Don 961: IMO ..... this was on the verge of being completed by DRS years ago .... until Maliki and the Iranian influence messed it all up .... can you imagine all that could have been accomplished for the whole country of Iraq and it's citizens ... and the world for that matter ... in all those wasted and destructive years ....It is a shame .... and a crime .....
Walkingstick: Agreed.... It is, a crime. The monetary/ currency reform, should have.... taken place, as early... as, 2010.... But, as much as we lay fault on M... one, can do so... with, our very own government... willingly, and knowing.... seating, a dictator.... who, was in fact... under investigation by the US/ EU and the UN for crimes against humanity (the disappearance of hundreds of Sunnis) at that time.....
Frank26 video 6-10-16 https://youtu.be/Ukrp88Tvm1A
ReddStarr: First steps....IMO
Iran bank joins euro payment system!
Iranâs Persia International Bank - which is based in London â says it has joined the euro payment system.
Iran says one of its London-based banks has joined the euro payment system â what could be another breakthrough for the country to remove technical hurdles created as a result of multiple years of sanctions.
IRNA has quoted -Reza Meskarian, the managing director of Persia International Bank as saying that his bank has joined euro payment system known as Target-II after undergoing âcomplicated banking proceduresâ. This, Meskarian added, was carried out through the German central bank - Deutsche Bundesbank.
âPersia International Bank belongs to Bank Mellat and Bank Tejarat and it is based in the UK as the first Iranian bank stationed in London with Iranian owners; it managed to join euro payment system known as Target-II after undergoing complicated legal procedures,â he said.
Meskarian further explained that in the international payment cycle (euro zone), the central banks of the euro zone countries are members of Target-II network.
âOther European trade banks do the clearing procedure by connecting to one of Europe's central banks; it is quite evident that Deutsche Bundesbank is the most powerful and most important central bank of the euro zone in the European Union,â IRNA has quoted him as saying.
Reports previously said that despite the January removal of economic sanctions against Iran, global enterprises are still complaining that trade with the country is still difficult as a result of lingering fears of US punitive actions.
Reuters in an exclusive report in March quoted business leaders as saying that a key obstacle which is specifically affecting business with Iran is the unwillingness of international banks to process transactions with the country.
Thor: IMO this is a good read. It describes many things regarding the US Treasury and SA. This also supports what, (I think) backdoc and poppaj said a couple of days ago. With SA threating to sell treasuries and other retaliations... and this deal should be over with..., and OPEC is dead... - there is no reason for SA to peg to the dollar anymore.
The Untold Story Behind Saudi Arabiaâs 41-Year U.S. Debt Secret
Dirck Halstead/Liaison via AP Photo President Nixon walks with Saudi King Faisal in Saudi Arabia in June 1974.
Failure was not an option.
It was July 1974. A steady predawn drizzle had given way to overcast skies when William Simon, newly appointed U.S. Treasury secretary, and his deputy, Gerry Parsky, stepped onto an 8 a.m. flight from Andrews Air Force Base. On board, the mood was tense. That year, the oil crisis had hit home. An embargo by OPECâs Arab nationsâpayback for U.S. military aid to the Israelis during the Yom Kippur Warâquadrupled oil prices. Inflation soared, the stock market crashed, and the U.S. economy was in a tailspin.
Officially, Simonâs two-week trip was billed as a tour of economic diplomacy across Europe and the Middle East, full of the customary meet-and-greets and evening banquets. But the real mission, kept in strict confidence within President Richard Nixonâs inner circle, would take place during a four-day layover in the coastal city of Jeddah, Saudi Arabia.
The goal: neutralize crude oil as an economic weapon and find a way to persuade a hostile kingdom to finance Americaâs widening deficit with its newfound petrodollar wealth. And according to Parsky, Nixon made clear there was simply no coming back empty-handed. Failure would not only jeopardize Americaâs financial health but could also give the Soviet Union an opening to make further inroads into the Arab world.
It âwasnât a question of whether it could be done or it couldnât be done,â said Parsky, 73, one of the few officials with Simon during the Saudi talks.
Â© Source: AP Photo Treasury Secretary William Simon, left, sits with Nancy Kissinger and Secretary of State Henry Kissinger as they listen to former President Nixon talk to his staff prior to leaving the White House for the last time, August 9, 1974.
At first blush, Simon, who had just done a stint as Nixonâs energy czar, seemed ill-suited for such delicate diplomacy. Before being tapped by Nixon, the chain-smoking New Jersey native ran the vaunted Treasuries desk at Salomon Brothers. To career bureaucrats, the brash Wall Street bond traderâwho once compared himself to Genghis Khanâhad a temper and an outsize ego that was painfully out of step in Washington. Just a week before setting foot in Saudi Arabia, Simon publicly lambasted the Shah of Iran, a close regional ally at the time, calling him a ânut.â
But Simon, better than anyone else, understood the appeal of U.S. government debt and how to sell the Saudis on the idea that America was the safest place to park their petrodollars. With that knowledge, the administration hatched an unprecedented do-or-die plan that would come to influence just about every aspect of U.S.-Saudi relations over the next four decades (Simon died in 2000 at the age of 72).
The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance Americaâs spending.
It took several discreet follow-up meetings to iron out all the details, Parsky said. But at the end of months of negotiations, there remained one small, yet crucial, catch: King Faisal bin Abdulaziz Al Saud demanded the countryâs Treasury purchases stay âstrictly secret,â according to a diplomatic cable obtained by Bloomberg from the National Archives database.
With a handful of Treasury and Federal Reserve officials, the secret was kept for more than four decadesâuntil now. In response to a Freedom-of-Information-Act request submitted by Bloomberg News, the Treasury broke out Saudi Arabiaâs holdings for the first time this month after âconcluding that it was consistent with transparency and the law to disclose the data,â according to spokeswoman Whitney Smith. The $117 billion trove makes the kingdom one of Americaâs largest foreign creditors.
Yet in many ways, the information has raised more questions than it has answered. A former Treasury official, who specialized in central bank reserves and asked not to be identified, says the official figure vastly understates Saudi Arabiaâs investments in U.S. government debt, which may be double or more.
The current tally represents just 20 percent of its $587 billion of foreign reserves, well below the two-thirds that central banks typically keep in dollar assets. Some analysts speculate the kingdom may be masking its U.S. debt holdings by accumulating Treasuries through offshore financial centers, which show up in the data of other countries.
Exactly how much of Americaâs debt Saudi Arabia actually owns is something that matters more now than ever before.
While oilâs collapse has deepened concern that Saudi Arabia will need to liquidate its Treasuries to raise cash, a more troubling worry has also emerged: the specter of the kingdom using its outsize position in the worldâs most important debt market as a political weapon, much as it did with oil in the 1970s.
In April, Saudi Arabia warned it would start selling as much as $750 billion in Treasuries and other assets if Congress passes a bill allowing the kingdom to be held liable in U.S. courts for the Sept. 11 terrorist attacks, according to the New York Times.
The threat comes amid a renewed push by presidential candidates and legislators from both the Democratic and Republican parties to declassify a 28-page section of a 2004 U.S. government report that is believed to detail possible Saudi connections to the attacks. The bill, which passed the Senate on May 17, is now in the House of Representatives.
Saudi Arabiaâs Finance Ministry declined to comment on the potential selling of Treasuries in response. The Saudi Arabian Monetary Agency didnât immediately answer requests for details on the total size of its U.S. government debt holdings.
âLetâs not assume theyâre bluffingâ about threatening to retaliate, said Marc Chandler, the global head of currency strategy at Brown Brothers Harriman. âThe Saudis are under a lot of pressure. Iâd say that we donât do ourselves justice if we underestimate our liabilitiesâ to big holders.
Saudi Arabia, which has long provided free health care, gasoline subsidies, and routine pay raises to its citizens with its petroleum wealth, already faces a brutal fiscal crisis.
In the past year alone, the monetary authority has burned through $111 billion of reserves to plug its biggest budget deficit in a quarter-century, pay for costly wars to defeat the Islamic State, and wage proxy campaigns against Iran. Though oil has stabilized at about $50 a barrel (from less than $30 earlier this year), itâs still far below the heady years of $100-a-barrel crude.
Saudi Arabiaâs situation has become so acute the kingdom is now selling a piece of its crown jewelâstate oil company Saudi Aramco.
Whatâs more, the commitment to the decades-old policy of âinterdependenceâ between the U.S. and Saudi Arabia, which arose from Simonâs debt deal and ultimately bound together two nations that share few common values, is showing signs of fraying. America has taken tentative steps toward a rapprochement with Iran, highlighted by President Barack Obamaâs landmark nuclear deal last year. The U.S. shale boom has also made America far less reliant on Saudi oil.
âBuying bonds and all that was a strategy to recycle petrodollars back into the U.S.,â said David Ottaway, a Middle East fellow at the Woodrow Wilson International Center in Washington. But politically, âitâs always been an ambiguous, constrained relationship.â
Yet back in 1974, forging that relationship (and the secrecy that it required) was a no-brainer, according to Parsky, who is now chairman of Aurora Capital Group, a private equity firm in Los Angeles. Many of Americaâs allies, including the U.K. and Japan, were also deeply dependent on Saudi oil and quietly vying to get the kingdom to reinvest money back into their own economies.
âEveryoneâin the U.S., France, Britain, Japanâwas trying to get their fingers in the Saudisâ pockets,â said Gordon S. Brown, an economic officer with the State Department at the U.S. embassy in Riyadh from 1976 to 1978.
For the Saudis, politics played a big role in their insistence that all Treasury investments remain anonymous.
Tensions still flared 10 months after the Yom Kippur War, and throughout the Arab world, there was plenty of animosity toward the U.S. for its support of Israel. According to diplomatic cables, King Faisalâs biggest fear was the perception Saudi oil money would, âdirectly or indirectly,â end up in the hands of its biggest enemy in the form of additional U.S. assistance.
Treasury officials solved the dilemma by letting the Saudis in through the back door. In the first of many special arrangements, the U.S. allowed Saudi Arabia to bypass the normal competitive bidding process for buying Treasuries by creating âadd-ons.â Those sales, which were excluded from the official auction totals, hid all traces of Saudi Arabiaâs presence in the U.S. government debt market.
âWhen I arrived at the embassy, I was told by people there that this is Treasuryâs business,â Brown said. âIt was all handled very privately.â
By 1977, Saudi Arabia had accumulated about 20 percent of all Treasuries held abroad, according to The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets by Columbia Universityâs David Spiro.
Another exception was carved out for Saudi Arabia when the Treasury started releasing monthly country-by-country breakdowns of U.S. debt ownership. Instead of disclosing Saudi Arabiaâs holdings, the Treasury grouped them with 14 other nations, such as Kuwait, the United Arab Emirates and Nigeria, under the generic heading âoil exportersââa practice that continued for 41 years.
The system came with its share of headaches. After the Treasuryâs add-on facility was opened to other central banks, erratic and unpublicized foreign demand threatened to push the U.S. over its debt limit on several occasions. An internal memo, dated October 1976, detailed how the U.S. inadvertently raised far more than the $800 million it intended to borrow at auction. At the time, two unidentified central banks used add-ons to buy an additional $400 million of Treasuries each. In the end, one bank was awarded its portion a day late to keep the U.S. from exceeding the limit.
Most of these maneuvers and hiccups were swept under the rug, and top Treasury officials went to great lengths to preserve the status quo and protect their Middle East allies as scrutiny of Americaâs biggest creditors increased. Over the years, the Treasury repeatedly turned to the International Investment and Trade in Services Survey Act of 1976âwhich shields individuals in countries where Treasuries are narrowly heldâas its first line of defense.
The strategy continued even after the Government Accountability Office, in a 1979 investigation, found âno statistical or legal basisâ for the blackout. The GAO didnât have power to force the Treasury to turn over the data, but it concluded the U.S. âmade special commitments of financial confidentiality to Saudi Arabiaâ and possibly other OPEC nations. Simon, who had by then returned to Wall Street, acknowledged in congressional testimony that âregional reporting was the only way in which Saudi Arabia would agreeâ to invest using the add-on system.
âIt was clear the Treasury people werenât going to cooperate at all,â said Stephen McSpadden, a former counsel to the congressional subcommittee that pressed for the GAO inquiries. âIâd been at the subcommittee for 17 years, and Iâd never seen anything like that.â
Today, Parsky says the secret arrangement with the Saudis should have been dismantled years ago and was surprised the Treasury kept it in place for so long. But even so, he has no regrets.
Doing the deal âwas a positive for America.â
âWith assistance from Sangwon Yoon