.Mnt Goat News Update for Tuesday January 31st

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.Mnt Goat News Update for Tuesday January 31st

Post  Admin on Tue Jan 31, 2017 5:17 pm

1/31/2017


 

January 31, 2017 Mnt Goat News Brief
 
Hi Everyone,
 
I bring you much news today.   
Well here we are. We have gotten through January and still no RV. Still two months left in EARLY 2017 and we keep waiting and reading the news. It all still looks very good for early 2017. Many say the new fiscal year that begins in March may have an impact on the timing of the RV. I do not have any evidence of this and don’t want to guess. It could but if I hear of anything I will let you know. Do you know something I don’t know?
 
So much for the “intel gurus: with this recent everyday / every weekend stuff again. So did everyone enjoy the running around in circles and the rollercoaster ride over this past weekend? 
 
As always my comments are in italic RED.
 
Articles Begin


A question to the Governor of the Central Bank on the Keywords drop on the country's reserves of foreign currency 
 
Twilight News / directed the head of the "will of the" parliamentary deputy Hanan al in the parliament session, which was held on Saturday, an oral question to the Governor of the Central Bank on the Keywords drop on the country's reserves of foreign currency.
 
The House of Representatives was held today under the chairmanship of its regular Salim al-President of the Council and in the presence of 170 deputies, the Council has voted on the law of arms and face an oral question to the Governor of the Central Bank.
 
Inquired MP Hanan asked about the reasons for the low central bank reserves and any specific date and where the amounts have been disbursed.
 
In replying to the central bank governor said that economic policy is made up of fiscal and monetary policy and monetary reserves which is a foreign assets denominated in the foreign currencies excludes including local currencies, up to about 90% and the remaining gold and assets are negotiable, liquid assets in  reserve at any time.
 
Keywords noted the importance of distinguishing between the central bank reserves and the excess reserves in the state treasury, which expressed the sovereign funds which is unrelated to the reserves of the Central Bank as lead functions present or future to cope with crises and bridging fiscal deficits and contributing to investment trends and its source is part of the state treasury, indicating that reserve which is managed by the central bank can not take from the state treasury and function to stabilize the exchange rate in order to curb inflation and maintain prices.
 
He noted that the central bank through the reserve pumped money to prevent the devaluation of the local currency, noting that the reserve consists of state revenues received in dollars of oil by 95% and the remaining local revenues and the Ministry of Finance relies on the Iraqi dinar, stressing that the dollar selling process is very important to maintain the value Iraqi dinar and the balance in the local economy as the work of the dinar to float an incorrect status for Iraq and the fact that the central bank only source to sell the dollar.
 
(They just told us 95% of Iraqi revenue is from oil and it is received into the CBI reserves in US dollars. Remember the merchants must still come to the CBI and exchange dinars for dollars to pay for imports. If there is any fraud involved the revenue in dollars will not match the price of imports. They are supposed to balance. If they do balance there is no drawdown in the CBI reserves. If they can get oil prices up then revenues will exceed cost of imports and the CBI reserves increase.)

 
He noted that the height of the financial reserves of the Ministry of Finance to the Central Bank does not represent an achievement and if the decline does not represent a deficit because the case involves what has been achieved from a financial and imports, the larger the overhead of the state's biggest of its revenues will affect the central bank's reserves, indicating that reserve at the central bank was at the end of 2014, more than $ 66 billion in 2015 and dropped to about $ 53 billion and in 2016 came to nearly $ 45 billion and a book value of $ 48 billion.
 
Among Keywords that the central bank resorted to the method of supporting the general budget through the purchase of treasury transfers and collided with the financial situation not great funding in case the central bank refrain from buying treasury transfers, it will lead to significant repercussions on the general situation in Iraq, stressing that the bank contributed to cross the toughest years.
 
It passed during the years 2015 and 2016 especially given that the contribution amounted to 20 trillion dinars, which is law, adding that the talks with the international Monetary Fund showed a lack of access problem in the reserve until 2021. For its part urged the MP Hanan to Governor of the Central Bank to pay attention to an auction of foreign currency through an integrated action.
(the parliamentary member wants the CBI to do something about the corruption in the currency auctions. I quote from the article – “MP Hanan to Governor of the Central Bank to pay attention to an auction of foreign currency through an integrated action” because he knows it is slowly depleting the CBI reserves due to corruption. How much longer will they allow this to continue? What does “integrated action” mean? To me it means that many entities are now watching and monitoring these auctions and helping out to weed out those that are frauding the system)
 
The size of the cash reserve at the central bank  
 
(So out pops yet another article much like the one above. We see that this article is a quick reply from the CBI as it follows up with more on the reserves as a response. Coincidental? I don’t think so. The CBI is constantly trying to educate the people and keep them informed just as I told you they said they would and plan to continue. So what news is the BEST news to watch for? CBI ANNOUNCEMENTS OF COURSE, Get it? )


A source reveals for "tomorrow Press" about the size of the cash reserve at the central bank 

January 29, 2017 

BAGHDAD / tomorrow Press: A government source revealed on Sunday, for the low monetary reserves of the Central Bank of Iraq to $ 45 billion, as a result of the deterioration of oil prices and the continuation of the "waste" of public money. 
 
The source for "tomorrow's Press," that "the government has stopped for the time being its reliance on central bank reserves, and began to take advantage of the state's resources and borrowing, "noting that" the high price of world oil market also contributed to stop relying on the financial reserve." He added that "the central bank's reserves in 2014 was 87 billion dollars, and as a result of cost to the country because of the war on Daesh and lower oil prices, Iraq relied on this reserve for running the country and the payment of staff salaries and the needs of the market," pointing out that "waste of money year contributed to the decline in current reserves to 45 billion dollars." 
 
He pointed out that "the Iraqi dinar is still safe despite the decrease in the reserve, is expected to return to its former glory after the end of the war on Daesh."  (Okay so is it time to get excited? Let’s look at what they told us in this article. Let’s not make more of this than it really is. First they told us the CBI reserves are safe in the near future, as they are stabilized due to the recent borrowing and other resources. I quote from the article above – “the government has stopped for the time being its reliance on central bank reserves, and began to take advantage of the state's resources and borrowing,” Okay so now we know they no longer have a need to tap into the reserves as they are using other sources to make up the deficit going forward. But the best news is the very last paragraph and statement within that paragraph. I quote from the article above – “ is expected to return to its former glory after the end of the war on Daesh”  So should this really be new news to everyone?Have I not been telling everyone we must wait for the final announcement from PM Abadi that the war with Daesh is entirely over. Yes this big final announcement in the news media. This is when the war will be “officially” ended. But nonetheless it is still excellent news to hear it from the mouth of the CBI  once again. We needed this “bone” today as we get weary and disappointed that it is taking so long to clear Daesh from Mosul. But, in reality it has only been since October they began their offensive operations against Daesh. Not too long. That is only 4 months.).  
 
But there is also another side to “the return to its former glory” statement. We have heard this many times already from the CBI. Folks this does not necessarily mean that the instant the war is over we get the RV. This statement could mean that over the next couple years along with the financial and economic reforms they plan to rebuild the economy and eventually get the dinar up to the past value. I said eventually. Did you hear me….eventually! But they will need something to kick start it.,
 
We all know this to be very true. We know for a fact this is the plan but my point is that this statement does not mean that they will trigger the RV the instant Mosul is declared liberated. This could be true, but we know differently since this process will begin with the launching of the lower denoms namely the 50, 100 and 250 notes. The CBI told us this. Then they plan to  continue to build the financial sector to support a yet even more robust economy that will drive the rate of the currency yet increasingly  higher. It is all a process.
 
It is the economy that will drive the rate higher and higher but first they must somehow kick start it. Thus I firmly believe that the initial launching of these lower denoms [with around a 1:1 - IQD:USD] as this catalyst. So let me explain by giving you an analogy. It like an engine attempting to start. The engine grinds and grinds but it just can’t get the fuel for the initial spark to start the engine. Or maybe it is something else preventing  it from starting. The launching of the lower denoms, with the initial rate, will be like injecting high octane directly into the carburetor and turning on the ignition key. The engine may still grind a bit but it will start and then they have to pump the gas pedal to raise the engine. But what if there are other things wrong with the car too that prevent it from starting?
 
Here is where we stood in 2014. The GOI had been taken over by a dictator Nori al -Maliki. This was apparent when the CBI was overrun. This was the final straw. As I always say – follow the money and eventually you hit a sore spot….lol…lol.
 
So they had a new election in 2014 and they seemed to get a better leader. But then the economy dropped out from under them and the war with ISIS began. The bills began to pile up. So now the political situation turned around but the economy died. So in my analogy - if all the other parts of the engine are also not ready to run, the engine will fail to start. They must check the battery, the fuel lines, the spark plugs, the oil, etc,..So they needed time to look the engine over and fix what is broken first. They needed to accommodate the economy and align it to the RV process. They has to bring in the experts, they had to train people to keep the car running once the it was started. Does no good to bring in the experts only to leave later and take their knowledge with them. So they also have to train the Iraqis. This takes time and so we watched and waited for another 2 years. But his effort will all pay off in initially starting the engine and keeping it going.  
 
For my analogy, this is all about the financial reforms, the banking reforms, fighting corruption and the training sessions that we are seeing. So, for the success of starting the engine, all these other items must first be in place. I know this may seem like a corny analogy or maybe even trivial to you but I assure you it is not. I hope this analogy worked for you. I am trying to help you understand the necessity for them to postpone the RV until now.
 
So let’s continue - Remember back in late 2012- early 2013 timeframe when they planned to move ahead with the RV, then the raid on the CBI as Maliki decided he was going to pursue a dictatorship now that the USA had pulled out of Iraq. We saw the political situation sudden change drastically and soon it was apparent they must postpone the process. The operative word here is “apparent”. Maliki’s ambitions could no longer just be assumed as they were confirmed. So were they going to try to RV with this dictator in place?
 
At that time oil was close to $100/barrel and they were not fighting ISIS. Things were different when it came to economy and there was plenty of wiggle room as they would be able back then to try to start the engine again and again, as they could fix things like the banking sector, establish financial laws and fight corruption along the way and keep trying over and over again to get the engine going. Eventually it would start. They had that luxury back then with all the oil revenue. They were swimming in money. But the situation soon changed and changed quickly.  

Now the political situation became much better with Maliki move out of the way but they had to work on the economic and financial situation. The was apparent with oil prices much lower, the expenses of the war, and skeptic investors. So you see the environment changed and will probably keep changing too. They had to be flexible too. What was stable a few years ago was no longer stable. What was stable in 2014 was not stable in 2013. So when the CBI says they need both Stability and Security this is what they meant. All these factors must align together. Because now  they may only get one try to start the engine. This has taken much too long already. They know this too.
 
For the Security - once the war on ISIS is declared done, they will have to deal with the Iranian militias. Maliki also is still the de-facto minister with many generals still favoring his policies even though he is no longer the prime minister. They could not deal with the corrupt generals in 2014 because who would lead the army against ISIS? Many of the former generals who apposed Maliki were locked up in prison (thus the need for the Amnesty law to free them). He Amnesty law has not been fully implemented and so many  of them still sit in prison. So they will have to deal with these generals too once the battle with ISIS is over. We watch this part of the security situation evolve in the coming weeks post ISIS. So we are not out of the “dog house” yet once ISIS is gone.   
 
For the economic Stability- we have been witnessing all the financial reforms, economic reforms, banking reforms and anti-corruption laws, the price of oil rise (thus more revenue) and so we know this part is ready and now in alignment. All the factors now seem to be coming into alignment once again like a solar eclipse….and this is our proof that the time is very near.
 
I believe with all my heart and passion for this investment, that when all these parts are finally aligned again, they will not postpone this RV process again. They know it may take years to realign all the parts them again and Iraq can not afford to wait years.      
 
I hoped this analogy helped everyone understand just where we are in this RV process. There is really no better way for me to explain it. There is no magical list of items that must be done nor some magical date on the horizon. Did they have a target of around the end of 2016? It was very apparent by all the articles they did and still do. It is already a month later than they targeted and so we wait to see what happens with Mosul then look and watch for these other factors.
 
So again I am telling you it is all a matter of alignment of all the parts that will bring the needed Security and Stability to Iraq so they can continue the process without these obstructions preventing it from succeeding (the engine starting, but not just starting but rather being able to drive the car down the highway). I do not care with any bank screens or bank memos are telling you. This is all a bunch of nonsense and is absolutely no indication of the timing of the RV. There are also may people who really believe they are getting factual information on the timing of the RV. They live in a fantasy world. You want to know when the RV will happen? I mean truly know when it will happen? FOLLOW THE NEWS OUT OF IRAQ! Sorry there are no shortcuts. You must work for you intel and it is hard work.   
 
Urgent and defense and interior ministers sworn in lead And Abadi Tweet 01/30/17 
 
Baghdad {: News} Euphrates valley and the new defense secretary Burhan Hayali, Interior Minister Qassim al-Araji, was sworn in after parliament gave confidence to them. 
 
The House voted today to give confidence to Aargi and Hayali with the voice not to consent to grant the office of the Ministry of Commerce to the candidate Inam al-Obeidi, and the granting of candidate Yusuf al-Asadi as Minister of Industry.
 
(Two of the three vacant ministers have been filled and this is exactly what we would expect to see. They will need a “fully functional govt in order to RV so Abadi has to come up with another candidate for the Ministry of Commerce. I also expect the HCL to pass soon.)

 
Articles End
 
Their words not mine…..No Rumors, No Hype, Just the FACTS!
 
Auf Wiedersehen
Much love to ya all,
Mnt Goat

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