US TREASURY TAKES CONTROL OF IRAQ’S CENTRAL BANK TO COMBAT MONEY LAUNDERING
Three informed sources close to the political and parliamentary decision-making process in Baghdad revealed extremely dangerous information confirming that the US Treasury Department has taken a permanent headquarters in the Central Bank of Iraq building. They considered that this step came as a result of the great pressures on the Iraqi banking system with the aim of limiting money laundering and dollar smuggling, as the governor of the Central Bank was forced to allocate an entire floor for US Treasury departments to monitor money transfers and prevent any illegal activities.
The three sources confirmed that a team of American employees is working permanently at the Central Bank of Iraq, as part of intensive efforts to ensure Iraq’s commitment to international standards for combating money laundering and terrorist financing.
(My CBI source confirmed to me on Saturday that a team of American employees from the US Treasury are working permanently at the Central Bank of Iraq and will be there for a long time to come. The question is how does this effect the timing of the RV? I will explain below in the RV Status.)
PARLIAMENT RETURNS THE OIL AND GAS LAW TO THE GOVERNMENT: IT MUST ADD PARAGRAPHS THAT KEEP PACE WITH GLOBAL DEVELOPMENTS
The Parliamentary Oil and Gas Committee has returned the draft oil and gas law to the government and is awaiting its return to the House of Representatives, after amending paragraphs in it and reaching political consensus on it.
Committee member, Dhurgham Al-Maliki, said in a press statement that “the oil and gas law is currently outside the halls of the House of Representatives after it was returned to the government,” noting that “the committee is studying the law in detail to achieve the political agreement.”
He explained that “the government must work on amending and adding new paragraphs to the law that keep pace with the tremendous development in the global oil field and then send it to the House of Representatives,” explaining that “political differences still exist and that is why it was not voted on.”
(WOW! This is excellent news. This article shows us the Oil and Gas Law is actually farther ahead than the news has been telling us. It actually did reach parliament and the readings were conducted so far. Will they vote on it and pass it once these changes are made and it returns to parliament? Can they get a political consensus finally after 19 years of stalling?)
More news….
BANKS OF “POWERFUL POLITICIANS” AFFECT EXCHANGE RATES, IRAQ FACES “INTERNATIONAL PRESSURE”
(Mnt Goat: If you care to remember I told you that one of the factors in moving ahead with success of the currency reform as part of the banking reforms, was that the CBI and the GOI must work together and promised to work together. But this article is telling us three reasons why this is not now happening. This situation MUST change. The US Treasury in now parked in the CBI building and is not going anywhere until the dollar sales is controlled and the parallel rate matches (or is very close to) the dinar rate. I certainly hope they can fight this corruption. We should expect blow-back from the corrupt as they have had it way too good in stealing money all these years. Remember where the money is going and so expect the Iranian backed militias to act up and get crazy in the process. Yes, they will be bombings in retaliation. This is why these militia must be dealt with too. Iran cannot forcefully set policy for Iraq under gun point. But they are now and have been! This must change.)
Professor of International Economics, Nawar Al-Saadi, revealed today, Monday (August 5, 2024), that there are political motives behind the Central Bank’s ignoring of some decisions of Prime Minister Mohammed Shia Al-Sudani.
He explained that “the Central Bank of Iraq faces a set of obstacles that directly affect its ability to implement the Prime Minister’s directives.
1.The first is the great international pressure coming from the US Federal Reserve, which imposes sanctions on some Iraqi banks and places strict restrictions on the movement of the dollar. These pressures make it difficult for the Central Bank to take effective steps to manage the exchange rate independently.
2.The second is that the bank suffers from internal structural problems such as corruption and mismanagement, especially with regard to selling the dollar. These challenges make it difficult for the government to achieve its economic goals regarding the stability of the exchange rate, and increase the complexity of the Iraqi economic scene in general.”
Al-Saadi stressed that “these problems make it difficult to implement monetary policies effectively, as financial resources are used for illegal purposes or are wasted due to corruption.
3.Third, the influence of some banks owned by parties with great political and security influence plays a role in complicating matters, and these banks may be resistant to the changes imposed by the Central Bank, which limits the bank’s ability to impose the measures required to achieve financial and monetary stability.”
The professor of international economics continued, “There are political motives behind the Central Bank’s disregard for some of Al-Sudani’s decisions, and given the overlap between politics and economics in Iraq, this situation has become a syndrome in the Iraqi regime from after 2003 until now, as there is an influence from political interests that play a role in determining economic policies.”
(So now you hear once again why the US Treasury has set up shop inside the CBI and thus also these same reasons are why the currency reform is held up, at least for now. But remember this move by the US Treasury was to that they could move to the next step of the currency reform. So it is a very positive thing for us investors. Get it?
RV update
Oh…. folks there is so much news pouring out of Iraq, most of it is all about the banking reforms and the necessity to clean up these 24 banks imposed with US Treasury dollar sanctions and for them to follow international banking practices. Where should I begin today?
First, we all need to establish a rightful “mind set” on what is actually occurring between the CBI, the Feds and the US Treasury. If you read the headlines today you might begin to panic. Oh…. you might say things are looking really bad for Iraq.
But I assure you that this is all actually VERY GOOD news for us investors. Try to remember this recent move by the US Treasury didn’t come without warnings. They have been warning the CBI for years to clean up this corruption mess with their banks and follow international banking laws.
Also keep in mind that this recent move by the US Treasury was made for the benefit of the currency reform process so that they could move to the next step of the currency reform once these issues are fixed. You do want this don’t you? You do want to go to the bank someday and exchange your dinar at a comfortable rate?
So, you can look at the glass as half full or half empty. Which is it for you? it is your choice and you can be a negative nanny or a smart investor. Either way the situation does not change until these banking reforms are instituted. Get it? Better now than waiting yet another frustrating year, just to get to this point.
We should actually all be VERY HAPPY that the US Treasury has now finally stepping in with more forceful measures. If anything could be negative about it, it is the fact that we ask why didn’t they make this move earlier, like last year or years before. They knew about the problem as we read many past articles on it. What made they react now is the fact that the Strategic Plan for banking reform and the currency reform could not move ahead on schedule in mid- June with the plan for the Project to Delete the Zeros. The level of corruption was only discovered with the extensive audits that were conducted as forced upon the banks by the US Treasury. In recent articles we learned about the financial group Ernest and Young who were contracted for this purpose.
Here are the headlines of some of the many recent past articles. Folks these are all about banking reforms. They are just not happening as quick to meet the Strategic Plans to move ahead at the pace needed. We all know Iraq is slow.
So, what happened. The Feds finally put their foot down and took aggressive actions and sent in the US Treasury to FORCE these reforms now, not months or years from now.
“AMERICA TO CONFINE IRAQI BANKS TO PREVENT CURRENCY SMUGGLING TO IRAN”
“ALIA NASSIF: THE CENTRAL BANK “EXECUTED” IRAQI BANKS WITH NEW PROCEDURES”
“US PRESSURES PUSH THE CENTRAL BANK OF IRAQ TO CLOSE AND MERGE TROUBLED BANKS”
“CORRUPTION AND FAVORITISM WEAKEN THE IRAQI STOCK EXCHANGE: NEGLECTED LAWS AND A BITTER REALITY”
“IRAQI PARLIAMENTARY INTEGRITY COMMITTEE ACCUSES CBI OF LACK OF TRANSPARENCY IN DOLLAR AUCTION”
Folks, what more can I say. I can almost end this Newsletter commentary right here. But I won’t because many of you STILL DON’T GET IT! You won’t get the point of today’s Newsletter.
You have been so brainwashed by all these intel gurus that even when you see PROOF of the holdup of the RV you close your mind to it and still believe this intel from these idiotic, self-proclaimed intel gurus idiots out there. You want the rollercoaster and enjoy the ride. But let’s go on and maybe I can knock some sense into many of you follows of these other brain dead idiots.
Yes, there is great pressure from the prime minister Al-Sudani to work with the CBI in getting the Project to Delete the Zeros underway and to meet the currency reform goals, which we know is ultimately the reinstatement. But there is also political resistance to it too and pressure not to do it. This is a goal of Al-Sudani’s administration, and he will be judged on meeting this goal come election time. I do not believe that any of this pressure from political levels will stop Al-Sudani as he already announced the coming change in the currency to the people. Get it? Even the team at the CBI was already engaged to help roll out the Project to Delete the Zeros as it too already broadcasted one of their educational videos on how the exchange would work. Did you watch the video?
In light of what I just told you I do not believe this delay will be a long delay. Yes, it may take till January 2025 as who can predict. They will have to re-educate the banks on the proper international procedures, then audit them for a time to ensure they are in compliance. In fact, we read in an article today that the Central Bank has contracted with an international company (K2) for the purpose of auditing banks that have restricted access to the dollar in previous periods, so that these banks can learn how to comply with international requirements. So, the process is already underway. You can read the full article in the articles section.
According to my CBI contact, Iraq will have to get the currency auction amount down to the level to support the economy as their gauge of success. They will have to keep this level for a period, which my contact is researching now for me. I hope to get this information in my next call to Iraq.
The US Treasury group in the CBI will be there long after the RV for a period of time. The “system” must be set up in a way to control these people and force them to abide by the rules. This is all this recent matter is about. Audits are controls to find those who break the rules.
Next, we must also consider that the democracy of Iraq is at stake too. Since Al-Sudani and his political party’s goals of accomplishing these reforms are at stake in fighting this corruption. Are the going to let the corrupt win and destroy Iraq? This 20 year democracy of this new Republic of Iraq is still young. Can they overcome the corrupt politicians and institute the will of the people? Seems it always comes down to this…doesn’t it?
Now, let’s take a step back to 2023. What was the main goal in 2023?
Of course, we all should remember. It was the DE-DOLLARIZATION of Iraq. Why de-dollarize? Again, I will review that this is part of the first step in the Project to Delete the Zeros. They must get the dollars out of circulation and go back to using the dinar, almost exclusively. They must flush out the stashes of currency both dinar and dollars and get it into the banks for liquidity of the banks. The gauge as to whether this effort is successful or not is the parallel market rate.
Remember also that today the dollars from the currency auction do not actually flow in the physical hands of most merchants anymore to pay their bills. The dollars now flow electronically to only approved sources for goods and to their banks of origin. The other means for obtaining dollars in Iraq is for travel. This too is now isolated to the airports where the goal is to issue the physical dollars then to watch them board the plane. This way the transfer of the dollars illegally for use on the black market can be tracked, controlled and limited. This is what was discovered in the audit process of the banks. There were still ways to slip the money through and the CBI was allowing these measures rather than cranking down on them. The excuse was given that there were ample reserves in the CBI to cover such losses. I find it hard to believe that these kinds of statements would even be openly made. But they were and you read the past articles by Saleh.
Knowing what I just told you, do you actually think that the RV is going to happen tomorrow or should have happened over this past weekend or even happen next weekend? How foolish are you to believe such stupid rumors. Please, please get of the RV roller coaster and come to reality. Do I have to drill a hole in your head and pour in the TRUTH to make you believe it?
I am going to follow the actions of the Feds and the US Treasury in Iraq and see where this takes Iraq. I am hopeful they can clean up this mess sooner than later and move on with the currency reform. I am hopeful this will all happen way before the end of 2024.
