SCOOTER CHAT AT BONDLADY'S CORNER 5-8-2012

Hi Folks,


Here's a recent chat we had at BondLady's Corner - I hope you enjoy.

Scooter
--------------------------------------



[Scooter-EG] sooooooo ---- let's get this party started

[Scooter-EG] perfect

[Scooter-EG] I won't have all the answers

[helend] Scooter-EG ok here comes number 1

[Scooter-EG] but I'll do my best

[Scooter-EG] ok

[helend] [oogie] for scooter: scooter without using a calculator, what is the square root of 2,000,937,926,856 and you have 10 seconds

[Scooter-EG] trick question

[helend] Scooter-EG

[Scooter-EG] my calculator can't go that high

[Scooter-EG] sorry

[helend] Scooter-EG okay, then on to # 2

[helend] [BondLady] what is einstiens theory of relativity scooter and explain in great detail why and how he came to his conclusions...ty


[helend] Scooter-EG are you laughing?

[Scooter-EG] The theory of relativity, or simply relativity, encompasses two theories of Albert Einstein: special relativity and general relativity.[1] The basic overall concept is that both time and space are relative, not fixed. However, the word relativity is sometimes used in reference to Galilean
[gaffi] E=Mc squared

[DogzNova] heack.. hes prol answering it

[helend] DogzNova he was!

[Scooter-EG] ohhhhhhhh yea


[Scooter-EG] who's da man now!

[helend] Scooter-EG now bondlady will be laughing

[player46] You!!!


[helend] Scooter-EG okay, we get to the really good stuff now

[helend] [lightingcslt] scooter what is the inflation rate in youropinion right now

[luckyintx] very good!

[Scooter-EG] WOW !!

[Scooter-EG] that is a very good question

[Scooter-EG] who was that

[Scooter-EG] here's why

[helend] Scooter-EG light


[Scooter-EG] ok -- this one will take some time

[Scooter-EG] just be patient

[Scooter-EG] one

[Scooter-EG] Iraq, please remember is a start-up country

[Scooter-EG] with that said

[Scooter-EG] they will be in high growth mode for the next decade

[Scooter-EG] and when I say start up mode

[Scooter-EG] I mean they were literally re-born

[Scooter-EG] now

[Scooter-EG] with high growth

[Scooter-EG] you will inevitably have higher inflation

[Scooter-EG] the imf

[Scooter-EG] says they could hit 11% - 12% growth in their GDP

[Scooter-EG] ok -- that's super cool

[Scooter-EG] but what does that mean to inflation

[Scooter-EG] and

[Scooter-EG] more importantly

[Scooter-EG] what kind of inflation

Scooter-EG] there's headline inflation

[Scooter-EG] and there's core inflation

[Scooter-EG] sorry

[Scooter-EG] had to turn off the phone

[Scooter-EG] now when a country of 30 million people are growing at that pace

[Scooter-EG] having inflation range from 6 - 8% in somewhat common

[Scooter-EG] the 8% is a bit high

[Scooter-EG] but 6 -7 percent

[Scooter-EG] is somewhat normal

[Scooter-EG] now if you goto the cbi website

[Scooter-EG] 6.21% is listed

[Scooter-EG] and Year over year is just over 8%

[Scooter-EG] now --- with that said

[Scooter-EG] 6.21% isn't bad inflation


[Scooter-EG] you can find that on the home page of the site www.cbi.iq
[Scooter-EG] bottom right corner

[Scooter-EG] but

[Scooter-EG] what you really want to look at are the financial indicators

[Scooter-EG] on this spreadsheet to get a clearer picture

[Scooter-EG] here's the link

[Scooter-EG] http://www.cbi.iq/docume ··· cial.xls

[Scooter-EG] That spreadsheet gets published every week

[Scooter-EG] or every two weeks

[Scooter-EG] and at the top of that spread sheet you'll find

[Scooter-EG] the consumer price index

[Scooter-EG] set for 1993

Scooter-EG] you'll also want to take a look at the money supply and sources

[Scooter-EG] which is located

[Scooter-EG] on cell B47

[Scooter-EG] no -- it's not bingo

[Scooter-EG] sorry

[Scooter-EG] litlle loopey today

[helend] Scooter-EG

[Scooter-EG] so -- when you ask the question

[Scooter-EG] what's their inflation rate really --- I always say it's

[Scooter-EG] right in between 6% - 7%

[Scooter-EG] and that's about where they should be right now

[Scooter-EG] there's only a handful of countries

[Scooter-EG] around the globe growing at that rate

[Scooter-EG] and they are bound to have increases in prices

[Scooter-EG] as they diversify their economy

[Scooter-EG] what they can't have happen

[Scooter-EG] is the same thing that happend in 2006 - 2007

[Scooter-EG] it became a disaster

[Scooter-EG] they never accounted for the USD in country

[Scooter-EG] terrorist were blowing up fuel supplies

[Scooter-EG] dollarization occurred everywhere

[Scooter-EG] at one point -- inflation (overall) hit close to 62%

[Scooter-EG] That's when the CBI bumped interest rate all the way up to over 20%

[helend] wow

[Scooter-EG] they had no choice to tighten the supply of money

[Scooter-EG] yea

[Scooter-EG] it was truly absurd

[Scooter-EG] they were very luck

[Scooter-EG] lucky things didn't completely go downhill

[Scooter-EG] great recovery by the world too

[Scooter-EG] long question

[Scooter-EG] I hope I answered

[Scooter-EG] it

[Scooter-EG] next

[helend] good answer

[helend] [Gizmo1] BondLady -- my question!! Scooter -- what the h**l is Shabs waiting for -

[Scooter-EG] hahahahaha

[Scooter-EG] Hi Giz

[Scooter-EG] nice seeing you again my friend

Scooter-EG] that is a very good question --- and here's why

[Gizmo1] Scooter-EG - back at ya!!

[Scooter-EG] thanks

[Scooter-EG] see -- hmmm -- how do I answer this one

[Scooter-EG] ok

[Scooter-EG] the original MOU

[Scooter-EG] memo of understanding from 2006

[Scooter-EG] had an arrangement with a list of items that needed to be completed

[Scooter-EG] The list of items were all thrown into a bucket

[Scooter-EG] this bucket originated from the US Congress

[Scooter-EG] the IMF

[Scooter-EG] the World Bank

[Scooter-EG] now

[Scooter-EG] this list --- I'll provide the link in just a second

[Scooter-EG] this list was assimilated into now what is called or part of the Paris
Club debt relief

[Scooter-EG] whereby the credit holding -- G20 type countries

[Scooter-EG] would relieve 80% of Iraq'

[Scooter-EG] Iraq's debt

[Scooter-EG] they tried to get the Arab countries to go along with the accord

[Scooter-EG] but

[Scooter-EG] to no avail

[Scooter-EG] now

[Scooter-EG] what's taking shab's so long

Scooter-EG] within that list there's several items that he simply doesn't have control over

[Scooter-EG] one being

[Scooter-EG] the restructuring of those state owned banks

[Scooter-EG] It is my assertion

[Scooter-EG] right now

[Scooter-EG] that nothing

[Scooter-EG] and I mean nothing will happen there

[Scooter-EG] until those two banks -- are devalued according to the IMF's independent auditors value

[Scooter-EG] For years

Scooter-EG] the Iraqi's have resisted

[Scooter-EG] largely because of the intense corruption

[Scooter-EG] they finally found the two missingm suspence accounts

[Scooter-EG] and now the auditors have valued those banks accordingly

[Scooter-EG] however

[Scooter-EG] they will take an immediate hit in value

[Scooter-EG] please remember

[Scooter-EG] these banks serve close to 85% of all transactions in that country

[Scooter-EG] the value they show on the Balance Sheets for Rafadain is close to 371 Trillion IQD

[Scooter-EG] and based on the old value

[Scooter-EG] the REAL value is close to 40 Trillion

[Scooter-EG] or 40 Billion USD

[Scooter-EG] now

[Scooter-EG] with that said

[Scooter-EG] the IMF also has promised that once those balance sheets

[Scooter-EG] are corrected

[Scooter-EG] they would re-capitalize those banks to the appropriate level

[Scooter-EG] ok

[Scooter-EG] there's first reason

[Scooter-EG] the second reason

[Scooter-EG] I think there's an internal struggle

[Scooter-EG] between the big banks or bankers funding the CBI and the government of Iraq

[Scooter-EG] remember -- they have access to funds they haven't been able to access before

[Scooter-EG] secondly

[Scooter-EG] in all major increases in history

[Scooter-EG] only a very few people benefited

[Scooter-EG] in this case

[Scooter-EG] in my opinion of course

[Scooter-EG] just a gut feeling

[Scooter-EG] the internet changed that theory

[Scooter-EG] and they didn't account for the number of individual investors

[Scooter-EG] just a theory

[Scooter-EG] but the the two government banks is the main reason in my opinion GIZ

[Scooter-EG] GIZMO

[Scooter-EG] I'll provide the link to the list at the end

[Scooter-EG] I'll need to search for that one -- it will only take a second

[Scooter-EG] next

[Scooter-EG] DogzNova

[Scooter-EG] it's ok

[Scooter-EG] next

[helend] [Gizmo1] - Scooter, you stated that the CBI banks need to adjust their asset value before an ri/rv can occur - have you seen documentation stating same??

[Scooter-EG] Yes

[Scooter-EG] IMF documents as well as the independent auditors

[Scooter-EG] i think it was Ernst and Young

[Scooter-EG] but it might be this last one from that british firm

[Scooter-EG] it was listed in the footnotes

[Scooter-EG] I am searching that one right now

[Scooter-EG] i can tell you that it was shown when i published The Trifecta Theory

[Scooter-EG] In essence, it details the TRUE value of those banks

[Scooter-EG] what caught me completely off guard is that they used the words Re-Value

[Scooter-EG] big no no in the banking

[Scooter-EG] community

[Scooter-EG] now did they state the IQD would Re-Value

[Scooter-EG] no

[Scooter-EG] they never do

[Scooter-EG] the IMF docs will never use those words

[Scooter-EG] What they use in its place are words like

[Scooter-EG] Sustainabilty

[Scooter-EG] CAPACITY

[Scooter-EG] Structural changes

[Scooter-EG] IN FACT, the "Structural Changes" is probably the best word that describes that one

[Scooter-EG] there are some CR's

[Scooter-EG] Country Reports

[Scooter-EG] that show the increases in REAL vs. Nominal Value

[Scooter-EG] Those are kind of interesting to dissect

[Scooter-EG] See whenever i view these docs

[Scooter-EG] I don't take just one document

[Scooter-EG] I cross verify with two to three other sources

[Scooter-EG] one document that shows one item

[Scooter-EG] means there's a 50% chance of it being real

[Scooter-EG] two docuements showing the same pattern

[Scooter-EG] elevates the statement to around 75%

[Scooter-EG] three docs from three different sources

[Scooter-EG] 96% chance

[Scooter-EG] the reason i say that is that I trust no one when it comes to currencies

[Scooter-EG] I hope that answered your question GIZMO

[Scooter-EG] oh yea

[Scooter-EG] nice to see you !!!

[Scooter-EG] next

[helend] [player46] BondLady .. for Scooter.. In your opinion, what was lacking in the budget to address real economy issues.. TY

[Scooter-EG] WOW!

[priscilla927] tell me we ain't smart....

[helend] Scooter-EG

[Scooter-EG] ok -- I'm going to answer this one

[Scooter-EG] priscilla927 oh

[Scooter-EG] you're smart!

[Scooter-EG] no doubt about it

[Scooter-EG] I can tell by just loooking at ya

[Scooter-EG] ok

[Scooter-EG] so to the question

[Scooter-EG] the budget

[Scooter-EG] Here's my problem with Iraq's budget

[Scooter-EG] at least for the last five years

[Scooter-EG] When they first started really to control spending and investing

[Scooter-EG] they didn't do two things

[Scooter-EG] one

[Scooter-EG] they didn't invest in the correct way

[Scooter-EG] see

[Scooter-EG] they needed capitol formatioln to occur

[Scooter-EG] and they needed that to occur immediately

[Scooter-EG] and they didn't do it

[Scooter-EG] two

[Scooter-EG] they needed to diversify the economy

[Scooter-EG] they invested all their money into oil

[Scooter-EG] here's an example

[Scooter-EG] Take Jordan

[Scooter-EG] they Capitol to GDP ratio is close to 200%

[Scooter-EG] Iraq

[Scooter-EG] 3.5%

[Scooter-EG] They aren't forming capitol in all the segments of the market

[Scooter-EG] In my opinion

[Scooter-EG] just my opinion

[Scooter-EG] they needed to invest in Agriculture and mfg.

[Scooter-EG] the oil and natural gas money would have come naturally

[Scooter-EG] from outside investors

[Scooter-EG] Do you realize that Agriculture

[Scooter-EG] was once a bigger contributor to Iraq than Oil

[Scooter-EG] it was close to 40% of their GDP

[Scooter-EG] while oil was at 35%

[Scooter-EG] that's huges

[Scooter-EG] huge

[Scooter-EG] so [Scooter-EG] in my opinion -- they're late to the game when investing properly into forming capitol in that country

[Scooter-EG] The third one

[Scooter-EG] probably the most important one

[Scooter-EG] in the long term

[Scooter-EG] is educating that great young demographic

[Scooter-EG] the citizens

[Scooter-EG] Whose going to invest in a country solely based

[Scooter-EG] on their natural resources

[Scooter-EG] sure

[Scooter-EG] they'll get a short term gain

[Scooter-EG] but in the long run

[Scooter-EG] it will bite them right in the XXXX

[Scooter-EG] next

[Scooter-EG] just my opinion

helend] [grashopa] ........hey scooter....ya got a motor in that thing.....or just flintstone feet??..

[Scooter-EG] isn't that a song

[priscilla927] Does anybody know?

[Scooter-EG] flintstone feet

[helend] good enough

[helend] here comes the next one

[Scooter-EG] kk

[helend] [player46] . for Scooter.. Do you expect to see tariffs begin on July 1st, and if so, what affect will it have on their economy.. TY

[Scooter-EG] hmmmm

[Scooter-EG] Let me turn that one around

[Scooter-EG] Are they deploying and using tarriffs right now

[Scooter-EG] the answer is yes

[Scooter-EG] on certain products

[Scooter-EG] now the one that you're talking about has to do with laws that standardizes

[Scooter-EG] the iraqi system to be compatible with the rest of the world

[Scooter-EG] so the answer is I hope they get that done

[Scooter-EG] It will only lead to more foreign investment and better living for the iraqi people

[Scooter-EG] a happy people

[Scooter-EG] are people that like to spend

[Scooter-EG] when they spend

[Scooter-EG] consumption goes up

[Scooter-EG] when consumption goes up

[Scooter-EG] the living standards move forward

[Scooter-EG] and a middle class is formed

[Scooter-EG] and the value of the Dinar goes upward

[Scooter-EG] not downward

[Scooter-EG] long winded answer I know

[Scooter-EG] but

[Scooter-EG] next

[helend] Gemini5: Goodevening Scooter, Thank you for spending your evening with us:) I have heard you talk about a "hybrid" RV...Can you please explain the following....The rate is 1:1 which we believe to be 86 cents....however ....we will not actually be receiving .86 for each dinar....I have heard you and Enoch explain it....but I could not turn around and explain a "hybrid" to everyone else....Thank You:)

[Scooter-EG] Let's get this one answered then, hybrid RV

[Scooter-EG] What is it

[Scooter-EG] before answering there's different forms of different terms that everybody uses

[Scooter-EG] now with that said --- let's dissect this one

[Scooter-EG] Iraq -- they are a country of 30 million people with vast natural resource wealth

[Scooter-EG] very vast!!

[Scooter-EG] now -- in most cases -- on the FOREX market

[Scooter-EG] countries and their central banks will REVALUE their currencies

[Scooter-EG] Heck, this last 24 months

[Scooter-EG] The eastern asian countries have revalued close to 18 countries

[Scooter-EG] but they aren't the same revalue as this community is thinking about

[Scooter-EG] in this case

[Scooter-EG] they are talking about a complete re-structuring of the monetary system to accomodate itself for the world community and improve the lifestyle of the Iraqi people

[Scooter-EG] now - with that restructuring comes things like increases in value -- RD's -- etc...

[Scooter-EG] in Iraq's case -- they are doing everything as quickly as possible

[Scooter-EG] but they will not just do a revalue

[Scooter-EG] or just a redenomination

[Scooter-EG] they will need both

[Scooter-EG] and both task will be performed on a timeline that's conducive and beneficial to the iraqi people

[Scooter-EG] We know they've established a new CPI

[Scooter-EG] We know the Ministry of Planning documents show increases in value at multiple spots

[Scooter-EG] We know from the originating documents from 2002

[Scooter-EG] they have always had a plan to remove the zeros

[Scooter-EG] so what does that mean

a hybrid of both tool sets to accommodate what's best for the people

[Scooter-EG] when and how this occurs

[Scooter-EG] nobody knows

[Scooter-EG] but one thing is for certain

[Scooter-EG] they need to increase and improve the buying power of the people of iraq

[Scooter-EG] without that

[Scooter-EG] they can never form a middle class and never SUSTAIN

[Scooter-EG] foreign investment in that country

[Scooter-EG] the biggest reason

[Scooter-EG] the biggest reason

[Scooter-EG] they won't be able to consume products internally in the country

[Scooter-EG] See

[Scooter-EG] the strength of a currency consist of several intangibles

[Scooter-EG] one being the Stochastic strength

[Scooter-EG] if you've ever seen a volcano explode

[Scooter-EG] you would see

[Scooter-EG] a Stochastic Cloud

[Scooter-EG] one of the most ferocious things to occur

[Scooter-EG] stronger than anything

[Scooter-EG] they need to do the same thing with the currency

[Scooter-EG] look that word up on Google and refer to currency

[Scooter-EG] Stochastic Strength of any stock, bond, or currency

[Scooter-EG] it's critical to maintaining or Sustaining the value

[Scooter-EG] just my personal take

[Scooter-EG] what was teh question again

[Scooter-EG] sorry -- i'm ranting again

[helend] crazy dude!

[priscilla927] so not ranting....

[Scooter-EG] next

[helend] [Mikey] Scooter: Do you think that before the RV the dinar will become scarce in the streets and markets? Can the CBI use the auctions to bring dinar into the bank and flood the markets with USD?

Scooter-EG] priscilla927 thank you priscilla927

[Scooter-EG] hmmmmm ---

[Scooter-EG] not sure

[Scooter-EG] and here's why

[Scooter-EG] there's several theories on this one

[Scooter-EG] see -- the iraqi's need to increase demand for the IQD

[Scooter-EG] and they'll need to do that quickly

[Scooter-EG] i do think the auctions will be part of the trigger that starts this process

[Scooter-EG] but

[Scooter-EG] here's the gotcha spot

[Scooter-EG] the neighborhood

[Scooter-EG] right now

[Scooter-EG] here's the gotcha spot

[Scooter-EG] the neighborhood

[Scooter-EG] right now

[Scooter-EG] demand for the USD is hot

[Scooter-EG] very HOT

[Scooter-EG] the petro dollar and the price of oil

[Scooter-EG] are high and will continue to be high

[Scooter-EG] in some countries like Argentina, Pakistan, Iran, syria

[Scooter-EG] they can't get enough USD in the market fast enough to buy basic needs

[Scooter-EG] remember -- the USD is 62 % of all the worlds currencies

[Scooter-EG] so their in a bit of a pickle

[Scooter-EG] and that's the reason I'm hessitant to answer that question

[Scooter-EG] I think their will be a tightning

[Scooter-EG] Yes

[Scooter-EG] how much

[Scooter-EG] not certain.

[Scooter-EG] great question

[helend] thanks scooter

[Scooter-EG] and I'm working that one through my pea

[Scooter-EG] brain

[Scooter-EG] next

[helend] [Gizmo1]... Scooter: current auctions are close to the same value as last year, and inflation is still on the rise. Will Shabs continue to use reserves to keep inflation in check - short & long terrm -- and how can they continue to afford it???

[Scooter-EG] hmmmm

[Scooter-EG] Is inflation really out of control right now

[Scooter-EG] that's the first question

[Scooter-EG] when the country is growing at 11% - 12%

[Scooter-EG] Honestly

[Scooter-EG] I'm in the camp that puts the inflation variable in the second tier

[Scooter-EG] I'm probably one of the few that is saying that

[Scooter-EG] but oh well

[Scooter-EG] I think if inflation becomes over 8%

[Scooter-EG] then the flags start to raise

[Scooter-EG] because the ratios don't jive properly for the economy

[Scooter-EG] first -- for a country to grow that fast

[Scooter-EG] WOW

[Scooter-EG] it's incredible

[Scooter-EG] but they have the tool set via the auctions to close that gap and control that inflation

[Scooter-EG] also

[Scooter-EG] please remember -- those auctions in many cases are just moving funds from one balance sheet to another

[Scooter-EG] Second

[Scooter-EG] remember how I said

[Scooter-EG] those two government banks need to be re-booted

[Scooter-EG] well

[Scooter-EG] once that occurs

[Scooter-EG] the next step is privatizing those 108 SOE's

[Scooter-EG] State Owned Enterprises

[Scooter-EG] Those will be the large insurance and utility companies

[Scooter-EG] those firms will then become the liquidity engine for the government via the primary bond market

[Scooter-EG] those two items

[Scooter-EG] in my opinion

[Scooter-EG] are the MOST critical components of this venture

[Scooter-EG] I think I provided a link last week to the list that was required

[Scooter-EG] that list as well as the CR's -- country reports from the IMF

[Scooter-EG] outline this very boldly

[Scooter-EG] I hope that answers that question -- ok -- I have time for one more question

[Scooter-EG] who gets it

[Scooter-EG] waiting for it

helend] [tlm724] hey helen,just wondering if one of the questions asks about shabbis vow article from last nite [tlm724] if he read it and what is his opinion

[helend] and I will get the link to the article

[Scooter-EG] ok

[Scooter-EG] I haven't read it

[helend] http://www.bondladyscorn ··· 12-05-07

[Scooter-EG] Try not to read

[Scooter-EG] let me read it -- one minute – brb

[Scooter-EG] so the question

[Scooter-EG] my opinion

[Scooter-EG] he indicated that he was intending to increase the value

[Scooter-EG] but through strong mechanism

[Scooter-EG] those mechanism's

[Scooter-EG] hmmmmm

[Scooter-EG] i wonder what that means

[Scooter-EG] perhaps a strong Bond market

[Scooter-EG] that would be number one in my books

[Scooter-EG] second

[Scooter-EG] or really first

[Scooter-EG] get your

[Scooter-EG] banks balance sheets in order

[Scooter-EG] so

[Scooter-EG] I know those are high on the priority list -- but what the status of those projects at this exact time

[Scooter-EG] are unknown

[Scooter-EG] I think his statement is consistent with the intent of all agencies

[Scooter-EG] it was very broad based and could be interepreted many ways

[Scooter-EG] that's all I have on that one

[Scooter-EG] with that

[Scooter-EG] I need to depart

[helend] Thank you so much Scooter

[player46] Scooter-EG .. TY for your time and wisdom..we really appreciate it..

[Scooter-EG] You are soooo welcome

[helend] As usual you are AWESOME!

[luckyintx] tyvm scooter, I enjoyed the learning experience!

[Scooter-EG] thank you for having me

[Scooter-EG] Have a great evening all

[Scooter-EG] Good night