UU1088 – “Baghdad is Stalling – Why?” by Mnt Goat

Hello Everyone,

Boy oh Boy ! What a weird last couple days this has been. If I was not following closely these recent events I too would be very frustrated. But I took the time to read the articles, make a few calls and piece together the story as to where we currently are on this Iraq dinar revaluation saga. Like with everything Iraq does nothing is simple and seldom on time.

Hope you at least take the time to read it all since it took a lot of time away from my family this past week and weekend to gather and analyze the information for you.

This is a continuation of the ongoing saga of the revaluation of the Iraqi dinar. Please read past news letter dated 2/12 (LINK) and 2/13 (LINK) to better understand this news today.

Today’s News
Today is Monday the 16th and still no RV. We wait for the announcement of the ratified budget to reach the gazette for the final step in the process of implementation. This final step has now reached its deadline. So what is the current status? Are we going to see these economic reforms completed any time soon? Are they going to stall it much longer?

Okay so here are the facts so far from what we now know and so we do not have to guess since they are reported “officially” from the finance committee of Iraq and not from some intel “guru’s” contacts or sources….lol.

FACT: we know the budget passed parliament on 01/29 and Iraq president Masoum then had up to 15 days to ratify it.

FACT: budget too only 12 days to be ratified on 02/10.

FACT: we know they have now reached the outer most constitutional deadline (which was Sunday 02/15) to post the ratified budget in the gazette (law library) which is the final step in the process.

FACT: once it is announced that it is posted it will be implemented.

FACT: once implemented it must be funded somehow in 24 hours.

FACT: once implemented they must also have all the laws supporting the budget implemented since how can you fund a project or a program in the budget if it is not yet legal?

Some are saying it is already posted in the Gazette. Really? Then why can’t I see it? But even if it is actually posted what significance does this have if Iraq then is still holding the announcement back from us? Are these intel “guru’s” then just telling us this because they want to stir up some more hype and get everyone excited and to prove to us they have leading information on the cutting edge? Are you getting tired of this yet?

I have to laugh since if it is not yet formally announced and viewable to the public it really means nothing and I mean absolutely NOTHING to me. If anything else it only confuses us since it muddies the water on the timeline and we have to ask ourselves as to why Iraq would hold this back from the public.

So in looking at the facts of what had to occur so far, and the timeline of what has occurred so far (that Iraq has announced already), we can see that once the budget was passed, parliament was moving along quickly and timely and so it seemed they would follow through on completing the economic reforms on time, as Abadi has said they would do by last Thursday 02/12. Remember his grand speech early last week telling us this? But now over this past weekend it seems to have stalled again. Why?

So today is Monday, a day passed the deadline of posting it in the gazette. So what is going on?

We know they can not fully implement the budget since it must be funded somehow. So how can they fund it without fully completing their economic reforms (meaning in part the currency reform and dropping the 3 zeros).

FACT: We know that parliament did not get a forum on Saturday or Sunday since Sunni MPs said they would boycott parliament after the killing of Sheik Qasim al-Janabi on Friday 2/13. So very little was accomplished in parliament over the weekend.

Such statements as “The bullet that shot Sheik Qasim also shot at the heart of national reconciliation,” said Sunni parliamentarian Raad al-Dahlaki. “The government has nice words but doesn’t execute its promises for security. It’s too weak to control the militias.”

FACT: We know these militias are now controlled by the former prime minister Maliki and his goons. He is still desperately trying to break up the unification effort of Abadi and create havoc. What does this tell us? Why do they allow this man to continue to disrupt this new government?

Not to get side tracked from the budget issue (this is all connected) but we will soon see a speeding up of the measures to deal with the Maliki and his goons. This I can promise you, especially after this last incident. This the USA and the UN wants and has been demanding all along from the Iraqi government. I am sure there will be some “I told you so” notes being sent to Abadi’s government.

FACT: The World Bank has allocated $ 10 million for the restructuring of State-owned banks and activation of electronic transactions including electronic clearing system in Iraq. This also will allow the Qi cards and other Iraqi bank generated/owned credit cards to be used widely internationally. This is huge but by itself does not mean Iraq is going international or to revalue its currency immediately. It does have great significance in that it tells us they are in fact gearing up for it and moving in the right direction. This surely could have been accomplished post RV and was not holding up the completion of the currency reform or was it?

Funny how items like this are accomplished and we don’t know what we don’t know until they happen. This will continue to happen and we don’t know if it is a needed requirement for an RV or something that could have happen post RV. What we do know is all those that keep saying Iraq is going to RV everyday should be ashamed of themselves. This is a prime example. I don’t care what their contacts are telling them either since they are big boys and should by now know better. What they say is not how they act. They criticize others for gearing up over one event, yet do the same themselves.

So as a sane and reasonable person how do you feed about all this so far? Can you see a reason why the budget completion may have just been delayed and things are still moving ahead?

What now would be your conclusions ? Come on it’s not that hard and there is no conspiracy going on here !

Before you answer these two questions let us look at what else popped up over the weekend as they neared the finish line to fully implement the budget.

FACT: Everyone (meaning provincial leaders) wants their money and they know what stage the budget is in just like you and I do. They too have heard about the ratification happening over 3 days ago. They too have an obvious stake in it. They want their projects funded as promised and as part of the reforms effort. It now comes down to a matter of trust. Trust can only go so far. Trust that this budge will be opened in a timely manner.

So over the weekend we see articles about two rounds of negotiations between Kurdistan and Baghdad. What were these talks about? What really happened behind the scenes when the cameras were not recording?

I believe this is what happened between Barzani asking Abadi – WHERE THE HELL IS THE MONEY THAT WAS PROMISED TO US! Threats of striking Kuristan government workers for not being paid since December.

FACT: Abadi and Barzani met on Sunday afternoon in Baghdad to discuss the financial benefits of the region in 2015, the federal budget and the implementation of the oil agreement between the two governments.

Does the timeliness of these meetings surprise you?

FACT: Then later on in the day, on Sunday, we see another article telling in fact what the issue was between Kurdistan and Baghdad and as to why these negotiations did not go so well and why a delegation from Kurdistan has to come to Baghdad in the first place. My hunch was correct ! It was all about money owed to Baghdad from the oil revenues as promised- WHERE IS MY MONEY…said Barzani?

FACT: Barzani stated to the press after the first round of negotiations –“Baghdad does not have sufficient funds to grant share Kurdistan ‘s oil but are still committed to the Convention”

FACT: Then even later in the day, also on Sunday, we see that there was a compromise made between and Kurdistan and Baghdad. How do I know this? They told us in yet another article that the Minister of State in the Federal Government for the Kurdistan Alliance Saman Abdullah in addressing the news that the Ministry of Finance will send the amount of 583 billion dinars to Kurdistan, representing an advance part of the budget for the month of January 2015 to pay the salaries of the staff of the province for the first month of this year.

FACT: I need to emphasize to everyone that this was only a “partial” payment not a payment “in full” for money owed to Kuristan under the oil agreements. It was given since the budget is not fully implemented and there is no legal obligation, as of yet to pay in full. Why did Abadi do this?

This was done to pacify the Kurds while we wait for the budget process to be finalized. But why not just post the budget in the gazette, finalize it, open it and then send the total allowed payment to the Kurds?

Can’t do this if the budget is not yet funded. Can’t fund it without what? Repeat after me……

a. completing all the laws to support it
b. completing the economic reforms (such as the currency reform of deleting the 3 zeros)

Do you see how these recent events are not just coincidental. They are signs to us telling us what is happening behind the scenes. We can ignore these articles as some wish to do or we can use them but we have to connect the dots to see the entire picture. It is all interconnected as it is always. This is the key to seeing what is happening in Iraq. It is never straight forward and you must remember past events.. I hope I did a good job for you today in connecting these dots.

Remember this scuffle over the weekend was not Kurdistan trying again to renegotiate the oil revenue deals or HCL or Article 140. Instead we know for a fact this is all done. Now we are into the payment side, making good on promises from Baghdad. This was the issue this past weekend. Remember too it is all a matter of trust. Will Baghdad be the same now in this new government as in the former Maliki government. All promises and little action so far. So far we witness the exact same movements of money as something Maliki would have done. Nothing has changed. Always partial payments to the Kurds. To change this Baghdad (Abadi) must make good on the remainder of these payments and do it soon and bring them up to date. Other provincial leaders too are getting suspicious and will soon come forward for their funding.

Do you see now how these three events:

a) the slaying of the Sunni Sheik Qasim;
b) Kudistan payment issue
c) currency reform not completed,
are all tied to not completing the budget before this weekend and why it caused issues?
Do you see how these events could collapse the entire unification effort if this budget is not completed and opened soon? Payment of monies owed now is the key to keeping this new fragile government intact. These payments can not be made without the funding and the funding can not take place without the currency reform happening. It keeps going back to currency reform for in part it is the necessary funds.

NEXT STEPS
As I explained in my last news letter technically we DO NOT want the budget bill to be posted in the gazette without an increase in value to the Iraqi dinar FIRST. If they do not increase the value on or before this bill is posted in the gazette (or announced in gazette) we are in trouble. What do I mean by in “trouble”.

If they do post it in the gazette (and announce it) without a currency reform of some kind, Iraq will have defied all logical reasoning and I am at a lost as to what is happening. I then throw in the towel and raise up my hands. Mnt Goat will be stumped !

But I do not believe this will be the case. I do not believe this will happen. As it has not yet happened and so far I do not like what is going on but at least it still makes total sense.

So here we are on the first day following the outer most deadline of Feb 15th to post the newly ratified 2015 budget in the gazette. They are already a day late but they have a good excuse. What will this week bring us? How many more days d they intend to stall?

You all know what comes next. They must fund this budget of 119 trillion dinars. I have to tell you there is not enough dinars in circulation today to cover this budget amount and they know this. So where will they get this much needed dinar with a rate of 1166? They have huge stockpiles of the lower denominations but currently they too are valued at the 1166 rate.

In my last news letter I stated what the next steps have to be on or about the time of the revaluation announcement in Iraq. They then have to de-dollarize and get the lower denominations out to the banks as this process will take many months to normalize. But first they need to complete the economic reforms and this means in part to go international with their currency. As this happens we all expect the rate to change to at least a rate conducive to pre-war era.

Yes I am a stubborn woman and will stand my ground in that I totally and whole heartedly believe they must pass this “package” of new laws and complete the currency reforms on or about the time they open this new budget. A formal announcement that the budget was posted in the gazette will be a clue for us that they are about to open the budget and so these other events are also close at hand, if not already accomplished by then. Something to watch for.

So you see Al-Abadi along with the CBI have to make a decision soon on when to RV this currency. I believe this decision had already been made weeks ago and was postponed due to recent events in Iraq. We are now in the final countdown window now that the budget is truly ratified and the deadline for it to be posted in the gazette is now overdue. We should hear news of this next event (gazette posting) this week. Then Iraq must fully fund the budget within 24 hours (partly by a revaluation). Can Iraq be fully positioned with all these events in time to open and begin spending this 2015 budget?

Peace and Luv To Ya All,
Mnt Goat

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