News, Rumors and Opinions Friday AM 10-1-2021
Holly Friday RV Update
Happy October 1st, there was a lot of talk yesterday about this new fiscal year starting everything off.
The day is young and I need to see where we are at today.
We are very close to this at our level. It’s trickling down. Holly
Courtesy of Dinar Guru
Bruce [via WiserNow] Iraq...had two separate bond offerings – over this past weekend...that is showing the sovereignty and the authenticity of the Iraqi Dinar in its ability for Iraq to offer these...very large bond offers with obviously a new rate on a bond that is gold backed by Iraq – and certainly their Iraqi Dinar is also gold backed...I think we can say Iraq is done and they have done everything they have been asked to do and the signing of the sovereignty and the sanctions that the USA Corp had put on Iraq have been removed – and they are rolling...I just know that we are all excited about the possibility of this going this week...
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KTFA
Samson: In the document.. the Iraqi army enters a state of alert {C} starting from Saturday and until after the elections
09/30/2021 15:45:53
The Army Chief of Staff directed all army units to enter a state of maximum alert {C} in preparation for securing the early parliamentary elections.
According to a confidential and immediate document of the Chiefs of Staff, a copy of which was obtained by the Euphrates News Agency, the state of alert begins from October 2 (next Saturday) until the 12th of the same month, i.e. after the end of the electoral process. LINK
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Samson: Two economists: The new central bank bonds are another type of borrowing
30th September, 2021
Two economists said that the goal of the Central Bank of Iraq's recent step regarding issuing new financial bonds is to reduce the rise in monetary inflation in the country.
And the Central Bank of Iraq announced last Sunday, the issuance of new bonds in two financial categories.
The bank stated in a statement received by Shafak News Agency; In continuation of the role of the Central Bank of Iraq in developing the local financial market and mobilizing savings, the Central Bank offered the first issue of (construction) bonds of two categories (500,000) dinars (five hundred thousand dinars) with annual interest (6%) for two years, and (1,000,000) dinars. (One million dinars) with annual interest (7%) for four years.
The central bank confirmed; That "the purchase of these bonds will be through authorized banks, which receive purchase requests from those who wish to do so and deliver them a receipt for the amounts of purchase of these bonds, where the Central Bank issues them and delivers them to the banks within a short period."
Other loans
The economist, Ahmed Saddam, says that “bonds are a type of loan, but they differ as they represent loans or borrowing from the central bank to the public, and this is done in contracts, and it is an important monetary policy used by many countries of the world, and it is one of the important tools of the central bank’s tools in controlling the presentation of cash.
Saddam states to Shafak News Agency; “The objectives of offering these bonds by the Central Bank at this particular time is for the purpose of financing and reducing the monetary mass as a result of the high level of financial inflation, as the Central Bank offers these bonds for the purpose of reducing the purchasing power of individuals, and at the same time there is an ability by the Central Bank to Lending to some investment agencies and having sufficient liquidity to approve some projects, so that he moves these hoarded funds in homes and from the pockets of individuals and directs them in an investment manner.
Saddam continues, "In Iraq, there is an important or partial flaw that is concentrated in the lack of trust (between the citizen on the one hand and the central bank and banks on the other) and exemplified by these bonds that are issued from time to time, on the grounds that if we assume that the exchange rate of the Iraqi currency has been reduced, As it happened in the past, here we will be facing an obsession with the citizen or the bond holder if the exchange rate is reduced, which is not expected to happen, then we will be facing a great loss for the bond holder.
He asserts that "the lack of understanding between buyers and decision-makers will push many not to go to such decisions to buy these bonds, as the issue needs explicit guarantees in this regard."
Internal borrowing
A member of the Iraqi parliament, Ammar Tohme, issued a statement regarding the issuance of these bonds to the public, declaring his rejection of the Central Bank’s decision to issue bonds (which is internal borrowing) because there are no reasons and justifications for this decision according to the data.
Tohme said in a statement received by "Shafaq News" agency, "Such a decision can be heard in the days when oil selling prices were below (thirty dollars a barrel), but with the rise in oil prices to nearly eighty dollars, there are no acceptable reasons or justifications for it, as the efficiency of collecting the revenues of the outlets and from all the governorates of Iraq, including the region, will save no less than (ten trillion dinars) at the least amounts, which was confirmed by the Ministry of Finance in previous official statements.
And he continued, "Taking strict control measures on the currency auction will save annually no less than (four trillion dinars) that go to undeserved profits to parasitic banks, indicating indicators of the return of their ownership or participation in the ownership of influential political parties. Rather, the figures indicate that the illegal profits obtained by those Banks during the days of fabricating a jump in the exchange rate at the end of 2020 in just two months amounted to more than (1.3) trillion dinars.
He pointed out that “the pressure of unnecessary expenditures, and based on the actual expenditures of the past years, will confirm the absence of the need to handcuff the state with internal or external borrowing. The plan for the year 2021, amounting to (130) trillion dinars, is far from the reality of the need for actual spending, which requires the pressure of many expenditures that disappear in vague public sections that make monitoring the validity and realism of spending difficult.”
He pointed out, "The cancellation of the unfair federal licensing rounds contracts, as well as the region's oil contracts with approved foreign companies, in the form of partnership contracts, and replacing them with a beneficial national formula. Of the oil produced in the region, the dues of foreign companies go.”
Tohme called for "reviewing the contracts of mobile phone companies, as official documents indicate that the revenues shown in the data of these companies for the year 2013, for example, amounted to (4.2) trillion dinars for only two companies out of a total of three companies. About (6) trillion dinars.
Government agent
In turn; The economic expert, Abdul Rahman Al-Mashhadani, explains how bonds are issued in Iraq, stressing that there are two bodies within the country that issue them (the first is the government, the second is the central bank, and the last can act as an agent for the government for the purpose of issuing bonds), but the matter is now different in these bonds, as the bank is the one who issued these bonds and not an agent for the government.
Al-Mashhadani spoke to Shafaq News Agency; That "when the government issues bonds, whether internal or external, the goal is to finance the deficit in the general budget or finance some important projects, and this is what happened during the past years, the last of which was in 2016, and it was to finance the deficit in the public budget, and the government did not succeed in this step."
He adds that "when the central bank issues bonds, it has monetary goals other than the government's goals, and this last central bank step comes after several loans it provided to the government and housing initiatives it provided to citizens, and all these steps confirm that the central bank pumped a new currency into the market with a value of more than 30 trillion Iraqi dinars, because the money supply rose from 64 trillion to 94 trillion dinars in the market, and this led to a rise in inflation rates in the country, through the indicators of the Ministry of Planning, which confirmed that inflation in the country rose by 14%.
Al-Mashhadani explains, “The Central Bank issued these bonds for one goal, which is to control inflation, because 70 to 77% of the currency issued by the Central Bank goes to the market and does not return as deposits in banks, and thus is trapped in citizens’ pockets and hoarded in their homes,” referring to that “there is confusion between the central bank’s procedure and the government’s procedure in terms of issuing bonds, and therefore you see some political blocs commenting that this procedure is incorrect and that it is launched at a time when the oil price may be $30 or less, but this procedure was not issued by the government, but by the bank and it aims to control on the inflation taking place in the country, and it is not, as was rumored, that it is a rescue of some small banks in the country.” LINK
The Nomad Economist
How Nixon and FDR Used Crises to Destroy the Dollar's Links to Gold
Sept.30, 2021