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Why is the U.S. threatening Iraq over Iranian militias?
The U.S. has made clear that Iraqi sovereignty means excluding Iran-backed militias from government. Continued militia influence risks sanctions, loss of dollar access, and delays to economic normalization.
Introduction: Sovereignty Comes With Responsibility
“The United States supports Iraqi sovereignty… That leaves absolutely no role for Iran-backed militias.”
That statement alone tells you everything you need to know.
Sovereignty does not mean serving Tehran.
Sovereignty means serving the Iraqi people.
And all of this pressure is intensifying as Iran’s own regime shows signs of cracking internally. This is maximum pressure — financial, political, and strategic — coming from every direction.
Financial Times Confirms Escalation: Dollar Supply at Risk
In the article titled:
“FINANCIAL TIMES: WASHINGTON THREATENED TO CUT OFF DOLLAR SUPPLIES TO IRAQ IF BAGHDAD REFUSED TO REPLACE ADNAN FAIHAN”
we learn that Washington is now directly pressuring senior Iraqi politicians to form a government free of armed factions.
One name stands out.
Why Adnan Faihan Is a Deal Breaker
Adnan Faihan:
Former member of Asaib Ahl al-Haq
Group designated by the Trump administration as a terrorist organization
Recently elected first deputy speaker of parliament
According to the report:
“Tensions have escalated with Washington following the election of Adnan Faihan.”
And the U.S. response?
“The U.S. embassy was furious… calling it hostile behavior and an act of defiance.”
The demand was unmistakable:
➡️
Replace him.
Read the Signals: The U.S. Is Not Backing Down
How many articles does it take to understand the message?
No Iranian-backed militias
No armed factions in government
No symbolic compliance
No delays
This is not negotiation.
This is enforcement.
Whether it takes months or weeks depends entirely on what Iraq chooses to do next.
Why Iran Needs Iraq as a Puppet State
Iran’s position is simple:
Iraq is a financial lifeline
Iraqi banks have been used to bypass sanctions
Dollar access keeps Iran afloat
U.S. and Iraqi officials have confirmed that Iran has long exploited Baghdad’s banking system.
That is exactly why Washington has:
Sanctioned over a dozen Iraqi banks
Tightened dollar compliance
Increased monitoring
And now the pressure escalates.
The Nuclear Option: Oil Dollars
So far, the U.S. has not fully cut off Iraq’s oil dollar flows.
But make no mistake:
Over $100 billion in Iraqi oil revenues remain under U.S. control
Funds are routed through the Federal Reserve Bank of New York
Oil is still sold in U.S. dollars
Ask yourself:
What happens if that flow stops?
How does Iraq pay salaries?
How does it fund its budget?
How does it survive?
Trump’s Envoy Arrives in Baghdad
In the article titled:
“BREAKING | SOURCES TO IRAQ OBSERVER: TRUMP’S ENVOY TO IRAQ, SAVAYA, HAS ALREADY ARRIVED IN BAGHDAD”
we learn that Mark Savaya, President Trump’s envoy, met with Prime Minister Mohammed Shia al-Sudani for a working dinner.
Sources say discussions focused on:
Rampant corruption
Drying up illicit funding sources
Structural reform
No official statement yet — but silence here is meaningful.
Washington’s Demand: Disarm the Militias — Now
Another article revealed even more urgency:
“WASHINGTON THREATENS BAGHDAD WITH THE ‘NUCLEAR OPTION’: REPLACE FAIHAN AND DISARM THE FACTIONS IMMEDIATELY”
Key takeaway:
Iraqi factions proposed a two-year phased disarmament
Washington rejected it outright
Immediate action demanded
Why?
Because history matters.
Why the U.S. Won’t Be Fooled Again
We’ve seen this movie before.
Nouri al-Maliki:
Promised reform
Delivered corruption
Blocked reinstatement in 2013
Purged the Central Bank leadership
Refused to leave office
Exploited ISIS as a power play
This is documented history — not speculation.
Washington knows it.
Positive News: Iraq Has No Budget Deficit
Let’s shift to something constructive.
In the article:
“BAGHDAD TODAY INVESTIGATES: IRAQ’S BUDGET HAS NO DEFICIT”
we learn what many already suspected:
➡️ Iraq does not lack revenue.
➡️ It lacks collection and discipline.
The money exists.
It’s just being stolen or mismanaged.
The Hoarding Crisis: A Banking Failure
Another article reveals why liquidity is scarce:
87% of cash (about 95 trillion dinars) sits outside the banking system.
Why?
Banks alter contracts unilaterally
Depositors receive lower returns than promised
Trust collapses
Economic expert Salam al-Zubaidi warned:
“These practices discourage deposits and worsen the liquidity crisis.”
This creates:
Hoarding
Weak lending
Slowed growth
Yes — more banking reform is needed.
What This All Means
This election cycle is not just messy.
It is decisive.
The coming weeks could:
Move Iraq forward rapidly
Or delay normalization for years
There is no middle ground.
Q&A: Key Questions Answered
Will the U.S. tolerate Iranian militias in government?
No. The position is explicit and firm.
Is dollar access really at risk?
Yes. Dollar flows are the U.S.’s strongest leverage.
Does Iraq have a budget deficit?
No. The issue is corruption and mismanagement.
Why is banking reform critical?
Without trust, cash stays outside banks, crippling liquidity.
Could this delay reinstatement?
Absolutely, if instability and Iranian influence continue.
Final Thoughts
This drama is far from over.
But now the lines are drawn.
The pressure is real.
And the consequences are clear.
Iraq must choose:
Reform or regression
Sovereignty or subservience
Stability or sanctions
The next few weeks will tell us everything.
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MNT GOAT
“The United States supports Iraqi sovereignty, and the sovereignty of every country in the region. That leaves absolutely no role for Iran-backed militias that pursue malign interests, cause sectarian division, and spread terrorism across the region,” With sovereignty means responsibility to serve the Iraqi people not the Iranian regime which desperately now needs Iraqi support. Remember too that all of this come on the heels of what is now going on in Iran as the current regime is about to break. This is maximum pressure from the US from all directions.
In the article titled “FINANCIAL TIMES: WASHINGTON THREATENED TO CUT OFF DOLLAR SUPPLIES TO IRAQ IF BAGHDAD REFUSED TO REPLACE ADNAN FAIHAN” we learn at the Financial Times reported on Friday that Washington is pressuring senior Iraqi politicians to form a government that is free from armed factions. There is one person especially they want out. His name is Adnan Faihan. He is a former member of the Asaib Ahl al-Haq, which has been designated by the Trump administration as a terrorist organization. Go figure?
I quote from the article – “tensions have escalated with Washington following the election of Adnan Faihan, a former member of Asaib Ahl al-Haq, as first deputy speaker of parliament last month.” According to the news, “The US embassy was furious and said this was hostile behavior and an act of defiance, and they demanded his replacement.” Can everyone see now where this is going and what it is going to lead to? How many more articles do we need to see to understand the US is NOT going to back down on elimination of these Iranian-backed militia members and politicians in the Iraqi government. It may be months before this government is formed correctly or it may happen sooner that we think depending on what Iraq decides to do.
Why does Iran need Iraq as its “puppet” state?
Iran’s stance is that it views Iraq as vital for keeping its economy afloat amid sanctions and long used Baghdad’s banking system to skirt the restrictions, US and Iraqi officials have said. Successive US administrations have sought to choke that dollar stream, placing sanctions on more than a dozen Iraqi banks in recent years in an effort to do so. But there is about to be sanctions like Iraq has never experienced before if they do not bend to these Iranian backed politicians. Washington has never yet curtailed the flow of dollars from the oil revenues of Iraq, sent via the Federal Reserve Bank of New York to the Central Bank of Iraq. As you might recall the US has had de facto control over Iraq’s oil revenue since it invaded the country in 2003.
So, all my readers should realize after learning of the complete news, not just one sided, that the drama of this election is far from over. These are pivotal weeks ahead. These coming weeks could either move our investment in the correct direction of sooner than later or it could push it to much, much later, like years away. I just have to be honest with everyone from the news we are getting from Iraq.
___________________________
What else do we know…..
In a recent article titled “BREAKING | SOURCES TO IRAQ OBSERVER: TRUMP’S ENVOY TO IRAQ, SAVAYA, HAS ALREADY ARRIVED IN BAGHDAD AND MET WITH AL-SUDANI AT A WORKING DINNER” we learned that the US President Donald Trump’s envoy to Iraq, Mark Savaya, has already arrived in Baghdad and met with Prime Minister Mohammed Shia al-Sudani for a working dinner on last Thursday evening. What do you think they mainly talked about? Conversation from sources told us it focused on combating the rampant corruption in the Iraqi state and drying up its sources. No official statement has yet been issued by the Iraqi government regarding the start of the visit and its agenda. I will try to give you today yet more of what I have learned so far since last Thursday.
Please take a peek at the article titled “WASHINGTON THREATENS BAGHDAD WITH THE “NUCLEAR OPTION” (in a matter of speaking): REPLACE FAYHAN AND DISARM THE FACTIONS IMMEDIATELY”. In it we learned that an Iraqi newspaper quoted informed sources stating that American officials, during their meeting with prominent Iraqi political leaders tasked with forming the next government in recent weeks, pushed for the presentation of a credible plan to disarm Iranian-backed armed groups quickly.
The news also quoted a source as saying that the coordinating framework, including the main militias backed by Tehran, offered to announce a phased disarmament plan over two years after the formation of the government, hoping that the issue would “lose momentum” before its implementation. However, the report said that Washington demanded immediate action not years away. We know that these Iranian-backed politicians will say one thing and do another. Nori al-Maliki’s last administration was full of saying what you wanted to hear and then he did what he wanted later. So, will the US be fooled again with their lies? Remember it was the US that had bad intelligence on Nori al-Maliki and supported his election at the second prime minister of Iraq in disregard to the election results and the winning political block to select the next prime minister. Remember Dr Ayad Allawi? He was interim prime minister of Iraq from 2004 to 2005 and then ran for the prime minister against Maliki in the 2006 election cycle. Allawi won the majority of votes and was selected by the majority political block as their nominee; however, the sleaze-bag Nori al-Maliki was seeded instead due to a technicality. This is when all the trouble began with Iraq right from this moment on and the corruption began. As we can prove he also blocked the reinstatement of 2013 with false accusations of Central Bank corruption. This is also when Dr Siani Shabibi was ousted as head of the CBI. Maliki served two terms and ended in 2014 as the prime minister. He had to be forcefully taken out of office as he refused to concede his office. He wanted another dictatorship and to be the next Saddam Hussien. He tried to use the ISIS invasion as his fear factor to do so. He is an opportunist and will step on anybody, kill anybody to gain control of Iraq again.
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Lastly let’s look at more positive news for today in the article titled “BAGHDAD TODAY INVESTIGATES: IRAQ’S BUDGET HAS NO DEFICIT… REVEALING THE “FIGURES” THAT CITIZENS ARE NOT MEANT TO SEE – URGENT” I have said previously that Iraq has no deficit only stolen money. This article takes a hard look at the revenue streams. Why do some politicians keep looking at deficits and the glass is half empty when we can clearly see that there is more than enough revenues only they need to align good sound practices to collect these revenues and put them into the Federal coffers, thus not steal the funds.
But, in this regard, we must also take a hard look at the US and all the stolen money exposed by DOGE and since. Even with measures in place in the US the money flows into notorious hands if not audited and carefully managed. Iraq, as new as it is, is even more susceptible to these dangers of stolen money. But this will change as it is changing also in the US.
In another article they expose yet another reason why these hoards of cash are not in the banks that the CBI keeps telling us about in many articles of the past. It is titled “AN ECONOMIST SAYS BANKS’ MANIPULATION OF PROFITS IS EXACERBATING THE “HOARDING CRISIS” AND LIQUIDITY SHORTAGE.” Oh… so it this issue much more complicated than most believe? These practices we learn about today have led to a loss of confidence in the public banking sector, encouraging citizens to hoard their money at home and in businesses, away from the formal banking system
In the article we learn that economic expert Salam al-Zubaidi warned on Thursday of the repercussions of some state-owned banks altering the terms of agreements with depositors. I quote –“He emphasized that this ill-considered measure has resulted in reduced profits for citizens and discouraged them from depositing funds, exacerbating the phenomenon of hoarding and the country’s liquidity crisis.”
I quote from the article again – “There are numerous complaints from citizens regarding the reduced profits they receive when depositing their money, which contradicts the initial terms of the agreement with the bank.” and that “the main problem lies in the ill-conceived management decisions that unilaterally change previous contracts.”
I quote “these practices have led to a loss of confidence in the public banking sector, encouraging citizens to hoard their money at home and in businesses, away from the formal banking system.” He pointed out that this “hoarding” poses a significant challenge to the Iraqi economy, as approximately 87% of the circulating cash (around 95 trillion dinars) remains outside the formal banking system. This phenomenon of hoarding money has caused a major liquidity crisis and negatively impacted banks’ ability to finance and lend, thus harming overall economic growth in the country.” Looks like yet another banking reform is needed….. will it ever end?
