Tuesday, December 12, 2023
Awake-in-3D: Iraq’s Dollar Crisis and Lack of Confidence in the IQD, 13 DEC
Awake-in-3D: Iraq’s Dollar Crisis and Lack of Confidence in the IQD, 13 DEC
RV/GCR University 2: Iraq’s Dollar Crisis and Lack of Confidence in the IQD
On December 12, 2023
By Awake-In-3D
A Pragmatic Analysis of an Iraqi Dinar RV in Today’s Global Financial Landscape
This multi-part article series discusses the following subjects:
- Part 1: Iraq’s Dollar Crisis and Lack of Confidence in the IQD
- Part 2: The Current IQD Peg and Iraq’s Financial Constraints
- Part 3: Iraq’s Pivot Towards BRICS and Geopolitical Shift
- Part 4: Challenges Facing Iraq for an “Independent” RV at $3.00+ per IQD
- Part 5: A Gold-Backed PetroYuan as an IQD RV Solution
- Part 6: Why Saudi Arabia’s Recent Geopolitical Pivot Matters to Our RV/GCR
- Part 7: BRICS Alliance and its Potential Gold/Asset-Backed Common Trade Currency
- Part 8: A Pragmatic and Realistic Base Case for a Meaningful RV/GCR
Part 1: Iraq’s Dollar Crisis and Lack of Confidence in the IQD
PREMISE: Iraq, once a robust economic force with a currency $3.00 per IQD, now contends with a self-induced dollar crisis, evident in a pervasive lack of trust in the Iraqi Dinar (IQD).
The widespread reliance on the US dollar for daily transactions reflects a profound mistrust ingrained in Iraq’s political and economic landscape, exacerbated by government corruption, political instability, and the constant threat of terrorism.
The Central Bank of Iraq (CBI) and the Government of Iraq (GOI) have pegged the IQD at 1310 IQD/USD, pursuing a cautious route towards financial stability. However, the potential to re-peg the IQD at a higher rate, such as $1.00/IQD, encounters formidable obstacles rooted in existing instability and insecurity, posing a risk of economic chaos.
In a strategic shift away for the USA/Western alliance, Iraq turns towards the BRICS alliance, particularly fostering close economic ties with China and Russia, signaling a pursuit of stability and economic revitalization.
This re-calibration within BRICS, coupled with geopolitical shifts in global energy dynamics, provides Iraq a transformative prospect to break free from the conventional PetroDollar system and forge a new economic currency structure.
These significant geopolitical currents warrant a detailed analysis of Iraq’s economic challenges and, more critically, a realistic forward path for a significant RV of the Iraqi Dinar.
Iraq, once a thriving economic powerhouse, now grapples with a self-induced dollar crisis.
The Iraqi Dinar (IQD) finds itself on shaky ground, lacking the confidence of both citizens and institutions alike. In the daily transactions of Iraqi citizens, the prevalent use of dollars for everyday essentials reflects a pervasive mistrust in the national currency.
Iraqi banks further contribute to the dollarization phenomenon, driven by the reluctance of foreign businesses to engage in transactions using the Iraqi Dinar.
Iraq finds itself caught in a paradox – it has the potential to re-peg the IQD at a higher rate, but the existing issues of instability and insecurity act as insurmountable barriers. The increased US dollar reserves needed to support a high peg rate at this time would equate to financial suicide.
This crisis of confidence in the IQD is not arbitrary; it is deeply rooted in the political and economic landscape of Iraq.
Government corruption, political instability, and the persistent threat of terrorist activities within and around the country’s borders have created an environment where trust in the national currency is eroding.
The Central Bank of Iraq (CBI) and the Government of Iraq (GOI) attempt to maintain a semblance of stability by pegging the IQD at 1310 IQD/USD. However, this peg is not without reason; it is a cautious response to the challenges that a higher peg rate would bring.
Iraq finds itself caught in a paradox – it has the potential to re-peg the IQD at a higher rate, say $1.00/IQD, but the existing issues of instability and insecurity act as insurmountable barriers.
The increased US dollar reserves needed to support such a peg rate at this time would equate to financial suicide for Iraq.
The amplified instability and the deep-rooted no-confidence crisis would render such a currency RV attempt economically unsustainable at this time.
In response to these challenges, Iraq is pivoting away from its traditional alliances and turning towards the BRICS alliance, with a specific focus on bolstering strong economic ties with China and Russia.
A recent article highlighting Iraq’s strategic shift towards BRICS underscores the nation’s quest for stability and economic rejuvenation. In contrast to the perceived lack of interest or capability from the USA/Western alliance, China and Russia are seen as partners with a personal stake and the ability to help Iraq stabilize its economy – and a practical scenario for a significant RV.
An impending alignment of Iraq with BRICS raises questions about the future dynamics of the global energy markets, particularly in oil and gas.
The collaboration of Russia, Saudi Arabia, Iran, and potentially Iraq within BRICS is positioned to reshape the supply dynamics of global oil and gas.
As these nations assert dominance, the traditional PetroDollar system is expected to diminish rapidly. Iraq, finding itself at the crossroads, could emerge with the potential to embrace a new economic currency structure, breaking away from the reliance on the US dollar and the Euro.
Part 2 of this article series coming soon…
READ: Iraq is not in the same situation as Kuwait was in the 1991 Kuwaiti Dinar currency series upgrade.
"RV UPDATE" BY BREITLING, 13 DEC
Breitling
US dollar, Iraqi dinar - they have one of the biggest US dollar reserves on the planet. And that's what backs up their dinar (outside of their energy sales). They are not de-dollarizing to do business internationally without using the dollar...they're not getting rid of the US dollar. It's still part of their reserve. If they're going to sell oil to the United States they're going to use the US dollar...
The inflation for Iraq is artificial inflation. You go back and look, How many customers did Iraq have back in the day?
How much oil were they selling? What was the value of the currency back in those days? $3.22 value. How many customers do they have today? They have way more customers. They have more production. The price per barrel is more than in those days when it [the dinar] was $3.22. It's not a market bearing inflation, it's artificial inflation. They have more customers. They have a bigger reserve than they've ever had. One of the biggest in the world for the US dollar. That's the reality that you're looking at. You are sitting on a gold mine.
"RV UPDATE" BY MNT GOAT, 12 DEC
Mnt Goat
Article Quote: “covering imports from retailers Turkey in tens of millions of euros, through Iraqi merchants paying in Iraqi dinars and the Central Bank strengthening them in euros to settle with Turkish merchants in Turkish lira.”
...WOW! WOW! WOW! Iraq is paying for imports in dinars. We have been waiting for this news for so long now, almost 17 years... We also previously heard that Iraq is trading with Iran in dinars too... this is all VERY GOOD news as this is how international trade should work...
Article: "PARLIAMENTARY INVESTMENT AND DEVELOPMENT: THE INDUSTRIAL INVESTMENT LAW WILL BE APPROVED DURING THIS SESSION"Iraq begins electoral silence on Friday. Documents, 12 DEC
Iraq begins electoral silence on Friday. Documents
2023-12-11 03:49Font
Shafaq News / The Media and Communications Commission announced, on Monday, that the “electoral silence” begins from next Friday, December 15, until the closure of the last electoral center.
This came in a book sent by the authority to media institutions in which it called on the institutions to abide by electoral silence and not to promote any entity or candidate.
Electoral silence is a period determined by law preceding every presidential or parliamentary elections, in which the practice of political propaganda is prohibited, during which all parties and independent and coalition parties are prohibited from exercising any activity within the framework of their electoral campaign, and in which candidates are strictly prohibited from carrying out any process that falls within the promotion, propaganda and winning the favor of voters.
