So, now let’s go on with the current juicy stuff from Iraq. Yes, real “factual” information.
😊As you know there is usually one article that stands out from the rest in just about every one of my Newsletters. Today is no exception. The title of the article today is “CENTRAL BANK: CLOSING THE ELECTRONIC PLATFORM ENHANCES FINANCIAL STABILITY”. Let’s exam this article today. What are they trying to tell us?
First, I need to lay some groundwork, a bit of history, about the strategy to get Iraq to where it is today. Then we will fit this strategy into where the current news.
If you recall there were two conflicting strategies for developing Iraq from the past. One was from the president G.W. Bush era and the other one from the president Obama era. The Bush era wanted to move quickly and get the Iraqi currency back to the global markets, if even a low rate, then as the economy grew stronger, watch the rate rise as speculators joined in.
This strategy knew the repercussions of lingering this objective and what might happen in the long term if not done sooner than later. Yes, as investors in the dinar we all could have made millions even at a lower rate if on FOREX.
Can you remember those days when we all thought even a 10 cent IQD was going to make us rich? This strategy was made possible under the tutelage of Dr. Sinai Shabibi and his financial expertise. Over this past decade we witnessed these repercussions too.
So, Bush left the Whitehouse and Obama took over. This is where the conspiracies took place. This is when all the corruption began. In December of 2012, the Central Bank of Iraq was allowed to be raided to end the Bush/Dr. Shabibi strategy for the Iraqi dinar.
Instead, Obama wanted to continue using the dollar for payments of imports and actually promoted the money laundering to Iran. This situation worsened as the years rolled on. As investors we followed the news and so we learned of what was going on and witnessed trillions of dollars of the Iraqi oil wealth being stolen, yet the Obama treasury did nothing to stop it then. It was just all words and no real action.
We witnessed early exchanges of the dinar for dollars by Obamas buddies, senators and even friends of friends. Finally, it stopped in early 2013 but left a scar of corruption on the Obama administration when it comes to Iraq.
This corruption has not yet been widely exposed, but it will and this is going to be huge news of exactly what happened back then. Trust me on this one…. .
So, under the Obama era for Iraq the strategy changed and so it was mandated that Iraq first rebuild its economy then we could think about moving the dinar to global markets.
There were no realistic set of goals or measurements set by the Obama administration to say to Iraq when enough is enough. Meanwhile, Iraq also did not have the benefit of its currency to help rebuild Iraq and accomplish these goals.
The constant corruption with the dollar left a stain on future investors. This strategy only hurt Iraq yet even more. Was this all intentional to delay any real progress for Iraq and allow this corruption to continue? One has to wonder…. I believe it was.
Okay so this new Obama era strategy was implemented and enforced now since 2012.
There was not going to be any major RV or Reinstatement until Iraq first rebuilt its economy, so what was said. You remember this mantra – get out of the rentier oil based economy…bla, bla, bla. But what about the value already in the dinar?
After all it was at around $3.22 when the 1991 attack into Kuwait began? Iraq then finally got rid of the 8 years of Nori Al Maliki and struggled to find a new prime minister who could lead the country out of this dilemma. Tell me Nori Al- Maliki disaster was not intentional. They also needed a champion to lead the Central Bank of Iraq.
Iraq then went through some really bad years over ISIS war and Covid events. Oil prices plummeted and the CBI reserves lowered to dangerous levels. All that work of Dr Shabibi was waisted away.
As the years rolled on, we read article after article about the Project to Delete the Zeros and it was coming.
There were times when they told us they were going to do it and do it now. But these times were short lived and it was always stopped from some excuse or another. So, we know they have the newer lower denominations and coins already printed. This is proof of it.
Then in late 2022 a series of four (4) events took place taking Iraq to a new level. Finally, the dragged out Iraqi elections, concluded and confidence was placed with Al-Sudani to lead the country.
Also, Ali Al-Alaq came back to the CBI as proxy governor. Remember he worked under the tutelage of Dr Shabibi.
Also, we learned that in fact Chapter VII sanctions were finally lifted, contrary to what we were told years prior. Yes, we learned that all war reparations had to first be repaid to Kuwait. It was done. In December 2022 Iraq was finally “fully” released from all Chapter VII sanctions.
So, you see I don’t know that if all of these events just happening in such a short period were coincidental or not or maybe by design but what I do know is the impact they have had in such a very short period of time in comparison to the Obama nightmare decade long era to the current.
So, Obama left office and the Trump era began. Everyone asks why didn’t Trump push the RV when he was in office. It’s not that easy to switch policies such as what was happening in Iraq. Let me explain what happened then.
The new President Trump, of course was briefed on the situation in Iraq. He made a decision to work more on containing Iran (preventing a nuclear war) and working with Israel as his partner to do so.
He wanted to prevent exactly what did later happen when Biden took office- a war in the middle east. During the Trump era at this time there was an economic plan devised for the middle east under Jared Cushner, do you remember it? He was an advisor to the president.
Jared’s plan basically asked all the countries of the middle east to work towards peace through economics. To pitch his plan, he suggested why not develop peacefully with economic policies rather than fighting through long standing terrorist aggression acts. Why spend so much money and wealth fighting each other?
The plan seemed to take root, but it needed a direct second term for Trump to grow, which he did not get. Under president Biden we witnessed yet another disastrous policy for the middle east and war exploded out once again. But the Trump era seeds were planted, remember this…..
However, I have to say that I witnessed God’s Hand at Work in the middle east. Even in spite of all the conflict and mess of the Biden administration as it turned on the middle east.
Iraq still seemed to move ahead. Was it God’s design then that instigating these four elements colliding all at once in 2022, as I described above. Was it coincidental? I think not! The progress made in the last two (2) years in comparison to the last decade is enormous. I know it is hard for many to grasp really just how far Iraq has come since 2022. Many in the dinar RV investment community still believe this is going to drag on and on, maybe for years to come.
So, let me show you yet more proof today it will not drag on. Was my last Tuesday’s Newsletter 1/14 was not enough evidence?
So, we learned in January 2023 that the CBI implemented the “Electronic Platform”. This platform did not end the currency auctions but instead was just a means to control them and audit them.
It allowed the CBI to get handle on just what was going on through these auctions set up by Dr Shabibi. They were meant to be short-term solution to prevent hyper-inflation. So who was purchasing the dollars and why? It was meant for full transparency. Also to prevent the funding of terrorism. Noe of this seemed to work.
Then throughout 2023 we witnessed the final de-dollarization of Iraq.
If you want to recall Dr Shabibi tried this also in 2011-2012 and got the dinar rate down to 1166 remember? It was stable and the parallel market was not a problem.The CBI mandated the use of the dinar in place of all dollars in sales and market places.
This was driven also by electronic point of sale and electronic banking. There was much more too but for the sake of dragging on this Newsletter let’s move on to the September of 2024.
In September 2024, it was announced that the electronic platform would end and dollar sales would be controlled by the Iraq banks with foreign correspondent banks. So, yet the CBI moved to another higher level of dealing with foreign trade. At this point Iraq moved to the normal way of conducting trade on an international level. Like I have said before, they simply moved to the “normal” way, the non-sanctioned way of doing business with the outside world. This is not new. Most countries follow this procedure.
This step that happened just two weeks ago is so critical to what is about to happen next.
This action of the correspondent banks completely took the sales of dollars away from the CBI.
The CBI is no longer using is reserves to back the dinar thus fund the payment of imports. In other words, the CBI is no longer backing the dinar solely by petro-dollars. Get it? Yes, we can summize this is what is happening slowly one step at a time. Many ask me what this means.
This means that Iraq is slowly breaking away from the de facto peg which is solelyto the U.S. dollar. Get it?
The dependency of the dollar alone to pay for imports is going away. In fact as of the move to correspondent banks, it has already gone away. It has to go away in order to go globally and reinstate the dinar back on FOREX. Get it? There is a new peg for the dinar coming shortly. In fact, this sole peg to the US dollar is gone now and the dealing with these correspondent banks already put an end to it since January 1st. Get it? Iraq is now just waiting and monitoring the parallel market. But in today’s news we learn that they are now talking about their next step. Read on….
So, in the two weeks since the Central Bank of Iraq implemented its decision to close the electronic platform for foreign transfers, opinions differed in economic circles regarding the impact of this measure on the financial situation in Iraq, especially in light of the current economic and political conditions.
However, despite the initial criticism the decision sparked, many experts and observers believe it is a “necessary step” to address the economic challenges Iraq is currently facing, especially in terms of reducing pressure on the central bank’s reserves and enhancing the stability of the exchange rate in the local market
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