Emerging Geo's: SCOOTER POST: SCOOTER CHAT AT BONDLADY'S

Hi Folks,

Here's a recent Chat at BondLady's.

Enjoy,

Scooter

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Scooters Chat 6-7-12
[helend] Scooter, plz read this art and explain if u could, if this is anything similar in reference to what u were talking about weeks ago, about Iraq diversifying in the economy and having bonds...obviously this has a greater affect on the strength of their dinar. (I hope I worded that correctly, that u could understand what I mean, basically, explain the significance of the bonds in reguard to Iraq's economy.)Ty
http://www.bondladyscorner.com/t45139-central-bank-sovereign-bonds-of-iraq-the-most-expensive-in-the-world

[Scooter-EG] ok -- let me gander
[Scooter-EG] I'll be fast
[Scooter-EG] Could you provide the link one more time
[Scooter-EG] got it
[Scooter-EG] sorry
[helend] Scooter-EG hang on one sec
[helend] http://www.bondladyscorn ··· he-world
[helend] try that
[Scooter-EG] WOW
[helend] Scooter-EG did that work for you
[Scooter-EG] Nice article
[helend] Scooter-EG whoops guess it did !
[Scooter-EG] Who asked that question
[helend] Scooter-EG lucky
[Scooter-EG] Great question and YES
[Scooter-EG] that's exactly what I was speaking about

[Scooter-EG] what's interesting is this section right here
[Scooter-EG] Central Bank of Iraq said that "international sovereign Iraqi bonds issued under the Paris Club granted a higher interest rate / not specified / purchased at prices which makes it expensive compared to the rest of the sovereign bonds rose for the rest of the countries that confer benefits by about 2%."

[Scooter-EG] that higher interest rate is key to attracting the big industrial type investors
[Scooter-EG] that extra 2% becomes critical in the long run when you're talking about Billions of $$$$
[Scooter-EG] it's also interesting that they are leveraging the paris club agreement
[Scooter-EG] and here's why
[Scooter-EG] that debt relief took out 80%
[Scooter-EG] of the debt from the debt paying countries
[Scooter-EG] remember
[Scooter-EG] the arab states really never adopted
[Scooter-EG] the Paris Club Agreements
[Scooter-EG] and still hold Iraq accountable for the much of the thier sovereign debt

[Scooter-EG] but here's the interesting part
[Scooter-EG] those countries like the US, Western European nations, etc..

[Scooter-EG] will now be able to earn an extra 2%
[Scooter-EG] perhaps that was part of the overall package with the Paris Club members
[Scooter-EG] But that really outstanding
[Scooter-EG] I like that plan a lot

[Scooter-EG] Here's the other important part
[Scooter-EG] "The current account surplus in the balance of payments amounted to about Iraqi 10% ratio to GDP (national income)." Stressing that "this will enable the dinar rate of improvement because of the trend towards the adoption of central bank monetary policies successful."
[Scooter-EG] The Surplus in teh Balance of payments
[Scooter-EG] SURPLUS

[Scooter-EG] equated to 10%
[Scooter-EG] in essence
[Scooter-EG] they aren't really running a deficit at all these days
[Scooter-EG] So if Iraq's GDP is 100 Billion -- rounding off to make this easy
[Scooter-EG] A cool $10 billion is accounted for as a surplus
[Scooter-EG] Remember how countries gain wealth
[Scooter-EG] they do it by exporting

[Scooter-EG] equated to 10%
[Scooter-EG] in essence
[Scooter-EG] they aren't really running a deficit at all these days
[Scooter-EG] So if Iraq's GDP is 100 Billion -- rounding off to make this easy
[Scooter-EG] A cool $10 billion is accounted for as a surplus
[Scooter-EG] Remember how countries gain wealth
[Scooter-EG] they do it by exporting

[Scooter-EG] the wealthier they become
[Scooter-EG] it's the countries that import more than they export that tend to get themselves into trouble
[Scooter-EG] unless they have huge domestic consumption
[Scooter-EG] which Iraq does not
[Scooter-EG] Great question
[Scooter-EG] sorry about that ramble
[Scooter-EG] but YES Lucky

[Scooter-EG] that's exactly what i was speaking about
[Scooter-EG] thanks for the question
[Scooter-EG] next[helend] scooter, in your opinions only, if the dinar revalues at 1 to 1 how much time do you beleive it will take to revalue at what it was before the war thanks lightingcslt
[Scooter-EG] haaaaah !
[Scooter-EG] I have absolutely no idea
[Scooter-EG] hmmmmm
[Scooter-EG] I remember doing a model once
[mm] BLONDE
[Scooter-EG] taking normal growth using Fibronacci
[Scooter-EG] statistics on a monthly basis

[Scooter-EG] mm Indeed
[Scooter-EG] wait
[Scooter-EG] I have dark hair
[Scooter-EG] hmmmm
[Scooter-EG] nevertheless
[Scooter-EG] here's where it gets difficult

[Scooter-EG] because we would have to place a fixed growth over a time period
[Scooter-EG] and that's just not feasible

[DannyG] Scooter-EG hey
[Scooter-EG] Hey DannyG
[Scooter-EG] but if it were to be fixed

[Scooter-EG] and all the other variables were to do the same
[Scooter-EG] It would take a 30 month to 48 month window to jump -- perhaps even five years
[Scooter-EG] it just depends

[Scooter-EG] What's certain though
[Scooter-EG] is that they need to stablelize the prices

[Scooter-EG] and oil will need to stay at the current prices to
[Scooter-EG] continue this growth
[Scooter-EG] and according the IMF recent presentation in Tokyo

[Scooter-EG] Oil is not going downward in the long term
[Scooter-EG] It could
[Scooter-EG] normal currencies
[Scooter-EG] don't jump like this
[Scooter-EG] If a currency jumps 20% over five years
[Scooter-EG] that's very significant
[Scooter-EG] and also
[Scooter-EG] I was using a simplistic model
[Scooter-EG] it didn't account for all the variables
[Scooter-EG] remember
[Scooter-EG] whenever a currency moves one PIP
[Scooter-EG] it runs through an algorithm that calculates

[Scooter-EG] over 1200 different measurements
[Scooter-EG] just to move that one pip
[Scooter-EG] PIP = Percentage Interest Point

[Scooter-EG] also -- what would happen if they put a 1.5% to 2.5% daily lock
[Scooter-EG] on the currency for the first 24 months
[Scooter-EG] In essence, the currency could only advance 2.5% a day
[Scooter-EG] that may not seem like a lot

[Scooter-EG] but it grows fast if that were the case
[Scooter-EG] ok
[Scooter-EG] next [helend] This may have been asked before, but I am still confused about the answer. Is there any way to estimate the amount of Dinar that is for sale through brokers, banks, currency exchanges and other financial institutions?? Seems to be an endless supply available to purchase?? Just curious as to why??
[Scooter-EG] oh yea

[Scooter-EG] who asked that question
[Scooter-EG] good question
[helend] sbxpress
[Scooter-EG] ummmmmm

[Scooter-EG] I don't know of any particular method to gage that information right now
[Scooter-EG] I just haven't seen any data on that one
[Scooter-EG] Great question though

[Scooter-EG] next [helend] question from member[crazydonk] im not a believer in the whole "world currency re-alignment "theory..but ask scooter does he think the banking woes in europe could be fixed with a Central Bank of europe ?
[Scooter-EG] NO
[Scooter-EG] In my opinion
[Scooter-EG] it's only a matter of time before the Euro is ......

[Scooter-EG] it's not a good situation right now
[Scooter-EG] the demand for the USD will skyrocket up

[Scooter-EG] and I suppose that's a good thing
[Scooter-EG] but what you need to look for
[Scooter-EG] when looking at the world global re-alignment
[Scooter-EG] is one thing
[Scooter-EG] in my opinion
[Scooter-EG] and my opinion only

[Scooter-EG] and that's the Petro Dollar
[Scooter-EG] If the USD loses the Petro Dollar
[Scooter-EG] WOW!
[Scooter-EG] I just don't even want to think about that one
[Scooter-EG] but here's the good news

[Scooter-EG] no other currency has the liquidity to support that kind of role

[Scooter-EG] I mean, the Great British Pound would have to be the closest

[Scooter-EG] so -- the USD I see being the safehaven

[Scooter-EG] for the next 24 months
[Scooter-EG] the Swiss will be stable
[Scooter-EG] just my opinion
[Scooter-EG] the yen will have some ups and downs -- but fairly stable overall

[Scooter-EG] but that's really it interms of supporting the purchasing of oil globally
[Scooter-EG] I hope that answered your question
[Scooter-EG] next
[helend] Scooter, I know we often crunch the numbers with you but I would like to hear your opinion on the economic ramifications of Maliki staying or going. Thank you for your partnership with BLC. --Shredd

[Scooter-EG] hmmmm -- you know what -- I'm the absolute wrong person to ask about the political environment in Iraq
[Scooter-EG] I honestly don't follow it
[Scooter-EG] but i think Malicki will probably
[Scooter-EG] be a main character there for quite some time to come
[Scooter-EG] he seems to have a resilience

[Scooter-EG] but either way, his impact on the currency getting stronger or staying the same
[Scooter-EG] in my opinion
[Scooter-EG] will become smaller and smaller over the long run
[Scooter-EG] Economic forces and the international community

[Scooter-EG] will have a much broader and stronger impact on the currency than one man
[Scooter-EG] even though he is the prime minister
[Scooter-EG] just my opinion
[Scooter-EG] Im probably wrong
[Scooter-EG] but we'll seee

[Scooter-EG] thanks for the question Shredd
[Scooter-EG] next
[helend] If the CBI and other banks are selling/auctioning off on a daily avg of $400 million dollars at a rate of 1166 dinars four days a week (400,000,000,000. X 4 days = 1.6 billion X 1166 dinars = roughly 1.86 trillion dinar. If this is correct then wouldn't all the dinar would be off the streets in less than 5 months, even with maintaining current street levels. If this correct in theory, then Iraq would RV their currency at that point having very little IQD to cover with their reserves. Am I correct in this line of thinking. If so could you give your thoughts on this. Thank you.

[Scooter-EG] hmmmmm
[Scooter-EG] who asked that question
[Scooter-EG] sorry
[helend] bibbier
[Scooter-EG] I just like to know who I m talking with
[Scooter-EG] thanks
[Scooter-EG] hmmmmm
[helend] np
[Scooter-EG] here's the thing with those auctions
[Scooter-EG] in some cases, Shabs just moves $$$$ from one balance sheet to another
[Scooter-EG] and what appears to be one thing occurring really is not
[Scooter-EG] so in terms of the auctions -- I really see that tool as the primary method\of controlling
[Scooter-EG] inflation
[Scooter-EG] it's really his biggest weapon to confront
[Scooter-EG] rising prices across the country
[Scooter-EG] so to answer your question

[Scooter-EG] that theory can calculate out many different ways
[Scooter-EG] but the reality, in my opinion,
[Scooter-EG] doesn't play out in my mind because we aren't seeing full transparency in those numbers
[Scooter-EG] Just my opinion
[Scooter-EG] sorry about the answer -- but it's just how I'm viewing things with those auctions
[Scooter-EG] in terms of blowing through the reserves

[Scooter-EG] I think that's specifically the reason, as I just outlined up above, why shabs has multiple balance sheets to play with ...
[Scooter-EG] JMO

[Scooter-EG] Ok 6 minutes left [helend] From me (helend) just in case you ask ...... would you like to give us an opinion as to where you feel we are in this investment today.
[Scooter-EG] one more question
[helend] Scooter-EG last question too,

[Scooter-EG] Too Funny
[helend] 6 minutes to make an opinion
[Scooter-EG] can I take three to think about it

[helend] Scooter-EG NO!

[Scooter-EG] ok -- Where are we today
[Scooter-EG] Too much fun

[Scooter-EG] I think we are heading for a Hybrid solution between

[Scooter-EG] the redenomination
[Scooter-EG] and the strategic goal of the country to increase the purchasing power of the people
[Scooter-EG] so what does that mean
[Scooter-EG] a process

[Scooter-EG] a process that will take time
[Scooter-EG] they will come out with the lower denoms first
[Scooter-EG] and maintain the fidelity of the larger notes

[Scooter-EG] suck those larger notes into the CBI

[Scooter-EG] and then slowly progress with moving the pricing to reflect the new CPI
[Scooter-EG] at the same time
[Scooter-EG] they launch their primary bond market

[Scooter-EG] and attract the big boy investors
[Scooter-EG] and
[Scooter-EG] at the same time
[Scooter-EG] take those surplus budget residuals since 2006

[Scooter-EG] and parlay those into miniture economic explosions
[Scooter-EG] in their primary vertical markets like Agriculture
[Scooter-EG] and mfg.
[Scooter-EG] Investment in items that get that young populace working
[Scooter-EG] and spending
[Scooter-EG] once those occur
[Scooter-EG] or at the same time

[Scooter-EG] they gradually bring or raise the value of the dinar
[Scooter-EG] with the bonds from foreign investors and their primary stakeholders
[Scooter-EG] providing the day to day liquidity

[Scooter-EG] and leveraging the growth markets that start to add to their GDP
[Scooter-EG] that's what I think will occur
[Scooter-EG] what they open up at
[Scooter-EG] nobody knows
[Scooter-EG] but
[Scooter-EG] it should be interesting
[Scooter-EG] helend
[helend] Scooter-EG yes sir?
[Scooter-EG] did that answer your question

[Scooter-EG] I hope so
[helend] Scooter-EG well if you would have said, I think it will RV tomorrow, I would have been much happier

[RickeyT] Scooter-EG so we can take a leave of absense from the dinar sites for a year or two?
[Scooter-EG] sorry
[helend] helend
[Scooter-EG] hmmmm
[Scooter-EG] If you want to
[Scooter-EG] but
[Scooter-EG] but
[Scooter-EG] but
[helend] Scooter-EG BUT WHAT?

[Scooter-EG] I'm typing --one second

[helend] Scooter-EG smartie
[Scooter-EG] but i think when we see the lower denoms
[Scooter-EG] floating into the market
[Scooter-EG] and being used exclusively by the people of iraq
[Scooter-EG] you'll see several significant jumps in the value

[Scooter-EG] largely because they'll need this to reflect the purchasing of common items

[Scooter-EG] food, milk, bread
[Scooter-EG] etc....
[Scooter-EG] ok

[Scooter-EG] fingerrs are toasted
[player46] Scooter-EG .. TY once again for your time and opinions.. we appreciate it..
[helend] Scooter-EG well we appreciate you Scooter!
[Scooter-EG] I would like to thank you for listening
[Scooter-EG] I hope that helped
[helend] Thank you for your time
[oogie] Scooter-EG hello and goodbye! Just got home!
[helend] you always have words of wisdom for us
[Scooter-EG] I appreciate the time
[Scooter-EG] I have fun here'
[Scooter-EG] and remember
[helend] WE appreciate your time
[Scooter-EG] nobody knows what's going to happen
[Gizmo1] Scooter-EG --- comeon lower denoms!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
[campdav] Many thanks Scooter now I got to scoot
[campdav] BBL
[Scooter-EG] anything can happen
[Scooter-EG] campdav
[helend] campdav thanks
[Scooter-EG] thank you my friend
[Scooter-EG] I do too
[campdav] helend Scooter-EG
[Scooter-EG] hey
[Scooter-EG] where's oogie
[luckyintx] Scooter-EG thank you soooooooo much!!!
[Gizmo1] Scooter-EG - great job my friend -- as always
[oogie] Scooter-EG hey!
[Scooter-EG] You are so very welcome
[Scooter-EG] Gizmo1 -- thanks buddy --- your comment is much appreciated