OIL 101: ENERGY ECONOMICS
OIL 102: PEAK CHEAP OIL
OIL 103: SHALE OIL
OIL 104: ENERGY & THE ECONOMY
CENTRAL BANKING 101: COMING SOON
CENTRAL BANKING 102: COMING SOON
CENTRAL BANKING 103: COMING SOON
CENTRAL BANKING 104: COMING SOON
MONEY 101: MONEY CREATION
MONEY 102: MONEY AS DEBT
MONEY 103: COMING SOON
MONEY 104: COMING SOON
Results 1 to 10 of 10

Thread: Kurdistan and CBI - Analysis by NEO

  1. #1

    Default Kurdistan and CBI - Analysis by NEO


    After the chat discussion led by Winston concerning the Explanation to Banks of New Monetary Policy Instruments by the CBI, I realized that the unexpected liquidity developments with open market operations and the relationship to the Kurds, warranted a review of Kurdistan and the CBI relationship and where we are at with our investment.

    The federal structure of Iraq is both formative and on shaky ground. The Arab leadership in the country has been reluctant to recognize the Kurds as the second-largest national grouping in Iraq and as their sovereign partners. The process of hammering out a revision of the monetary and fiscal disposition of Iraq has been as we have surmised an arduous task for Shabibi. These efforts as we have seen are a complex mix of components on many levels including the volatile political elements that Maliki has introduced that has an impact on how and when the CBI can function effectively throughout this process. I think we can all agree that in keeping our financial house in order, priority has to be given to the reliability of our income and expense projections.

    In light of these facts, consider if you will the Arab leadership of the country has been reluctant to recognize the Kurds as the second-largest national grouping in Iraq and as their sovereign partners. This relationship between the Kurds and the Central continues to deteriorate. In my opinion, The Kurds are edging closer to declaring their own separate state. The evidence is compelling. Barzani’s most recent travels and activities are indeed provocative and after receiving Jordan’s prime minister in Erbil, would you not begin to wonder if the Kurds are now attempting to establish their own foreign policy?

    Now back to Shabibi and why we are waiting. I would propose this line of questioning, while speculating on the notion that the CBI’s lack of movement is predicated on the possibility that should a separate state emerge, the exchange rates and monetary dynamics modeled on Iraq by the CBI do not include a country divided!

    1. What do you suppose would happen if say just 50% of the Kurdish contribution to the central government suddenly stopped or was deferred for political and economic restructuring?

    2. Hypothetically if Kurdistan officially became a separate state, what do you think that would do to the plans and government balance sheets Shabibi has managed and followed all these years?

    3. If your you going to put $100,000 in your home improvement but realized that there was a good chance that your spouse might file for divorce, would it be reasonable to hold off on pulling the trigger until you had time to come to a political impasse or understanding about the situation?

    We have done an outstanding job filtering out the process methodology and its significant components that define the process from identifying the need to examining the stated goal. Included in this real time tracking of events we have been relatively accurate in weighing the objectives and objections throughout this investment ordeal. Reasonable care has been taken to identify and post numerous triggers such as Chapter VII-HCL- Erbil-dropping zero’s- Redline/inflation and the list goes on.

    Conclusion: This condition I think bodes well with the other key factors we are tracking and is worth keeping an eye on. I believe that the issue of inflation will be addressed sooner than later and will prevail as the primary motivation that moves this investment forward ahead of less critical issues we have examined. We are positioned very well and I would not be suprised to see the dinar emerge as a player at any time now. I just want us to be mindful of the scope of these issues as they relate to our investment.
    Last edited by neo; 10-01-2011 at 01:36 PM.

  2. #2
    Join Date
    Sep 2009
    Location
    Wichita Falls Tx
    Posts
    23

    Default


    Thanks NEO, always appreciate your analysis of the situation.

  3. #3

    Default


    Thank you Neo

  4. #4
    Join Date
    Jan 2010
    Posts
    3,409

    Default


    Thank you, Neo. I am sorry I missed the chats this am.
    I have - perhaps - another thought for you to add to the mix.
    The funds 'returned' to Iraq by the UN (DFI) are quietly sitting in and being protected by the US to protect them from 'creditors'
    I suspect, I do not know, that a large part of the oil which generated that huge pot of revenue was from the Kurdistan oil.
    It would seem to me that it might be possible - should Kurdistan decide it is within their best interest after they withdrew from Iraq - for Kurdistan to claim a good part, if not all of that money. The implications of such a move would, I would think, cause a great deal of angst at cbi, and other places in Iraq. ... so, it may not be possible for Shabs to move until the Kurdistan issue is settled. Comments?

  5. #5
    Join Date
    Sep 2009
    Location
    Cincinnati Ohio
    Posts
    1,410

    Default


    thanks neo and Sally, I do believe the Kurds play a big part , that is why their threats are taken seriously and they will eventually get what is only fair and maybe just a little more in their favor ? Still can't understand why they backed Maliki after the elections and expected him to keep his word??? Duh !! LOL Again I believe the US and UN won't allow this to happen and are even at this moment trying to get this resolved !

  6. #6
    Join Date
    Jan 2010
    Posts
    3,409

    Default


    glk, here is a theory of why the Kurds backed Maliki.
    We focus on Maliki and all that he has/hasn't done. But that really isn't the issue for the Kurds and who would be the PM really wasn't the point for them. it was a 'trading card' so that erbil would contain their favorite topics - the oil/gas law, the article 140 and the peshmerga. The other stuff that Maliki or his government has done (or not done) with the various ministers, etc, are peanuts compared to the main points of erbil....and the Kurds appear to have that in their pocket. They just need to be patient while the worms wiggle on the hook.

  7. #7
    Join Date
    Aug 2009
    Location
    Southern Florida
    Posts
    186

    Default


    Thank you Neo.

  8. #8

    Default


    Thanks Neo...The way you put things together really helps!

  9. #9

    Default


    There was mention several times in the recent past of new currency, with three different languages.
    I cannot see the Kurds breaking away on their own, just yet. Maybe in the future after all the dust settles.

    Wish they would pull the trigger already! Even if I'm raptured, as I step outside of my Bank, with a very large
    grin on my face, let's just get it over with!

    7.62x39

  10. #10
    Join Date
    Aug 2009
    Location
    Chattanooga,Tn
    Posts
    50

    Default


    Thank you Neo. I always enjoy reading your analysis.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •