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CNN. Broadcasting A Long Interview With Saleh In Arabish Which U May Want To Skip - Followed By A Lengthy Discussion Starting About Halfway Down ! AdminBob Site Owner: Iraqi economist Mohammad Saleh appearance of time live market breakdown and impasse of 2014 is not valid for Exchange July 29, 2013 Interviewed by khodayyir Abbas Abdul Jabbar Back talk these days of the deletion of three zeros from the Iraqi currency against the backdrop of Iraq out of Chapter VII sanctions as achieves positive goals, and contribute to the reform of the management system, and strengthen the confidence of citizens in the national currency at the expense of the dollar and the other effects of the subject project opponents have doubts on the timing and implications and forgeries and attendant corruption and money laundering. On 17 may 2013 President Barack Obama to extend protection to the Development Fund for Iraq to continue for an additional year until mid-2014, this is already a decision Iraq out of Chapter VII sanctions for more than a month, the question what is the Iraq Development Fund money? ... Does the UN resolution 1483 remains valid under which established the Development Fund for Iraq, which indicates that the Fund be used for the benefit of Iraq, but did not indicate that it belonged to him? Does this still valid resolutions after Iraq from Chapter VII sanctions. There are requests to lawmakers on the background of the increase in Iraq of foreign currency reserves which stood at 76 billion dollars as well as 30 tonnes of gold bullion reserve investment. These questions and others interviewed some time known Economist Dr. Mohammad Saleh appearance and follows the Development Fund for Iraq as it is currently a quality economic necessity and what does this have to do with the renewal of protection by u.s. President Obama? Let's start from the fact that Iraq under resolution 687 of 1991 had all the costs of the war to invade Kuwait, and its result, and thus carry historic responsibility for this Iraq war, part of the arrangement, while Iraq signed a memorandum of understanding of the oil-for-food and drug administration in 1996 with Kofi Annan and this program aims at two things: first, to alleviate the suffering of partial and provide food and, more important, the aim of the oil revenue, go to fund 30 covers that The payment of compensation to Kuwait plus 4 pay the costs of the inspection teams, and for the success of this program, the mechanism by which open account in the name of UN Secretary-General Kofi Annan, French Bank in New York, Kofi Annan, is to pay, and supervised by, a stirring account. Iraq exports oil and oil revenues are deposited in this Bank and the Secretary-General, Iraq begins with the opening credits for the purchase of food, medicine and materials allowed and prohibited masks, for example as to prevent import of pencils. Companies and demanding Iraq confirms receipt of the material and the Secretary General directs the corporate payments processed through appropriations. All these funds under the control of the Secretary-General not to Iraq the right to dispose of the AED. The former regime put him opposite the after-sales services, companies must take into account open at a Lebanese banks $ 10 of the contract amount, interest amount oversized here began financial and administrative corruption as emerging, for example, tons of buckwheat b $ 350 inflated for up to $ 600 according to the mechanism of corruption and economic book price $ 30 to $ 300 for the Iraq account The Ministry of higher education. Deposited 10 companies account for Iraq under fictitious names, and then start the embassies in Beirut and Damascus, Iraq and Oman collects these funds cash and send them to the Central Bank of Iraq, so the system could collect more than $ 2 billion. In an account registered as presidential, after the change in 2003 issued meise resolution 1483 several closed oil-for-food programme. So it has to be a new mechanism is more flexible than the previous mechanism was established for the account of the Central Bank of Iraq at the Federal Reserve Bank rather than a French Bank in this Bank all imports of oil, gas and petroleum products, and any other frozen funds are released, deposited in this Bank, but keep oil revenues is essential in this Bank, and will be subject to this account as follows Iraq Government ActObjects through the guidance comes from the Central Bank and the Prime Minister, at first it was Bremer's Coalition Provisional Authority Chief and Finance Minister and then the Prime solution which gave Cabinet Secretary instead and Finance Minister in the Iraqi Government, coming as paper payments, any payment order includes a convert to Iraqi bank, for example, to create the Iraqi dinar, dinar issued this way and built its reserves or convert to that. PHP. Any T.B.I TBI founded the Bank to finance imports by the Government, for example, to pay the Department of Commerce or health needs. Money in the Bank is a subsidiary of the Ministry of finance, managed by the Central Bank of Iraq on behalf of the Ministry of finance. Now the mechanism easier for us but what changed? The decision in 2004 to establish a State Council to control and check this Board that Iraqi oil is sold to international standards, and is not sold at the price too high and low. In terms of price and marketing. In order to ensure proper position of funds within the Iraq account, and the funds drawn by the Iraqi Government are for the benefit of the Iraqi people. This Council consists of a representative of the United Nations and a representative of the Arabic League and said Iraqi finance representative to the Iraqi Government wanted to create a mimic of the Shura Council called the Committee of financial experts, chaired by the President of the Committee of Kofi Office of financial supervision and accompanied by three financial experts. The State Council has its international accounts ttdkik company accounts in accordance with international standards, each year to check invoices, payment orders, and the health of the breasts, and where did they come from? How behavior? And the Committee of the Shura Council by Kofi mimic the same mechanism continued this course to 15» 12» 2010 as issued resolution 1956 on the Development Fund for Iraq for the protection money, while the registered account, Kofi Annan, were 100 percent protected, and such funds as long as they are registered in the Development Fund for Iraq is also protected 100 percent, but this does not prevent it may be subject to seizure in accordance with the laws of America, given the implications of America's responsibilities as the occupying power of Iraq there is validity to the US President to release Ommar emergency or To protect u.s. national security, whereby it is possible to exclude any State funds into America from any court decisions on the protection of the funds and called this presidential executive order by Bush since the establishment of the Development Fund for Iraq in 2003 until the present renewed each year. What do you mean by protection money and threatening this protection? Protection means no complaints come from commercial creditors on Iraq and they are many, those whom have judicial decisions to seize Iraqi money where and whom in the process of the courts, and many of them have fake claims dust war hopes luck and had to take the compensation and trying to get it again, imagining there is no know. These forms and types. AdminBob Site Owner: Private sector debt And fears of The size of the private sector debt on Iraq and fears a catastrophic or dramatize her there? These creditors are unknown, it is expected that the external indebtedness of the foreign private sector constitutes 20 of external debt on Iraq, those who complain, in fact had been the settlement of debts in 2006 when Iraq announced to each creditor debt settlement process aims to adjustment of debts to the Paris Club agreement if, for example, large indebtedness of $ 35 million, Iraq gives him internationally and support this bond can earn interest through 5.8, in two instalments per year, 20 years after the grant 20 of any amount deducted under the mediation of 80 such machinery deducted 80 debt estimated at $ 17 billion to $ 2.7 billion debt and most of these bonds were sold on world markets, and is now in circulation, in the beginning when the bond was sold, the dollar sold for 60 cents and currently sold by 90 cents is an indication that the Iraqi economy is moving in the right direction, as you point this increase at the same time, that Iraq is theSaniva trust, is now the default classification about my way of this classification, such as classification, Iraq does not have credit, but this approach, if Iraq Trust workbook. The Security Council resolution No. 1956 in 15» 12» 2010 noted that United Nations resolutions ending 30» 6» 2011 no protection to the Development Fund for Iraq if the circumstance in this case available to each individual claim that driven. There is debt less than $ 35 million, giving them a 10 from the Iraqi Government indebtedness cash these are junior creditors amounting to some $ 10,000 debt gives over 1,000 dollars, a ratio approaching Paris Club terms, calculated in accordance with the financial account with net present value benefit of 20 stretches for 20 years, those up to 4.5 billion indebtedness turned into $ 450 million in spite of all this, there are trade creditors insist on advancing their claims to obtain full Their debts, because each has a final rulings under which requests as well as the amount. So those waiting for opportunities to seize Iraqi funds wherever you are to sign the seizure and execution to get their debts from Iraq. What is the value of these debts have not been subject to adjustments and the owners insist they meet? These debts are unknown, this mobile part not control so far, official Iraqi financial entities have their estimates, which did not disclose to the precautionary reasons, that this has not resolved yet, but by my calculations, the amount is not big and not fear him, but the allegations are feared. There are prosecutors who we described them with job seekers luck understanding. Practically nothing left is important, partly because it came out of the books of account, because companies don't wait 20-year debt, accounts with more than 5 years. If my personal is a modest amount of concern, and no country in the world, no complaints from the private sector until the United States exposed to it. In Iraq there is a legal Committee of the Ministry of Justice and the Council of Ministers, the foreign debt on Iraq and complaints with international lawyers are watching the movement maintains its permanent secretariat and work with discipline, they work with professional financial experts, lawyers, and judges of the Ministry of Justice, and where movement claim they were responsible for its response, Iraq has received plenty of spurious litigation. The extent to which the protection of Iraqi funds and fear? United States at the request of Iraq, the protection of Iraqi funds, most applications will be completed by mid-2014, which now is protecting the Development Fund for Iraq funds that we run it and approach it, but has the same mechanism, deduct 5 from each barrel of oil sells for Iraq, the question here is what is the nature of the Development Fund for Iraq? Is a normal bank account works on the Opera called this account consists of two upper section lower section, the upper number involving oil revenues to the specified automatically deducted from day 5 to go to the United Nations Compensation Commission, for the transfer to Kuwait to pay compensation of $ 52 billion and the remaining $ 11 billion at the present time and the afternoon fall in 95 the Development Fund for Iraq in the open account in the name of the Central Bank of Iraq for the benefit of the Republic of Iraq. The reason for this is the United Nations request for a single account to pay reparations to Kuwait, now out of Chapter VII sanctions, such compensation can be settled through bilateral dialogue between Iraq and Kuwait. Some say this Fund was established to protect the funds of Iraq and did not say that it belongs to Iraq what your interpretation of this vision? No, this money belongs to the Republic of Iraq in my opinion tolerates it another interpretation, not how we behave now funds within the account of the Central Bank of Iraq? The resolution, in accordance with the 1956 Act of 12» 5» 2010 money in the Development Fund for Iraq, are the property of the Republic of Iraq. Today's proposals are raised regarding the deletion of three zeros from the Iraqi currency against the backdrop of Iraq out of Chapter VII sanctions and will have many positive effects and there are those who believe that the circumstance and timing is not suitable as it will provide an opportunity for a broader process of money laundering and currency smuggling what likok? All civilized nations when circumstances or situation of acute conflicts or runaway inflation, then we see a small number of significant financial category value, Iraq went from 25 JD 1980, equivalent to $ 75, equivalent to 300,000 dinars at this time, to 25,000 dinars for the category is not tantamount to only $ 21 at this time and became a huge cash and block number arithmetic, Iraq moved from inflation as well as 9 to 12 billion to trillion. The currency increasing proportion and fit with economic activity and economic growth, if continued growth wezdadt of oil revenues and the value of the currency and as such, there is a possibility we turn to ACE 15 and go to the post number is computational trillion then complicated time deals Iraq country alsghirbalkwantlion. Question here or monetary policy monetary policy management reform, the reform process is the availability of two conditions: first, the availability of economic stability, which now gets, there is economic growth and a large block of foreign currency and the exchange rate relatively stable and, secondly, the availability of political stability and political will, the question if economic stability is whether political stability exist? This question is difficult to answer. So the process entailed reform of my account, which will delete the three zeros from the currency, and when it will change all books, instead of typing 1000 will overwrite the start also need 1 of the fiscal year, which begins the general budget, the largest in the State budget, comprising 73 expenditure of GDP, Iraq is one of the largest countries in the world by public expenditure of the GDP, we are big States any bigger size of the State in the economy, it spending in the United States between 21 to ttrah 23 and State domination, if so the process to delete zeros should start with the beginning of the fiscal year, if we started to change the currency on 1» 1» 2014 is appropriate is time, the political climate helps. The answer is, no, it's the year parliamentary elections, and not in political stability, replacing the currency in 2014 is questionable. Any resolution needs a historic moment which corresponds to the political and economic stability in conjunction with stability. All reported as well as the political will and on the monetary policy we need to switch all books, there will be two currencies at the same time for example, if someone gave you 1000 dinars, we hit the new dinar account so will calculate the new currency. The process is very complex, plus historical references, as well as data on computers, and programs all will change digital Yeh Hassa when due to old accounts, you must delete the three zeros for the switch, in a country like Iraq not easy, going into so difficult and complex process, need the will and efforts of artistic, political and economic imperative of high class. Only see necessary at the moment? Necessary future accounts, you need a historic moment as I said earlier, either on the fear of counterfeiting and smuggling currency and hype exaggerated size. I tell you this country from anarchy and stability even when counterfeiting and smuggling operations of this magnitude catastrophic? I think it's exaggerated perspectives and unreasonable and illogical, why? If you underestimate the ability of the Iraqis to this degree? It is possible that the violation occurs here or there, but not to this degree of hype. And frankly may be behind some personal motives to undermine the project. The question is that an appropriate time next year to switch currency say no, but my optimism project, so only the suggested projects in its currency rise and soar to the improvement and acceleration of economic growth, there is no country in the way, too, seeks to swap its currency, does not offer the only lucid thought, in a country with rapid economic growth. Is said to cover the currency in Iraq now equals vulnerability, what does that mean? This is part of the philosophy of economic stability required replacement, pain spreading above the need for economic stability, monetary stability, Iraqi currency stable, which covered more than doubled and that's a good thing. For example, a Central Bank can pull all the Iraqi currency and replace it with foreign currency. This is part of the required stability, growth and economic development and help to accomplish such projects. There are deputies consider that the high volume of foreign exchange reserves in Iraq to 76 billion dollars as well as 30 tonnes of gold bullion and exit Iraq from Chapter VII makes it necessary to invest this large reserve while the bank laws do not allow disposal of Iraqi reserves since your comment? Central Bank reserves are part of the philosophy of sovereign wealth funds, but usually more liquidity to return the once large amounts of reserves it is possible to enter into investment beat return on liquidity, meaning that enters the greater financial investments, real investments, in the thoughtful does not threaten the safety and liquidity of such investments. In this case use of the reserve is fully or partially? Use are partly estimated as needed, a Central Bank reserves are a debt owed by the Central Bank by Iraqi dinar holders, sovereign wealth funds were surplus from the public budget. In countries such as Kuwait and Saudi Arabia are getting funds from oil and gas revenues, than about their needs, and the surplus go to sovereign wealth funds, they react emotionally by return on liquidity, for example in real estate and other investments. And they call it in financial diversification, financial diversity process at home if you can't invest agriculturally and industrially invested in sovereign wealth funds like you invest in real investment sector in other countries. Not fear these funds from financial and administrative corruption? Here the question, need external financial professional, efficient management, and the International Monetary Fund has a Permanent Committee for guidance with regard to sovereign wealth funds, where there are 30 countries in the world have sovereign wealth funds. AdminBob: Monument and its sovereign Does Iraq possess sovereign wealth funds? Iraq does not have sovereign wealth funds, government revenue, two-thirds of its revenue into his salary and wages of dinar and one third of the foreign currency remains open it for the purpose of financing trade, such as the Ministry of Commerce to import ration, Ministry of electricity imports, the Ministry of health. And the rest goes to other budget, the remaining so-called sovereign wealth Fund is simple possible stabilization fund called evolve to protect the budget from fluctuations in oil prices and is part of sovereign wealth funds. World Bank commends the draft reform of the banking sector in Iraq. What happened and what its impact on the economic situation in Iraq? The International Monetary Fund and World Bank concerned with development the sector in Iraq, mean by financial markets, banks, Government or private, and the Iraq market for securities as a secondary market for the capital market. The theme of praise, they sometimes express negative remarks on the performance of the banks, but this does not mean that the sector is evolving and not the level of ambition, and it is not reasonable that the banking and financial sector has not developed, the number of accounts increased and set up branches there, and then the private sector external trade funded and managed by why this trivialization? The banking sector is the only sector that runs and drives the market, despite all its shortcomings honestly is most active in the country there are flagrant and exaggerations by encroaching on the private banking sector, but this is not exempt from him some of the problems and abuses, it is on the right track with some irregularities but they are routing and processing through the accumulation of expertise and experience. Generally are selling and errors occur in all countries of the world and it's not disastrous banking sector has seen more liberal market transition in Iraq The Central Bank of Iraq asadertalimat in the year 2012 that enables private banks to import foreign currency including USD, who owns the import right is right? Yeah, right. Updated time banks experience applied because of the lack of b-cache why don't we import our existing world applications, especially for tourism purposes, in the Iraq Central Bank sells dollar cash unit however finished and published in the Iraqi Gazette help in the middle of last year allowing private banks after scrutiny by the State Council, import foreign currency reserves or assets out of Iraq, but with conditions and pass through the Monetary Authority, and scrutinizes and sold an action against Money laundering, there are instructions on the facts, join this work but the Bank is selling the dollar to banks. Can you explain to us the difference between the concept of money laundering, smuggling of funds? Iraq under the Convention on the International Monetary Fund and in accordance with resolution 1483, which demanded that Iraq return of normalcy to the International Monetary Fund and the World Bank Hrralhassab current balance of payments, which means the balance of goods and services and transfers from one end of any restrictions and the right of any individual to import whatever he wants and issued what he wants from without any restrictions, so the Iraqi Central Bank canceled the circle of foreign exchange controls, and canceled all the instructions that restrict foreign remittances, created for that anti-money laundering department. It is your right to be converted for the purposes of claiming to be for trade, provided that such funds clean subject to Law No. 93 of 2004 the law against money laundering and funds crime and terrorism and established a department to combat money laundering within the central bank and founded a department to combat money laundering in banks and other outside banks, in security At the national Interior Ministry and Interpol .. Cooperate with each other to combat money laundering. Money laundering means there money is being handled at home or abroad, the money resulting from a crime such as money selling drugs or arms trading funds .. A broad and long series of other methods of money laundering. The question here, is in Iraq to the Iraqi capital to invest abroad outside of national incubation Center, for example, can the investor that comes out $ 1 million to invest outside Iraq in Sudan or buy a factory in Somalia are allowed? This question is answered, does Iraq harrhasab a head money of the balance of payments or not edit it? There is no answer. So who wants to leave his money rely on import under the pretext of trade, and this behavior falls within the smuggling of funds. It swelled the list price that way evade. In the general context of the Iraqi State and Constitution of the Iraqi economy is a market economy but in government departments and institutions is under a central economy permeated engaged in Iraqi economic identity? The problems and foul up a large part of the Central thought of the directions we are clear in our economic policy, so weak economic identity. We are in fact living trouble part market. The Iraqi Government should consider two things, study the subject of the Iraqi capital, and a law to enter the Iraqi capital protection and a law governing the exit correctly and protected. It is OK if the Iraqi businessman to come out $ 1 million to build a factory, for example in Somalia under the auspices of the Government, and part of the profits tax is paid to the Iraqi Government, there is nothing wrong with so why demand entry of capital into Iraq, and don't allow the Iraqi capital invested abroad. What type of interest derived from the investment in Iraq and protect capital? This freedom paid Iraqi capital abroad, to come to Iraq, while reassuring capital freedom of entry and exit of capital which allows creating comfortable investment climate, but this current repressive economic climate in Iraq in such a way that full of fears, and presentations like that comes out of the capital will not return, then will not come to Iraq to capital as such laws anthelmintics capital, thus we have contributed over existing laws to expel capital. Smuggling money abroad There are funds coming out and what your comment? This is true, but to say exaggerated, today money out through money laundering from criminal offences, we vigorously pursued these issues as well as international law is international cooperation in this area is limited, and may not be exaggerated. Overall profit opportunity today is in Iraq, it is not logical to take out money from Iraq and betting opportunities are scarce and research about the benefits of a simple reach 1, you will starve to death, the question of any crazy out money from Iraq, leaving profit opportunities enormous Aikarf curve that does not have a semi-any country in the world where the commercial market is open and profit margins are enormous, generally those traders their money out and back, but they fear part of their money in foreign banks, as some concerns, such as tomorrow there is no money stopped transfers and according to the unstable security situation, they do notreassured and this part a little of it while the bulk of $ 85 is an investor in the trade the 15 remaining are who deserted from Iraq must escape his money to buy him a house there and this case applies to more than three million Iraqis migrated or abandonment of Iraq Those ofcertainly they have well and money properties .. How they described? How Iraqis lived in Syria after the change and the events of 2005 and 2006? Then there are transformations taking place across the Rafidain Bank for retirees. According to the economic growth and the fulfilment of international obligations Iraq is it possible to classify Iraq credit? Opportunity and possible entry into Iraq, and begins with the credit rating of bonds sold in the international market, as it can give a picture of the economic situation in Iraq which the creditworthiness of Iraq especially after graduation from Chapter VII and through credit rating can be obtained. AZP02 http://www.microsofttranslator.com/bv.aspx?from=&to=en&a=http%3A%2F%2Fwww.azzaman.com%2F%3Fp%3D40086 Kaperoni Moderator: This is a really good article Bob. Thanks. Its going to take some time to digest it...Anyone is welcome to chime in. What I see initially, Saleh is stating they need to move forward with the currency reform. And if the excuse is "political stability" next year is an election year and they will use that as an excuse as well. He also says at the end, that the GOI is afraid to open the economy because they are afraid they will take all their capital and leave Iraq. Saleh said that is non-sense since their is such potential for success and profit in Iraq. I also like this quote... "Is said to cover the currency in Iraq now equals vulnerability, what does that mean? This is part of the philosophy of economic stability required replacement, pain spreading above the need for economic stability, monetary stability, Iraqi currency stable, which covered more than doubled and that's a good thing. For example, a Central Bank can pull all the Iraqi currency and replace it with foreign currency. This is part of the required stability, growth and economic development and help to accomplish such projects. " This implies to me that they will use the currency auctions to pull all the dinar off the streets in Iraq and dollarize (replace with foreign currency) prior to implimenting this event. That is how they will reduce the money supply. He finishes basically saying that is part of the plan. This should be a good thread over the next few days with Enorrste, Tlar and others commenting. 2COLLECTG: this is the statement that is awesome! Iraq under the Convention on the International Monetary Fund and in accordance with resolution 1483, which demanded that Iraq return of normalcy to the International Monetary Fund and the World Bank Hrralhassab current balance of payments, which means the balance of goods and services and transfers from one end of any restrictions and the right of any individual to import whatever he wants and issued what he wants fromwithout any restrictions, so the Iraqi Central Bank canceled the circle of foreign exchange controls, and canceled all the instructions that restrict foreign remittances, created for that anti-money laundering department! i bought this stuff for a penny i just want to sell mine back for a dime! 2COLLECTG: normalcy 1,5,10,20,50 &100 denominations! great artical adminbob!! --i bought this stuff for a penny i just want to sell mine back for a dime! ZenMav Moderator: I think another misunderstanding that has been exposed in this article is the notion that the DFI would in some fashion be used as a direct fund for rebuilding Iraq, like en escrow account that would pay for infrastructure as needed. But, it appears that the design & intention of the DFI has been to join the reserves of the CBI to assist the CBI in maintaining & defending the rate of the dinar as it rises in value. PART 2 CONTINUED Joeg: My opinion, for which the hopium smokers wil boo me yet again, is that the cat is out of the bag. This is merely another opinion piece by someone without any power. We've seen tons of these kinds of articles over the years and we're still sitting here waiting. There's one sentence that let's us know what to expect. Those in power will continue saying the time is not right because of political instability, and that the time will not be right until after some kind 2014 election, which if I remember correctly is in April 2014 (I forget the details). In my opinion, that's the key takeaway of the entire interview. All the rest of the article is merely Saleh's stance, which is meaningless because he lacks power. Sorry guys. To misquote the XX beer guy, "Stay hopium free, my friends." ... ZenMav Moderator: Joeg, you're welcome to your opinion, but to me, your resaons for nay-saying are no longer valid. Perhaps a few months ago, even weeks ago, they were spot-on, but in light of recent events and information, it doesn't hold up. First, the IMF Mission Chief for Iraq, Sdralvage, revealed that the 76B in reserves of the CBI cover all dinar in circulation and in deposit by 104%. Second, the CBI will have even larger reserves to report at the end of August, as well as, the 80 or so billion from the DFI will be added, too. And, lets not forget that Sdralvage also mentioned in his interview, that the exchange can be defended with proceeds from oil revenues alone. In other words, as Iraq exists now, as jacked up as it is now, the foreign exchange can be liberalized and defended, and that is why he said to liberalize the foreign exchange as soon as technically feasible. Third, there is the quid pro quo between Turki and the private banks that are currently selling the dollar at net, no spread and no profit, which banks will stop doing that if they aren't compensated, and fairly soon. Knowing banks, and bankers especially, to think that they are going to do that for Turki out of kindness or some idealistic, boyscout duty offends even mild skepticism. I think even you see/understand that something has to happen to compensate the private banks for assisting Turki in this manner, or Turki's word means nothing and the CBI loses ground taken. Fourth, the CBI's autonomy today versus last year is without question, and Maliki has no where to go with false arrest warrants and trumped up charges. Parliament knows he fights dirty, and the relationship between Parliament & the CBI is stronger today than last year. The support of Finance Committee MPs has become quite vocal, and lest we forget, numerous articles from different agencies, gov't officials, economists, the IMF & the World Bank saying that the time to do this is now. People are clamoring for this. Like you said, the cat is out of the bag. There is no doubt this bronco is going to buck, Joeg. And, I think you and I both know it is going to buck hard. But, I think that today, more than ever, when one considers the autonomy of the CBI, the coming enormity of the CBI reserves after the DFI is added, Iraq's release from Ch 7 sanctions, the public political support of monetary reform, and the general knowledge & anticipation of this event that the actual time-line for activation is actually sooner vs. later. At least, that is my take on it, and I'd like to think a hopium-free take on it, as well. Tlar: I think all the back and forth, pro and con arguments between those that support the deletion of the zeros and those that oppose it, is just window dressing. Turki has made statements that support the deletion of the zeros and show that he has a plan that is already in motion. The bank itself, the CBI, is not publically weighing in this time as did Shabibi when he tried to delete the zeros.. Turki did his thing behind the scenes one on one attempting to get as much support as he could , but the reality is he was attempting to get support for "something that is already decided upon and in motion." Statements by Turki about Iraqi's and friends of Iraq being happy very soon, the slip up by a member of the Finance Committee on the rate of 1.16 dinars per dollar, the reference on going back to the original plan, the article day before yesterday saying they were going to do this in August. and more. The recent spat of articles of support for this process and non support saying the time is not right, tell me that the one on one meetings that Turki had with the members of both committees, had the effect of making them believe the deletion of the zeros is proceeding. Turki stirred up the bees nest an since then has wisely stepped away. If you look at the press releases of the ones not on board, once again we see that their arguments are trying to stop the process which implies what the member of the Finance Committee told us. The process has begun. The CBI under Shabibi fought back vehemently arguing their side of the equation publically attempting to logically dispel these arguments. The more Shabibi tried to engage and reason with the Maliki idiots, the uglier those detractors became. Ultimately we know it did not happen under Shabibi and charges were brought against him. This time the bank is not engaging. Turki has said his piece behind closed doors. He is done trying to convince and he is moving ahead. One more thing that is new this time. The Association of Independent banks of Iraq. There has to be a relatively quick positive ending to their "selfless" act or they will come back selling USD above the rate and Turki won't get a second chance to get these guys to do this again.. These banks can't do what their doing very long and stay in business. Turki knows this and so he must follow through or he will exacerbate this problem. Turki knows he has one shot to get this done. He won't be around for long if this doesn't work and the rate returns to non stability. These independent banks are his only hope to get this done. He must do it in a timely manner to keep the banks sacrifice to a minimum. These independent banks have greatly pressurized this. ZenMav Moderator: Nice post tlar. Guess we will know who was reading the tea leaves correctly pretty soon, right!? Terry: Zen and Tlar, you both expressed my thoughts exactly. I am impressed how both of you are able to put your thoughts to print so perfectly. Keep em comming, makes DA by far the best source for info anywhere. Thank you! Tobyboy: Tlar & ZenMav - Love you postings I agree with both of you, plus remember the ogininal article posted in Aug 09,2012 concerning the deletion of zeros from CBI said the removal of zeros next July 2013 which the government had agreed to this. They may be a little late maybe a month or so but I to feel this is going to happen soon. Both of you please keep up your opinions they are great and your knowledge is awesom. Forgive me Kap & Steve not taking anything away from you , I believe this site would be lost without your knowledge of what is happening with our investment. This is what is great about Dinar Alert with such talented people here. I believe we all reSpect each of your opinions tremendiously. HandOverFist: Great posts, Zen Mav and Tlar.Thank you very much. Tlar, let me ask this for clarification.........regarding the "slip-up" of 1.16 dinars per dollar: People have said the 1.16 works out to .86 cents, but the way you wrote it sounds like $1.16. Which one do you think is correct? Thanks in advance, Tlar. ReVbo: I know that was addressed to tlar, HoF, but more opinions never hurt, right? It reads as 1.16 dinars to the dollar, so I'd say it's 86 cents. Great posts, Zen and tlar. Agree completely. Sweetpea: Great thread guys, very good observations and opinions. Hope to see Enorrste chime in on it , as well. HandOverFist: Thanks, ReVbo. ZenMav Moderator: Sweetpea, I can't wait to hear Enorrste regale us all on the next CC with his color commentary, especially while he has a few cocktails! 2COLLECTG: should make everybody smile! Central Bank reserves are a debt owed by the Central Bank by Iraqi dinar holders!! yep came out and just stated it! i bought this stuff for a penny i just want to sell mine back for a dime! Bigjon: holy crap ur right , 2collectg 2COLLECTG at July 30, 2013 at 11:11 AM: this should make everybody smile! Central Bank reserves are a debt owed by the Central Bank by Iraqi dinar holders!! yep came out and just stated it! Punisher: 2COLLECTG, Where did they state that? Corvetteman: so,how much longer can this go on,before they push the money button Punisher: Corvetteman, one can read this article two ways...after the 2014 elections in April or before...I say before on New Years 2COLLECTG: right here p In this case use of the reserve is fully or partially? Use are partly estimated as needed, a Central Bank reserves are a debt owed by the Central Bank by Iraqi dinar holders, sovereign wealth funds were surplus from the public budget --i bought this stuff for a penny i just want to sell mine back for a dime! Enorrste: This article has two extremely important points, in my opinion. The first point made by Saleh is that : "The answer is, no, it's the year parliamentary elections, and not in political stability, replacing the currency in 2014 is questionable." This is the most direct statement that we have seen from Saleh on this matter, and he is quite specific. What he is telling us is that our currency will remain legal tender until at least 2014 and then beyond. That much is certain. In addition, however, he is stating that our currency will not even begin to be replaced until after the next election in March 2014. The fact that he states that the process of "removing the three zeros" must take place at the beginning of a fiscal year makes 1/1/2015 the earliest date for that process to begin. While on the surface that would seem to be a "downer" for us all, actually that is not the case at all. It is Saleh's second point that makes this become more clear, and KAP rightly brought it to our attention: "For example, a Central Bank can pull all the Iraqi currency and replace it with foreign currency." This statement is amazing, because it appears that Saleh has told us in no uncertain terms how he will reduce the money supply of Iraq by 99.5%. He will exchange (buy) the dinars back from Iraqis for dollars. How can he do that? First, he needs only buy back dinars that are located in Iraq. By their own records the M1 is about 33 trillion dinars, worth about $30 billion. The larger M2 is about 78 trillion (this would include deposits and other "non-cash" money in the economy). So how could they buy back all of this without destroying their reserves? The answer is really not that difficult to determine, since Saleh himself referred to it He made the bold claim that the DFI funds are the property of Iraq, and specifically of the Central Bank. Assuming that this totals up to $80 billion, then there would be ample funds to buy back the dinars with dollars directly from the Iraqi people. However, it gets even better, because they do not have to buy back M2. They only have to remove the cash (M1) from the economy in order to achieve their purpose of reducing the "money supply" to 25 billion dinars. The "electronic money" can simply be "dollarized" digitally by making the statement as follows: "if you have 1000 dinars in the bank, you now have $1 in the bank." There is no "cost" to the CBI in making this statement. The equivalent VALUE is changed from dinars to dollars as an accounting procedure, not an actual purchase made by the CBI with real dollars. Therefore, let's assume that the CBI spends $30 billion to buy back all of the dinars in circulation in Iraq. This leaves $48 billion in reserves, to which they will add up to $80 billion from the DFI funds, giving them almost $130 billion in reserves to cover a NON-EXISTENT money supply (since all of the cash dinars are then removed). They then issue the new currency (2015), at 1 dinar for $1, and they issue 25 billion dinars (worht $25 billion). With $48 billion in reserves (not even counting the DFI funds), they have well over 150% coverage of the new money supply. The Iraqis who did not use a bank would be required to turn in their dollars for new dinars at no loss in value. The electronic money is just switched from dollars to dinars within the account (no cost to CBI). Here is the best part, because it refers back to Saleh's first point. He has until 1/1/2015 to prove to the people of Iraq that the dinar is a real currency with real value. We therefore may reasonably suspect that the CBI will float the currency during the next 1.5 years unti it reaches about $1 per dinar. Now, the question becomes this: when must they make the announcement that they are totally dollarizing the country? The answer depends on how much the CBI wants to pay for the cash on the street. Clearly it is to their best interest to announce the change PRIOR to the announcement of the free float. In doing so they get the dinar back at today's price. If they float the currency first, then the cost to buy back the cash in circulation increases with the rise in value of the dinar. Remember, changing the electronic money is not a factor in terms of expense to the CBI. It is simply an accounting switch. Therefore, I look to see the announcement of a PLAN that will lead to the introduction of the new currency. The first part of the plan will be the conversion of all dinars in country to dollars. The second part will be the floating of the currency for 1.5 years, with the goal to be at 1.16 to 1 by 1/1/2015, at which time all accounts in banks are converted back to the NEW dinar and the NEW dinar is issued to buy back the dollars on the street. After watching the dinar rise in value for 18 months the Iraqis will be happy to convert dollars into the NEW dinar. In sum, our next thing to look for is an announcement that the country will totally dollarize in preparation for the issuance of the new currency. Enorrste Corvetteman: are they saying that they are not going to start the float until next year. JR: Thanks Enorrste Question! At what point does the currency become internationally recognized? --"If you want something you've never had, you need to do something you've never done" AdminBob Site Owner: As soon as they accept Article VIII. JR: Bob, I am with you "sooner".... "If you want something you've never had, you need to do something you've never done" Kaperoni Moderator: Keep in mind articles today imply the CBI is following the IMF directions. So the float should begin soon. Though Saleh makes these statements, the dinar needs to rise so the people settle down. I expect this to start any day. Corvetteman: Thanks to all,It means alot to me on all of you that help me understand what is going on!!!! Gale Richardson: Oh my.....this is looking very promising! Thanks everyone! Without you I wouldn't understand anything! Terry: My thoughts are due to Saleh being arrested by M and being away from the CBI for so long now. What are the chances he isn't on the inside of how Turki wants this to go down? Is there a chance he is not up to speed on the plan?? Treyb Moderator: Excellent interpretation of a very interesting post, Tlar and Zen. Maybe just maybe we are moving ahead in the correct path and that bright light is the train heading our way and not a missile. Tripphood: Ennorste, I thought that Iraq was already well on there way to being completely dollarized. No? Punisher: Enorrste, let me get this clear...you are saying it is going to take 1.5 years to float the dinar to $1? Tlar: Ennorste, as usual your logic is impeccable. It is one workable plan out many possibilities, but I have to respectfully disagree with your conclusions. IMO it fails to address the most important issue that I see. How do the Independent banks fit into your thoughts. To ignore theses banks and expect these banks to continue sacrificing their profits is a recipe for disaster IMO. These banks cannot wait until the rate is sufficient to warrant Iraqi's using independent banks. If we assume these same banks have been and is making a selfless sacrifice making no profit on dollars sold, how long can they hold? If they can't hold then it is my opinion they will be working against the value increasing maybe not intentionally, but just to survive. as they just go back to selling dollars above the program. These banks temporarily have endangered the own well being. IMO they are an important factor in this puzzle and must be recognized and dealt with. If they think the light at the end of the tunnel is a long ways off, IMO they won't/can't hold. For profit businesses can not survive long making no profit. I don't believe they would have agreed to make this short term sacrifice based on your timetable of 2015, because most are already strapped for both profits and capital. How do you see these banks in relation to your thoughts on how this will go down? Under your premise what do you see as the problems for the CBI if these banks don't hold and bolt from their sacrifice, selling the dollar again at much higher than the program rate? I would like to also ask, is Saleh a part of the CBI anymore or is he speaking opinion as are members of the Finance and Economic Committees are? If he is not a part of the CBI then might this just be considered his thoughts on this, even given his qualifications and experience? In your opinion do you think at this time he is a part of the inner circle that makes this decision or just voicing his opinion as you and I are? I'm trying to establish from what value do you hold Saleh's views over other outsiders making their own thoughts known? Personally, the way this interview is given, I think he is just weighing in, not telling us the reader, how this will go down. Unless you know something I don't I hold that as my opinion. Enorrste: Tipphood, the dollarization has been ongoing, but the CBI has stated that there are still 4 billion "pieces of paper" still outstanding in the economy. We don't know what denominations, but they talk about 33 trillion to be removed. Punisher, KAP called me this morning on another article that states that the rate will be 1.16 dinars to 1 dollar at the beginning of the 2016 budget. We have no way of knowing how quickly they will get there, but we expect the float to be announced shortly. I've held the position that the rate could rise to $1 fairly quickly (months) while KAP tends toward thinking they will manage it so that it takes a little longer. Tlar, the banks will begin making money once the float is announced. In fact, they may be allowed to participate in the conversion from dinars to dollars PRIOR to the announcement of the float. In both cases they will earn a "spread." Therefore they do not have to wait for the introduction of the new currency to make money. They can make money with a currency denominated in dollars. Remember, there will be a heavy push for more commercial activity during the next 1.5 years as the dinar rises in value. Commercial activity means that banks will make money. Chase and others are already chafing at the bit to get inside Iraq, so they obviously figure they will make money doing so. Iraqi banks will also participate in this commercial activity. I therefore see their "sacrifice" as a short term measure with an implied or stated promise from the CBI that this is definitely short term and will be followed by an influx of capital into the country (thereby allowing the banks to profit). Enorrste Art: great opineons by all tx again Tobyboy: Enorrste I believe 2-3 mos ago they had talked about less than 7 trillion dinars outstanding in the markest now. They have been pulling in a tremendous amount each month of cash amounts so I would think down to around 4 trillion in streets now JMO 2COLLECTG: they imf rep told us he has been given the green light to start the process of liting the 000`s it could have started or been a ongoing process! --i bought this stuff for a penny i just want to sell mine back for a dime! mexia7: So they will float a currency that does not exist "in-country". It is a currency that will be held by you and me and central banks around the world? I'm not sure I grasped this. Who will be trading the currency to drive up the price? Punisher: Enorreste, thanks. I don't think Saleh's voice of opinion is as important as it once was when he was in fact at the c.b.i. so Joeg could be right that what he states might not hold too much...he is not in Turki's inner circle. I personally don't see it taking so long to get up to $1.16 once they start this thing going. To get to $3 yes...to get to $1...no! Kaperoni Moderator: mexia, all of this is well documented in the Kaperoni & friends section.. 2COLLECTG: the currency is already trading in the GCC region in middle east was in several articals on here! --i bought this stuff for a penny i just want to sell mine back for a dime! Carrello: I am assuming that Turki's inner circle is heavily influenced, if not directed by, Dr. Shabibi. Punisher: Kuwait is Iraqs neighbors ...imagine Kuwait has a $3 currency and Iraq does not once it becomes internationally tradable...I just dont see that imho. Enorrste, I still see a $1 rate out of the gate on January 1st. We all know the c.b.i. can support that and then some... Hacker: Thanks all. The time table seems to be a moving target, but they must start "something" soon, or chance what little economy they have failing. Tlar: Thanks Ennorste for the quick response. If the CBI goes from Article XIV to VIII, and their desire is to dollarize Iraq, what would be the Iraqi citizens incentive to continue to buy the dollar? Almost all Iraqi's are paid in dinar and if the dinar was going to go up, they would not need to stand in line to buy the dollar.. Why would he want to buy dollars after the first pips are removed? It has been drummed into him for 3 plus years that the CBI wants to see the dinar equal to the dollar. As the dinar starts to go up, it should make believers out of those Iraqi's that have been buying the dollar. No body wants to own a currency that is going down in value as will be the dollar under your premise. There will be very few wanting to buy that dollar and the spread to the independent banks will be minimal along with their profits. Also once the process is recognized as having started with the end goal of being $1.00 in value Iraq runs the risk of increased counterfeiting because with each new increase in pips that still uses the old money we have, counterfeiters will have a greater incentive to produce an increasingly more valuable bogus currency. Also they cannot operate another 18 months with its current currency because of condition. Their is also an increased risk of state sponsored counterfeiting as the currency becomes more valuable. Syria and Iran both already have in place the people to handle and distribute the bogus currency. It is logical to assume then that there will be increased smuggling if this is done gradually as you proposed because of the increased counterfeiting. I can see many more problems if they approach this plan they way you have described it. A question I would like you to answer if you care to, is the same question I have posed in a few of my posts. Why do they continue to refer to this plan as the deletion of the zeros when in fact that only occurs at the very end of the cycle when finally all three zeros will be gone. At first its just pips until the first zero is removed. It goes on until the last zeros is removed. Why would they continue to say that the smalls will be released on such and such a day? How would they know on an exchange rate that is crawling up sometimes daily, sometimes weekly. Shabibi said he would release the smalls in Sept of 2012. The article released day before yesterday by the finance guy said they would release the smalls in August. The article is dated 7/28/13. Why would this article that says they are going to delete the zeros in August mention the release of the smalls in the same article if the currency is to just float? Lastly one of the problems as has been stated over and over by the CBI is the under capitalization of the banks in Iraq. Chase, Citicorp and other international banks will be able to take advantage of the opportunities coming to Iraq by making the major loans necessary to finance pipelines and infrastructure etc. Iraqi banks do not have the capital to be involved as stated by the CBI. Under your plan the independent banks will be unable to compete with these internationals. The exception is if deleting the zeros is an actual all at once event. Shabibi was looking for a way to get Iraqi's using the banks again and recapitalizing these same banks. This was all apart of the "original plan." By deleting the zeros two things happen immediately. The first is de-dollarization. The second is that Iraq's will beginning to bring in the old dinars in to trade for the new ones. Shabibi had told the banks to "take your time with each person coming in to swap his old dinars for the new ones. Talk about the banks services and attempt to set up savings and checking accounts." If an Iraqi has (3) 25000 dinar notes as an example, and after the deletion of the zeros he received 65 to 70 thousand dollars worth of small dinars, the bank was to try to get him to leave most of it in the banks, taking only walk around money for his own personal safety. That dinar held by that Iraqi is not different than what you and I hold. Its value is determined by the exchange rate. It was Shabibi's hope that this money left in the bank would be a recapitalization of the bank. If this were to happen this way, it is more likely that the independent banks of Iraq would be in a better place to compete with the internationals. IMO these benefits only come with deleting the zeros. Not with a float. Respectfully, tlar ZenMav Moderator: Very good point, Kap. I feel like Iraq will become a powder keg if they wait too much longer. Punisher: Tlar, if and when September hits and no rv or float then that deal Turki made with the banks must not have been so serious.