Doc: Many sites are speculating that all is done. Unfortunately these continue to overlook the obvious. We continue with our position Maliki does not want currency reform at least not quite yet. We are reminded his goal appears to be to control every aspect of Iraq to the point of dictatorship.
Our opinion is he will release the RV when he feels he has full control. Right now he does not. He does not control the "wealth" of Iraq in that the HCL is not done.
He does not quite have full control of the entire GOI in that he continues to release bogus warrants for those that oppose him.
We are also reminded that to control the masses he has to keep them in fear and/or dependent on him. This has been confirmed by various sources such as the Secretary-General of the UN, Allawi and others.
As the political wrangling works it way out then currency reform can happen. A free market currency needs a stable political environment and assets to support its value.
Doc: Moon is in Iraq as has been reported. Our guess is he will convey what was in the Secretary-General's report. The report basically said Iraq had not made much progress on the political front.
Read More Link On Right
DOC CONTINUES: It went on to say while some progress had been made with Kuwait there were still outstanding items. Is Iraq making progress - absolutely. Has everything been completed - absolutely not.
We are hopefully the outside political pressure will prevail and Maliki and company will comply so we can see the RV in first quarter 2013. As an aside we monitor Forex exchanges and major banks around the globe and neither the IQD or VND have showed any appreciable change in recent days. We report, you decide
Goldiegirl: They don't have to be out of chapter VII to revalue. They have been revaluing their curency since 2003. Just ask some of the vetrans who bought it at 4000:1 USD. A big difference what we have been buying in the last 3 or 4 years. What is it today, 1166:1 USD?
Chapter VII is only part of the process. The UN will remove them from Chapter VII so they can do business with the rest of the world. Their currency could stay at the same rate. That does not give them a tradeable currency.
What people seem to be ignoring or "not" looking for is signs and news from the IMF. The IMF controls whether they are eligible for a tradeable currency or not. They are currently in Article XIV and when the IMF conducts their reviews and if it meets their criteria Iraq will be moved to Article VIII.
This will allow them to have an international tradeable currency which would make sense to RV at that time and not before.
Now having said that, they do need to be out of chapter VII for the IMF to be satisfied with their obligations to the agreements set by the IMF.
We need to watch what the IMF is doing in regards to Iraq's situation as much as we watch the UN. Two very different bodies with two different responsibilities and powers. Don't confuse them.
The bottom line is that the IMF is concerned with the global financial system ,and the behavior of exchange rates & exchange rate regimes. Whereas the UN is concerned with global security and how to maintain peace and prevent the outbreak of war regionally and worldwide. As such, the UN is concerned with the behavior of governments & ruling regimes.
Chapter VII of the United Nation’s Charter explains the enforcement powers, specifically the Security Council’s power to authorize economic, diplomatic, and military sanctions, as well as the use of military force, to resolve disputes.
While the UN can impose economic sanctions on a country and its currency, the UN is not specifically concerned with global financial systems or the stability of exchange rates.
That’s the IMF’s job – overseeing the global financial system, which includes the stability of international exchange rates.