Stevel & Members

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Stevel & Member Discussion
“An invitation to link the Iraqi dinar to the global economy”
Stevel:   Ok folks, here is some charts. Remember, this information is from our team whom eat, breath and live charts because it is there business. This what they found:

The darker more constricted pattern on the lower right hand side it the IQD tracking the price of gold (never going above it, tracking in a 2% range) whereas before it was pegged to the USD which at times was above the price point of gold!
Here is the link to that 1 Year Chart on XE Currency.
Note the frequency of change during this period is much higher because gold prices were more volatile than the price of the dollar. You can see this more clearly as you shift to the 1 month chart. Enjoy! Let me know if you need a hard copy of this.

Here is the chart for one year:
Here is a more detailed one month:
Now remember, this is way above my level of explaining so I rely on other that are experts in their perspective fields.
Also, I meant no harm in my comments about MD posts, but rather she does an awesome job and many missed the point. A friend of mine said I was bashing her, or whatever other are posting and saying.
My only comment is the idiot that takes this and tries to make fun of our information is missing many marbles and has no live except to bash our information because they cannot be a productive person in real life. We are all going to pray for that individual.
Remember, for this currency to be an investment is does have to be backed by something other than oil or the USD.
I talked to our team about the countries next to Iraq and feel that a one to one has no signification disadvantageous regarding fair trade. I am going to have another call in the next day or two with our team and I will explain why in more detail that makes perfect sense.
Now, will this happen the way we think? Maybe or maybe not, but it sure does appear to be pointing that direction of being backed by gold. I really do not care on bit if I am wrong, because we are doing our very best to bring the information as we find it and not sugar coat anything.
Also, please quit PM’ing me telling me how disappointed you are that your dreams are crushed because it is not a high rate like you wanted at a $3 plus rate and what appears to be more like a 1:1 rate or a bit higher. I would like to remind you, this is about Iraq and the global economy and not your personal well being or the toys you now cannot afford.

Those will be broke in less than a year anyway. If you want a three dollar rate then leave it under your mattress for another who knows how many years and then get what you want.
Please do feel free to ask any questions and we can and will do our best to provide you with what we can, when we can.   Steve
An invitation to link the Iraqi dinar to the global economy
Stanleymt  said:  HI Steve, thanks so much for the info.  The question I have is how the process of revaluation of the dinar changes (if any) being pegged to gold.  In other words, would it be a gradual or a more sudden increase?
Stevel:    There would be no “revaluation” but rather now a value that follows the gold standard. This is what we are being told and how I understand it.
One possible scenario: The CBI will just announce that the IQD is now backed the the gold standard. So if you go to the bank, now any bank for that matter, they would simply looked up the buy rate at the time and pay you in USD that value. Now all banks and investment (exchange companies) will compete for you business where I could see only certain major banks getting involved,  I hope this helps.   Steve
An invitation to link the Iraqi dinar to the global economy
Jimplants said:   I could be wrong or I could be right Gold is pretty strong right now and oil might be going to an historic low,to drive countries out of the oil business, so if the IMF wants Iraq to be a strong currency and help bail the world out all the more reason to be gold backed. Time will tell cause they are moving to what we call our finish line and their starting line  Blessings  Jim
Stevel:    I do not believe this to be accurate. Here is one possible reason for the oil to reach its low point. Lets say Saudi Arabia flooded the marked with oil to drop the price per barrel very low, this will in turn make any profits that ISIS is selling from Iraq and then selling it to Turkey making it not all that profitable.
Now when ISIS is done sealing oil and is out of Iraq and under control, I do see the oil going back up in price. The budget in the past was based on oil revenues, but not the budget of 2016.
Yes I might be stretching this a bit, but I cannot find any other great or even good reason for this drastic drop in prices.
13 During the first eight months of the year, public expenditures were compressed owing to the tight financing constraints. Oil revenue amounted to ID 39 trillion, non-oil revenue amounted to ID 5 trillion, and total spending amounted to ID 54 trillion, out of which ID 41 trillion in current expenditures and ID 13 trillion in investment expenditure.
Total spending was about ID 23 trillion lower than the path assumed in the budget. The resulting deficit of ID 11 trillion, or 5 percent of GDP, was financed mostly by the issuance of T-bills subscribed by the state-owned banks Rasheed and Rafidain, of which 4 trillion was refinanced at the discount window of the Central Bank of Iraq (CBI).
The deficit was also financed by the accumulation of domestic arrears estimated at ID 5 trillion at end-April 2015. The government paid all the arrears it owed to the international companies (IOCs) in an amount of $3.5 billion.
The deficit was also financed by a loan of $1.2 billion by the IMF under the Rapid Financing Instrument (RFI) approved by the IMF Executive Board on July 29, 2015.
“An invitation to link the Iraqi dinar to the global economy”
Stanleymt  said:   Thanks Steve.  You said, ” they would simply looked up the buy rate at the time and pay you in USD that value.”  Who would determine the buy rate, CBI, parliament, or economic committee, and what would change the exchange value to a 1:1 which is still a dramatic change from 1:1190?
Stevel:   If you had 1000 shares of Microsoft stock and you wanted to sell them, where would you find the asking price?   The official Gold code is XAU.  Same thing. I hope this helps.
“An invitation to link the Iraqi dinar to the global economy”
goods10 said:   Just so I can get a better understanding of what this means for the dinar if it becomes Gold backed. Let’s say hypothetically that the switch is flipped today and the dinar is now backed by Gold.
What would the dinar value be at this point? Is it even possible to determine that or is there more to it than just looking at the price of Gold?  Thanks
Stevel:   What got us thinking about this concept was the GOLD coins that Iraq was trying to introduce into the market. Remember those articles?
New York Gold Spot Price (24hrs) Gold Price Per Ounce $ 1,101.65
Here is how it was explained to me. Lets say the CBI said that one IQD is now backed by one ounce of gold.
It is my understanding that one IQD would be equal to $1,101.65 or a 25K note would be worth $27,541.25 USD, less any spread and fees. I am not a broker so I have no knowledge of how gold is purchased or sold, just stocks on NASDAQ.
Exchange is not my strong point, so you might want to ask someone smarter than myself,
 Stevel:   A few more constrictive comments:
I personally believe that this is a brilliant idea. This would prevent a massive cash out by IQD holders and countries holding their currency. This will attract major investors to purchase their currency because it now has a value and would be considered an investment.
Then this will also attract all developers to come and be a part of the Iraq’s booming growth because contractors will be paid in the IQD which is now worth something and not rendered worthless like it is today.
With the evidence our team has discovered, this is what and how we believe it will play out.
So lets look at both sides of the coin now.
So it is not pegged to to Gold, what else could it be pegged to? Yes the USD, which is still fairly close to a 1:1 or a bit less at the moment, regardless worth something. If there will be no immediate future value, the all will cash in and walk away. So who are the winners here, most everyone including yourselves.
Now it comes out at a $3 plus rate, who is the winners here, again you are, but I do not see how Iraq can support that type of cash out now that oil is so low. Iraq needs to be able to set themselves up for success, not a rate that cannot be sustained.
Any comment is welcome because regardless, we are all winners here, so relax and just let it come to you as Iraq deems necessary and when they are ready. I hope you all quit worrying about this because you cannot control anything about it.
Worrying is causing negative attitudes and debates on this site which is not healthy.
Millionday’s posts are very good and extremely helpful. As you can see, she is the only one we even allow on this site, so that speaks volumes for her integrity.   Steve
“An invitation to link the Iraqi dinar to the global economy”

VictorD  said:   Great food for thought. Thanks!  My confusion lies with the article from the IMF that was presented last week that laid out a “road map” for Iraq. In step 18 (I think it was) it stated the IQD was to remain pegged with the USD. How does that come into play, or is the current thought that the pegging to gold would happen when that agreement with the IMF expires?
Stevel:   Maybe this will help:
The government will gradually remove remaining exchange restrictions and multiple currency practice (MCP) with a view to eliminating exchange rate distortions.
Such a move towards acceptance of the obligations under Article VIII of the IMF’s Articles of Agreement will send a positive signal to the investment community that Iraq is committed to maintain an exchange system that is free of restrictions and MCPs for current international transactions and thus facilitate creation of a favorable business climate.
As a first step, the government will, by end-February 2016, amend the Investment Law, or issue clarifying implementing regulations, to remove the limitation on transfer of investment proceeds that gives rise to an exchange restriction, as recommended by a recent technical assistance mission of the IMF.
Ok, so go compare the USD peg and the Gold peg, is it not close?   Steve
“Economic analyst: the dollar against the Iraq dinar is not real price”
SteveI:    So here is my comment, if Iraq and other feels that pegging it to the USD is not great, do you still feel it is that great for your investment return?  Would like to hear your takeaway on this article.  Steve
“An invitation to link the Iraqi dinar to the global economy”
Buckaroo said:   Is this ever been done by any other country before ???? Or is it a new era, a new possible pattern ???
Stevel:   I hope this helps. What is a “Pegged Currency” and How Does it Affect Exchange Rates?
If you’ve been following the news recently, you’ll have seen last week’s decision by the Swiss National Bank to remove the cap on the Franc, which was pegged to the Euro.
The reasons behind their decision are difficult to understand, but what’s also quite tricky is the idea of the fixed exchange rate itself, so let’s try explain what that is first!
A country or government’s exchange-rate policy of pegging the central bank’s rate of exchange to another country’s currency. Currency has sometimes also been pegged to the price of gold. Currency pegs allow importers and exporters to know exactly what kind of exchange rate they can expect for their transactions, simplifying trade. This in turn helps to curb inflation and temper interest rates, thus allowing for increased trade.“.
It might surprise you just how many nations have their currency fixed to another. Danish Kroner is pegged to the Euro, while the list of nations pegged to the US Dollar is quite long, including Hong Kong, the UAE, Saudi Arabia, Kuwait and Venezuela.
Fixed exchange rates became a “thing” in the UK around 1821 with the adoption of the Gold Standard, and other major world currencies followed soon after. What this meant was that “the external value of all currencies was denominated in terms of gold with central banks ready to buy and sell unlimited quantities of gold at the fixed price. Each central bank maintained gold reserves as their official reserve asset.” ****
Addition resources: Nixon Ends Convertibility of US Dollars to Gold and Announces Wage/Price Controls
August 1971
President Richard Nixon’s actions in 1971 to end dollar convertibility to gold and implement wage/price controls were intended to address the international dilemma of a looming gold run and the domestic problem of inflation. The new economic policy marked the beginning of the end of the Bretton Woods international monetary system and temporarily halted inflation.
The international monetary system after World War II was dubbed the Bretton Woods system after the meeting of forty-four countries in Bretton Woods, New Hampshire, in 1944. The countries agreed to keep their currencies fixed (but adjustable in exceptional situations) to the dollar, and the dollar was fixed to gold. Since 1958, when the Bretton Woods system became operational, countries settled their international balances in dollars, and US dollars were convertible to gold at a fixed exchange rate of $35 an ounce.
The United States had the responsibility of keeping the dollar price of gold fixed and had to adjust the supply of dollars to maintain confidence in future gold convertibility.
Initially, the Bretton Woods system operated as planned. Japan and Europe were still rebuilding their postwar economies and demand for US goods and services—and dollars—was high. Since the United States held about three-quarters of the world’s official gold reserves, the system seemed secure.
In the 1960s, European and Japanese exports became more competitive with US exports. The US share of world output decreased and so did the need for dollars, making converting those dollars to gold more desirable. ‘
The deteriorating US balance of payments, combined with military spending and foreign aid, resulted in a large supply of dollars around the world. Meanwhile, the gold supply had increased only marginally. Eventually, there were more foreign-held dollars than the United States had gold.
The country was vulnerable to a run on gold and there was a loss of confidence in the US government’s ability to meet its obligations, thereby threatening both the dollar’s position as reserve currency and the overall Bretton Woods system.
Many efforts were made to adjust the US balance of payments and to uphold the Bretton Woods system, both domestically and internationally. These were meant to be “quick fixes” until the balance of payments could readjust, but they proved to be postponing the inevitable.
In March 1961, the US Treasury’s Exchange Stabilization Fund (ESF), with the Federal Reserve Bank of New York acting as its agent, began to intervene in the foreign-exchange market for the first time since World War II.
The ESF buys and sells foreign exchange currency to stabilize conditions in the exchange rate market. While the interventions were successful for a time, the Treasury’s lack of resources limited its ability to mount broad dollar defense.
From 1962 until the closing of the US gold window in August 1971, the Federal Reserve relied on “currency swaps” as its key mechanism for temporarily defending the US gold stock. The Federal Reserve structured the reciprocal currency arrangements, or swap lines, by providing foreign central banks cover for unwanted dollar reserves, limiting the conversion of dollars to gold.
In March 1962, the Federal Reserve established its first swap line with the Bank of France and by the end of that year lines had been set up with nine central banks (Austria, Belgium, England, France, Germany, Italy, the Netherlands, Switzerland, and Canada).
Altogether, the lines provided up to $900 million equivalent in foreign exchange. What started as a small, short-term credit facility grew to be a large, intermediate-term facility until the US gold window closed in August 1971. The growth and need for the swap lines signaled that they were not just a temporary fix, but a sign of a fundamental problem in the monetary system.
International efforts were also made to stem a run on gold. A run in the London gold market sent the price to $40 an ounce on October 20, 1960, exacerbating the threat to the system. In response, the London Gold Pool was formed on November 1, 1961.
The pool consisted of a group of eight central banks (Great Britain, West Germany, Switzerland, the Netherlands, Belgium, Italy, France, and the United States). In order to keep the price of gold at $35 an ounce, the group agreed to pool gold reserves to intervene in the London gold market in order to maintain the Bretton Woods system.
The pool was successful for six years until another gold crisis ensued. The British pound sterling devalued and another run on gold occurred, and France withdrew from the pool. The pool collapsed in March 1968.
At that time the seven remaining members of the London Gold Pool (Great Britain, West Germany, Switzerland, the Netherlands, Belgium, Italy, and the United States) agreed to formulate a two-tiered system. The central banks agreed to use their gold only in settling international debts and to not sell monetary gold on the private market. The two-tier system was in place until the US gold window closed in 1971.
These efforts of the global financial community proved to be temporary fixes to a broader structural problem with the Bretton Woods system. The structural problem, which has been called the “Triffin dilemma,” occurs when a country issues a global reserve currency (in this case, the United States) because of its global importance as a medium of exchange.
The stability of that currency, however, comes into question when the country is persistently running current account deficits to fulfill that supply. As the current account deficits accumulate, the reserve currency becomes less desirable and its position as a reserve currency is threatened.
While the United States was in the midst of the Triffin dilemma, it was also facing a growing problem of inflation at home. The period that became known as the Great Inflation had started and policymakers had put anti-inflation policies in place, but they were short lived and ineffective.
At first, both the Nixon administration and the Federal Reserve believed in a gradual approach, slowly lowering inflation with a minimum increase in unemployment. They would tolerate an unemployment rate of up to 4.5 percent, but by the end of the 1969-70 recession the unemployment rate had climbed to 6 percent, and inflation, as measured by the consumer price index, was 5.4 percent.
When Arthur Burns became chairman of the Board of Governors in 1970, he was faced with both slow growth and inflation, or stagflation. Burns believed that tightening monetary policy and the increase in unemployment that accompanied it would be ineffective against the inflation then occurring, because it stemmed from forces beyond the control of the Fed, such as labor unions, food and energy shortages, and OPEC’s control of oil prices.
Moreover, many economists in the administration and at the Fed, including Burns, shared the view that inflation could not be reduced with an acceptable unemployment rate. According to economist Allan Meltzer, Andrew Brimmer, a Fed Board member from 1966 to 1974, noted at that time that employment was the principal goal and fighting inflation was the second priority. The Federal Open Market Committee implemented an expansionary monetary policy.
With inflation on the rise and a gold run looming, Nixon’s administration coordinated a plan for bold action. From August 13 to 15, 1971, Nixon and fifteen advisers, including Federal Reserve Chairman Arthur Burns, Treasury Secretary John Connally, and Undersecretary for International Monetary Affairs Paul Volcker(later Federal Reserve Chairman) met at the presidential retreat at Camp David and created a new economic plan.
On the evening of August 15, 1971, Nixon addressed the nation on a new economic policy that not only was intended to correct the balance of payments but also stave off inflation and lower the unemployment rate.
The first order was for the gold window to be closed. Foreign governments could no longer exchange their dollars for gold; in effect, the international monetary system turned into a fiat one.
A few months later the Smithsonian agreement attempted to maintain pegged exchange rates, but the Bretton Woods system ended soon thereafter. The second order was for a 90-day freeze on wages and prices to check inflation. This marked the first time the government enacted wage and price controls outside of wartime.
It was an attempt to bring down inflation without increasing the unemployment rate or slowing the economy. In addition, an import surcharge was set at 10 percent to ensure that American products would not be at a disadvantage because of exchange rates.
Shortly after the plan was implemented, the growth of employment and production in the United States increased. Inflation was practically halted during the 90-day wage-price freeze but would soon reappear as the monetary momentum in support of inflation had already begun.
Nixon’s new economic policy represented a coordinated attack on the simultaneous problems of unemployment, inflation, and disequilibrium in the balance of payments. The plan was one of the many prescriptions written to cure inflation, which would eventually continue to rise.
“An invitation to link the Iraqi dinar to the global economy”
21dsm said:  Hi Steve, my question would be if they exchange it at the current gold price what ever that might be would this eliminate the banks charging their 1 to 3% per million cost of doing busines?   Thank you
Stevel:   I am not a trader so lets leave this to someone that is experienced in it. I will however ask our team who does have that experience but I will need some time to get a reply back.  Good question though.  Steve
“An invitation to link the Iraqi dinar to the global economy”
T & D  said:   Ok I’m going to use simple math , we paid $25 for a $25,000.00  IQD note right , so lets say just for simple math that gold is a $1,000.00 an oz . I go to the bank and cash that $25,000.00 note in and I will get $25,000.00 in usd . That is awesome for a $25.00 investment !!!!!!!!!!!!!!!!!!!!!!!
Stevel:   Yes you math is correct and yes it is a good investment. I am still trying to get some answers how this will work inside the country which is probably a whole new set of rules and standards.  Steve
“Economic analyst: the dollar against the Iraq dinar is not real price”
buck72801 said:  ugggg im afraid this is gonna sound dumb, im not real bright as others are, but isn’t it a good thing since USD is backed by gold as well as the IQD, now I know this makes no since,
Stevel:   Maybe this will help: What Really Backs the U.S. Dollar?
Is U.S. currency still backed by gold?
Federal Reserve notes are not redeemable in gold, silver, or any other commodity. Federal Reserve notes have not been redeemable in gold since January 30, 1934, when the Congress amended Section 16 of the Federal Reserve Act to read: “The said [Federal Reserve] notes shall be obligations of the United States….
They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.” Federal Reserve notes have not been redeemable in silver since the 1960s.
The Congress has specified that Federal Reserve Banks must hold collateral equal in value to the Federal Reserve notes that the Federal Reserve Bank puts in to circulation. This collateral is chiefly held in the form of U.S. Treasury, federal agency, and government-sponsored enterprise securities.
Since 1971, U.S. citizens have been able to utilize Federal Reserve Notes as the only form of money that for the first time had no currency with any gold or silver backing.
This is where you get the saying that U.S. dollars are backed by the “full faith and credit” of the U.S. Government. In other words, Nixon implied; take our paper dollars or don’t.
The U.S. at this time was a world super power having been victorious in WWII and there really wasn’t much anyone could do about the decision by the U.S. government to abandon metal backing.
What Does a Dollar or Federal Reserve Note Represent?
What does a dollar or Federal Reserve note represent now that gold and silver no longer back any of the currency printed in the U.S.?
A dollar bill used to say “This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury or at any Federal Reserve Bank.” Look at a dollar bill today. It simply says; “This note is legal tender for all debts, public and private.” In other words, you can’t redeem it for “lawful money.”
From the Treasury;
“Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything. Redeemable notes into gold ended in 1933 and silver in 1968. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are “backed” by all the goods and services in the economy.”
What the government, via the Treasury and the Federal Reserve, really did in 1971 was coerce you to accept something (Federal Reserve notes) that used to be redeemable for gold and/or silver but now aren’t redeemable at all.
But let’s play along with their definitions and see if “all the goods and services in the economy” really back the dollar?
What the Treasury would have you believe is that GDP backs the dollar. GDP is defined as “The monetary value of all finished goods and services within a country’s borders in a specific time period It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.”
To break it down;
GDP = C + I + NX + G
“C” is equal to all private consumption, or consumer spending, in a nation’s economy
“I” is the sum of all the country’s businesses spending on capital
“NX” is the nation’s total net exports, calculated as total exports minus total imports. (NX = Exports – Imports)
“G” is the sum of government spending
For the U.S. Presently:
C is down to nothing with high unemployment and people struggling just to pay bills.
I is down to nothing (especially now that lending has dried up)
NX is hugely negative and has been for quite some time
“G” is the sum of government spending
For the U.S. Presently:
C is down to nothing with high unemployment and people struggling just to pay bills.
I is down to nothing (especially now that lending has dried up)
NX is hugely negative and has been for quite some time
G or “government spending” is all that is running the show
Yes, that’s right, government spending is all that is running the show for the most part.  Does anyone think that adding more debt to debt is in the long run a healthy thing to do?
Does it work for the consumer to take out more credit cards and use this newly created credit to pay for old debt and current expenses?  Hardly. How will it work for the U.S. government?  Can the U.S. government really afford to keep policing the world and fight wars and keep spending without consequences?
If this theory of GDP backing the dollar is viable, and if government spending is all that is backing the dollar at this point in time, where do they get the money to do it? Answer; taxes and printing it out of thin air.
The Theory of GDP Backing the Dollar Is Flawed
But the reality with this government theory of GDP backing the dollar is flawed to begin with. The dollar acts as a “medium of exchange” and is only valuable because it can be exchanged for goods and services. It is one’s production that is the actual backing of the dollar, not the piece of paper itself.
Take another look at that dollar bill you pulled out….
Do you need further proof that U.S. dollars are debt?  What does it say at the very top of the dollar bill? It’ says “Federal Reserve Note.”
What is the definition of the word “note?”
Note: “A written promise to pay a debt.”
What is this debt that you, the one who is possessing these dollars, has to pay? I thought your production (via your hard earned labor) was something you got to keep? But according to what you are being paid for your labor, i.e. dollars you are accepting as payment, are nothing but IOU’s.
Since you can’t redeem these IOU’s for “lawful” money (gold or silver) any longer, what makes you think that these pieces of paper called “notes” that have 38 short years of existence at the time of this article are going to maintain your wealth in the years to come?
What are you doing about it today to protect yourself? Perhaps a little insurance with gold and silver, what used to be our money and back our money makes sense?
Don’t be confused by all the games the Treasury and the Federal Reserve are playing with Quantitative Easing and interest rate manipulation to help the economy. We’ve seen their failures several times and they will fail again. Educate yourself as to what money is and what really backs the U.S. dollar. Educate yourself about investing in gold.   Steve
References: http://www.federalre…rency_12770.htm
“An invitation to link the Iraqi dinar to the global economy”
VictorD said:  This all makes sense to me in that I’ve been reading and hearing for years that the IMF is moving towards tying a countries currency value to its assets be that gold, agriculture, manufacturing capabilities or what have you.
This also ties into what MD has been reporting about the IMF calculating a (here’s that term again that is getting tossed around and MD uses a lot so please forgive me) “realistic value” for Iraq to use when it re-enters the Global Economic Community.
This value might be thought of as a reinstatement of the dinar at a 1:1 (or near rate). Then at some point in the future it de-pegs from the USD and changes to an asset back currency.
Basically we’ll get a reinstatement of the dinar into the global economic community at a lower rate (i.e.1:1), no RV but increases in value based on Iraq’s assets that they develop over time. Hope this makes sense……I do think we are thinking basically the same.
Stevel:   Very nicely stated. Thanks for sharing. I would like to add to your comments:
Fiscal Program in 2016
On October 18, 2015, the government approved a draft budget for 2016 with a non-oil primary deficit of ID 78 trillion (57 percent of non-oil GDP) with a large amount of foreign financing.
In light of the adverse market conditions (¶10), the government decided to reduce its foreign financing forecast and introduced amendments to the 2016 draft budget to parliament  on December 2, 2015 that target a slightly lower non-oil primary fiscal deficit of up to ID 77 trillion (56 percent of non-oil GDP; prior action for management approval, Table 2) with financing tilted towards domestic sources. This will be achieved through the implementation of the following measures:
collect at least ID 8.8 trillion (6.5 percent of non-oil GDP) in non-oil revenue, out of which ID 1 trillion from an increase in wage taxation; and
contain non-oil primary expenditure to ID 86 trillion (63 percent of non-oil GDP). This containment of non-oil primary expenditure at a level slightly higher than the low level programmed in 2015 will be obtained again mostly by the postponement of lower-priority non-oil investment projects to later years.
Furthermore, they go on by saying:
In order to finance the non-oil primary fiscal deficit, oil investment expenditure and debt service, the government will have recourse to oil revenue (ID 73 trillion), domestic financing (ID 20 trillion) and external financing (ID 4 trillion). ‘
The domestic financing will be covered by the issuance of Treasury bills, out of which up to ID 7 trillion will be refinanced by commercial banks at the discount window of the CBI, the issuance of national bonds for the general public in an amount of ID 5 trillion, and the drawdown of government deposits in the banking sector in an amount of ID 4 trillion.
The amount of central bank indirect monetary financing will be revisited  on the occasion of the first review in light of the inventory of government cash holdings in bank accounts to be completed by end-February 2016 (¶27).
The external financing will be covered by the planned issuance of Eurobonds ($2 billion), a loan from the Islamic Development Bank ($500 million) and project loans by the World Bank ($50 million), JICA ($502 million), and Italy ($40 million).
The government will not resort to the accumulation of arrears to finance the deficit. It commits to a zero ceiling on external arrears (continuous quantitative target, Table 1) and regular inventories of domestic arrears with a view to ensuring that new arrears do not accumulate and   to paying them down after proper audit, as will be done for the existing stock of domestic arrears (¶27, second bullet).
Stevel:  Now I find this very positive. The IMF is talking about detailed revenues and here is what they are telling Iraq:
Detailed revenues, operating and capital expenditure, and financing items of consolidated fiscal and oil operations, and overall fiscal balance. These data should include:
the execution of the Iraqi budget, comprising the incremental revenue from the impact of revenue (tax) measures stipulated in the 2015 Budget Law (sales taxes on mobile phone cards, internet usage, car sales, and on tobacco and alcohol, in addition to incremental receipts from the entry into force of the amended Customs Law for 2010), and savings realized via (a) any cuts in investment projects or financing for investments through public-private partnership schemes;
(B) cuts in operating (current) expenditure, such as the enactment of compulsory or voluntary national savings schemes (including as a result of changes in legislation governing the wage ladder for public sector or civil service employees), and removal/streamlining of subsidies on electricity and gasoline or other products;
transfers to and from the Kurdistan Regional Government;
and the list goes on.
Stevel:    So, explain this one, they are talking about revenues from the Iraqi citizens, (sales taxes on mobile phone cards, internet usage, car sales, and on tobacco and alcohol, in addition to incremental receipts from the entry into force of the amended Customs Law for 2010)  with the current value of their currency, how in the world are they going to expect any sort of revenue from all of the taxes and assessments the citizens are going to have to pay without some sort of change in the value of their currency they own?   Steve
“An invitation to link the Iraqi dinar to the global economy”

Hstrymknwmn said:  Here’s something else. After reading this, I am not sure why Iraq OR the IMF would want to back it with gold due to never working to control inflation, and the govt. is restricted in controlling its money AND makes a HEALTHY COUNTRY HIGHLY SUSCEPTIBLE TO INFLATION or depression of its trading partners. That imo doesn’t sound so good for Iraq….and this is all about Iraq and its people.
System of backing a country’s currency with its gold reserves. Such currencies are freely convertible into gold at a fixed price, and the country settles all its international trade transactions in gold. Between 1900 and 1914 world’s major economic powers were on gold standard, but could not maintain it during first World War (1914-18) and, except the US, finally abandoned it in 1931 during the Great Depression(1930-40). The US too abandoned it in 1971 to join the floating exchange rate system which is the international monetary-system as it exists today.
The gold standard has never worked satisfactorily in controlling inflation or maintaining equilibrium in international transactions. Its major drawback is that it restricts a government’s ability to control money supply, and makes a healthy economy highly susceptible to the conditions of inflation or depression of its trading partners.
here’s the link   http://www.businessd…d-standard.html
Stevel:   Nice article but I do respectfully do not agree with it in today’s global economy.
I do appreciate you sharing so everyone can see both sides of the fence and letting them determine in their own minds what is good or not good. Thanks.
“An invitation to link the Iraqi dinar to the global economy”
hstrymknwmn said:   Thanks for responding Steve. Just researching to try and understand what is happening. So, you are saying you think because the global economy today is better the issues stated should not be an issue today? Like I said, just trying to understand because I am NOT an economist   🙂
Stevel:   Our team maybe totally wrong but based on hundreds of hours of research, it appears they (Iraq) is setting themselves up for what we are seeing.
Remember, is not a sin to be wrong, but not in the best interest to fabricate things for the sake of getting on some dinar recap site which make you look very stupid and very dumb.
Only Iraq and the IMF know the outcome, I feel either way, we are going to benefit from it.  Steve