More News, Rumors and Opinions Thursday Afternoon 9-28-2023
TNT:
Harambe: Argentina peso (ARS) could become the next Zimbabwe dollar | Invezz (9/28/23)
The Zimbabwe dollar is often seen as the poster child of bad macro and fiscal economic collapse. At its lowest moment, a 100 trillion Zimbabwe note was actually worthless. Today, these trillion-dollar notes are being sold in platforms Amazon.
The ZIM dollar collapse was attributed to the actions of Robert Mugabe, the then president, and the central bank. Facing heavy sanctions, the government turned to cash printing in a bid to fund its projects and welfare projects.
Cash printing leads to more money supply, leading to hyperinflation. At the worst period, Zimbabwe’s inflation surged to 3.13×109%, the highest on record. As a result, the middle class that existed decades ago disappeared and Zimbabwe became one of the poorest countries on earth.
Now, there are signs that Argentina, once a leading South American economy, is walking in the same footsteps as Zimbabwe. Like Zimbabwe, Argentina has consistently printed money to fund its ballooning deficit. In 2022, the country had a primary budget deficit of 2.4% while the financial deficit came in at 4.2%.
Argentina cash printing continues
Argentina could now be heading into hyperinflation ahead of the general election. In a statement, the economy minister who is also a presidential candidate announced a series of handouts that could make the situation worse.
All registered workers will receive the of $80 while informal workers and retirees will receive $125 and $49. The scheme will cost about 1.3% of GDP and will be funded by cash printing. Another handout will see the government raise the income tax threshold to 1% from the previous 7%.
Therefore, adding more Argentina pesos in an economy where inflation is soaring could lead to more challenges. The most recent data showed that the headline consumer inflation rose by 12.4% in August, the highest point since 1991 when the country was moving from hyperinflation. Inflation rose by over 124.4% on a YoY basis in August.
The challenge for Argentina is that it has no plan to exit this economic crisis. The ruling party is committed to continuing with the socialist policies that have brought it to its knees. On the other hand, the right wing candidate has pledged to get rid of the Argentina peso and replace it with the US dollar.
To a large extent, replacing the now-worthless Argentina peso with the US dollar makes sense. However, the reality is that implementing it will not be easy since the government needs to have resources to acquire the dollar.
It is hard to solve the Argentinian economy crisis. For one, solving the crisis would need to get rid of most welfare programs, raise some taxes, raise interest rates, and reduce the bureaucracy that reduces foreign investments. Scrapping these social programs would be unpopular.
Therefore, we can’t rule out a situation where the Argentina peso crashes hard in the coming months. The official has surged to 350 from 36 in 2018. The unofficial rate is much higher than the official one.
https://invezz.com/news/2023/09/28/argentina-peso-ars-could-become-the-next-zimbabwe-dollar/
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Harambe: Iran Starts Using Newly-unblocked Assets In Qatar | Iran Front Page (9/28/23)
Tehran and Doha have agreed a mechanism that allows Iran to tap into funds recently unfrozen and deposited into bank accounts in Qatar as part of an agreement with the United States.
Central Bank of Iran (CBI) Governor Mohammad-Reza Farzin and Qatar’s top banker Sheikh Bandar bin Mohammed bin Saoud Al Thani reached an agreement in Doha on Wednesday to start banking operations to use the funds transferred to Iranian bank accounts in Qatar earlier this month, a CBI statement said.
The statement added the agreement was reached as part of a broader discussion between Farzin and Sheikh Bandar to boost banking cooperation between Iran and Qatar.
Farzin stated on September 18 that some 5.573 billion euros of Iran’s foreign assets had been successfully transferred to accounts held by six Iranian banks in Qatar’s Ahlibank and Dukhan Bank.
The transfer took place under a Qatari-mediated deal between Iran and the US whereby the US agreed to lift sanctions on Iranian funds that had remained blocked in two South Korean banks since 2018. The two sides also exchanged prisoners as part of their deal.
Qatar paid for banking fees related to the change and transfer of the funds from South Korea via Swiss National Bank to Qatari banks.
The CBI statement identified the six Iranian banks holding accounts in Qatar for the purpose of processing the unfrozen funds as Keshavarzi, Saman, Pasargad, Gardeshgari, Shahr and Karafarin.
Iranian authorities have indicated in previous statements that they will use the newly-unfrozen funds in Qatar for purchase of non-sanctioned goods, including for imports of animal feed for which Iran spends billions of dollars each year.
Courtesy of Dinar Guru https://www.dinarguru.com/
Angel1 When Iraq got placed on sanctions, yes they got a program rate, but the nail that kept them functional to sanctions was the auctions...What they're telling us now is the way they've always done auctions is going to be gone...The old way for you to pay for imports would be you would have to go to the auctions and do it through submitting invoices and proof and paperwork. It takes about 2 weeks...Now a coffee shop is going to be able to pay his own import right through his bank like every other normal country in the world. We are excited...That means they're going to be an internationally acceptable...tradable currency. They're going to have value...
Frank26 I believe on the 28th Iraq is going be in a position to do financial international transfers without any restrictions. Oh, boy! Wouldn't that be great? I believe it's a 10 day period...28th to 8th of next month...I believe in these 10 days we're also going to see the HCL. And I believe without a doubt, the reason why we haven't added the HCL and everything else is because we don't have a new international exchange rate...It is fantastic. These 10 days have great potential for may things to be paid.
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Fleeing the US! The Middle East Spends Tens of Billions of Dollars Investing in the Chinese Market!
DeepIn Moments: 9-28-2023
Hello and welcome to Deepin Moments:In this video, we delve into the significant shift of Middle Eastern capital into emerging asset sectors in China, with a focus on high-quality Chinese companies, A-share valuations, and the recovery of the domestic economy.
Learn how Middle Eastern sovereign wealth funds are actively investing in China's high-end manufacturing and pharmaceutical biotechnology sectors. Discover the deepening economic cooperation between Middle Eastern countries and China, with insights into financial technology, ESG, and data exchange collaborations.
Explore the investments in various sectors, including automobiles, pharmaceuticals, and non-ferrous metals. Find out how Middle Eastern countries are looking to reduce their reliance on traditional oil economies and transition into modern, diversified nations, with a particular focus on digitalization and new energy.
China's role as a leader in modern manufacturing and digitalization is highlighted.