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  In Dinar Guru Updates, KTFA

Samson: Washington: Iraq’s leaders should act as a sovereign country and two options before them through strategic dialogue

5th June, 2020

US Assistant Secretary of State for Middle East Affairs David Schenker said that Iraq had two options during the upcoming strategic dialogue between Washington and Baghdad, indicating the need for Iraqi leaders to act as a sovereign country. “The strategic dialogue between the United States and Iraq aims to renew the relationship between Washington and Baghdad,” Schenker said in an online seminar with the Middle East Institute.

Schenker added that the dialogue aims to “renew and renew our relationship with Iraq, and our strategic dialogue will be renewed next week, and we hope to have a personal meeting sometime in the next July or August, when travel and meetings are allowed.”

And he added that “the strategic dialogue will chart the future of the relationship and the presence of the American forces in Iraq,” adding: “The strategic dialogue allows us to confront Iraqi leaders with a strict choice, if the Iraqis choose to act as a sovereign country, then bilateral relations will continue to bring great advantages to Iraq, and if they do not take this The choice is, we will not be able to maintain our commitment or our presence in Iraq.”

Schenker added that “the United States aims to build a partnership with Iraq not only in the security sector, but also politically and economically,” adding that “this partnership requires that Iraq exercise sovereignty, especially when it comes to external forces, and that Iran’s agents threaten the safety of US and Iraqi forces.” Alliance and diplomatic personnel.”  LINK

Samson:  Trump to Iran: Thank you and let’s conclude a grand deal before the elections

5th June, 2020

US President Donald Trump on Friday thanked the Iranian authorities for the release of former US Navy personnel Michael White, who have been in their custody for two years.

On his official Twitter account, Trump re-posted clips showing White upon his return home, saying: “It is great that Michael is in his home country. He arrived a while ago, which is very exciting.”

Trump addressed the Tehran government, saying: “Thank you, Iran. Do not wait for the American elections to conclude a grand deal. I will win it and will make a better deal now.”

White was detained with the Iranian authorities in July 2018 during a visit to meet a woman who had communicated with her over the Internet and had romantic relations with her, and was sentenced to ten years imprisonment for insulting Iran’s Supreme Leader Ali Khamenei and publishing classified information on the Internet.

White was released as part of an exchange deal that also included Iranian scholar and academic Cyrus Asgari, who recently returned to his homeland after the US authorities released him.  LINK

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Samson: “The mission was successfully completed” … Australia announces the return of its soldiers from Iraq

5th June, 2020

On Friday, the Australian Ministry of Defense announced the return of its soldiers from Iraq, usually “the mission completed

Defense Secretary Linda Reynolds said in her remarks that “the mission has been successfully completed, and the soldiers will return to their homes

Australia contributed to a military training mission in Iraq

Australian and New Zealand forces have been deployed since 2015 in the Taji camp, north of Baghdad, on a mission to train Iraqi forces

It is noteworthy that the Australian and New Zealand forces deployed since 2015 in the Taji camp, north of the capital, Baghdad, for the task of training the Iraqi security forces   LINK

Samson:  Morgan Stanley: Washington will not cancel the trade deal with China

5th June 2020

Morgan Stanley economist believes that the United States will not want to cancel the first stage of the trade deal with China, despite the escalation of tensions between the two countries in recent weeks

The chief economist of the American investment bank, “Chetan Ahia”, said on Friday: “At this stage from our economic point of view, as long as the first stage deal continues and there is no renewed escalation in terms of tariffs, the outlook for global growth will be sound

“Ahya” indicated that the administration of US President Donald Trump will focus on the economy at the present time and will not want to cancel the first stage deal, so the risk of renewed trade war between the United States and China and hitting the global economy is unlikely to occur

Donald Trump said last month that he was “very distracted” about ending the deal in January, raising concerns among investors and analysts that the world’s two largest economies would return to a tariff war that is hurting the global economy

Ahya also expected markets to see tensions in the short term due to the ongoing tensions between the United States and China   LINK

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Samson:  The Chinese central bank injects 21 billion dollars into the financial markets

5th June 2020

The Chinese central bank pumped $ 21 billion into the financial system through reverse repurchases; In an effort to maintain cash liquidity

The People’s Bank of China announced on its website on Friday that it had injected 150 billion yuan (approximately $ 21.1 billion) into the market through seven-day reverse repo operations, at an interest rate of 2.2 percent

The move aims to offset the effect of the entitlement to reverse purchases and repo, to keep the money supply in the financial markets at the targeted proportional limit

Reverse repo operations are a process by which the central bank buys securities from commercial banks and pledges to resell them again

Since the global virus outbreak that infected 6.7 million people globally, China has increased its political support in monetary and financial terms to help companies to overcome the effects of the epidemic on the economy  LINK

Don961:  The US Fed is an influential financial force in the year

– Two Days Ago Researcher Shatha Khalil *

The US Federal Reserve is one of the largest financial institutions in the world, and it determines the liquidity and credit policy in the United States in terms of strength and influence and the policy of controlling the economy that it follows through printing the first currency in the world.

The Federal Reserve was formally established in 1913, but it exists much before this date, and if we follow the beginnings of its emergence with the “emergence of banks” we find the Central Bank of the United States, and we can say that it is the most powerful financial institution in the world. It was established to provide the country with a safe, flexible and stable cash and financial system. It consists of 12 regional federal reserve banks headquartered in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco, each with responsibility for a specific geographic area in the United States and is the strongest monetary system And financially safe, flexible and stable in the world.

The Fed is independent because its decisions should not be endorsed by the president or any other government official. However, it remains subject to congressional oversight and must operate within the framework of the government’s economic and fiscal policy goals. Its duties can be categorized into four general areas:

• Implementing the national monetary policy by influencing the monetary and credit conditions in the American economy to ensure maximum employment, stable prices, and moderate long-term interest rates.
• Supervising and regulating banking institutions to ensure the safety of the US banking and financial system and to protect consumers ’credit rights.

• Maintaining the stability of the financial system and containing systemic risks.
Providing financial services, including a pivotal role in operating the national payment system, to depository institutions, the United States government, and foreign official institutions.

Federalism and Dealing with Crises:
In the 2008 financial crisis, the four largest central banks (America, Japan, the European Union and Britain) pumped nearly $ 13 trillion during 2008-2018, stimulating the global economy and helping it out of its crisis.

As for the time being, and with the crisis of the Covid 19 outbreak and its repercussions on the global economy, the US Federal Reserve was able to pump two trillion dollars in monetary instruments in March and April alone. The Fed is expected to purchase more than five trillion of US corporate debt until 2021, while the European Central Bank pumped $ 3.4 trillion until the end of April, while Japan and Britain pumped another 1.5 trillion. Interestingly, the US Federal Reserve did not purchase Debt for big companies only, but I buy medium and small debt.

Central banks have come to play a greater role in economic policy, and finance ministries are also able to bypass their traditional role in budget control and tend to intervene more contrary to traditional economic theories.

The central bank, which has resumed its gigantic bond purchase program a few days ago, said it will expand beyond at least $ 700 billion in treasury and $ 200 billion in mortgage-backed securities that it initially committed to buying. Instead, officials will buy the bonds “with the funds needed to support the smooth functioning of the market” – including the purchase of government-backed debt linked to commercial real estate.

The program, which was supported by the Federal Open Market Committee which formulated policies unanimously, is a reference to the fact that the crucial markets at the heart of the financial system have struggled for action. In developing such an unlimited package and in the creation of such expansionary emergency loan programs.

Where large and small companies suffered from economic pressure with the spread of the virus and the restriction and paralysis of shops, airplanes and hotels, and this needs a lot of financial support to continue working, whether in the form of loans or issuance of new debts in light of the instability of the economic environment and the exposure of hungry investors to the desire to obtain Corporate debt owed, as interest rates jumped, making the cost of raising funds by selling new bonds too expensive for companies.

The Fed’s plan to support the corporate bond market is through two new programs created using the Federal Reserve’s emergency lending powers. They should help the market operate while allowing companies to keep one of them, which is the corporate credit facilities in the primary market, which is open to investment-grade companies and will provide temporary funding for a period of four years, according to the Federal Reserve version. The Fed will create a special purpose vehicle that buys bonds and extends loans.

As the central bank worked to get rid of treasury debt and corporate bonds, and sought to issue high-risk bonds and loans to small companies, and its $ 500 billion plan specifically for lending to local governments and companies directly – under the main lending program of $ 600 billion – will come into effect by End of the current month.

The Fed program will make the Bank of England’s efforts seem almost moderate (£ 200bn earmarked for quantitative easing and the £ 330bn commercial paper scheme that is restricted to investment grade firms).

As for European countries, after its early and hesitant response, the European Central Bank also introduced a smaller program for asset purchases worth 750 billion euros, and expanded the scope of lending in exchange for additional high-risk guarantees.

As for the Federal Reserve, it was forced to move more quickly amid the bickering between the Republican and Democratic parties over support plans, but the decision to choose the governments or local companies that should receive the money is not within the jurisdiction of the central bank.

The Fed launched a series of comprehensive new programs designed to support large and small companies and keep markets functioning, while mortgage markets showed signs of collapse, and companies struggled to sell debt and pressure on the entire financial system.

The Federal Reserve pledged to buy as much of the government-supported debt as possible to support the housing market and treasury bonds, and announced that it would buy corporate bonds, including the most serious investment grade debt, and the Fed throws its full weight in the face of the economic consequences of the coronary virus, This poses a serious threat with the closure of factories, the loss of people jobs and the economy stopping work, while lawmakers in Congress continue to struggle to find a financial response, making the central bank the primary line of defense, and economists estimate that growth can contract by 24% in the second quarter, It is expected to reach 30%, which would be the worst drop in a quarter in recent US economic statistics.

Finally, the truth … The Federal Reserve pledged to buy as much government-supported debt as possible to support the housing market and treasury bonds, and that it would purchase corporate bonds, including the most serious investment grade debt, for the first time in its history. Support will be provided to small companies in the coming period, and that the dollar, despite its decline in recent years, still represents two-thirds of global reserves, which enables the United States to borrow with minimal losses.

Economic Studies Unit

Links Center for Research and Strategic Studies   LINK