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UU4400 – “ RV News This Week So Far 4/13” by Mnt Goat Part 1
If you haven’t done so already I suggest you read my last news letter dated 4/10. It will help you understand this news today since it is a continuing saga in the revaluation story of the Iraq dinar.
The events taking place may be complicated to understand since they are multi-layered and all interconnected. I will try to break them down into simple terms so we can all understand.
Remember that all the news in the region is all about getting to a place of peace and security and this is the main issue now facing Iraq. With (relative) peace and (relative) security will come prosperity. When they prosper we get paid…..lol….
Today is Monday April 13th and yes there is still no Iraq currency RV.
Surprise! Surprise! Surprise! Are you surprised once again another weekend has passed and still no RV?
But wait……now we are now being told by some intel gurus there is a plan to exchange us all out early, even prior to the currency exchanges having live rates.
All I can say is it great entertainment….lol…Meinen Hubby and I roll on the floor laughing over this stuff…..lol….
Honestly if I thought it was going to RV any time soon (within the next days or weeks) I would honestly say so but this is just not going to be the case since there is absolutely no sound evidence of this being the case.
So relax and enjoy the Springtime! We still may have a some time to go prior to completing the revaluation process.
I have been attempting to explain to all of you why this is the case and what the delay is. Have you been listening? I am not just telling you that there is going to be no RV in the near future but rather I am explaining to you why this is the case and what evidence there is to support the NO RV viewpoint more so than having an RV.
Again what is the near future? I do not think June is that far away. Also consider that there could be more quickly won battles with ISIS and thus the rollout plan could be expedited.
But I can only tell you what I now know to be true and I will not fabricate lies to keep you on pins and needles each and every weekend waiting for the RV on Monday.
Oh but many of you are in the clouds and desire the RV so badly that you will believe more anyone giving you this rush of “hopium” each week. You are like junkies! They have clouded your better judgment and you minds are not clear to see the truth of the matter.
So to you I say - GOOD LUCK with that!
Okay - so back to reality. What do we know as verifiable facts and not rumors.
[Solution to the Liquidity Problem]
As I stated in my last news letter we were told that Iraq had a solution to their liquidity problem and that the solution was going to take effect prior to the end of this month (April).
Remember what I told you about liquidity. Lack of liquidity does not mean you are broke or bankrupt. It simply means you do not have readily available cash to pay debtors.
Kind of like you owning 3 homes but don’t have enough cash in your checking account to pay the electric bills. So what do you do? Well you go out and find some more cash……right?
You do this by either bringing in more revenues or you can sell some of your existing assets.
In the case of Iraq the liquidity problem was at the local banks not the CBI so let me make this point very clear. Iraq is very wealthy and rolling is dough…lol….:)
So here is the heart of the liquidity issue - Since they had been exchanging the 3 zero notes for USD, as part of the project to delete the zeroes, the banks no longer has readily available cash (dinars) to meet their new banking laws liquidity standards.
They had been exchanging dinars (lower denoms) for USD. The dinars however are the lower denoms and not worth much unless there is a significant increase in the value of the dinar.
So what does the average citizens do with them? I have to tell you that in the rollout plan of the lower denoms they were supposed to pull the trigger on the revaluation as soon as a certain percentage of provinces had the lower dinars and then followup quickly with the rest after the announcement. The lower denoms were supposed to have increased value over the USD by now.
So now much of the currency was tied up in the form of USD in the bank vaults. A new banking law stipulated they were only to conduct banking transactions in dinars and could no longer use USD (or other foreign currencies) for this purpose.
So they had plenty of cash (in USD) but in actuality could not lend it out or use it for the general public or even pay contractors. How can the banks even make any money to stay in business? How can they get around this liquidity issue?
To get around this liquidity issue, the banks must now turn in their 3 zero notes to the Central Bank of Iraq (CBI) and in return get issued more of the new lower denominations (paper and coins) going forward.
This is the new money to be used going forward for loans and everyday use. Remember the CBI just does not hand out FREE money !
But many of the banks could not do this since the CBI refused to exchange and thus transfer these new currencies to the banks while they were still under ISIS occupation. Do you see the problem?
This tells us once again this RV IS A SECURITY issue since they even halted the RV process due to it. Why can't some see this?
This ISIS is like a clogged drain. It caused the liquidity problem! ISIS is stopping the flow of the undergoing revaluation process. Was it coincidental is that all of sudden Iraq announces a liquidity problem after ISIS began taking control of the major cities of Anbar, Turik and Mosul? Go figure !
So since the project to delete the zeros (which includes the switchover to the lower denoms was put on hold) the banks reverted back to using the USD in disregard to the new banking law.
There was no alternative. The justification was that the CBI caused this violation of the law. So we see pressure then on the CBI to fix this issue. How do they fix it? I just told you above how they can fix it.
The CBI needs to continue the project to delete the zeros and issue the banks the needed lower denominations and soak up the USD. The CBI does not want a large influx of USD in circulation again in Iraq. They are at a critical junction. An opportune time to RV. Like a ripe peach, it must be picked or it spoils.
So they do this by getting rid of ISIS and thus allowing the CBI to continue their exchanges with the banks of USD for the new lower denominations (the new currency to replace the provisional currency).
Oh … but wait the CBI desperately needs this USD now tied up at the local banks too to allocate to the general budget to pay the bills (ongoing govt services and programs) and fund the needed projects. Time is of the essence.
Also let us not forget the process of how these funds get paid out to the contractors. The funds are transferred to the local banks to pay since the contractors do not go to the CBI to cash their checks or get electronic transfer of funds. It does not work that way. They must go to the local banks.
It is the local banks that interact with the consumer. These funds must be in dinars. Do you see the cycle re-accurring here with this cash flow issue?
Do you see why they would say they have a liquidity problem? Do you also now see the solution(s)?
Then to our surprise the other day out pops a major 2014 budget revision as it gets raced through parliament, gets ratified and posted in the Gazette in record time. It tells us the gauge for funding the 2014 budget has been raised to $56 a barrel. What was this all about?
As a side note - It also now includes sections related to HCL that were left out of the first draft budget completed and posted in the Gazette. This was expected since we know they have been paying out already on HCL. This also confirms to use once again HCL is done.
My impression is they are actually a bit behind on getting out this legislation. We have seen multiple payments already on HCL funding to the provinces. Come early May we will see yet another payment.
Like clock work articles will tell us the amount. We should all watch for it. How much more of a confirmation do we need that HCL is done? Have I made believers out of you disbelievers yet?
Comments may be made at the end of Part 2 Thank You