Yesterday the day was bright and the sky sooo blue so I decided to head up the mountains once again. I hiked higher up the Alpine trail than I normally do. I had to leave Meine Kinder below since they could not take the longer walk.
I missed them since their playfulness and giggling normally gives for good companionship. Today the trail was narrower and the climb steeper than normal. It became at times almost dangerous too. But once I reached the top I could overlook not just my village but actually could see the next village too. I can see very clearly now.
In today’s news I need to address some more concerns about why the Iraq currency has not yet gone international. I have heard much speculation on Thursday of this week that Iraq announced that their currency went international. Is this really true?
Some say there were numerous attempts but again they had issues. Since I considered this just a rumor I had to verify with my CBI source. This is what he said – (I do not quote since it was translated)
Read More Link on Right
[ The announcement in the mosque simply said the currency of Iraq was recognized internationally. It was not communicated that it was revalued internationally. That is correct. Nothing has changed. We (CBI) still wait to announce. ]
So what is your definition of going international? My CBI contact has told me that the CBI of Iraq will begin the process by posting the new rate on their site.
This will be followed by rolling the rates out to the exchanges and banks. There is a whole new CBI site that will come up at this time. The auctions will then also end.
Just prior to the revaluation look for the rate on the CBI site to change drastically to be almost cut in half to something around 500-600. This will be a sign of the proximity of the full revaluation happening. It will then happen very soon after.
Prior to the go ahead of the revaluation, there are still members in the Iraq parliament who are very cautious. In fact the CBI feels they are overly cautious and if this RV is further delayed it could actually cause more harm than good in the long run.
Just again last week the same members of parliament stood up with back lash comments that it is too soon and they should wait till 2014.
However I know for a fact this is not going to be the case to wait till 2014, so relax. What has changed from three weeks ago is that there are all now the signs and signals coming out of the GOI that they fully support the revaluation as soon as possible.
This is what we have been looking for.
This is what is needed.
Remember what has held this up in the past? We all know for a fact that the revaluation was scheduled for June 2012 and again in April 2013. It has been the GOI each time that has held it up. Now whether the GOI is taking directions from the USA or not is another set of questions.
But Iraq has to announce the new rate on the CBI website to make it formal. They have also showed us recently that they plan to embark on a new 5 year reconstruction plan and the basis of this plan begins with the revaluations of their currency
So if the CBI wanted to RV at least twice in the past then why do they need all these new initiatives?
I do not know (as does anyone) just how far they intend to continue in this final setup process for the start of this new 5 year plan but here are just some of their new initiatives that are being implemented in these final steps (see below).
If you follow the news you can see that they are urgency moving forward and the stalling is over. To me there seems to be new sense of urgency to complete the Strategic Framework Agreement by the end of September for the start of the formal execution of their new 5 year plan in early October.
1. Infrastructure plan - formalized and voted on months ago but now it is being implemented. It is fully supported by the GOI and the prime minister himself gave a speech on the plan just last Monday.
2. Capital Flow – Iraq needs avenues and ease of capital flow for this new plan since they can not pay for it entirely on their own. They need investors to come into Iraq and build malls, shopping centers and service oriented businesses. They need some way of screening this new investors.
3. Just last week the Bank Of Iraq established an office in Europe. We have been hearing that European banks are coming into Iraq but this new development shows that Iraq now has established communication and coordination with the rest of the financial world. This will be needed for the future capital flows of funds to pay for these projects.
4. Credit Bureau – I can’t say enough about how important this is to Iraq and how Dr Shabibi has been planning for Iraq’s own credit rating process. This too will be needed to screen businesses that want to come into Iraq. Incomers must be able to financially live up to any contract provisions and prove by their past performance this will be the case.
5. New Banking Law to be Enforced – there is now a new level of urgency to enforce the new banking laws we have been hearing about over the last year. These laws are now effective and being enforced. There are stiff penalties too for not abiding.They will need these laws for the transition and transparency needed between the banks and the financiers.
6. Many huge, huge projects slotted to begin in 2014. One example is the new housing developments. They increased the 2014 budget 60 times more for housing than allocated in 2013 for housing. How will people pay for these new homes without an increase in the value of their currency? Just like in the USA they must either qualify and take a mortgage or pay in cash prior to the house being erected.
7. Attempt to qualify for the WTO- this is also enormous since joining the WTO is normally a double edged sword. You can’t get full WTO support unless you qualify and you can’t qualify without getting the support you need to do so. So the IMF has relaxed these standards somewhat and is wrenching up to fully support all efforts Iraq makes for WTO ascension. I suspect they will ascend soonr. This will be a huge step for them.
8. New Peace Initiative – as many of you know a Peace Plan initiative is also underway. In the long run it is hoped this will address the security issue. Last week some 400 national figure representing all the political blocs actors and components of society and the provinces of Iraq conducted the signing of the terms of that document. This indicates their goals to ensure peaceful coexistence between All components of the Iraqi people and establish a national partnership through a commitment to the Constitution and the law and the adoption of dialogue as the only way to resolve the differences that accompany the political scene.
I hope everyone understands the points in this post. Knowing that this is still in the hands of Iraq is knowing some of their long term plans as to how they want to roll this out. I listed some of their current initiatives. They are cautious.
Will they complete all of them and to what extent prior to revaluation? .
I believe they will take these initiative just as far as they have to in order to feel comfortable and get approval of the majority of their politicians to buy off on pulling the trigger for the revaluation.
Remember I still stand with my position that we will not see this RV until late September or early October timeframe.
I have talked about why in more detail in my last 2 posts since they need to align all these other events. I am not concerned about bank stories or messages from Washington contacts as some intel providers suggest.
I do not understand all the false revaluations and why everyone is being told it is going to RV today or tomorrow. I am not saying it could not RV tomorrow since there is so much uncertainty and anything of course could happen. But lets follow the process and lets get the process correct.
I do strongly believe this RV process is like a bouncing ball. The ball seems to move from first Iraq then to the USA and now back to Iraq. Seems it’s also just a matter of perception about this bouncing ball since the ball is really always in both courts and will continue until this is done.
Its just the perception of the urgency at the time as related to the task at hand of each side. When Iraq was busy passing the needed laws our attention was concentrated on this aspect and this is all we knew and expected to the RV once these laws were passed. We did not get the RV.
Then when the upgrades to the technical side, to make it technically feasible, were underway our attention then shifted to the USA and the Wells Fargo Bank. We thought if they could only fix all the issues that we would see the RV. We did not get the RV.
Now since this is all completed our attention once again now must shift back to Iraq to see how they finalize these steps. But remember Iraq all along has been working on new laws even while we watched the technical issue get resolved. It just a matter of perspective at the time and what we chose to pay attention to.
So could they have RV’s in April. We now know they could not have since the technical system was not yet in place to RV 190+ currencies. This is what we think stopped it but in fact was this the only factor?
The Iraq GOI will continue to tell their citizens the revaluation is just around the corner if not tomorrow or in the “coming days”. Do you now understand that the UST in the USA is doing exactly the same thing to us? and why?
Remember too today is now days past the midway point in September and early October is just around the corner. How long now can the USA stall this process and keep telling the American public it’s going to RV? Seems the stalling tactics are now also in their hands.
Hope this helps everyone.
Peace and Luv to ya,