MINISTRY OF FINANCE FINALLY PUBLISHES INSTRUCTIONS FOR THE IMPLEMENTATION OF THE FEDERAL FINANCIAL BUDGET LAW
{Economic: Efrat News} The Ministry of Finance has published instructions for the implementation of the Federal Financial Budget Law, calling on “all ministries, governorates and unrelated entities to review the ministry to receive instructions.”
A statement by the Ministry, a copy of which was received by {Euphrates News}, said: “In view of the approval and publication of the Federal Budget Law of the Republic of Iraq No. (13) for the fiscal years (2023, 201224 and 2025) in the official Iraqi facts sheet issued in June 2013 with number 4726, the Ministry of Finance invites all ministries, governorates, bodies and entities not associated with the Ministry of Attendance to the headquarters of the Ministry of Finance / Budget Department Budget Preparation Section for the purpose of receiving a copy of the instructions for the implementation of the general budget and the instructions for implementing the planning budget for the public sector and self-funded bodies and companies.”
(I know the funding to complete the changeover of the currency from the 3 zero notes to the lower denominations (project to delete the zeros) is in the budget year for 2023. Will they do it?)
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Economist: Washington imposes its authority on Iraqi oil revenues
8-15-2023
Economist - Washington imposes its authority on Iraqi oil revenuesInformation / Baghdad…
Economic affairs researcher Muhammad Al-Saadi explained, on Tuesday, the extent to which it is possible to obtain oil revenues from importing countries directly without placing these funds with the US Federal Bank.
Al-Saadi told Al-Maalouma that “China, India and other Asian countries import Iraqi oil in large quantities, but Iraq receives the revenues through the US Federal Bank, which makes Washington an authority over those revenues.”
He added, “The dollar, as an American currency prohibited in some countries, Iraq can benefit from such a procedure by selling oil in exchange for goods, goods and raw materials needed by the Iraqi industry, or introducing companies from those countries and engaging them in the field of construction, construction and project implementation.”
And he indicated that “the continuation of selling oil in exchange for obtaining dollars may not be a good idea, as it is possible to obtain projects, goods and goods instead of oil revenues in dollar currency.”
He pointed out that “Iraq has large reserves of hard currency with the US Federal Bank.”
They need to find at least 80% of the money and get it back from them [The corrupt politicians and mafia] back for them to revalue the dinar.
MarkZ
[via PDK]
Comment: [Guru] Nader said, corruption slowed down RV IQD no budget no HCL? [reference Nader post 8-14-2023]
MarkZ: Remember these are the same stories we saw before the RV is Kuwait…The same stories we saw in China…the same stories we historically see before any revaluation of any currency in the last 100 years. Could it be a little longer?
It could but I don’t think so…they are desperate and need the rate…
Question: We have never seen an RV…so how do we know what to expect? We have seen RV’s (Re-Valuations). We may not have seen a world-wide event…but there have been many RV’s. We saw one in China in the 90’s…We saw Kuwait go through one in 91…in the 1970’s we saw Iraq go through one…After world war 2 we saw Japan go through this…We have seen Germany go through this twice…once after world war 1 and once after world war 2. This is not unprecedented.
I have not heard anything negative…a lot of projects are being funded. We know that now that money is moving they have go to get a rate change at any moment.
MilitiaMan (KTFA)
Article Quote: “The parliamentary economic committee stands with the government and the central bank in fighting the speculators at the exchange rate…”
Everybody’s in agreement we need to fight this parallel market – we need to shut it down. Again, what is the easiest way to shut it down? Change the exchange rates to a Real Effective Exchange Rate shuts is down. In a broad sense that’s what they’re actually saying without saying it…
[Financial] systems are in place that have been updated, modified and now they’re waiting for Iraq to be ready to go to the global financial system. Once they get to that stage they’re going to be an Article VIII IMF compliant currency. That’s our expectation…That’s what they’ve been saying for quite some time.
If they haven’t gone to the international stage of 1310 and they haven’t done it today, the chances of them doing it are highly unlikely the International world wouldn’t accept Iraq at 1310.
FIREFLY: Friend from the bank said this is what I heard trough the rumor mill. There will be another push. It will be the final push round up of the heads of corruption coming very soon. They are looking for a blend of the budget and money flow after this final push. This is just from the rumors.
Article Quote: “The Iraqi dinar has been in an unenviable situation for nearly 20 years. After one dinar was equal to 3 and a half dollars…”
Why are they doing this? We told you years ago when the second article from the CBI comes to the citizens they would explain to them in detail the history of their currency, they would explain the exchange rates, the currencies around them and you are seeing this… $3.21 – why are they bringing this up to their memory…psyche? …to educate them. That’s what we told you…voila.
[Iraq boots-on-the-ground report]
FIREFLY: TV saying battle of the stability of the exchange rate will end soon with the recovery of the dinar.
FRANK: This is amazing. I admit it has been a battle to stabilize the exchange rate and a program rate is not stable…a program rate has no equilibrium. The CBI is about to decrease the value of the American dollar in your country…these are indeed very exciting time.
Judy Note: “The next week or twois going to be crazy. It’s going to require a lot of focus and perspective to navigate it. A lot. When in doubt, shut down the drama and the news cycle and review the facts. 40k feet. If you remember nothing else, remember that. Media Internet shutdown. Hence, 40k feet.” …Rubix Q
Global Currency Reset in Progress
Global Currency Reset:
Tues. 15 Aug. Bruce: Tier4b (Us, the Internet Group) should be notified to set foreign currency exchange and Zim redemption appointments prior to the BRICS Summit, which begins next Tues.Aug. 22-24.
Tues. 15 Aug. MarkZ: “Bond people are expecting their funds on Wed. 16 Aug.”
Sun. 13 Aug. American Patriot: “
The Military Earth Alliance Covert Operations have neutralized covert operations and all 209 countries were now gold/asset-backed. The Star link Satellite System has been interconnecting computerized unmanned stations to monitor the Quantum System that’s been connected and synched up.”
By Mon. 7 Aug. the Iraqi Parliament had approved their budget with the new Iraqi Dinar Rate in it and published it in the Gazette the next day Tues. 8 Aug.
On Wed. 9 Aug. the new Iraqi Dinar Rate was believed to have revalued at a 1:1 with the USD and then began trading up on the Forex back screens.
On Thurs. 10 Aug. the direct payment system was activated to send funds internationally person to person.
Tier 4b should be notified to receive appointments to exchange foreign currencies and redeem Zim bonds within 48 hours of Bond Holders.
The Gold/asset-backed USN was expected to be announced between Aug.18-21, or most certainly at the BRICS Summit in Johannesburg South African Aug. 22-24.
A couple of days ago political things started to happen in all 50 states which were moving this forward. They planned to eliminate the Deep State within the next few days.
The Emergency Broadcast System (EBS), or Emergency Alert System (EAS), or Emergency Warning System (EWS) will be activated to expose all the corruption that was going on in our government.
The BRICS Summit in South AfricaTues. 22 Aug. through Thurs. 24 Aug.included 93 member countries that were gold backed in their own currency and wanted to be part of BRICS.
The gold backed USN was being traded digitally and should be out publicly two days prior to the BRICS Summit (by Sun. 20 Aug.)
Bond Holders were still waiting for notification to receive access to their funds.
Iraq could publish their new Dinar Rate on Wed. 16 Aug. or Sat. 19 Aug.
Tier4b (Us, the Internet Group) should be notified to set foreign currency exchange and Zim redemption appointments prior to the BRICS Summit.
Despite a series of high-profile regionalbank failures, tech sector layoffs and fears of a recession, the U.S.Federal Reserveremains staunchly committed to hiking the policy interest rate, which sets the interest rate at which commercial banks can lend and borrow from one another.
On May 3, Fed Chair Jerome Powell once again announced a 25-basis-point rate hike, as inflationis still a long way from the Fed's 2% long-term target rate. This latest rate hike came despite the failure of First Republic Bank, the latest victim in the ongoing banking crisis, and news that U.S. gross domestic product growth slumped from January to March.
For now, only time will tell if the Fed's spate of rate hikes will achieve the desired "soft landing" of taming inflation without inducing a recession. Regardless, many investors anticipate market volatility to remain elevated as participants price in the effects of the ongoing rate hikes.
"The purpose of rate hikes is to slow down economic growth and control inflation," says Wes Moss, managing partner and chief investment strategist at Capital Investment Advisors. "When the economy is growing too fast and inflation is rising like in 2021 and 2022, the Federal Reserve increases rates to discourage borrowing and spending, which helps slow down economic growth and stabilize prices."
However, despite their stabilizing effect on the economy's long-term prospects, rising interest rates can often hurt many investments.
"Warren Buffett once compared interest rates to gravity when it comes to asset prices," Moss says. "Increasing interest rates makes the cost of capital more expensive and current cash flows more important, which pull asset prices downward."
For an example of this, consider all the high-flying pandemic-era growth stocks, many of which have fallen significantly from their all-time highs. "In general, the most interest-rate-sensitive sectors are tech, communications and real estate," says Derek Horstmeyer, professor of finance at the George Mason University School of Business. "When the Fed raises interest rates, these sectors usually fall the most."
Also significantly impacted by rising rates are fixed-income assets such as bonds. When interest rates rise, bond prices fall to make their yields more competitive with current rates. This is governed by duration, a measure of interest rate risk. Broadly speaking, longer-maturity bonds with greater durations have been the most sensitive to rate hikes and thus were one of the biggest losers throughout 2022.
That being said, investing during a hiking cycle doesn't mean just incurring losses. There are assets that have historically proven resilient to rate hikes, or even benefited from them. To access these assets, investors can buy exchange-traded funds, or ETFs, that provide transparent and cost-effective exposure.
Here's a look at seven of the best ETFs to buy when interest rates rise:
ETF
EXPENSE RATIO
iShares 0-5 Year High Yield Corporate Bond ETF (ticker: SHYG)
iShares 0-5 Year High Yield Corporate Bond ETF (SHYG)
"Now that rates are rising, ETFs like SHYG could be extremely attractive," says Christopher Manske, president at Manske Wealth Management."Because bond prices tend to go down when interest rates go up, this means ETFs like SHYG have been beat up a bit recently." For investors who don't mind greater credit risk, a high-yield bond ETF like SHYG pays a higher yield to maturity of 8.2% right now.
Even if interest rates continue to rise, ETFs like SHYG will be well insulated. Right now, this ETF only has an effective duration of 2.4 years. All else being equal, a 1-percentage-point increase in rates will result in a 2.4% loss for SHYG. "The ETF's short maturity means the managers are replacing maturing bonds with new, lower-cost ones as rates rise, while investors collect a great interest rate along the way," Manske says.
"If an asset's value is tied to interest rate movements, then rate hikes will benefit that asset," Manske says. "A floating-rate bond fund is an excellent example of this, but the problem is that everyone already knows this."
Still, in the event that inflation remains high and interest rates continue at the pace seen during the 1980s, then floating-rate bond ETFs like FLOT could offer protection.
FLOT indexes a portfolio of investment-grade floating-rate bonds with remaining maturities between one month and five years for a 0.15% expense ratio, which works out to $15 annually for a $10,000 investment. Currently, the ETF sports a very low duration of 0.03 years, showing its resilience to interest rate movements. Thanks to the recent rate hikes, FLOT is paying an average yield to maturity of 6%.
Another asset with a history of strong returns during rate-hiking cycles is gold, which typically exhibits a negative correlation with the U.S. dollar. "After the last interest rate hike in 2000, gold went on to rise 55.8% through early 2004," says Robert Minter, director of ETFs investment strategy at Abrdn. "The same occurred after the hike in 2006, where gold went on to rise 230.6% through late 2011."
An alternative to physical bullion that can offer spot-gold price exposure in any brokerage accountis SGOL. "SGOL is a transparent 'physical gold' ETF which buys gold bars, stores them in audited vaults and avoids futures contracts," Minter says. Investors therefore receive proportional exposure to the underlying gold bullion in exchange for a relatively low 0.17% expense ratio.
"Consumer staples companies such as food processors, grocery stores and makers of personal care products may also be more resilient to rate hikes," says Jim Penna, manager of retirement services at VectorVest Inc. "These businesses are centered around essential goods and services. This makes their margins and earnings less likely to be impacted by the higher rates."
For a straightforward way of indexing America's most prominent consumer staples companies, investors can buy XLP. "This ETF tracks the consumer staples sector of the S&P 500 index, which includes companies involved in food, household products, tobacco and other personal products," Penna says. XLP currently has 37 holdings and charges a 0.1% expense ratio.
"I also like BIL as it focuses on Treasury bills, or T-bills, with one-to-three months' maturity remaining," Penna says. "Short-term Treasurys are about as safe as you can be at this point, so it's a good place to allocate a portion of your portfolio if you have a low risk tolerance."
Thanks to the rising interest rates, BIL pays a decent yield to maturity of 5.2%.
In terms of risk, BIL is as safe as it gets. With an average duration of 0.08 years, BIL is only expected to lose 0.08% if rates rise by 1 percentage point, all else being equal. Its portfolio is held solely in U.S. government-issued T-bills, long regarded as the "risk-free" asset due to their high credit quality and virtual lack of default risk. Currently, BIL charges a 0.14% expense ratio.
"While each rate-hiking cycle is accompanied with specific characteristics and different quirks, owning blue-chip companies with strong balance sheets and consistent free cash flow that have weathered the storm during multiple economic downturns is never a bad idea," Moss says. These tend to be large-cap stocks with robust profitability that form the backbone of most indexes.
"Companies that exhibit those characteristics usually not only pay dividends but tend to grow them year after year after year," Moss says. An ETF that targets the most long-standing of these companies is NOBL, which only holds dividend aristocrats from the S&P 500. These are stocks with a history of growing dividend payments consecutively for at least 25 years. NOBL charges a 0.35% expense ratio.
"The Federal Reserve has been raising interest rates for a year now, which has created some uncertainty in the markets," says Sophoan Prak, certified financial planner at Vanguard Advisers. "However, despite rising rates and market uncertainty, investors should stay disciplined and committed to their long-term retirement strategy." This means ignoring the recent noise and staying the course.
For most investors, the current interest rate turmoil is unlikely to spell doom for a diversified, long-term portfolio. "We believe in the benefits of global diversification, and a market-weighted index ETF can provide those benefits," says Prak. To put this into play, long-term investors can buy VT, which provides exposure to over 9,000 domestic and international stocks around the world for a 0.07% expense ratio.
