Eagle1 Says Iraq Is Selling Gold To Prepare For Dinar RV 8-18-12

Max is sitting up at attention now waiting for the word

Eagle 1……his opinion…he was in international banking for years.

From CC with Frank 26 8/17/2012

Greetings to all of you!

It’s been four weeks since I sent out the last update. Been meaning to bring everyone current with the news and developments, but things have really been a zoo for us.

Last night, Frank (Villa) and I did a world-wide conference call in which we discussed much of the following. I’ve clarified some of the issues in this email that we didn’t really expand into last night.

This update probably could have been posted several days ago, but we were waiting to see if the Central Bank (CBI) actually followed through with its plan to begin selling off a portion of its gold. 12 days ago Dr. Shabibi announced his intention to begin selling some of the gold in their vaults, but it didn’t actually begin until yesterday. This, along with some other developments, is a very significant event.

First let me provide you with some numbers and statistics so you know where I’m coming from.

According to the CIA’s statistical reports at the end of 2011 (and they provide these reports for all countries or nations of interest), the CBI held some 80 metric tons of gold in its vaults at that time. (We know, by the way, that this number has increased significantly since then; and the CIA is reporting that central banks worldwide have been purchasing massive amounts of gold for their treasuries. The Federal Reserve purchased some 400 metric tons of gold during the past quarter, just as an example.)

So that you understand the significance of these amounts, let me break it down for you.

There are 14.57 ounces of gold in a troy pound.

There are 2200 pounds in a metric ton.

That equals 32,054 ounces in a metric ton.

Multiply that by a rounded off $1600/oz. and you have a dollar value of $51,286,400 per metric ton of gold.

Now let’s pick an arbitrary number and say that the CBI is going to sell of a quarter of the gold reserves they had at the end of 2011. That works out to $1,025,728,000 (a trillion, 25 ¾ billion dollars) in cash returns to the CBI for the sale of that gold. A trillion plus dollars to add to their coffers.

Why would they do this?

Let’s look at the amount of Dinar that the Central Bank has outstanding worldwide. According to the latest figures provided by Dr. Shabibi, there are between 35 – 37 trillion Dinar in circulation outside of Iraq. The U.S. Treasury holds a lion’s share of that amount, and there are many other countries that have purchased significant amounts of Dinar. China has been scarfing up Dinar (and silver) like there is no tomorrow. Italy and Greece each hold something on the order of 500 Billion Dinar.

According to the Year-End Report issued by Ernst & Young (December 31, 2011, and signed off as accepted by Dr. Shabibi on February 2, 2012), Iraq’s Central Bank held a total of $76T+ in monetary assets (cash on hand, foreign currencies, gold, treasury notes, silver, diamonds and other tradeable securities). I just about did a double-take when I saw that figure. $76 Trillion in monetary assets is not pocket change, folks! Iraq is one VERY RICH country!! None of these figures take into account receivables in oil revenue, oil reserves, proven gold and diamond reserves or other commodities.

You’ll all appreciate that the U.S. military, when fighting the war against Saddam, stationed soldiers in the streets of Baghdad. When fighting broke out in the streets, soldiers began digging fox holes and trenches in the streets of the city from which to fight. As they dug, they discovered extremely rich veins of gold running through the middle of the streets. At this point, no one really knows how much gold Iraq has in the ground, but when you remember that this area was part of the Garden of Eden, it all makes sense!

Back to the question of why Iraq would sell some of its gold: having been in banking, I can tell you that when bankers are faced with unknown prospects such as those the CBI faces knowing that they could very well have more folks cash in their Dinar than their statistical model indicates, they tend to be almost overly cautious. From a banker’s perspective, it is very prudent for them to increase their U.S. Dollar reserves in preparation for a potential run when the announcement is made. Last week, the IMF announced that the CBI had 130% of its minimum needed asset requirements to begin the RV. That may sound impressive, but that’s 130 percent of 15%. We can round this off and use a general figure. What the IMF was saying was that Iraq had cash reserves amounting to roughly 20 cents on every dollar (or dinar) outstanding.

That’s a whole lot better than any U.S. bank, but let’s look at that in actual numbers. Let’s assume that investors are going to cash in 5 Trillion Dinar within a two-to-four week period of the announcement, and that the initially announced rate will be $3.86. That means that the CBI will have to cough up $19 Trillion+ USD. It takes no great rocket science to see that a sudden demand for that amount of cash could easily put a strain on things – their monetary reserves notwithstanding. Apart from the USD the CBI holds in its vaults, it has something on the order of $5 Trillion in U.S. banks and around $750 Million in Canadian banks. Selling off some of their gold is a pretty smart move, and they could easily sell off half of the reserves (or 40 metric tons) if it seemed prudent to do so.

This is all fascinating information, but I hear the questions: namely, what does this have to do with the timing of the announcement and the rate?

Iraq’s President Talabani has just returned (according to unverified info) or will return before the end of this week. Shabibi made it clear some weeks back that he wanted Talabani to make the actual announcement of the RV. Talabani has already indicated in advance that he will be calling a public event on Sunday, August 26th. While there are possibly other reasons for this announced event, there is a general consensus among our analysts that we will have our RV announcement on that date. There is other logic for believing that.

In the last couple of days, Dr. Shabibi has announced that the CBI will release 1 Dinar, 5 Dinar and 25 Dinar coins for public use and trade on September 1. It makes no sense whatever to issue a 1 or a 5 Dinar coin if the RV has not taken place. What good is a 5 or even a 25 Dinar coin if a loaf of bread costs 3,000 Dinars (current price of a loaf, pre-RV). If indeed the plan is to release these coins for use on September 1, then August 26 makes sense for the RV announcement. (And that doesn’t mean the announcement will wait that long. It could actually occur even sooner.)

That’s it for the moment! There is another development unfolding behind the scenes but I’ll hold off on that for the moment. While it could be related to the RV, or not related, it will certainly have worldwide economic consequences. Let’s see what happens over the next ten days or so, and if it seems appropriate I’ll send out another memo for your consideration.

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