No RV yet. I am told by my CBI contact on Wednesday that they are still waiting for the new US administration to determine their policy towards Iraq and if they are going to support the effort of the reinstatement of the Iraqi Dinar back to Forex. Of course they will support it, but under what terms. Are we going to have to wait longer, like with the Obama and Biden administrations?
It was also explained to me that there is still the CBI targeting early 2025 but I could not get a more definitive timeframe. Early could be January all the way until they open the 2025 budget in March. So, we will wait and see what happens. I believe it almost has to occur in January if you follow the news. No, the RV rate is not in any of the budgets, as the finance committee themselves told us in an article that the rate is “flexible”. In a more recent article from Tuesday we read that the budget could be cut substantially if there was a major revaluation as the Iraqi Dinar would go further in more purchasing power.
In the meantime, we are still seeing lots of news from Iraq on educating the citizens in many areas. One biggie is the census. There were multiple articles telling us this was a “comprehensive” census which we were told including all of Iraq and Kurdistan for the first time. This level of census has NEVER been conducted since the 2003 invasion. Lots has changed since. This census is also part of the Article 140 and the process of determining the shares of the excess oil revenue streams to be divided up to the citizens as part of the Hydrogen Carbon Law (HCL) this is also better know as the Oil and Gas Law. Yes, the GOI does plan to administer oil profit shares to the citizens much like they do in the Saudi and Kuwait. However, if you are smart enough you can see that they first must rebuild their economy and infrastructure. Today there is not much remaining of oil revenues after they pay all their bills. The surplus will come once they diversify their economy and these other sources of revenue come pouring in, as we are seeing now to begin. The CBI reserves must be preserved for stability and downturns. It is not planned to ever use these funds for this purpose of oil shares. I would not gamble on this HCL triggering the RV, as many of these gurus seem to think will happen when they finally pass the Oil and Gas Law. They also strongly believe the new RV rate is still in the budget. So they tell their listeners, once again, that the new budget will bring the RV. When will they learn?
There is an article titled “THE FUTURE OF INTERNATIONAL TRADE TRANSACTIONS IN US DOLLARS IN IRAQ” again, to reinforce your knowledge of this process and what the CBI intends to do at the end of the year. This news coincides nicely with a new article that came out this week.
The US dollar is the first global currency for foreign trade transactions between countries of the world. It constitutes 80% of the volume of international financial transactions and represents about 60% of international reserve currencies. The dollar is the only currency that accommodates large financial transactions in the oil and energy sector and global oil trades amounting to 100 million barrels in addition to other commodities. Other currencies constitute about (20%-25%). So the dollar is not going away for Iraq only how they use the dollar for conducting trade. Get it?
Another headliner article for this period is titled “DOLLAR-IRAQI DINAR EXCHANGE RATE GAP: CAUSES AND TREATMENTS”. This article is telling us many important issues about the sole peg to the US dollar and literally giving many valid reasons why Iraq must get off this sole peg and go to a new basket of currencies for its peg. They are also literally telling us they cannot and never will resolve this issue of the parallel market vs CBI official rate for the dollar. I also want to let you know that my CBI contact informed me on Wednesday that this new peg is completed and we will see it soon. Do you see now why Ali Al-Alaq does not find this parallel market gap as crisis? He is monitoring it closely and knows that this black market with the dollar will soon dry up as more and more “correspondent” banks come online and are willing to deal with the Iraqi Dinar. But like I always say “first things first” or “what comes first, the chicken or the egg”?
In another article titled “ECONOMIST: BIG CAPITALS BENEFIT FROM THE CONTINUED RISE OF THE DOLLAR IN IRAQ” we find that economic expert Safwan Qusay said that there are big heads benefiting from the economic chaos and the rise of the dollar in Iraq. Qusay also said in an interview with Al-Maalouma Agency, “There are speculators and local mafias trying to obstruct economic organization and thwart the government’s attempt to control the state’s resources.” He added, “The government can strike these mafias with the force of law by directing the supervisory and security agencies against the violators and their continued presence under multiple fronts.” So now you can see why this has gone on so long already? Can you see that many of the politicians are invested to keep this corruption going. So there is an uphill battle but I believe the CBI has a plan and the parallel market will soon dry up.
We have been witnessing the preparation of a huge move for the Iraqi financial system come the end of the year. I do not want anyone to think that everything will go so smoothly. Iraq has already told us there will be some bumps but as the international community comes to support the Iraqi Dinar more and more things will then quickly recover. Remember I told you that when they go to the new peg the plan included monitoring for inflation before they take the next move. This could be 3 days, 3 weeks or even longer. How can they predict as they are not yet there. Of course, we know that the CBI is trying to mitigate the risk as much a possible.
Q & A
Question from Shueladi:
Hi Mnt Goat!! I want to ask where is all this money going to come from? Also, if everything goes digital, do we really get spendable currency?
Answer Mnt Goat:
Seems to me you have two questions for me to address today.
1.Where is all this money going to come from?
I trust that you are referring to Iraq on paying us investors for the Iraqi Dinar exchange for currency of our currency? So, to answer I will refer you to the article titled “DELETE ZEROS AND EVALUATE THE IRAQI DINAR” ? I will quote from it now – “As for China, despite having an advanced economy, its currency remained fixed until 1994, before the Chinese government revalued its currency in 2005, which was linked to the US dollar. After the revaluation, it was linked to a basket of global currencies.”
Also “If the above-mentioned currency revaluation occurs, any assets held by a U.S. corporation in the foreign economy must be revalued. If the value of the asset held in a foreign currency was previously valued at $100,000 based on the old exchange rate, the revaluation requires a change of $200,000. This change reflects the new value of the foreign asset in the local currency by adjusting the revaluation of the relevant currency.”
- Do we get spendable money?
This is kind of a silly question to ask, don’t you think? I am confused. I certainly hope you voted for the right candidate in US elections if you are so concerned about less taxes and having money to spend. Are you referring to walking out of the bank with cash in your pocket? if so, why don’t you say so? I will assume this is what you mean. The money in your bank account will also be spendable only digital, as all bank accounts are today. You can have a debit card or checking account too. Here is the Link
