REMOVING ZEROS FROM CURRENCY: SMART MOVE OR RISKY GAMBLE?

To exclude Iran. US bet on open energy doors in Iraq, 22 AUGUST

 Shafaq News / The American magazine “Forbes” highlighted the doors open to American companies in the Iraqi energy sector, considering that the United States government, in order to neutralize Iran, is working with these companies to accelerate efforts in the presence of Iraqi Prime Minister Mohammed Shia Al-Sudani, who described it as “pro-business sector,” in order to achieve Iraq’s independence from Iran in the field of energy by 2030.

The magazine indicated in a report translated by Safaq News Agency that the American companies “KBR, Transatlantic Petroleum, Honeywell/UOP, Baker Hughes, Emerson, Arc Energy and GE” are working with the Baghdad-based company “RASEP” in the field of infrastructure and energy development, in order to develop what could be one of the largest oil and gas fields in the world, specifically in the Ben Omar River in southern Iraq.

The report pointed out that the project includes an escort facility for the export of liquefied natural gas near Basra, which can become operational during the current decade, while France-based Technip Energies will develop the plan and feasibility study for the LNG terminal, adding that other aspects of the project are gas collection, compression and central processing and the laying of more than 400 kilometers of pipelines.

The report quoted RASEP Director Ahmed Imad Al-Mohsen, as saying that exports of liquefied oil gas and condensates alone can generate $100 million to enter the Iraqi treasury annually.

After the report pointed out that the Iraqi government agreed to establish the first liquefied natural gas import terminal in the southern port of Al Faw, which can be converted into an export terminal, Al-Mohsed said that Iraq is a welcome market for US energy and technology companies.

According to Al-Mohsen, US investments contribute to the stability of Iraq’s economy, the creation of thousands of direct and indirect jobs, the strengthening of Iraqi finances, reconstruction and dealing with emission reduction goals, adding that this helps “strengthen US government initiatives towards climate change.”

The report quoted KBR’s head of sustainable technology solutions, Jay Ibrahim, asserting the importance of timing that.

The report pointed out that KBR has been working in Iraq since the seventies of the last century, and has recently employed more than 500 people, including 150 Iraqis to work on the development of the energy and electricity sector.

The report also stated that during the visit of Iraqi Prime Minister Mohammed Shiaa Al-Sudani to Washington last April, KBR signed a contract worth $12 million to deal with the engineering side of the Ben Omar project, after which it will manage the project, engineering, procurement and reconstruction.

According to Ibrahim, Iraqi ministers are working in a way that the government shows that it is working with the private sector in a new way, which is “exciting and new and has never done before.”

The U.S. report said the ultimate goal is to produce natural gas, build electrical infrastructure, provide excess energy to allies and stop relying on Iran for energy.

The report quoted Al-Mohsen as saying that Iraq spends “about $5 billion a year on importing Iranian gas.”

According to former US Undersecretary of Defense Robert Welke, Iran’s reserves in 2021 when President Donald Trump left office was only $5 billion, adding that Iran currently exports 1 million barrels of oil per day, explaining that the Iranians “have returned to the Shah’s levels, which were present in the 1970s.”

The report added that Iran is currently exporting oil to 17 countries, including China, Oman and Bangladesh, noting that it consumes most of its natural gas production except for what it exports to Iraq.

He added that Iran has the largest gas reserves in the world after Russia, shares gas fields in the Gulf with Qatar, and exported 18.04 billion cubic meters of gas via pipelines in 2022.

The report quoted the Washington Institute as saying that Iran’s oil exports, more than tripled during the Biden administration “due to the easing of U.S. sanctions and increased Chinese demand for crude oil subject to substantial rebates.”

After the report noted that the Trump administration was able to prevent Iran from producing at the levels it currently is, Welke was quoted as saying that “Iran is back. And their cabinets are full, and they are able to cause problems all over the planet, especially in their region.”

While the report noted that given the ease of transporting Iranian power to neighboring countries, it is becoming relatively cheap, Wilke was quoted as saying that “so it is its price, and the cost of that is significant.”

According to Wilke, the development of Iraq’s energy sector is part of a larger effort to ensure U.S. national security and stability in the Middle East, explaining that “in terms of U.S. national security, looking at Iran only as Iran is not the right way to look at it,” adding that “you have to look at it as part of a trilogy involving Moscow and Beijing, and therefore weakening the Iranians, weakens the Chinese and weakens the Russians.”

Welke explained that weakening these governments requires beyond making Iraq independent in the energy field, which includes making the United States more in control of energy so that countries do not have to rely on Russian gas or Iranian oil, noting that during the Trump era the United States was able to secure cheap gas and oil for “our friends” while imposing sanctions and banning Iranian oil sales mainly.

“In theory, anything that allows countries on the outskirts of Iraq to be stronger, is a counterweight to Iranian pressure, and the Iranians will have nothing to provide for a country that has enough energy,” the report quoted Wilke as saying.

Welke spoke of “strategic calculations” for the Trump administration, namely how to establish a special “deterrence loop” about Iran, and that the “Ibrahim Accords” were the focus of that strategy.

“We were working on the Saudis when Trump left office, bringing the Saudis closer to the anti-Iran ring involving Israel with U.S. backed,” Welke was quoted as saying, adding that anything Saudi Arabia could do to challenge Iranian influence “would make sense from a military-strategic perspective.”

He noted that if Trump wins the upcoming election, he “will be a renewed push for the full inclusion of the Saudis to this alliance.”

While the report said Iraq’s oil production increased according to the International Energy Agency, it noted that Iraq struggled to lock up and process the gas, leaving its electric system at risk.

“The main pain point in the country is the lack of electricity as during the summer, there is a deficit of about 12 hours a day of electricity supply,” the report quoted Al-Mohsen as saying.

While noting that the associated gas burning poses a huge risk to the environment and government revenues, Mohsen said that one of the “top priorities on the prime minister’s agenda” is to limit the gas burning.

The report continued that “RASEP” became the first Iraqi company to lead a gas development project in the country, pointing out that the government is currently working on building electricity transmission lines to connect it to Kuwaiti, Jordanian and Turkish electricity networks.

The report mentioned the results of Sudan’s visit to Washington and the joint statement that indicated the United States’ support for Iraqi energy efforts, including the completion of the connection of the electrical network with neighboring countries including Jordan and other Gulf countries, and on helping Iraq reopen the pipeline and Turkey.

“The US government supports such initiatives that promote energy independence in Iraq, which will sever all ties and all natural gas and energy imports from Iran,” Al-Mohsen was quoted as saying, noting that Washington has “long pressed for the severing of relations with Iran.”

According to the mohenceful, the funds payable from the Iraqi side to the Iranian side are in US dollars, which is a source of funding for the Iranian government.

He pointed out that US companies have so far been focused on rebuilding the Iraqi government, and that most of those companies have dealt with the Ministry of Oil and the Ministry of Electricity, but the private sector in Iraq has not been fully strengthened.

“We have open doors to invest in energy projects, and we are the first Iraqi company to carry out a gas development project,” the report quoted Al-Mohsen as saying. In the past, this was intended for the government side, and covered by the government,” he said, noting that international companies would participate in the upcoming licensing rounds to develop the oil and gas fields.

Translation of Shafaq News Agency

https://shafaq.com/ar/تقارير-وتحليلات/ل-قصا-يران-رهان-مريكي-على-بواب-الطاقة-المفتوحة-في-العراق

DINAR REVALUATION UPDATE: The Decision to Remove Zeros from Currency: A Prudent Move in 2024?, 22 AUGUST

The Decision to Remove Zeros from Currency: A Prudent Move in 2024?

The topic of removing zeros from currency has resurfaced, particularly with economist Yasser Al-Mutawali's insights in August 2024. This concept, often considered a monetary reform, has been implemented in various countries at different times, each with its own set of circumstances and outcomes. 1

Historical Context: Removing Zeros from Currency

In 1997, Russia made headlines when it announced its plan to remove three zeros from the ruble. 1 This move was symbolic, meant to signify the end of an inflationary era and instill confidence in the currency. However, the decision was met with cautious optimism, as previous reforms had led to chaos and the loss of savings for many citizens.

The Current Scenario: Yasser Al-Mutawali's Perspective

Al-Mutawali's stance in 2024 is that the procedure of deleting zeros is not appropriate at the present time. He suggests that the implementation of such a decision should be deferred until electronic payment tools are utilized by 90 percent of the population . This high adoption rate would facilitate an easier and smoother transition. 1

The Role of Electronic Payments in Reform

The economist's criteria for electronic payment adoption highlights a significant consideration for monetary reform. In the digital age, the widespread use of electronic transactions can mitigate potential negative impacts on the general public during currency transitions. It ensures that the population is well-prepared and minimizes the risk of financial loss or confusion.  1

Conclusion: Timing and Preparation

Yasser Al-Mutawali's advice emphasizes the importance of timing and preparation in monetary reforms. Removing zeros from currency is a complex procedure that requires careful planning to avoid negative consequences. As of August 2024, Al-Mutawali recommends against proceeding with the removal of zeros until electronic payment tools are more widely adopted. This cautious approach aligns with historical lessons and the need for a smooth transition that protects citizens' interests. 1

THE RODRIGUEZ ESTATE & JEFF RAHM with MERLIN, the RENO MAGICIAN 08-21-24...

Iraq is out of the grey list of money laundering, 22 AUGUST

Alsumaria News – Local

The Office of Money Laundering and Financing of Terrorism in Iraq announced that the country is far from being included in the Grey List of Money Laundering, after the establishment of updated, comprehensive and confidential databases that meet international requirements.

The representative of the office to the Central Bank, Hussein Al-Maqrim, reported the completion of the mutual international assessment by the international expert group to which Iraq recently underwent, which lasted for 14 months, with the aim of assessing the technical compliance with the legal framework, regulations, instructions and controls to combat money laundering and terrorist financing.

In an interview with the media, Muqren explained that “the international expert group worked to evaluate the effectiveness of anti-money laundering and terrorist financing systems, by providing statistics, in addition to practical cases, to prove the application of the legislative framework, as well as the field visit.”

He added that “the evaluation report was discussed and approved by the Middle East and North Africa Financial Working Group (MENAFATF) last May,” noting that “the preliminary results confirmed the departure of the Republic of Iraq from inclusion in the gray list, and an action plan and recommendations were drafted by international residents, to ensure compliance with international standards.”

Controversy over the gray list

The Office for Combating Money Laundering and Financing of Terrorism in Iraq, which was established as a public department within the departments of the Central Bank of Iraq, supervises and follows up with all concerned authorities, to implement the strategic objectives of combating money laundering and terrorist financing for the years 2023 – 2027, and enjoys moral personality and financial and administrative independence.

The evaluation conducted by the Middle East and North Africa Financial Action Task Force (MENAFATF) addressed technical compliance with legal elements, regulations and instructions related to combating money laundering and terrorist financing, in addition to the effectiveness of the systems by providing statistics and practical cases, which indicated an improvement in the application of the legislative framework.

The announcement of the exclusion of Iraq from the list of developed countries in money laundering operations has sparked controversy among Iraqi financial and economic specialists, while the non-inclusion of Iraq on the gray list is considered “positive.”

https://www.alsumaria.tv/news/economy/497705/العراق-يخرج-من-القائمة-الرمادية-لغسل-الأموال?src=rss&utm_source=thewall360&utm_medium=rss-articles&utm_campaign=rss&utm_term=Rss

DINAR REVALUATION : THE DYNAMICS OF CURRENCY REVALUATION AND ITS IMPLICATIONS IN THE POTENTIAL COLLAPSE OF THE FIAT FINANCIAL SYSTEM, 22 AUGUST

The Revaluation of Currencies Amid a Fiat Financial System Collapse in 2024

As the global financial landscape evolves, the stability of fiat currencies is a subject of growing concern. The potential collapse of the fiat financial system, fueled by factors such as inflation, economic instability, and geopolitical tensions, presents a complex scenario for the international economy. 1 Amid this turmoil, opportunities for currency revaluation (RV) emerge, signaling a significant shift in monetary policy. This article explores the dynamics of currency revaluation and its implications in the context of a potential collapse of the fiat financial system.

Understanding Currency Revaluation

Currency revaluation refers to the process by which a nation's central bank adjusts the value of its currency in relation to foreign currencies. This adjustment can be upward (revaluation) or downward (devaluation) and is usually aimed at correcting imbalances in the foreign exchange market or stimulating economic growth.  4

The Context of Fiat Currency Collapse

Fiat money, which is not backed by any physical commodity like gold or silver, faces challenges when governments are unable to maintain its value. As inflation rises and economic confidence wavers, the purchasing power of fiat currencies can erode significantly. 4 In the event of a collapse, the value of fiat currencies could plummet, leading to a loss of confidence in the monetary system.

Opportunities for Revaluation

In the midst of a collapsing fiat system, nations may seek to stabilize their economies by revaluing their currencies, often by linking them to more stable assets such as gold or other commodities. 1 This shift towards a gold-backed system could provide a measure of stability and restore confidence in the monetary framework.

Gradual Transition

The transition to a gold-backed system is likely to occur gradually. Central banks and governments may initially implement a dual-currency system, allowing both fiat and commodity-backed currencies to coexist. 1 This period of transition would provide time for economies to adjust and for necessary reforms to be implemented.

Economic and Political Implications

The revaluation of currencies has far-reaching economic and political implications. It can affect international trade, investment flows, and the geopolitical balance of power. 1 Nations with stronger economies and stable currencies may gain, while those with weaker fiscal positions could face further economic challenges.

The Role of Cryptocurrencies

In the context of a collapsing fiat system, cryptocurrencies could play a significant role as alternative stores of value and mediums of exchange. 2 The decentralized nature of cryptocurrencies offers a potential hedge against the failure of traditional financial systems, although their volatility and regulatory uncertainty remain major concerns.

Conclusion

The potential collapse of the fiat financial system in 2024 and beyond presents a complex scenario with significant implications for global economies. Opportunities for currency revaluation, particularly in the direction of a gold-backed system, could offer a path to stability. However, the transition will likely be gradual and fraught with economic and political challenges. Understanding the dynamics of currency revaluation in this context is crucial for policymakers, investors, and citizens alike as they navigate the uncertain future of the global financial landscape.

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