I want the same thing you do. Trust me, I would love nothing better to wake up in the morning and find out that the zeros are still on the dinar but they've magically changed the exchange rate to $3.22. That would be awesome.
Q & A WITH THE PROFESSOR
Question: "What does Iraq need to do right now to reinstate their old rate of $3.22?"
Professor Boskin [of economics] graciously shared the following information which I am pleased to relay to you...It should be able to give you an idea of how far away this thing might be...The first thing he's talking about is implementing monetary reforms.
PIMPY: We've been hearing about that for years so we know they definitely are implementing monetary reforms.
PROFESSOR: ...The Central Bank of Iraq may consider removing zeros
...
PIMPY: Obviously if they're going to remove the zeros off the currency, they're going to re-denominate and print new bank notes.
PROFESSOR: Establish a currency basket system...the value of the dinar would be determined against a weighted average of several currencies.Reduce their dependency on the dollar.
PIMPY: At the beginning of this year they were not supposed to use the US dollar anymore.
PROFESSOR:
...Focus on diversifying its economy beyond oil dependency...
PIMPY:Right now...only 89% of [the budget] is dependent on oil sales. A lot better than where it was.
PIMPY: Right now Iraq is somewhere around 5%...He's saying if they want to reinstate the $3.22 rate these things have to be taken care of. I do find it interesting we've been listening to them talk about deleting the zeros and he's put that in here...A lot of this stuff Iraq has already started...Kudos to Al-Sudani.
Al-Sudani leaves for New York early next week to participate in the UN General Assembly meetings
9/19/2024
Government sources announced that Prime Minister Mohammed Shia al-Sudani will leave for New York early next week to participate in the meetings of the United Nations General Assembly.
The sources stated that al-Sudani will head a high-level government delegation to New York and will deliver Iraq's speech before the United Nations General Assembly.
Al-Sudani will also meet with world leaders on the sidelines of the United Nations General Assembly meeting. LINK
Member: Mark how would you rate your warm and fuzzy feeling on a scale of 1-10?
MZ: I would rate my warm and fuzzy feeling at about a 9.9 right now. It’s very warm and very fuzzy.
Member: this on NINA news Thursday: Al-Sudani leaves for New York early next week to participate in the UN General Assembly meetings
Member: I am still hearing RV in September
MZ: I am still hearing that as well. I hope it’s accurate.
MZ: It’s been very quiet overnight o the RV front but, it was a fantastic news week from Iraq. They are being told budget tables are approved and HCL is coming. We will have more news on that front tonight when MilitiaMan joins us. I am saving some interesting tidbits for tonight
MZ: Redemption center/banking folks on a shortened “on call” for this weekend in case they are needed. These are people that work in wealth management for large banks…
.
MZ: We have somebody that was recently invited to come in and SKR (Get a safe keep receipt) on currency. They have a very good relationship with their banker and were told to expect funds within a week or two tops. If I get permission I will share a little more on this one- if I can. IMO this tells us how close we are…or at least how close bankers feel we are. This was at one of the top 5 US banks .
MZ: No fresh updates on bonds since yesterday but, I do have some folks who finished final paperwork this week and are expecting their funds tomorrow. One is in Europe so by the time we do our podcast tomorrow –we may have an answer already…..So fingers crossed.
FIREFLY:They're going to the streets with Sadr on the 25th. We will hit the streets in millions. We do this weekly until we are paid, starting on the 25th. Sadr has organized this and we will back him for our constitutional rights.
FRANK: Sadr is a good leader. He will not do anything violent. Make sure you don't protest because you will retard the whole monetary process for you.
FIREFLY: We know there's got to be a new rate coming and we going to help speed this up...
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Frank26
[Iraq boots-on-the-ground report]
FIREFLY:On November the 20th to the 21st we have a curfew for the very first census in the last 27 years
.
FRANK:...It looks like Sudani ordered for this new census to occur for your HCL benefits as Iraqi citizens. It seems to me the only reason he's doing it now is because you have a new exchange rate that they can work with. If not...there wouldn't be a new census...as they determine the fair amount everyone is supposed to get. This new census IMO screens that there is a new exchange rate...
FIREFLY: ALAQ SAD THAT AT THE END OF THIS YEAR THEY WILL IMPLEMENT THE INITIAL PLAN TO COMPLETE THE REFORMS FOR THE BANKING SYSTEM, 18 SEPT
Frank26
[Iraq boots-on-the-ground report]
FIREFLY:Alaq is on TV and he's singing like a bird with information.
He's talking to us an awful lot every day about what they're going to do with this reform. He gives speech about how much money is in the digital system already. It's growing. He said at the end of this year we will implement the initial plan to complete the reforms for the banking system...
FRANK: The digital information is one of the main key parts of the monetary reform. It will allow your money to float freely not only inside of your country but outside...You are going to be internationally recognized. This is extremely exciting.
FRANK26: "AND THE MESSAGE SAYS... NO MORE PROGRAM RATE, NO MORE RESTRICTIONS!!!"...F26
"Our Country's Dream"... Al-Sudani Sends an "Important" Message to Gulf States Regarding the Path to Development
9/17/2024
Baghdad
Prime Minister Mohammed Shia al-Sudani stressed that the drop in oil prices to less than $72 confirms the need to diversify the Iraqi economy, while he addressed a message to the Gulf countries regarding the path to development.
Al-Sudani said during a televised interview followed by "Al-Eqtisad News", "The federal administration's budget allows it to pay $8 for every barrel of oil produced, while contracts signed with the Kurdistan Regional Government give companies $26. This stagnation has affected production from the region and led to a delay in the resumption of the pipeline."
Baghdad has been unable to agree on how much to pay international oil companies operating in the north of the country for their production.
"We have to look at how we balance these issues. Do we look at the budget to see what we can do or do we try to look at prices?" he added.
“Closing the pipeline, which can carry nearly half a million barrels per day of oil from Kurdistan to the Turkish coast, would cost billions of dollars in lost revenue. However, restarting it would pose a dilemma for Iraq, which has failed to comply with OPEC+ production limits amid dire financial needs but has repeatedly said it will compensate for overproduction,” he said.
Al-Sudani said, "We are committed to abiding by OPEC decisions and maintaining the oil price in a way that achieves a balance between the interests of users and producers."
Pipeline problems
Turkey halted the pipeline in March last year after an arbitration court ordered it to pay Iraq $1.5 billion in compensation for transporting oil through it without Baghdad’s consent. Ankara, which claimed the pipeline was shut for repairs after two massive earthquakes in February, said in October it was ready for operations and that it was up to Iraq to resume flows.
But financial and legal issues have emerged, such as compensating companies for costs. International companies have said they also want to settle their overdue receivables — including $1 billion for oil produced between September 2022 and March 2023.
With exports halted, companies have begun producing some crude and selling it domestically. Iraqi officials have previously said this production has caused problems with compliance with quotas set by the Organization of the Petroleum Exporting Countries.
Iraq’s production cap is set at 4 million barrels a day, but it produced 4.32 million barrels a day last month, according to data compiled by Bloomberg. The country, along with some other OPEC+ members, will gradually lift those limits starting in December.
Al-Sudani is keen to “increase production in the long term after years of war and internal conflict that have affected Iraq’s oil industry. In August, BP signed a preliminary agreement to help boost production from the Kirkuk region. Iraq is also rehabilitating and modernizing damaged refineries to help reduce fuel imports.”
The Prime Minister continued, "Because of the wars and the blockade over the past four decades, Iraq has been late in exploiting the wealth we have of gas and oil properly.
Now we are looking at how to exploit the new wealth we have and how to use it effectively."
Diversify the economy
But he said, "The drop in oil prices in London to around $72 a barrel - near their lowest levels since 2021 - underscores the need to diversify the economy."
Iraq is OPEC's largest oil producer after Saudi Arabia and derives the bulk of its revenues from exporting the commodity, and needs much higher prices to balance its budget.
The IMF has long said the country needs to develop its private sector, and that economic progress is being hampered by a huge public sector wage bill, with successive governments not doing enough to curb high wage increases.
Al-Sudani pointed out that "his administration is looking to invest about 40% of Iraq's oil revenues to boost the non-oil sector," adding that "the planned trade corridor extending from Basra Governorate in southern Iraq to Turkey and then to Europe was a 'dream' for his country, and he is looking to the Gulf states to help finance the project, which is supposed to cost $17 billion.
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