Post From Currency Chatter - Commentary By RandyToo
JTDinar: Maliki is NOT the obstruction for monetary reform. In fact, as I'm sure you are aware but perhaps not many others, he is pro RV. All the talk of Maliki not being in favor of Monetary Reform is garbage. As you say, it will take place regardless of whether he is IN or OUT. In addition your points are well taken as to WHY he is still here. It is all part of the plan. When and if he is chosen for a 3rd term it may very well cause disruption but not at the cost of the rate change. The fatalistic view of our RV that Tlar puts forward if Maliki remains is unjustified and incorrect in my opinion. Respectfully of course.
RandyToo: jtdinar, I disagree with you. I believe Maliki is the problem. I think he has his own agenda, which In My Opinion is tied to Iran and Syria, but don't quote me on that one.
Do you remember what happened to DR. Sinan Shabibi? In 2010 Maliki put his friend and chief thief Hussan al-Shahristani as Minister of Energy.
He gave him a budget of over almost 8 billion dollars to build electrical plants of which over 5 billion are now unaccounted for, His solution: Buy electricy from Iran instead of putting the money into electrical plants. It's easy to embezzle that way.
The corruption throughout Maliki's administration was so bad most the projects and services just were not getting done. Well this created a problem for Maliki.
The people were up in arms because it was not only electricity that was availble an hour or two a day, but sewage was running in the streets. Their ration cards was spotty at best. Food that was being imported was spoiled or rancid. Unemployment was rampant as jobs were going unfilled.
Faced with increasingly deadly anti-government protests (just after the protests that toppled the governments in Tunisia and Egypt), at the end of February, 2011 Maliki gave an ultimatum to the officials of Iraq to improve public services within 100 days or "Heads Would Roll".
Of course 100 days expired and nothing happened except that it did stop the protests. So Maliki extended the ultimatum for another 100 days. The problem was all the money for the public projects had been embezzled by his cronies in the SOL and they were not about to return it.
So Maliki cast his eye on the reserves that Shabibi was diligently building for the RV and he wanted Shabibi to make him a loan to cover these public projects. Shabibi said NO because it is illegal to use the CBI reserves as part of the government budget.
Since Maliki was in the process of taking over all the independent agencies in Iraq, his next move was to try to put the CBI under the umbrella of the Executive branch instead of the Parliament.
After getting a positive ruling from his friend Medhat al-Mahmoud (the chief justice of the Supreme court) Shabibi appealed.
With the help of the UN making to make it clear to Mahmoud that if the Central Bank was not independent of the government then all the protections the reserves had from being under Chapter 7 would vanish.
International suits that were frozen could now proceed and there was nothing Iraq could do stop them. Medhat al-Mahmoud reconsidered his decision and the CBI is the only institution in Iraq that remains independent.
Shabibi continued with his plans to RV the currency. There is an 9 minute interview that you can view on YouTube of Shabibi before the Chamber of Commerce on April 19, 2011 where he answered question about the RV that is very interesting.
Things were progressing but there were several banking and other laws (the economic reform package) that was needed but was being in blocked by the SOL in Parliament.
Shabibi publicly gave Maliki a deadline of July, 2011 to get this package passed and call for the RV. Otherwise Shabibi said that he was going to go ahead and pull the trigger himself regardless since he had the authority to do so.
There are two comments that Shabibi has made that people have latched onto.
One - that the Iraqi currency would be the strongest in the region. He made that statement in a speech to the Iraqi people on Sept 16, 2011.
Shabibi has often talked about the timing of the RV and said that fiscally it needs to happen at the beginning of a quarter and ideally at the beginning of a fiscal year. Think about it for a moment.
For accounting and bookkeeping reasons alone this makes perfect sense. Thus, everybody expected it at the beginning of 2012. when it did not happen it was a huge letdown.
In fact, Shabibi recently published an explination of what happened when he left and he said it was supposed to have happen then, but Maliki interfered and war in Syria got in the way.
Unfortunately in the beginning of 2012 on the Iraqi economy that Shabibi could not control.
Besides the EU crashing and burning (remember Greece and then Spain almost going bankrupt). The devaluation of the dollar which the dinar is pegged to (Quantitative Easing 1, 2 & 3).
A persistent world recession plus sanctions on Iran producing a requirement for $$ since they cannot sell their oil or even access any international financial markets. Their only access is through Iraq and through the CBI currency auction since Iraq has bank branches in Iran.
Shabibi was appointed by Parliament, but the staff in the CBI was controlled by Maliki. So when Shabibi wanted to fire several people from the CBI, he could not. What happened was that Shabibi was using the Currency Auctions to control the Inflation in Iraq.
However, as it turns out, Maliki was using the auctions as a way to channel funds to Iran.
Here is how:
Certain Iranian banks, currency traders of businesses that privileges to enter into the currency auctions would manipulate the spread between the buy and sell rate.
At the CBI they maintain it at say 10 to 12 between them. These traders would expand that 60, 70 or even 100 dinar and pocket the difference. They would then be able to sell that back to the CBI and get US dollars for them.
This is what the money laundering at the CBI was all about and all those articles that you kept reading.
Shabibi wrote all about this in his expose at the end of 2013. There were 4 clerks from the SOL in the currency auction staff that he could not fire (but he kept very good notes on them).
With all this pressure on the dinar, Shabibi could not keep inflation in Iraq under control and prices in Iraq started to raise.
Maliki made a run at the CBI again in April 2012. He accused Shabibi of Corruption and Money Laundering. Given the seriousness of this Maliki filed a case in federal court so that his friend Medhat al-Mahmoud would to let him take control of the CBI with all that lovely money.
Nujafi wrote a letter telling Maliki and al-Mahmoud to stop interfering with the independent institutions. In June Maliki tried to appoint Turki to the post of CBI Governor, but that was rejected by Nujafi and the parliament.
Maliki forced Nujafi's hand by putting an arrest warrant out for Shabibi while he was out of Iraq attending an IMF meeting in Tokyo in October 2012. In the Iraq press, Maliki made it look as if Shabibi was fleeing the corruption charges when nothing could be further from the truth.
Shabibi never returned and Turki took over the CBI.
In this turmoil, the UN made it very clear that they were watching very closely and would not allow Maliki to take control of the CBI. From many of the deft moves that Turki has made I think that Shabibi has been tutoring Turki. I don't believe that Maliki ever did get his hands on the reserves, but the money laundering has continued.
Now this is my opinion only:
This is a cozy situation for Maliki. He gets all the money from the Petro-dollars. He has had the Constitutional amendment that says they are to share a portion of that with the people of Iraq unconstitutional so he could keep it all.
What he and his cronies do not put into their pockets they send to Iran and I think it finds it's way to Assad to fund the war in Syria. Besides the petro-dollars, they have found a way to profit handsomey off the CBI and its auctions.
All of this will change once the currency RV's.
And should Maliki or one of his puppets not become Prime Minister, the rats in the State of Law coalition who have been ripping off Iraq of all the money and resources are screwed and they know it.
Why do you think they are fighting so hard to stay in control despite the overwhelming cacophony of voices for Maliki to leave.
I have gone on way too long and oversimplified things greatly.
Shabibi is only one of the many Sunni's politicians that Maliki has marginalized. He has done this over and over and over again until almost all the main Sunni politicians are no longer in government.
It is no wonder the the people just exploded when Maliki started to do this to Finance Minister Rafi al-Issawi, which lead to year long plus sit-in protests and the massacre in Hawijah and more.
But that is whole other long story and I am sure you have had enough with this history of the CBI, but I tend to be a storyteller if you haven't noticed.