Dinar Observer Daily

Kaperoni – Dinar Guru   There are some signs…that once the new government is in place they will revise the 2020 budget to only cover expenses.  If true, that means the public/private partnership to begin reconstruction will be put on hold until next year.  Guess we will wait and see.

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MilitiaMan – Dinar Guru    “Al-Nassiri: Government support to the private sector is the savior for achieving economic reform”  Quote:  “Al-Nussairi added that there is a need to secure the governmental program for the interim or ordinary government with a clear vision of the role of the private sector for the new stage and to involve non-governmental experts and specialists in the implementation of the desired comprehensive economic, financial and banking reform program”  The new stage and it implementation for comprehensive economic, financial and banking reforms… Today we saw them talking to the people about how to check authenticity of USD currency and the Dinar with coins considered! The new stage! Coins beget value!!  One doesn’t counterfeit coins at a program rate...They don’t warn about counterfeiting coins for just no random reason. They warn about knowing other countries currency and that legal obligations are coming soon to the local currency. These things in the news earlier today suggest more reasoning they are about to get plenty of USD coming into banks and will need new local currency. A obligation for the locals will to cease using USD and will have to accept only local currency. Hence again, coins with value begets a warning to not counterfeit and to check your currency for authenticity before bringing it in!! Imo

Kathy – Dinar Guru   Article:  “Strategic advisor: Iran will not support the removal of US forces from Iraq .. “will lose the dollar”  I don’t really know if the US has any control over the RV or not, as Randy and a few others think, but if they do, then this would seem to be a good reason to RV!  Make their currency more valuable than the US currency and stop the auctions!  Just a thought!

Delta – Dinar Guru    Article:  “Exclusively For “Al-Ahed News” .. Allawi Has Completed The Government Formation And Will Announce It Within 72 Hours”   Quote:  “Prime Minister-designate Muhammad Allawi has completed the formation of his cabinet, and will be announced officially within 72 hours, no later than Tuesday.”

Kaperoni – Dinar Guru   This is one of the good articles from a few months back…  “A government decision to do the partnership with the private sector”  “To implement vital projects that support the country’s economy”   …there is a reason for all these talks about a private sector. That is the focus at this time to create this market economy private sector to put people to work, create business and attract investment and reduce dependence on oil. But more importantly is that this is required to create the conditions for the dinar to rise. Until they have a market economy/private sector there will be no change in the dinar... Iraq has work to do. Let’s hope they can pick up some momentum as the year progresses to get back on track.

Dinar Investor – Jeff   …there’s things happening.  IMO you’re seeing the last remaining variable happening in Iraq.  Allawi’s trying to get his cabinet done…If you look at Iraq’s actions they’ve had demonstrations since October.  They’ve told us that all the demonstrators demands which are reforms are inside the 2020 budget...those require the rate change before they can implement them.  So what they are telling you is in order to satisfy the demonstrators demands they have to change the rate…the 2020 budget itself is married to the rate change…they cant’ start the budget approval process until after the rate has changed…

Kaperoni – Dinar Guru   …they [Iraq] have to meet Article VIII compliance and they request the IMF accept them into Article VIII and more importantly, the IMF has to accept them.  They have met some conditions yes…last I read, still one condition was outstanding but in any event, it does not mean they will move to Article VIII once in compliance because the IMF needs to agree.  And I do not see that happening until Iraq gets back on track:  new gov, cabinet, pass laws, stable, investors…lots to do.  They need to create the conditions and right now, they are far from the right conditions.  Until they get there act together and launch the private sector, there is no increase in the dinar…which could be months or years…up to them…I am hopeful though.

Mountain Goat – Dinar Guru   …the designate PM is desperately attempting to get his government formally completed and ratified by parliament. He wants to get it right this year.  Next he is going to try to ram-rod the 2020 budget with some changes to parliament and get is passed.  Why is this so important for the RV?  We know that the 2020 budget includes the reinstatement as there has been many scenarios played out by consultants hired the CBI to determine different “what if” scenarios for different rates.  So we wait and watch for 2 things now: 1) getting the new prime minister ratified and his govt formed and 2) getting this damned budget to parliament and hopefully passed in record time.   [post 2 of 2]

Mountain Goat – Dinar Guru   So what we know right now is the CBI wants to continue with the project to delete the zeros but had to put it on hold since the beginning of the protestors.  They told us they intended to complete it by year end. This verified once again that December and January are significant months for the CBI to complete this project.  Many keep asking me if the project will still work outside of this Dec – Jan time frame. Yes it will but this is not the “optimum” time the CBI and the Finance Committee would like to do it…This week my CBI contact told me they had 2 important meetings and they were all about the project to delete the zeros. I am telling everyone that this project is VERY, VERY important for the 5 year plan of which was supposed to end in 2020. This project was (or still is) supposed to kick off the investment frenzy for Iraq by this time. So, we have now entered 2020 without it.  So what? It is only mid-February and still they have not yet paid anything out this year. This is good and we can see are intentionally holding off. But this can only last so long.  [post 1 of 2]

Kaperoni – Dinar Guru   …MCP  [MULTIPLE CURRENCY PRACTICES]  has nothing to do with dual currencies…has to do with pricing…has to do with price of goods.  MCP  is the variation or price of goods from one currency to another…has nothing to do with dual currencies in a country.  That will always exist in Iraq.

Mountain Goat – Dinar Guru   Article:  “L-KINDI NEWS: SALEH, AL-HALBUSI, AND AL-BARZANI ARE TOOLS TO IMPLEMENT THE NEW US PLANS IN IRAQ”   …there is a US plan of Iraq and they are implementing it. This is how this entire protesting stuff started. It was the beginning of the end of the Iranian militias and politicians in Iraq. But it takes time and so be patient.

Kaperoni – Dinar Guru  Currency auctions are based on a “balance” of dinar to dollars. In fact, the recent weeks have seen a significant increase in dollar sales, therefore the CBI has to inject dinar to balance it.  That is why you also see an increase in recent weeks in the money supply of dinar...its the balance of the two that maintains the exchange rate and the stability of the spread is a IMF requirement.  [ 2 percent 90 days yes]  Yes, they are in compliance, but that is because they are maintaining a balance of dinar to dollar…so there is no way to significantly reduce the money supply (either dinar or dollars) under the current system.  If they reduced the dollars, they could in theory also reduce the dinar but it must be a balance or the exchange rate and spread would change and if you reduced the dollars it would create issues since they need dollars for foreign exchange.  It is complicated and their are many aspects you need to consider…it is not a simple, reduce the money and RV…

Mountain Goat – Dinar Guru  …This reinstatement, would have and should have, already occurred by now. But we all know why it hasn’t…right? …the Trump administration is working very hard, with and within Iraq, to clean up this Iranian mess. They will succeed…There is a plan and they are moving forward aggressively.

Mountain Goat – Dinar Guru   …If you have been following the news from Iraq you should clearly see that they are “fast-tracking” the new government and also getting the 2020 budget amended and passed on to parliament. Why is all this occurring so fast?  For one it is the pressure from the protestors. Second it is the threat of going back in to UN sanctions chapter VII. Already UN security forces are in Iraq…But this is all very good for us…

Kaperoni – Dinar Guru     … “Anybody who researches this investment will know the IMF is the trustee of the CBI. They took control in 2015. Therefore, and it is already been proven that the CBI does with the IMF tells them to do. So one only has to go read the Article IV consultation from a few years ago when Shabibi was preparing to transition. It is plan [plain ?] as day… 14. The de facto fixed exchange rate (that means peg) has served Iraq well. The authorities agreed that a stable nominal exchange rate provides a valuable anchor for inflation expectations in an uncertain environment, and intend to continue implementing this policy for the foreseeable future. In the medium term, staff encouraged the authorities to consider creating the conditions which would make possible a move to a more flexible exchange rate policy (they are talking about a float). Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low…It does not get any clearer than this direct from the IMF. Not only is this the plan but this conforms to monetary policy…”

Kaperoni – Dinar Guru   People need to realize that even though the protests demanded change it substantially slowed progress.   The new PM needs to be confirmed, a cabinet needs to be named and confirmed and parliament needs to get back passing legislation.  Months of delays are expected…

Dinar Investor – Jeff  ...Can it [the rate change] only happen on a Sunday?  …yes.  and the reason why, remember Kuwait did theirs on a Sunday morning.  This is not just a small rate change.  Small rate changes can happen any day of the week.  This is a massive jumbo rate change.  The reason why it has to happen on a Sunday morning is because it has to happen when all financial markets around the world are closed to control and reduce market volatility because with that size of a rate change being so massive it would…cause tremendous volatility within the financial markets around the world. They don’t want that…it’s easier for them to do it after hours when markets around the world are closed…

Mountain Goat – Dinar Guru   Article:  “MUHAMMAD TAWFIQ ALLAWI TO ADDRESS THE 20202 FISCAL DEFICIT”  Quote:  “AFTER THE PARLIAMENT VOTES BY AN ABSOLUTE MAJORITY OF THE MEMBERS OF THE NEW GOVERNMENT AND THE MINISTERIAL PLATFORM, THE ALLAWI GOVERNMENT CAN DISCUSS THE BUDGET AND SEND IT TO THE PARLIAMENT.”   this article is telling us that Allawi’s new government must be formed and ratified by parliament before the new budget can be sent over to them. This is why Allawi must work quickly to form his new cabinet. Also they tell us he does not like the large deficit and so he is going to first address it too before sending it over.

Chattels – Dinar Guru  Allawi presents his cabinet in two weeks, and its names will only be announced in Parliament.  Constitutionally speaking, Allawi’s 30 days to form a government began on February 2.  Not that in Iraq constitutional deadlines or red-lines mean anything. But, two weeks from today will be February 24 or only a week left under the constitution to form a government. Hardly a meteoric pace.  Assuming it is done timely which would be a change for Iraq.

Mountain Goat – Dinar Guru   …I am hearing lots of chatter about elections in six months…This is NOT going to happen and here is why.  The Iraqi legal expert, Ali al-Tamimi, said on Wednesday (February 05, 2020) that the Iraqi constitution did not include an article or a paragraph called “an interim government,” noting that the  Prime Minister-designate Muhammad Tawfiq Allawi, would continue to run the government until 2022.  …sometimes what you are seeing in the surface is not the entire story…TRUST ME there is a plan and they are executing it. We will see our reinstatement sooner rather than later.

Francis Albert – Dinar Guru  […bottom line Iraq can make monitary changes when ever they want I believe it is and has been a security issue holding them back.]  It feels that way to me also… I “believe” the CBI has been ready to do something significant. (not sure what this will be). As things cool down and the Iran ‘s influence decreases…something will happen.

Dinar Investor – Jeff   …Trump actually picked the year that he wanted this to happen.  Obviously Iraq had to have a combination of stability too but Trump most likely wanted this timed for the rate change to be timed with his 2020 campaign theme of a strong economy…all we’re waiting on here is a specific calendar day. [Sunday March 22, 2020].  Iraq does appear to be walking possibly when Kuwait did there’s…everything is looking good.

Breitling – Dinar Guru  …what Iraq needs from their budget – how much they make and how much they need – they talk about getting to a billion notes to get to $1.17 and up.  At a minimum they need about .53 cents.  That’s based on their information.  Even though I’m speculating that’s the best math I can come up with based on what they need.  They need about .53 cents.  That does not mean that’s what they will come out at...

Francis Albert – Dinar Guru   Obviously… Kap is throwing the baby out with the bath water. I don’t believe any sensible person believes the Iraqi Dinar is going to go from .00086 to $3.50 overnight. (This is what most believe an RV will be)…What Kap doesn’t see, is the forest for the trees. It is obvious to anyone paying attention to the news, Iraq is going to take their currency international and take off the program rate instilled by the IMF, U.N…So, a hit from program rate to something like .86 popping on Forex overnight, (my prediction), is very possible and doable…of course it will “float”. All currencies are pegged to the dollar and go up and down as people buy them… Kap is right. Who knows how long it will take for it to go up from the initial hit? I think a few months can get us to an “interesting” number. But, hey, .86 is pretty darn interesting, but I wouldn’t sell at this price. That’s my .86 for today (FWIW).

Dinar Investor – Jeff  …Iraq’s got a new PM…hopefully by the end of February he can get his cabinet formed…we are not waiting on the formation of that government.  Sometimes people might tell you we are.  We’re not waiting on the formation of the government.  They have their stability they need…Iraq’s transitioning to a new fiscal year.  They’ve already told us that the reforms are the large deficit within the budget – that’s all post rate change.  Everything is moving in the right direction.  We’re looking good.  I have not changed my time-frame...Iraq is now walking in Kuwait’s timing footsteps.  It’s that simple…we’re waiting on one thing.  We’re waiting on the calendar [March 2020]...

Breitling – Dinar Guru   …People send me emails asking very specifically if Trump has any sway or anything like that on the Iraqi dinar?  Not the Iraqi dinar.  He has influence on the price of oil.  And he has influence on Iraq’s U.S. accounts.  We can freeze those.  The dinar itself they have control of...everything we look at and look for that’s what’s going on.  They are reducing their note count.  Oil prices are going down.  They have an emergency budget put together because  that exact cause and effect. So here we are...I’ve never had any fear about them adding value to the dinar.  Not once…

Kaperoni – Dinar Guru  If they float the currency like the IMF has asked. Who knows how fast Or at what pace it would rise. Market forces determines that.

Mountain Goat – Dinar Guru   2) Remember they must go at least 1:1 in rate if they pay out the stipends and this would mean the project to delete the zeros would be necessary. My take on all this is this is what will finally trigger the RV. This would also lead to the reinstatement. We know the banks have already exchanged three zero notes for the smaller category notes and have ample supplies to go ahead now. This happened over this past year. So they are ready for something. The CBI would not be doing all this is nothing was being planned.  So, this is all VERY GOOD news for us…I am told this is coming in “the coming days”. However days always seem to miraculously turn into months somehow…lol..,   [post 2 of 2]

Mountain Goat – Dinar Guru   What does the CBI need? The CBI needs political stability and for the protestors to go home. Allawi is desperately trying to gain their confidence but we know he will have to eventually put out or shut up…he will have to produce something meaningful for the citizens. This is probably going to be the HCL stipends. This is my guess. What do we know about these stipends?  1) Over two months now an agreement has been made to actually begin the payout of these stipends…the referendum has already been written and passed through the parliament in 2018. Like other legislation it just sits on someone’s desk and never gets implemented. Now they agreed to implement it to help in this situation.   [post 1 of 2]