ASTRO GUY CHAT - 1/8/09

I heard that Mr M has given the RV files to Mr Shabibbi (Governor of the Central Bank of Iraq - CBI). I wanna share my thoughts on this. There are 3 reasons i think this would be the case. I strongly feel the third reason is what i believe is happening. Now the three reasons:

1. Politicians don't want any blame on them during an election time that they are mis-using rv for political gains. So M gave the RV files to S for further processing.

2. They don't wanna do it now due to election code of conduct law coming into force very soon (on 12 jan may be).. so he will leave the buck to S until a new govt is elected.

3. I have never seen a PM or a President announce an RV before in many countries. it is always the Central or Reserve bank which is independent and autonomous, and that which control the money supply for a country announces such. When we were told about the intel that M is gonna announce. I told couple of my friends this and said that he will never do it, but he will give the green signal and it will be the CBI chair Shabibi who will announce it. I said this in Sept or so. That is the case. The decision as to when one can release is of the head of state and politicians but, actual release is by the CBI President. I strongly believe that he has given his blessings to announce the RV at the next available opportune time, which in my thinking is Monday 11, Jan 2010. That's all folks.

QUESTION: Astro do you think M held it and used it for political reasons and now is done with it??
ANSWER: M held for the timing in my opinion. This is the timing right before election is about to kick off.

QUESTION: What about Plausible deniability... If it works we told him to do it, and if it fails we had no idea what he was doing?
ANSWER: It is so possible. But Maliki is not an angel, and he is after all a politician and fits in the realm of many such.
RESPONSE: But he may not run, but his party is, and the last thing he needs is more egg on his face.

COMMENT: I think the incoming government is going to hang all iraq trouble , ie security, power trouble , price controls on Maliki.
ASTRO RESPONSE: Yes they are..so it is better M doesn't re-run. But, if he chooses to run, in my opinion, the US will find another amicable leader as PM, and make him vice president, or of that sort. This is just an opinion.
COMMENT: Shabibbi is western educated and done work with imf world bank and UN. I think he is best suited to handle this.
ASTRO RESONSE: Yes, also he is the rightful authority to announce such things. A PM can announce some new development programs etc., not the value of a currency. It is the final responsibility of CBI. The signature of CBI
governor has to bear it for it to be valid. Even if M wants to announce it, it is a mere post man work to do so. It is basically the job of Shabibbi. I have seen many RVs in India and other democratic countries. It is the Central Reserve Bank Governor who announces such. It is possible he is scared to handle it. But, if we take the recent 10 country rv, how many presidents and PMs announce them? None.

QUESTION: Astro will it be a big deal, or will it just show up?
ANSWER: It will be a simple press release. Maybe some symbolic one under the new flag and some theme at the back ground with many press persons.

QUESTION: Astro Guy is there still a chance for tonight?
ANSWER: I still don't think they will do it on a Friday. All Iraqi banks who must first see the benefit, must be open and as well the international banks in most western countries need to be open. This is possible on Monday. Even if Shabibbi opens the CBI on Friday just to announce, can he make all other banks open as well? Heck no.
****** says to (01:51:11):
COMMENT: Remember that Shabs is all about the Debt Sustainability Model.
ASTRO GUY RESPONSE: Very good point. The recent audit on CBI probably revealed something surprising that S can handle it better now.

QUESTION: Wouldn't the RV have to be higher because the lack of dfi funds, and the lack of subsidies and such to make up for the things that are not yet in the approved budget?
ANSWER: Ok, the problem with a very high RV is inflation, and the acute effects of it. Remember for most in here even a rate of .80 is a thousand % increase. Can you imagine the effect on the economy if you woke? Up tomorrow and every 1 dollar bill in your wallet now was worth a 1000 dollars?
RESPONSE TO ANSWER: But an RV of 1.50 will create a ton of speculation and the currency will be all over the place.

9:46 PM [Astro Guy] the friday is holiday for them alright. but this time it is the US who is so much involved right from when the new currency is set etc..the past rvs are not this big one

THE REST OF THE "UNKNOWN" CHAT...
****** says to (01:54:12):
eitgher. mere 4 % or so can happen anyday. but this is life alterting and all iraqi banks need to be open on this so that people gets the benefit rigfht away..
****** says to (01:54:34):
9:46 PM [Mailman's neighbor] Lan, I would not look a gift horse in the mouth, I am just thinking about the speculation and the GCC when they enter it, wont the value again increase and this could lead to even more speculation?
****** says to (01:54:57):
9:47 PM [lanachy] no because you are mixing two priciples supply side econ and pegs i believe that it will have a crawling peg to a basket of currencies
9:47 PM [lanachy] i we should of had this talkl before i started drinking
****** says to (01:55:25):
9:47 PM [seasefire] so td you think 1.50 is too low?
9:47 PM [tdurden] Yes I do. I think they need at least 2.50
9:48 PM [tdurden] and we forget about iraqi pride in the equation
****** says to (01:55:57):
9:48 PM [tdurden] number crunching will never account for that
9:48 PM [tdurden] and we wont really be able to understand there inflation numbers for a year or two
****** says to (01:56:19):
9:49 PM [lanachy] i believe its going to come out about on par with the euro as the eu is there biggest tradeing partner and they need to achive Purchasing power
****** says to (01:56:48):
parity
9:49 PM [Foxyrodeo] i think it makes sense for them to do it on their weekend so they have time to update their systems and the stores to make changes to prices
****** says to (01:57:13):
9:49 PM [tdurden] I think the systems are updated already foxy
9:49 PM [tdurden] thats why the ISX has been BS all week
9:49 PM [Mailman's neighbor] They hate Kuwait, I would think they would want to be somewhat close.
****** says to (01:57:36):
9:49 PM [tdurden] yes mailmans neighbor
9:50 PM [Mailman's neighbor] Lan, What about all of those workers that are Iraq going to KUwait to work and all of the business leaving Iraq to go to Kuwait to make more money?
****** says to (01:57:53):

9:51 PM [lanachy] kuwait is basicly a welfare state, i believe they need parity with the eu for supplies they need brought in to rebuild iraq
****** says to (01:58:42):
9:52 PM [Mailman's neighbor] Lan, How much Kuwait dinar does Iraq hold?
9:52 PM [lanachy] who knows?, it cant be a hugh amount or they would just repay kuwait with it
9:53 PM [lanachy] astro what is you rate guess?
****** says to (01:59:00):
9:54 PM [DinarKing] there was something I didn't understand LAN.. how can Kuwait's currency be at 3.48 ans Saudi Arabia at .27
****** says to (01:59:19):
9:54 PM [tdurden] cause Saudi Arabia keeps it that way and no one will tell them differently
9:54 PM [lanachy] because saudi has a hard peg to us dollar to help keep there currency value low
9:55 PM [tdurden] they also have .25 cent gas
****** says to (01:59:41):
9:55 PM [lanachy] kuwait has a peg to a basket the rate was much lower when pegged to the dollar
9:55 PM [kingwm] i don't understand what is the benefit of keeping the value of your currency low
9:55 PM [lanachy] trade
****** says to (02:00:02):
9:55 PM [Astro Guy] lan i thought of 1.47 as feasible one. unless US steps in and say in some writing to IMF that they will support the rise to 3 high with their reservers byu withholding the US based several trillions of liquid IQD cash indefinetely or atleast next 20 some years.
****** says to (02:00:23):
9:56 PM [lanachy] were right in the same mind set astro
9:56 PM [butterfly] wouldnt we, meaning US, want it higher since we hold so much? and since we are pretty much the IMF?
****** says to (02:00:40):
9:57 PM [lanachy] no because if iraq falls on its ass the imf is left holding the bag
9:59 PM [Astro Guy] we donno what S found out from the recent audit of cbi and its asset
****** says to (02:01:08):
if anything surprising was found that may make some difference on the already decided rate.. but noit too much... because ..
9:59 PM [blackhoeman] i would think they would
****** says to (02:01:52):
come out moderately grow private sector and bump value up as exports and agriculture as well as other goods for export rose and oil out put increased JMO.
****** says to (02:02:11):
9:59 PM [lanachy] im with you blackhoeman
10:00 PM [Astro Guy] i strongly beleive that the rates are factored into the new laws and budgets that are coming out in the coming weeks.
****** says to (02:02:44):
9:59 PM [Mailman's neighbor] How come us to Iraq is 1132 and Iraq to US is 1170?
10:00 PM [lanachy] buy sell and midmarket price mm neighbor
****** says to (02:03:17):
10:03 PM [Astro Guy] Say the election code of conduct law coming out on 12 jan has a limit of spending as some 100,000 iqd. it is currently
****** says to (02:04:04):
10:04 PM [Astro Guy] take for example the oil contracts..
10:05 PM [Astro Guy] never went the way the bid majors wanted it..they did what was sensible to them..just 1.40 to 2.00 per barrel and no share in oil reserves as such..
****** says to (02:04:20):
10:06 PM [Astro Guy] if they can disaapoint up these oil ambtions they can do anything..oil contreact are much huge to loose than currency rv..
****** says to (02:05:37):
10:07 PM [JARV] Thursday, January 07, 2010 08:59 GMT Iraq Ministry of Oil Spokesman Assem Jihad said that the Cabinet ratified all the oil
****** says to (02:05:59):
contracts with the International companies after these companies approved the amendments Iraq government suggested.
****** says to (02:06:18):
Jihad said that the date of signing the contracts will be fixed soon. The companies approved the amendments which
****** says to (02:06:36):
are legal and do not interfere with the core of the contracts as these amendments provide an additional legal cover for the companies and the government, Oil Ministry Spokesman uttered.
****** says to (02:06:54):
JARV link - http://www.alsumaria.tv/en/Economics-Ne ... racts.html
****** says to (02:07:12):
10:08 PM [JARV] Print Send to a friend Comment this article Economics Mosul economists call to activate investment projects Thursday,
****** says to (02:07:33):
January 07, 2010 09:10 GMT Economists in Al Mosul Province claimed to activate investment projects in the region in order to revive the economic and service sectors in the Province.
****** says to (02:07:59):
To that, economists called the government to work on establishing coherent measures in order to control importing goods from other countries.
****** says to (02:08:25):
Jarv Link - http://www.alsumaria.tv/en/Economics-Ne ... jects.html
****** says to (02:08:51):
10:08 PM [JARV] Both of these articles just came out on tv in Iraq what do you think Astro?
10:11 PM [Astro Guy] first of all the revised rate or increase in rate all mean the already decided rv value.
****** says to (02:09:09):
10:11 PM [JARV] Exactly
10:11 PM [JARV] but the they both said activated
10:11 PM [JARV] right
****** says to (02:09:31):
10:15 PM [JARV] Do you think they are activated as the articles say
10:15 PM [Astro Guy] you mean the oil contracts..
****** says to (02:09:50):
10:16 PM [JARV] yes and the investments projects
10:16 PM [Astro Guy] yes it appears to be. i dont see any reason as to why they cant be..
10:16 PM [Astro Guy] investment projects are approved as well but they kick into effect on 31 jan only
****** says to (02:10:14):
10:16 PM [JARV] With the new rates
10:16 PM [Astro Guy] yes with the new rates
10:17 PM [JARV] So wouldn't they have to rv then before they changed them
10:17 PM [Astro Guy] if they dont rv on monday 11th then they need top postpone the
****** says to (02:10:38):
election code of conduct either being published or coming into effect on jan 12
10:18 PM [Astro Guy] to postpone
10:18 PM [JARV] Thank you astro for your opinion appreciated
****** says to (02:11:09):
10:19 PM [Astro Guy] i think the code of conduct has time until feb 6 to come into effect. so for some reason they dont do rv on or before 12 jan then they wont make the code of counduct law public until rv is announced..
****** says to (02:12:04):
10:19 PM [JARV] This is getting very interesting
10:19 PM [Astro Guy] we dream it is not public yet..
10:20 PM [Astro Guy] can i take a break now
10:20 PM [JARV] Yes thank you
****** says to (02:12:09):
OK ALL DONE
****** says to (02:12:11):
THANKS