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As you all know Shabibi held his meeting with the US Chamber of Commerce two days ago. In that meeting he said quite clearly that the “revaluation” of the dinar was going to occur “very soon.” I transcribed his answers to two questions here on chat at the time.

My friend John just happened to be the person who asked the first question (when will the dinar be revalued?). What many of you may not be aware of is that after the meeting John was able to ask Shabibi another question 1-on-1.
That question was: “What is the connection with the completion of the GOI to the RV?”

Shabibi’s answer, although longer than what I am going to relate, essentially came down to this quote: “The GOI has nothing to do with the RV.”

Now, this is extremely important because we have from the mouth of one of the highest officials in Iraq, and more particularly the SINGLE HIGHEST official dealing with the upcoming RV, a statement that should give us all a great deal of relief.

I see no reason whatsoever why Shabibi would lie to John. There seems to be no motivation on his part to do so that I could determine. Therefore we should take him at his word.
Having done so, then, we may summarily dismiss “intel” that indicates anything to the contrary, right?

I could give one recent example where someone has stated that the IMF is going to allow the RV to go ahead coming out at a lower rate ($2 to $3) because the GOI is not yet formed, and that it would then do ANOTHER RV after the completion of the RV. I think we may ignore this intel, given what Shabibi said.

At the same time, however, I read today from a couple of blogs that Maliki has apparently “approved the RV.” Once again, based upon Shabibi’s own statement, this is not necessary, right? We might ignore that intel as well.

Well, then, if the GOI isn’t a part of the RV (“the GOI has nothing to do with the RV”) then who is in control?

By process of elimination it seems clear that the IMF is now fundamentally in control of the RV. Based upon Shabibi’s actions of late this is reasonable and apparent, IMO.

Remember, Shabibi worked for the IMF for over 20 years in a high position. He is joined at the hip to this organization. Furthermore, and this is very important, he is both apolitical AND he clearly loves his country and wants only the best for it.

This man, who is somewhere between 70 and 80 has an impressive background portfolio and is one of the few “straight up” people involved in the whole Iraqi scenario. We may trust that he is working assiduously to achieve a lasting non-inflationary growth in Iraq with a strong and stable currency.

Therefore, it seems clear that to me that, out of frustration with the childishness of the players (mainly Maliki) in Iraq, he has moved ahead out of necessity to ensure that the Iraqi economy steps up to the plate at the exact appropriate time from a WORLDWIDE perspective (remember, he is essentially an IMF guy).

In order to meet the deadline WORLDWIDE, therefore, it is my opinion that he manufactured a crisis in Iraq that can only be solved by revaluing the currency “very soon”, to use his own words.

He did this by withdrawing the large denominated notes, first gradually, and then more recently almost instantaneously. The result is that the country now has no cash, essentially, and MUST revalue simultaneously with the issuance of the smaller denominated notes. The small notes CANNOT be distributed without the RV, period.

In doing this withdrawal he has forced the hand of Maliki to the point that Maliki is now playing “catch up.” Through his actions it is clear that Shabibi is telling the truth: the GOI has nothing (now) to do with the RV. I added the word “now” for emphasis. The truth of this statement is evident from the fact that Maliki is moving (now) as quickly as possible to complete the government.

Furthermore, even assuming that he did “approve the RV” as some intel reports, this is a rubber stamp effort on his part to appear “presidential” in the sense that he’s trying to make it appear that he affected the event, when in fact we now know otherwise.

I think that it is safe to say that we need not concern ourselves any further with the machinations of the internal workings of the GOI, including Maliki’s possible downfall, the role of Allawi, or the impact of the Parliament. To do so may provide some of you with interest, but it is no longer seminal to the process leading to the RV.

Finally, I think that it is fair to say that whether the RV is announced tonight, or tomorrow, or before the weekend is out, or even next week is really not that important anymore. I say this because we now have absolute assurance from the two highest officials in the CBI that this will occur “very soon” and that “it is time to do the revaluation”.