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Wednesday, April 29, 2015

Mnt Goat Wed. Afternoon Update - "The Journey" - Part 2 of 2

[Banking/CBI  Updates]

So we finally see more action going on with the CBI. The parliament is going after the CBI for a couple reasons:

1)    officers who were complacent during the Maliki takeover in 2013, when Dr Shabibi was  wrongfully accused of corruption, are still at large and operating. Many of these agents for the CBI were involved with corruption during and after Dr Shabibi was in exile. This does not make Dr Shabibi the criminal but rather who is behind this all is the criminal. Yes – so me of these crocked CBI officers still have to be dealt with. Just one more bit of cleanup still ongoing.

2)    parliament does not see the progress of the CBI is taking direct and speedy measures to deal with the increase of the dollar against the dinar issue, also the liquidity issue. I believe they also want to see a revaluation since the go-ahead was given months ago to continue the deletion of the zeros project.
This action, as we see from this next article, forces the CBI to respond and demand now a law to guarantee its independence from the GOI (second article following this one).

Articles follows:

On Monday BAGHDAD / Baghdadi News / .. revealed to the Parliamentary Integrity Committee, on Monday, for re-investigation file corruption Central Bank, confirmed the existence of the complicity of some officers with the Central Bank and private banks owned by influential government officials.

Said committee member Mohammed fact that L / Baghdadi News / "The Subcommittee problem re-investigate the issue of central bank file because of the complexity of things, accusations and the goal is to reach real results", adding that "the parliamentary integrity is still being investigated seriously the importance of the subject."
He said the fact that the "The Commission is working on new ways to detect fraud in the currency smuggling abroad," noting that "there is complicity of some officers with the Central Bank and private banks owned by influential government officials" ([Khvm] refused to be named).

CBI Independence Issue Once Again

Parliamentary approval of the economy calls for the central bank law and the "expulsion" of the government

Forecast for economic and investment commission parliamentary, on Sunday, taking the central bank package of measures that will reduce the price of the dollar against the Iraqi dinar, while confirmed that the citizen is the biggest affected by the high dollar exchange rate, demanded the adoption of a law on the Central Bank guarantees his independence from government.


[More Banking Liquidity Issues]

Below we find yet another set articles on the issues concerning the banks.

They go right back to the liquidity issue once. Why still such a liquidity issue?

I attempting to explain it to you in one of recent last news letters. Basically they have taken in 95% of the 3 zero dinar notes out of circulation and once again dollarizing. I already explained too why dollarize and thus why they would resort to taking this measure. In conjunction with this effort they are also holding off on opening and spending the 2014 budget. Ironically they already obligated themselves to these contracts as we have seen the many articles on this topic explaining the numerous reconstruction contracts that were signed.

Now we see the impact since these contractors went to the banks for loans to begin the work. Loans were granted since the repayment was guaranteed by the government but not they are not paying them. So how can they then repay the loans to the banks?  Do you see the real issue here?

The solution:

1)pay the darn contractors as promised on their contracts for the work already done as allocated in the budget. How can they repay their loans to the bank for the materials and labor spent when they do not get paid by the GOI when done. So what is holding up the finance ministry from releasing these funds?   

They will have to open the 2014 budget that is why!

2)and once they open the budget they have to bring out the lower denoms in exchange for the US Dollars and revalue their currency to support the budget expenditures.

Instead what is Iraq doing?
Well they are not doing the solution we want that is for sure….lol…

I have included an article telling us they are being given a 5 billion dollar (not dinar) loan from the IMF. Thus they are borrowing money to pay out on the budget expenditures rather than to RV their  currency and move forward. This is not good for us and shows now no current pressure under this 2014  budget to RV. Sorry for the bad news! This loan should take care of their liquidity problem.

Why did they do this and not RV? One of two reasons – they may feel Iraq is not yet a safe place to RV (security reasons and maybe worried about their currency in the hands of terrorists once it goes international) or they are greedy and are trying to milk as much as they can prior to the RV. Folks they are swimming in money and there is no justified reason to borrow money. It is simply time for them to move to play with the big time players in the international arena. So what are they afraid of? or maybe they are being told to hold off by the PTB until the mess with ISIS and Syria  is cleaned up or at lease under more control. Obviously they know something we don’t.

The 2 articles follow:

Baghdad: Banks refuse to pay deposits to customers

Baghdad, Mohammed Hadi attributed the bankers not to most government and private banks commitment to the return of deposits to the customer within a specified time to the reluctance of most borrowers to pay their loans because of the lack fulfill government's financial obligations, the creation of a "lack of liquidity", as pointed out that the central bank is granted for the time being Benefits for banks closer to 4 percent of the size of their deposits, indicated that those benefits reached earlier to 19 percent.

He said the former head of the private banks association Abdul Aziz Hassoun told the "world", that "private banks facing scarcity of liquidity, as the borrowers of contractors, importers did not get their dues from the central government what made them slow to return the loans to banks, and some branches of the Central Bank did not return to the civil and deposits banks ", noting that" it was born big problems with those banks. "
He said Hassoun, " should the central bank should take swift measures to solve that problem is to re-money private banks through cash reserves "in addition to" necessity that the government go regardless dues contractors and suppliers in order to raise the proportion of cash liquidity in the local market. "
With regard to the benefits size, pointed Goldfinch that "the Central Bank grants at present benefit worth 4 percent of domestic banks for the size of their deposits."

The IMF Provides Loans to Iraq Worth Five Billion Dollars

April 28, 2015

BAGHDAD / ... MP for the Parliamentary Finance Committee Masood Haider, on Tuesday, the International Monetary Fund agreed to Iraq's request Baagheradh amount worth five billion dollars as part of the response to the financial crisis experienced by the country.

Said Haider's "Eye Iraq News" that Iraq has the right to apply to the International Fund request in accordance with the law of the budget financial loan, pointing out that the government presented its request and received the fund approval and procedures are left to the Ministry of Finance and the IMF on the delivery amount.

He said, that there is the benefit of the International Fund imposed on each loan granted shall be the interest rate according to the size of the amount borrowed.

Economic Adviser to the Prime Minister mention the appearance of Mohammed Saleh announced the approval of the International Monetary Fund to lend Iraq $ 800 million in government confirmed the existence of a future orientation to borrow from the IMF three billion dollars, noting it's simple and affordable benefits

[Once again – it’s time to pay monthly dues to Kurdistan]

So now May is close at hand and so once again we see articles telling us the amount and necessity for the GOI to pay the Kurds what is due to them and agreed upon in the 2015 budget. We know that they have plenty of money to make this payment too. This article is also interesting because they tell us that Kurdistan is pumping 550,000 barrels per day not what most believe to be 330,000 barrels.

So they generated revenues for Baghdad of about $33,000,000 dollars per day (at a modest $60 a barrel -which is in the budget) thus about $1 billion dollars in revenue for the month of April. Did I do my math correctly? Looks like their bill to the GOI is amounting to only about half that amount $591,000,000.

The question is this. Is Kurdistan complaining or just reminding everyone the money is due like they do each month? We surely hope there is no issue. Under Maliki in the past we never knew for sure…..lol…..But here is the article so you can see the money is flowing.  So you can also see how they have a net gain that Bagdad is keeping of almost $400 million. 

Article follows:   

BAGHDAD / News Today

Demanded the Kurdistan Regional Government province, on Tuesday, the federal government to pay their financial dues under the budget law for the current year.

They demanded but then what? 
He Amanj Rahim, secretary general of the Council of Ministers of the region, according to the Kurdistan Democratic Party site and I followed (News Today), that "the region is expected from the central government to pay financial entitlements under the budget law, amounting trillion and 200 billion dinars, in addition to the benefits of the Peshmerga to become the total dues trillion and 333 billion dinars. "

And merciful that "the amount required to pay the salaries and wages of employees is more than 58 billion dinars," noting that "the region can not continue to deliver the agreed amount according to the agreement if the financial dues did not receive legal under the budget law."

The Secretary General of the Council of Ministers of the Kurdistan region that "the oil minister in the federal government Adel Abdul-Mahdi, confirmed the fulfillment of the Kurdistan region's oil obligations contained in the budget law for 2015 indicates that the region has met its obligations to deliver 550 000 barrels of oil per day to the company of the Federal Government Sumo According to the agreement concluded between the two sides, which have become part of the general budget for Iraq in 2015 the current law. "
[Other Currencies]
Many speculate that the Zim may be the reason for the delay in the RV since they want to RV three main currencies at once (not 190+), Iraqi Dinar, Zim and Dong. This is simply not true and they would  not hold up Iraq due to other countries not being ready as this point in time. But we do see now some support from China for African Zibabwe economy. This is good news for us, if we own their currency and if they do this inflation adjustment as planned.

Article follows:
Zimbabwe: 'Speed Up IMF Reform'
Jakarta — Chinese President Xi Jinping met here Thursday with his Zimbabwean counterpart, Robert Mugabe, and pledged support for the African country's socioeconomic development.
This support is dependent upon the USA passing the much needed IMF reforms.
Beijing. — - The ship is leaking, but the captain is reluctant to do the repair. That is exactly what the United States, veto-wielding master of the International Monetary Fund (IMF), is doing in the reform of the global lending body. With pretty much all of the IMF members voicing deep disappointment with the US Congress' block of the reform plan at the ongoing annual spring meeting of the Washington-based lender, US Treasury Secretary Jack Lew said on Saturday that he still believes that the Congress will pass the reform "soon."

It is funny now how after so many years of reading articles and watching how Iraq works, I can almost predict their next step. So if I believed an RV was imminent I would definitely know and tell you.

Peace and Luv To Ya All, 
Mnt Goat


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