UU6859 – “RAISE THE VALUE OF THE CURRENCY to cover the deficit”
by Mnt Goat
Sometimes news we hear seems gloomy and we think we may have to wait yet longer for the RV. We are thinking this way because we have a problem connecting the dots to see the entire, full picture in this RV saga puzzle.
So again today I am pointing out many connections for you again and helping you see how to connect the dots and get the BIG picture of what is going on here.
Today is Wednesday January 20th 2016 and yes we are very close already to the last week of January and still no RV. It seems, however, the further we go into January the clearer it is appearing to us that Iraq fully recognizes and intends to implement the needed currency reforms. They also know they can not fool around with their political stalling any longer.
This week the Abadi’s council of ministers has a meeting to review radical solutions to rid Iraq of it’s economic crisis. I will review some of these solutions that were tried in the past and new ones they are now considering. Pay attention to this news letter today since I am telling you so much about what is about to happen.
So Monday I brought news of the IMF mission to Iraq in reaching an agreement for a Staff-Monitored Program (SMP) and an important MOU that went with it and press version of the it all. Based on the best information we have at this time it now appears that the IMF and Iraq are working closely together towards a late February/ early March timeline for movement to Article 8 of UN charter for Iraq. This is of course not a predicted date but is just what the news seems to be telling us.
Can this new timeline be also tied to the effort to rid Iraq of ISIS? Most probably it is but let’s look at the timelines in the SMP as our basis for surely they included completing the fighting of ISIS in their evaluations. Why wouldn’t they? You tell me because I don’t know.
I totally expect to see more and more articles come out about the Iraq currency reform and the “project to delete the zeros”. But first parliament must get this “basket” of laws completed, as I explained in my last news letter. We know that parliament has come back into session and we wait to see their agendas.
So based on the MOU dated January 12th there are challenges for the CBI to unify the exchange rate of the dinar across Iraq and control it against the dollar. But we all know this news is nothing new since we have read article after article from Tamini on this topic. So how will they do it?
Next we are hearing increased pressure to implement the Tariffs in boarder areas, especially with the Kurdistan region. Again I will say this new Tariff is like a double edged sword without having an international currency. Let me explain.
On one side it hurts the Iraqi economy since the tariff fees will be passed down to the citizens in increased prices in goods in the market place. Today citizens are already ridden with inflation with provisional currency and the rounding up process due to the large three zero notes and inability to make proper change. Remember also they want to launch the 50k notes in early February too (which we know for the common person is felt to be another burden and cause more inflation).
But they know part of the diversification process for Iraq is also to put pressure on the economy to begin production of domestic goods and services to circumvent any Tariff fees on imports. Iraq wants more exports not more imports. The GOI also wants the Iraqi citizens to begin using goods and services as produced from within their own country.
Now let’s circle back to the other problem (the other edge of the sword) when they do begin to ramp up to selling more exports as part of this diversification process and that is – How do they transact with the outside world on a global scale without a global currency? And much more than that – How will they transact with the global banks through the WTO and so also meet the standard global banking protocols by using your own countries currency and having it valued on the global exchanges to keep its value consistent with all entities using it? This is one purpose for the global money exchanges.
But wait a second Iraq can not now do this since they are under Article 14 of the UN charter and are not allowed to transact with the rest of the world using their own currency (the dinar). We know currently they must convert the dinar to another foreign currency namely the US dollar for all transactions to pay for imports or even to sell oil to the outside world.
So you see in the MOU and the SMP I presented to you on Monday’s news letter how important this news was to us and what it was telling us. There is so much at stake in getting a global currency recognized for Iraq (and one that is of it’s true asset backed value).
So the article below is yet another indication of the pressure to get the Tariffs underway. We now know that it is more than just about increased tariff revenues but about forcing more domestic production an incentives to bring more foreign investors to operate inside Iraq.
THE APPLICATION OF CUSTOMS DUTIES ON GOODS ENTERING IRAQ TARIFF
Announced that General Customs Authority to start applying the tariff law on goods entering Iraq, including the Kurdistan region.
He said Associate Director of body shimmer Samurai morning: The body began applying the tariff law on all land, air and sea ports, including Kurdistan region with effect from Monday.
He added that trucks will pay amounts ranging from 5 to 25 percent of the value of the goods met by the Commission staff who are stationed on the cities, particularly Baghdad outlets.
THE EXCHANGE RATE AND THE PARALLEL MARKET NOISE
Mohammed Sharif Abu Mayssam
Uproar provoked in parallel for buying and selling the dollar market last Wednesday, which resulted in the exchange rate appreciation in less than six hours to around 40 dinars to the dollar gives a very clear indication of the ability of speculators in the recruitment propaganda in order to prejudice the market movement and specifically the exchange rate.
This indicates the fragility of the first monetary stability and to wasting in the body of the commercial selection in the market about the rumors and propaganda fluent employed speculators at any time in order to turn a profit or hurt the national economy.
The central bank, quickly lied reports that break into the premises, and stop operations to sell the dollar, stressing the continuation of the currency sale to finance foreign trade and meet the market needs of the dollar, but the fluctuations in the exchange rate has remained between 1250 to 1290 dinars to the dollar, it has not seen the market stable even writing this article.
This refers to a set of facts that should be recognized them to put processors in particular, and we are embarking on a phase will see more changes in the commercial and financial and monetary reality, and the first of these facts is the case of non-monetary stability, despite the significant attrition in central bank reserves resulting from the sale of the dollar in large quantities every day are not commensurate with oil revenues, if we know.
The function of the central bank next to his direct supervision on the performance of government and private banks is to maintain monetary stability and by, in order to create a stable climate for local and foreign investments that rely feasibility where a fixed rate in the price of studies of exchange.
It is clear that the beneficiaries of the support selling the dollar at the central auction by the import of goods at a subsidized price is estimated at 1182 dinars to the dollar, do not just huge profits they earn them and following them due to the difference between the subsidized price and the price of the parallel market for imported goods, as well as the value added to the profit margin, as taking advantage of their control and monopoly of the market and they make noise when what they want motives may be suspicious business or in order to damage the situation of stability of other motives leave it to the reader, and remained this case is prevailing since the start of the work of the Central auctions to this day, which means that the monetary stability practical sense will not be achieved as long as the country in a state of political and security confusion and as long as the traders who enter the auction Central are the speculators in order to reap more profits, which calls for the central to search for another way to intervene in the market and achieve monetary stability, if the government and private banks to adopt and more banking offices licensed to sell the currency mechanism Court included the sale of the designated quantity and at a specific price per day for those who have savings in dinars Iraqi banks to ensure not fall into the «dollarization of the market» and damage the banking system based on encouraging savings in local currency, along with the importance of the work of bank credits to ensure go remittances to finance foreign trade in order to stop the attrition in the central reserves, and as long as measures conducive always more noise in the markets as a result tattoo speculators, and the government as long as the past in its austerity and reform, the need for seriousness in the implementation of any measures will be an order of urgency.
We propose here to open the door to volunteers of the Central staff of government and banks to work within a team oversees the application of strict mechanism generally speculators to ease the damage to the poor classes during the next phase, as will experience of the middle class to a decline in its revenues due to adjustments in staff salaries and raise tax collection rates and collection services next to deductions Social Security and withholding support for the displaced folk crowd, what necessarily mean lower demand for luxury goods and entertainment services and non-essential goods rates, along with the importance of pressure on the departments of specialized banks to launch the Central Bank loans amounting to about 5 trillion dinars electronic mechanisms reduce red tape and corruption, after the private banks began firing small business loans supported by the Central also estimated trillion and 200 billion dinars, which means the possibility of meeting some of the local demand for goods, and thus relieve demand for the currency difficult and employment, especially since the application of customs tariff law, will add support for these elements available towards accelerating in finding solutions, but the foot-dragging and lack of seriousness would create a climate of noise speculators and users in order to raise prices, which requires condensation media to guide public opinion of the importance of relying on local product to limit the flow of the dollar abroad and activating the role of the real sectors and sectors chock her which will be placed in the service of the people and the national economy at the same time, and thus can skip to adapt the least damage on condition activating the laws that regulate market relations stage and in the forefront of the competition law and antitrust and consumer protection law and the law of
The current stage through which the Iraqi economy that are linked one way or another to the war on pivotal terrorism and corruption together, you need ideas and work hard to get out of the turn of the financial crisis and economic rent to the path leading to economic development as little as possible of losses that can be visited on the poor in favor of the class the bourgeoisie created by the scourge of corruption and financial mismanagement.
Update: Currency Reforms
So I bring the article below to you because now it seems finally all alternatives to bridging the fiscal deficit are now being considered. One of them under study is to increase the value of the dinar. Wow! What took them so long to figure this one out? …lol…..lol….
I quote from the article below - " there are several measures of the government to overcome this crisis and is now in the process of study, including raising taxes and the value of the currency in order to plug in the budget”.
As I said previously that these lower oil prices are actually in our favor and is pushing Iraq to aggressively make moves towards the much needed currency reforms. The last paragraph also tells us of other alternatives they have already tried and we all know just successful they were….lol…lol… without an international currency.
Now you know why the IMF is helping Iraq so aggressively in getting them ready for the RV (make reference to my last news letter).
VICE CALLING ON THE GOVERNMENT TO RAISE TAXES AND THE VALUE OF THE CURRENCY TO BRIDGE THE BUDGET DEFICIT
Deputy for the National Alliance called on the government to RAISE taxes and THE VALUE OF THE CURRENCY to cover the deficit in the fiscal budget.
Sadiq frankincense told all of Iraq that "the economic situation may be confusing but bridging the fiscal deficit is a real dilemma, noting that" there are several measures of the government to overcome this crisis and is now in the process of study, including raising taxes and the value of the currency in order to plug in the budget.
"The government is moving to all solutions and percentages simple even not be the there are gaps or heavy burden on the citizen.
The Commission on oil and energy parliamentary member Jamal Panthers, said in a statement to that" the country to the brink of bankruptcy as a result of the financial crisis and low prices oil.”
It is noteworthy that, oil prices witnessed over the past week, a collapse remarkable which recorded the lowest level over the past 12 years since I arrived last Friday to $ 25 a barrel for a basket of crudes OPEC and less than $ 30 for Brent.
The Office of the Prime Minister Haider al-Abadi, confirmed last Friday, the government continues to search for sources of funding out of the economic crisis, including internal and external borrowing and taxation and activating the customs tariff and selling bonds, international and internal subscription and implementation of projects on credit.
A spokesman for the Office Saad al-Hadithi's [where], "The government has drawn up plans in budget 2016 approved by Parliament is in the search for sources of financing be helping and assisting the oil sources, "noting that" the adoption of the budget on oil sources this stage is no longer feasible.
He said Sabri that" there are other options carried out by the Iraqi government through A BOND OFFERING, OR IPO INTERNAL OR EVEN INTERNATIONAL BOND SALE AND IMPLEMENTATION OF SOME PROJECTS ON CREDIT PAYMENT SYSTEM according to the specific percentages do not conflict with Iraq's economic future, ".
Next I am bringing you news of this banking conference to be held by Iraq. Why do you think they are having this conference and what will they be talking about ?
If Iraqi banks are to conform to the WTO and IMF global banking regulations they must consult with those that have already been in the process. These are their neighboring countries and they will have to coordinate for inter banking transactions in the near future. These are their trading partners. These are countries that will be selling (imports) and buying (exports) from Iraq.
So articles like this are good but we must always tie what they are now telling us to what we know they must do for future efforts. They just don’t put these articles out to be nice. They are informing us. They are giving us another piece to the puzzle.
IRAQ HOSTS THE FINANCIAL AND BANKING CONFERENCE NEXT MARCH
January 19, 2016
Direct: State of Iraq, will host the third International Conference on Finance and Banking, in an open dialogue between Iraqi officials and international business partners and investors within and outside the financial services sector.
The event will be held from 7 to March 8, 2016 in Beirut, Lebanon.
It will address "the Conference" opportunities for professionals and foreign investors IN THE DEVELOPMENT OF THE BANKING SECTOR IN IRAQ, by creating a platform for all stakeholders to network with key decision makers, and exchange views and experiences and business deals.
Update: Abadi Economic Reforms
I knew this was coming in spite of the GOI denials that they would resort to this action.
MEMBERS OF THE HOUSE OF REPRESENTATIVES TO REDUCE THE SALARIES OF HALF ENTERS INTO FORCE
Baghdad-Iraq-Presse -20 January 2016:
Detection of the parliamentary finance committee member Masood Haider, Wednesday, from entering the reduction of the salaries of members of parliament in half into force, while noting that the council past administrative reforms.
Haider said in a press statement, "The reforms included by the House of Representatives within the financial budget for 2016, entered into force," noting that "reducing the salary of a member of the House of Representatives by 50% among the reforms, which fell from 12 million to six million Iraqi dinars" .
Haider said, "The reforms also included a reduction of the protections of the current MP and former half," pointing to "reduce the percentage of 30% of the salaries of the staff of the House of Representatives, based on the reform of the paper presented by the House of Representatives and the government."
He said a member of the parliamentary finance committee, that "the Council past reforms administrative system and activate the administrative institutions", and the voice of the House of Representatives, in the March 12, 2015 during its 41 to reduce the salaries of the three presidencies law.
And honest Iraqi Council of Ministers, the beginning of the same month, a draft of the three presidencies and special grades reduce the salaries of the law, and turned it into the House of Representatives for approval, and ranged reduction rates according to the draft law between 80% and 40%, which was reduced three presidents allocations and their deputies by 80%
Update: Fighting ISIS
Let me now attempt to tie in the fighting of ISIS with the RV to help you understand. I am doing this again because there is just so much garbage intel being passed around by those who know very little about what is truly going on in Iraq.
So one thing we so know for sure is in all the timing of events for Iraq and recent monetary agreements between the IMF and the CBI is that the security of Iraq must be obtained first prior to any RV. But we must ask ourselves - but security at what level?
Will they sacrifice the entire Iraqi economy for the sake of a lack of security in one region? But how far must they go to ensure that any increased value in the dinar does not fall into the hands of the enemy namely ISIS and DAASH? These are all educated questions we must ask ourselves. All very good questions. So let us discuss them now.
I heard in many of the dinarland forums that many believe that the drop in oil prices was intentional as to starve ISIS and DAASH from revenues that support their terrorism. This could be true but it is only conjecture since the price of oil is determined mostly on the demand in the global market for the product and willingness to pay a price. You may not know it but oil is sold in very large volumes, like billions of barrels at a time, and so it is almost completely disconnected to the demand at your station pump since you must buy the completed product like it or not (if you drive a vehicle and heat your home). So the price is determined based on speculation of the ability and need to buy more and the ability to bring it to market. So if the price is low oil refineries stockpile large quantities of crude for the future (when they speculate prices could rise). This drives the price lower since their demand to buy more in the market lessons. It is a cycle.
As we know most of the revenues from these organizations come from stolen oil and from pillaging. Since they do not have a country how can you shut off their global cash flow by playing the currency game as we have seen happen in Iraq, Syria and Iran as well as many other countries in the past. We know this is almost now standard procedure when the UN needs to stifle a countries ability to make war. So you then do the next best thing. Since you can’t stop the flow of the oil to the market one thing you can do is drastically lower the price of oil thus limit the terrorists cash flows. Makes total sense to me. So is the drop in oil prices intentional then?
Let’s look at some of the other issues to the intentional dropping of oil prices:
- unofficial economic penalties against Russia for interference in Ukraine and Syria.
- can’t go for too long since it is going to soon kill the shale oil production in the USA. The USA has a policy of oil independence by the year 2020 and shale oil is an integral part of the plan.
If this is true then we should soon see the price of oil rise as this terrorist groups are ridden from oil rich countries and their ability to bring oil to market is limited, or at least let me say the pressure to bring about this increase is now very high.
So for bringing about the RV for Iraq is a catch -22 situation. If they raise the price of oil it will set Iraq up for a period when the RV could more easily but may also decrease the security situation in Iraq by spreading more terrorism. If you keep oil prices low or lower then you increase the security situation but you lesson the ability to roll out the increased value of the dinar thus the RV.
So in this second scenario Iraq along with the IMF must find alternative means to assist Iraq and move forward with their currency in spite of lower oil prices. We now know the plan and how they intend to do this. We have read the mandates in the SMP and we know the pressure to get the existing laws passed in parliament to facilitate some of these needed actions/reforms. We also now know a timeline, as sketchy as it may seem, it is still better than this misinformation, garbage intel of everyday / any day / every weekend crap we are hearing from particular forums and conference calls. We know also that these efforts will coincide with the efforts to rid Iraq of ISIS from Mosul region or establish a security situation that is BEST for Iraq going forward with the RV.
The answer is that oil is an important product of the area of Mosul. The Islamic State is alleged to be making significant sums of money selling oil and automotive petrol to the inhabitants of Mosul as well as exporting oil products. The battle for Mosul is not going to be cake walk since the USA does not want to make it their battle. It must be planned very carefully with all coalition forces. The KRG Barzani predicted it would take up to 6 months to clear Mosul and he may be correct if the right strategy, the amount of weapons, air and ground support is not provided. But I do not think this will be the case. We know the USA forces in Iraq now have a new commanding general as of last week and so let’s see what he brings to the table before we make any judgment calls on the timing of this effort. We don’t like assumptions, rumors or hype, instead just FACTS.
One more item today:
Let’s not forget to keep praying for the success of THESE IRAQI AND COALITION SOLDIERS. I believe their success is in part some of the acceleration of the process we are now witnessing.
Remember too to pray to the princess of peace – Our Blessed Virgin Mary. She has the ear of Christ and she can intercede in heaven and bring us the peace we all desire here on earth. We can not do it alone. I believe that if we all make this our daily prayer you will see change. It is already working even in the short time since I have been publishing this prayer section. It does not matter what religion you believe, if you pray then to your oven beliefs entity it is still the same powers and good for all of mankind. Ultimately it is all the same God anyhow.
“Lord, protect Abadi and all who stand with him in righteousness, the Iraq and Coalition Soldiers who are fighting the good fight against terrorism, that they would be shielded from the enemy and would be Victorious against them! We ask that the Victory comes swiftly and healing of the Iraqi peoples and all whom have been effected by these evil doers can begin!
We pray for the process of the currency reform, the full implementation of the Iraqi economy to full international status and the bringing of prosperity and wealth to its people“ Amen!
Till next time…. Auf Wiedersehen!
Peace and Luv To Ya All,