Trinity's Take - Simplified Explanation of what the CBI is doing

[TrinityeXchange]

hello my friends.  thanks for joining me as i offer my view on what is actually happening inside of iraq with the cbi and the banking reform.

 

so as we have all been able to determine, the goi is broke.  no question about it, maliki and his regime pretty much raided the coffers of iraq.  the country was run without an economy and what is worse is that many of the people in financial leadership simply severly lacked any expertise in dealing with macroeconomic stability (what say you to all of the gurus spouting that maliki was good for our investment?!). abadi took over the helm of the ship and received a shock. the financial house of iraq is in utter shambles and it was able to endure 8 years in this state because of the massive amounts of money being generated through +$100 per barrel oil sales.  the recent oil crisis, isis threat and change in leadership has uncovered the truth surrounding iraq's fiscal policy.  

 

the bright spot in all of this is that iraq is now doing what it takes to put the country back on track of its original plan to create a market economy and make the nation a powerhouse of the middle east.  too little too late?  i don't believe so.  there are many nations and global entities pulling for this project to succeed.  

 

with that said, let's get into what the CBI is actually doing to help right the ship:

 

first off, no economy survives without proper banking supporting it.  it is illegal for the cbi to loan money directly to the goi but it can give loans to private banks who in turn can support government.  iraq does have private banks however their abilities have been severely restricted while the state banks are overly empowered to generate financial flow.  because of these practices the private banks are broke, low on capital!  this is bad for economic growth because when the government (state banks) control most of commerce, competition is all but destroyed.  competition creates innovation and growth.  abadi's fix: Empower Private Banking!  

 

how will they do this?  the cbi will infuse the private banks with reserve currency.  this is a common occurence for stimulating economies within debt based systems all around the world and it typically goes like this.  banks buy government bonds ---- central banks buy the bonds from the banks ----- the money received to the bank is "special money" called reserve currency used as seed money to determine how much a bank can create in loan money.  the private banks will begin loaning money to create commercial opportunity in the private sector.  an unfortunate side effect though is the government becomes beholden to pay once the bonds mature.... the debt system at its finest.

 

the cbi will allow the private banks to control the audit system as well as conduct trade between local and foreign entities.  the cbi will take an oversight role with representation into the private banks.  the cbi will cover/insure the transactions to foreign bank accounts and allow the private banks to deal in letters of credit (an ability previously owned solely by the state run trade bank of iraq).  

 

as we see, the root of the new plan for privatization and a market economy is through the proliferation of the private banking system and non-banking financial institutions like money transfer companies. the private banks will be able to help fund the government's deficits as well as offload government fiscal responsibilities as operations once performed by the government is transferred to private business.  we should expect to see a sell-off happening where the government is trimming industrial and agricultural operations into the private industry.  

 

be encouraged my friends!  iraq is making all of the right steps toward a strong economy and currency reform.  we are moving in the right direction after an 8 year stall.  you are going to be so glad you stuck around for this.  and KUDOS to all my isx buddies invested in bank stocks.  you are getting ready to see something really phenomenal happen.  

Edited February 9, 2015 by TrinityeXchange

[chess]

GREAT......so, do we RV Friday or Monday??.............................................

[TrinityeXchange]

you buy some bank stocks!  BBOB and BNOR if you are uncertain.

[gymrat76541]

Yup we have always had faith in the overall investment but the only question that needs answering is: When? What's the rate? LOL

[moneysoon]

Thanks TrinityX,

 

Yes the my friend, the ISX will he heating up as they begin to force the operation to correct the status quo.

Edited February 9, 2015 by moneysoon

[boosterbglee]

Thanks TrinityX!   Like what you bring to the table!  

[millionaire in training]

I like the way you think............

[ginger21]

Thanks trinity, I do have both those stocks thanks

[bjb]

Trinity,

Thank you, I also have BBOB stock, but unable to view this stock on my Warka Account.  Can you help me with this issue?

Thanks in advance

bjb

[TrinityeXchange]

Trinity,

Thank you, I also have BBOB stock, but unable to view this stock on my Warka Account.  Can you help me with this issue?

Thanks in advance

bjb

unfortunately my friend i do not trade through warka bank and have not idea how to help you.  perhaps one of the dv members with successful trade history through warka might be able to lend you a hand.

[millionaire in training]

Trinity how can I go about buying BBOB & BNOR stock.  I thought Warka was the only way.  Can you explain?  TY 

[TrinityeXchange]

Trinity how can I go about buying BBOB & BNOR stock.  I thought Warka was the only way.  Can you explain?  TY 

hiya mit!  a lot of us dv'ers utilize an alternate brokerage firm from warka.  however i am under strict orders per adam not to promote any brokerage on this site.  i recommend going to the isx section and looking through a few pages of postings, it should be easy to find.  perhaps some others can help you out as well.  i hope you understand.  i enjoy Adam's site and will do nothing to jeopardize it.  

[SnowGlobe7]

Like what you bring to the table my friend..thanks a ton

[Laid Back]

Thanks for taking the time to put this together.!

Iraq continues moving forward.... Step by step.!

Go iraq

[millionaire in training]

Thanks Trinity......I understand.     Will be looking into that.    Thanks for the tip.

[kostaske]

what say you to all of the gurus spouting that maliki was good for our investment?!

Read more: http://dinarvets.com/forums/index.php?/topic/196707-trinitys-take-simplified-explanation-of-what-the-cbi-is-doing/#ixzz3RLQx1RCG

 

I had a long time saying that maliki was a major "brake" in Iraq's progress, and no RV would happen with him as PM and got criticised for that. It turned out it was exactly like that.

[sourpuss]

Trinity, thank you very much. I always value what you have to say about this mess.

[dontlop]

I don't understand how the govt is broke because of maliki

I really don't

They can't pay their bills because the price of oil went so low

They still have an income and they still spend it , all of it just like every other country in the world

I just would like an explaination why its Malik's fault that the oil price fell 50%

The govt has govt programs they pay out of their income when the oil price dropped they no longer can afford all those programs so they needed to make cuts

They chose to run a deficit instead

How did maliki do that ?

They got 70 billion in reserves

They can cut their programs

They sell 4 million barrels a day for money

More oil production than ever before

When the price goes back up and iraq has money again are ya going to say maliki fixed it?

[dontlop]

A lot of that maliki talk reminds me of move on dot org

Or a nancy pelosi speech about George bush

With msnbc and huffinton post in the backround cheering them on

I really can't belive most of what I read in iraqi media

There's a lot of political infighting going on over there

[dontlop]

Just like political opponents attack obama here or George bush or bill Clinton

They do the same even worse in iraq

Accusations are one thing

Proof is another

Someone should put together the things he's been accused of and the things they have proof of make a list for people to read

[dontlop]

I've asked what he's done and asked not for opinionated answers and got no response in the past over the last year or so

You know what I think

I think it's just a way to keep people in the game

Oh it's gonna rv now since maliki is gone kinda game

Now we just need to wait a few more years and then iraq is going to rv

Just another guru ploy

They needed someone to blame it on

When the irs targeted republicans did obama do it ?

Did they question obama or Lois Lerner

When geitner didn't pay his taxes did obama do it ?

When malikis son stole something , did maliki do that?

I'd really like to know what he did

Because there's a lot more going on in iraq than maliki

Out of the 331 billion dollars in the top polititions hands maliki only had 50 billion

Barzani had 48 billion yet no one says a word about barzani

Or talabani or mutlag or the others

Those were only the top 15 polititions

There's still over 300 more polititions who may have hundreds of millions in their names but they didn't break the billion mark and were not mentioned

So ok let's say maliki did steal 50 billion dollars

Let's concede that fact

Now let's talk about the other 280 billion dollars in the rest of the top 15 polititions in iraq

Did they earn that legitimately or did they all work together and cover up each other's tracks

I say they all were involved and since they were maliki got dirt on all of them and with that being said I believe absolutly nothing will happen to maliki

If he goes down

They all go down

Do ya think they will go along with that ?

Edited February 10, 2015 by dontlop

[dontlop]

It seems instead of the cbi loaning comercial banks money to get the economy going it borrowing money from the comercial banks

http://dinarvets.com/forums/index.php?/topic/196767-cbi-borrow-six-trillion-dinars-deposited-by-commercial-banks-have-reserves-to-finance-the-budget/

[TrinityeXchange]

It seems instead of the cbi loaning comercial banks money to get the economy going it borrowing money from the comercial banks

http://dinarvets.com/forums/index.php?/topic/196767-cbi-borrow-six-trillion-dinars-deposited-by-commercial-banks-have-reserves-to-finance-the-budget/

the interpretation of the article might be a bit hard to follow but the cbi is buying government bonds from the commercial (private) banks.  this will infuse the private banks with reserve currency and allow the private banks to use that capital to create a mechanism for loans to businesses and such.

[TrinityeXchange]

I've asked what he's done and asked not for opinionated answers and got no response in the past over the last year or so

i hear you DL.  people should be able to defend their claim.  here is mine and it is found in the official report from the world bank brought into iraq to conduct banking reform.  they do not name names in the report but all things good & bad reflect on the person in charge, unfortunately that is just the way it is.  if a company fails, stockholders look to the ceo for answers.  when a country fails, everyone (and justly so) looks to the president and his/her administration for answers.  no different from iraq.  i give you an excerpt from the official report:

 

Political economy considerations are critical when assessing Iraq’s financial system. The difficult security situation imposes costs and constraints; the complex political situation impedes decisive policy action; governance and transparency issues linger; inadequate implementation capacity hinders reforms; and the legacy of prevailing state intervention has not been fully addressed.

 

This operation set out to begin a process of financial sector reforms.—Given the broad nature of the project’s name and the low level of resources available under this project, however, expectations for what this project could achieve may have been higher than what the project could realistically have delivered.. The project’s aim was to initiate a dialogue with the Iraqi authorities in support of their efforts to build a sound and efficient banking system which would be able to provide, in the medium-term, efficient financial services competitively. This in turn would ensure efficient mobilization of funds and their allocation to the most productive investments, thereby promoting private sector development. 

 

there you have it my friend straight from the report of those sent in to HELP iraq build a sound and efficient banking system and competitive financial services in order to promote private sector development (in other words build a market economy).  they have no reason to lie.  the leadership in iraq was abysmal and therefore the project's expectations were not achievable.  this all happened under maliki's regime.  and here we are today trying again to create private sector under a new regime.  this time it looks like it just might take because iraq has a better leader.

Edited February 11, 2015 by TrinityeXchange

[dontlop]

Thanks

I read the article wrong the first time

The CBI has decided to finance the state budget with a loan of six trillion dinars, through the operation of 50% of the deposited by commercial banks reserves has, and the repurchase of treasury bonds from the secondary market.

According to a statement of the bank it will buy about five trillion dinars, of which the first stage, and then to run 50% of reserves deposited by commercial banks has, and re-buy Treasury bonds from the secondary market, that these measures do not affect your Bantrza reserve in excess of $ 70 billion, the financial support of the budget and try to reduce the deficit. As well as enable them to provide housing and real estate loans for industrialists and farmers, support economic activity and job creation.

Read more: http://dinarvets.com.../#ixzz3ROZimBAs

Ok so the cbi is loaning the goi money to pay for the budget

It's borrowing some of the comercial bank deposits and selling bonds to raise the money to loan the govt

I read it wrong the first time

Read more: http://dinarvets.com/forums/index.php?/topic/195339-cbi-boosting-liquidty/#ixzz3RObeXMoy