(Thank you George for emailing this to Dinar Recaps.)
UU1066 – “Quick Update” by Mnt Goat
Grüße aus Bayern,
Die heutige Meldung ist über die Hoffnung und den Glauben an diese Investition von uns.
We have been waiting a long time for this final conclusion and it is about to happen. I would not be writing and sending out this news letter today if I did not feel this revaluation was literally about to happen.
This is a continuation of the ongoing saga of the revaluation of the Iraqi dinar. Please read past news letter dated 2/12 (LINK) to better understand this news today.
Today is Friday the 13th and still no RV. As we know president Masoum ratified the 2015 federal budget bill on Tuesday Feb 10 and we now wait for it to be posted in the gazette. But don’t be in such a hurry for this since there could be complications if this is done too quickly. I will explain.
Let me explain something to you first that is very important. Technically we DO NOT want the budget bill to be posted in the gazette without an increase in value to the Iraqi dinar first. If they do not increase the value on or before this bill is posted in the gazette we are in trouble. What do I mean by in “trouble”.
So far all the grand speeches by Abadi on economic reform along with all the new banking laws and changes to bring Iraq international are telling us with a high degree of certainty that they do NOT intend to defy the basic rules of international monetary trade – that of having an international currency worth something.
What I am telling you is if the budget gets posted in the gazette without some major financial changes / restructuring taking place, then Iraq can not meet its financial obligations as approved under this new budget to pay debtors. They are in trouble ! It also is telling us that something smells very fishy and we will then have to take a step back and rethink what the heck they are doing since this will defy all logical sense and standard monetary practices. But I do not believe this will be the case. I do not believe this will happen.
Here we are on the third day following in the new parliamentary session that began on Feb 10th and still parliament has not yet voted on the “package” of new laws needed to support this new budget. I am being told this MUST take place first since these laws support the budget. Look at it this way. If they are allocating funds in the budget to support a project but the project has not yet been legally approved by the government then how can they fun a project that literally does not legally exist? Many of these projects also call for immediate, very large sums of money for down payments, as specified in contracts already signed and post-dated. Where will this money come from? They can not borrow this large sum of money since it is an entire year’s budget.
Today is Friday and a holy day in Iraq so not much normally happens. I am being told they will hold the session in parliament today. What is on the agenda? Many of these bills in the “package” of laws I speak about already have a first and second reading. We are not hearing any disputes, issues or arguments over these bills in the news, which is a good thing. This normally tells us the bills are written and everyone is happy with them. These bills include the HCL, Article 140, National Guard, Amnesty, Reconstruction, Education, Defense, etc…all the ones we heard so much about.
All the reforms agreed to and they have been working on over the last four (4) months. The National party as to now make good on the promises of the 27 reforms used to negotiate them into power to form the government in the first place. Remember the May through September timeframe? They must now make good on their promises.
However to make them legal they must go through the entire legislative process. This process means at least 2 readings and a final vote. Next these bills must be posted in the gazette. All this can happen very quickly since it is my understanding the Federation Council is now established and reviewing these new laws. Is this holdup?
No I do not believe the Federation Council is or will be a holdup in this legislative process. I explained to you in my last news letter why I feel this way. So then what is the hold up?
Abadi made a short speech to the news the other day. He was specifically talking to the provinces and telling them to be patient. he was not talking to us directly but we know we must be patient too. They are waiting for their funding for these projects since they know the budget has been passed and now ratified. The reason the government has been pushing this budget along to get it completed was because they fully intended to fund it and begin spending it – like ASAP. But there is a delay, hold up, a snag. These are unpredictable and just happen.
What I am hearing is simply that technical issues are holding up everything. These are not hard issues to fix and the GOI and the CBI want them fixed prior to moving forward. I know this sounds fishy but it is what I am being told and I believe my source. Iraq now has control over when the RV happens.
WHAT COMES NEXT?
You all know what comes next. They must fund this budget of 119 trillion dinars. I have to tell you there is not enough dinars in circulation today to cover this budget amount and they know this. So where will they get this much needed dinar with a rate of 1166? They have huge stockpiles of the lower denominations but currently they too are valued at the 1166 rate.
In my last news letter I stated what the next steps have to be on or about the time of the revaluation announcement in Iraq. They then have to de-dollarize and get the lower denominations out to the banks as this process will take many months to normalize. But first they need to complete the economic reforms and this means in part to go international with their currency. As this happens we all expect the rate to change to at least a rate conducive to pre-war era.
If you have been paying attention to what I have been saying in my past news letters and especially today’s news you know that they are about to revalue the Iraqi dinar IQD and it MUST happen in the coming next few days ahead (not weeks). I fully expect something to happen very soon – like tomorrow or today since the deadline for posting in the gazette ends tomorrow and like it or not the budget bill automatically gets posted in the gazette and is then technically opened and fully implemented. Can they try to stall the posting? Yes maybe by a day or two since anything is possible in this process when Iraq is involved. But this is only a temporary delay to fix what they need to fix, as I mentioned above.
Do not be discouraged. Just as sure as I am sitting down in my office in Bavaria today, overlooking the Alpine mountains of my village, writing this news update – we will see this RV very shortly.
It is coming !
So you see Al-Abadi along with the CBI have to make a decision soon on when to RV this currency. I believe this decision has already been made weeks ago and we are now in the final countdown window now that the budget is truly ratified and the deadline for it to be posted in the gazette is about to expire. We should hear news of this next event (gazette posting) today or tomorrow. Then Iraq must fully fund the budget within 24 hours (partly by a revaluation). Can Iraq be fully positioned with all these events in time to open and begin spending this 2015 budget?
Peace and Luv To Ya All,