that today this need is at least as great if not greater?
The news for the past week or so has been especially vague as to where things stand at present and this I believe...intentionally so. The articles speaking to the re-pricing of the IQD are lacking in specifics. The ones from parliament are still favorable, the COM is largely silent, Saleh [Deputy Gov. of the CBI] is not saying anything new, Dr. Shabibbi is no where to be seen, and various economic experts are simply saying:
"Just do it!"
They are beating the same drum as to the timing of the project as well. Recall that about a year ago a committee was formed with the express purpose to study the historical record of nations who had deleted zeros from their currency. This team reported their findings in late May2012 and concluded that Iraq was well positioned to do this at any time and further they suggested that it be done as a mid-year project [July1 was my thinking]. The CBI quickly refuted this and made it clear that such a thing was not an option. In fact they went further and said that it could ONLY be done at the onset of a F.Y. which for them is Jan1.
This has now become the only date that is being thrown at us in the news and I still do not accept it. What IS logical tho is that the new rate be made effective prior to consideration of a next years budget and this not by necessity but as a matter of great convenience. Iraq's 2013 budget is in it's final stages of work with the COM [See post #119 above for evidence]. At the point that they send it to parliament for consideration/debate is a very logical time to have all the numbers reflective of the value to be used for the IQD.
Another point to consider [as I further digress from the topic] is that the IQD that is in use is in need of replacement. These bills are all falling apart and many [if not most] citizens do not even bother with it anymore but simply trade in USD. If the CBI does not act in the near term? They would need a new run [printing] of the large notes just to carry thru for another year [or more]. This does not make sense and the evidence in fact suggests that the CBI has been bringing down the volume of IQD in circulation thru attrition.
I speculate that the CBI's recent decision to flood the market with larger amounts of USD is a manifestation of this currency problem in their nation.
Further, we were told early in the summer by Dr. Shabibbi that the contract had been awarded for the printing of the new IQD bills. The CBI immediately went to great lengths to kill this story and explain away what the good Dr. "meant" to say. My point here is that these new "lower denomination" notes either are or will be ready to go into circulation. OK, back to the topic at hand....
In order to lay this out I went back to a period of time where IMO we were actually given some true insights into things. This portion of an article from June29 is important as it lays the basis for my 1st point:
NOTE: If you are new to the forum. words in [brackets] have been added for clarity...
by walkingstick » June 29th, 2012, 6:33 pm • [Post 27]
...at the same time the central bank announced that the countdown to the implementation of the project to delete the zeros did not start yet, [as] there is no unified vision on it.
You may be asking what in the world the CBI means by this call for a "unified vision". If so, the next sentence in the article has your answer. The CBI was sitting around [hands folded] waiting patiently for the Executive Branch to [finally] add their consent [cooperation] to the project. Here it is:
Saleh said in a statement received the long version of it that he [the CBI] has approached the Council of Ministers [asking them to reconsider and agree] on raising [their earlier position for the CBI to wait or be] patient as [to] the implementation of [the CBI's] project, [in] which will be deleted 3 [zeros] ranking calculation from the accounts of the Republic of Iraq, and did not takes us back anything yet, "hoping that" comes replies approval. "
The underlined portion needs help :thug: here is a paraphrase:
"At present, the COM has yet to respond to our request but we are hopeful to hear a favorable response from them soon in order that we might proceed."
Ok, now that this cornerstone is laid, let's FF a week and L@@K at the news received on July4. This article was IMO one of the most revealing that I have ever read on the CBI's project [the RV]. What follows here is lifted from my original post.
To be clear and avoid confusion....EVERYTHING that follows is from a post made on July9 [a full 3 months ago] and it will conclude with a quote that is in direct response to the CBI's request to the COM from June:
by Memphis » July 9th, 2012, 3:34 am • [Post 1]
Recall that the CBI has independence from the gov't of Iraq. This is important to define in order to reach any conclusions. Affer many months of articles that speak to this IMO it can best be explained as a type of symbiosis in that the CBI needs the cooperation of the GOI in order for their project to be a success.
Strictly speaking does the CBI need the "permission" of the GOI? no....but....they need their cooperation. About 5 months ago the Council of Ministers asked that the CBI hold off on the project. This body is an extension of the PM Maliki. Anytime they meet...he is in the room presiding. They asked the CBI to delay until political stability was obtained and security established.
Subsequent to this request, the CBI agreed to delay. It is important to recognize here that had this recommendation made no sense and had the prudent course been to proceed? The CBI could have and likely would have proceeded.
If the COM were to now come back and give their blessing...would that not be huge?
The CBI was obviously ready to act [implement] months ago else the request for them to "hold" would have been unnecessary....
This next sentence speaks to a meeting between Dr. Shabibi and the COM, a meeting that I knew nothing about. We often are not told such things and here is further proof. What this sentence tells us tho is of great importance. Five (5) months ago the COM asked the CBI to "hold" on the project. In this recent meeting [as we about to read] the COM has now given their blessing!
The answer that "the Council of Ministers approved [going ahead] during the meeting [with] the Governor of the Central Bank on the project to delete the zeros and replacing Iraqi currency after it [the COM had] decided earlier in the [year to wait or to be] patient [they now add their consent] as the project [needs to go forward] due to [the negatives we are seeing of the] rising [value of the U.S.] dollar [vs. the IQD] on the domestic market for the past few months," noting that "the project to delete the zeros and currency exchange aims to restructuring of the Iraqi currency and the form in which to do business in line with Iraq's internally and externally. " If my added words [in brackets] bother you, take em out, it still reads the same. This clearly reads that the COM has reversed their position and have given their support to the CBI.
Earlier in this post I remarked:
" The CBI was obviously ready to act [implement] months ago else the request for them to "hold" would have been unnecessary...."
Consider this...the CBI has bragged [often] that Jan 2013 will be their implementation date. They also [often] remind us that they have been stating this fact since Sept 2011. Now, if these things be true, then the CBI could not have been planning to implement in the earlier parts of 2012 and yet the COM felt it necessary to urge them to hold off on their project? And now, this same COM has given the CBI the go ahead and the finance committee is all giddy over the project as well? And thru all this, the implementation date has not moved? How is that possible? How could the COM place a six month delay and then the project still be on schedule for Jan2013? I conclude [for the 100th time] that Jan2013 means nothing and has never been a real date. The CBI had plans for earlier this year, now they have the blessing to proceed and all that we await is for the CBI to proceed.
"Peace is not the absence of trouble...
...but the presence of God" : posted in ptr