(Thank you George for emailing this to Dinar Recaps.)
UU6846 – “More Pieces to the Puzzle - Currency Reform ” by Mnt Goat
Today I need to give you yet more pieces to the puzzle to currency reform and so read this section very carefully. It can get confusing real fast if you don’t read it carefully and clearly.
In the section I review the currency reform exchange process with you but in relation to what is happening in Iraqi banks, the CBI and the citizens and not your exchange. This is important to know as it is how it relates to the overall planning for the ultimate revaluation of the IQD down the road. If you want to know what is taking so long to RV…..well here it is.
Today is Wednesday December 16th and yes we are fully now in the third week of December already and still no RV.
Many events seem to converge on the month of December and recently we heard news of also January being pivotal. How do these events relate to our inevitable RV?
Let’s pay close attention to what is happening these next couple months in this regards. I believe in retrospect we will say this was a very significant time in this ongoing saga.
In my news letter I also told you that it has been suggested to me by my CBI contact to refocus my attention (thus you should also) to mainly the currency reform efforts by the CBI and what is now happening there. So I have been doing this now for the last couple weeks. It is a very good approach and I am glad I did.
Update: Currency Reform
I want to keep all of us focused on currency reform. Right now this is exactly what we should be watching in expectation of the launching of the lower denominations. Many sources have told me the plan of the CBI is to launch the lower denominations soon. Will it occur?
We can only wait and watch. We can all get hyped up and excited about this every day / any minute RV stuff being put out there by these so called intel “gurus”. It is all just foolishness. I have to tell you once again you will see no RV window up until the time period of mid January / early February 2016. I have positive proof this is the new target date for the CBI.
So now many keep asking me - What is the hold up? Is it really a hold up or just a delay from 2012 effort to RV? All I can say is go back and re-read (or read for the first time) my last 50+ news letters (LINK to Mnt Goat category or posts) and you will see the hold up (if you want to call it that). Also read today’s news letter for it will give you an insight as to why it is not that easy to just “pull the trigger”. Yes – there is a plan and they are moving forward with it very methodically and carefully. The timing and targets may have changed and YES they could change again. I mention these dates not to hype you up for this every day / any day crap but to inform you since this the information given to us directly from the CBI.
So let’s look at where Iraq is now and this new RV target date given to us.
Can I scream it any louder, again and again watch for ….CURRENCY REFORM…..CURRENCY REFORM !
Pay attention – CURRENCY REFORM !
In my last news letters dated 12/7 (LINK), 12/9 (LINK) and 12/14 (LINK) I presented to you articles about corruption and issues with the CBI and in particular about the conduct of the MONEY AUCTIONS. These issues were raised by a member of the Finance Committee in Parliament, Majida al-Tamimi. Why am I dwelling so much on the money auctions?
These money auctions now are at the heart of the stress on the Iraqi dinar that is keeping the rate artificially low. Many ask why they don’t just “pull the trigger” on the RV since so much seems to ride on it. To those that make this statement I can see you are very ignorant of the currency reform process and refuse to educate yourself to learn more. I have tried to teach you but yet you resist to learning. If this “pulling the trigger” was so easy don’t you think they would have done it by now?
So we have see in my last three news letters, and now in today’s news, one of the reasons why it is not so easy just to “pull the trigger”. Oh boy – am I tired of hearing this stupid term – “pull the trigger” !
I am presenting the article below so you can see the lost in money each and every day from the CBI reserves. How are they losing this money?
The are losing this money from the high demand for the US dollar vs low demand for the Iraqi dinar. If you read my last couple news letters you would know this.
Oh – so you think maybe these auctions are worth studying to see why they are losing all this money?
What could you do with 80 million? Almost every week a new article comes out from the CBI telling us they are in good shape and have 6 months of reserves at hand. Really? Of course they keep adding to the reserves from oil revenues but it will never increase due to two reasons: 1) this constant subtraction of loss of revenue due to these currency auctions 2) low oil prices at $35 a barrel. So Iraq at this rate will never realize their dream of a higher asset backed currency rate unless something serious is done to fix these auctions (stop them).
So let’s take a look at the auctions as many of the financial experts and economists have done in Iraq. I presented their findings to you.
I quote from the article below – “Said al-Dulaimi told a news conference held by the House of Representatives attended / JD / that "the government should stop the currency auction, because of the large corruption in it,"
So what do you think they will do at the end of December? Will they stop the currency auctions, as they told us months ago or have they changed their minds again?
Committee the economy: central bank pulls the daily $ 80 million from the reserve
BAGHDAD / JD / .. announced member of the committee of economy and investment parliamentary deputy olive-Dulaimi, Sunday, on the sale of daily currency auction $ 200 million, while pointed out that the central bank pulls the daily $ 80 million from the reserve.
Said al-Dulaimi told a news conference held by the House of Representatives attended / JD / that "the government should stop the currency auction, because of the large corruption in it," indicating that "Iraq's imports of oil close to $ 120 million, and the auction currency daily selling $ 200 million and this is a disaster real ".
He pointed out that "there are $ 80 million is pulled from the central reserve".
Did you read the article above?
If not, go back are read (re-read) it because it is a lead into what I am about to talk about now.
The “program rate” of the dinar is a rate valued determined by sanctions and scarcity of the currency in Iraq.
Between October 15, 2003, and January 15, 2004, the Coalition Provisional Authority issued new Iraqi dinar coins and notes, with the notes printed by De La Rue using modern anti-forgery techniques to "create a single unified currency that is used throughout all of Iraq and will also make money more convenient to use in people’s everyday lives. Since Iraq has few exports other than oil, which is sold in dollars, there is little demand for dinars and they remain in "exotic" status.
However the new currency has sparked a multimillion-dollar industry in selling dinars to speculators. These so-called "money service" companies will sell dinar to speculators at an inflated price and push the idea that the dinar will "RV" or be revalued to greatly increase the exchange rate against the dollar. The dinar is currently pegged to the dollar at a rate of 1166/1164 (sell/buy) dinars per dollar as can be seen on the Central Bank Of Iraq's home page. The exchange rate reportedly available on the streets of Iraq is around 1,200 dinars per U.S. dollar.
There is considerable confusion (perhaps intentional on the part of dinar sellers) around the role of the International Monetary Fund in Iraq. The IMF as part of the rebuilding of Iraq is monitoring their finances and for this purpose uses a single rate (not a sell/buy) of 1170 dinars per dollar. This "program rate” is used for calculations in the IMF monitoring program and is not a rate imposed on Iraq by the IMF.
Link to PART 2