_The context is a discussion regarding the nature of the 2Billion USD that left Iraq in the last 30 days. I thought it was a nice speculative analysis, especially when contrasted with Med & Mailman's chat on the same subject (posted yesterday in your blog).
1. We have no way of knowing that Iran was paying for the $$$ with IQD.
2. It is highly unlikely that Iran would have 2 trillion in IQD anyway.
3. If they DID have 2 trillion in IQD they would not be so stupid as to sell it now! DUH!
4, Iraq is ON RECORD that an RV is in the works for the near future. DUH!
So, how can we better understand this?
5. The dollars were sold into Iranian hands directly from the CBI (through banks) without the proper paper trail. We know this because just two days ago the CBI insisted that a full paper trail exist on all sales of dollars. This is why the auction fell from $200 million per day to $3.5 million just yesterday. This proves that the paper trail would expose the buyers of dollars.
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6. We don't know who was buying the dollars, but we DO know that from around 20 banks in Iraq dealing in the auctions it fell to only 4 major banks willing to provide a paper trail.
7. Therefore, we know that there was corruption WITHIN Iraq that was obtaining the dollars, then smuggling them to Iran. Does the DAWA party ring a bell? As in: within the government? As in, Maliki?
8. Shabibi stopped it by insisting on Basil III compliance: paper trail.
So, then what:
9. Iran didn't have 2 trillion dinars; never did.
10. Someone inside Iraq was supplying the dinars for dollars, illegally (read Maliki here).
11. He was stopped, legally, by invoking Basil III compliance rules, which should have been in place already.
Now, how does this affect Iraq?
12. IF, and this is a big IF, Iraq needed $200 billion infused into the economy daily to keep the economy afloat, why don't we have evidence of that in other auctions?
13. Perhaps it is the case that Iraq needs an infusion of only $3.5 million daily to keep the economy afloat. Then there would be no pressure to RV, since they solved the smuggling problem.
On the other hand:
14. There is clear evidence that in order to obtain dollars in Iraq there is now growing a black market. This is evidenced by an article that stated that the IQD has gone from 1170 to 1235 to the dollar in the local markets. In other words, dollars are more important for the local economy, and the locals are bidding up the dollar (lowering the dinar value locally) in order to obtain dollars. They don't want dinars!
15. THIS, and not the smuggling, is what is leading to pressure to RV soon. Shabibi has withdrawn the majority of the IQD supply within Iraq and what little that is left is no longer trusted. This is why the black market is raising the value of the dollar against the dinar in-country.
What is the solution?
16. Shabibi has set up a scenario in which it will become necessary to RV very soon, IMO. The Iranian smuggling was not the reason; it in fact has been dealt with swiftly and legally. Shabibi is not interested in allowing another country to affect his grand plan, positively or negatively. He said just that through Saleh yesterday!
Listen to the conference call with me, Kap, and Russell tonight on DinarAlert. We cover this extensively.