Seeds of Wisdom RV and Economics Updates Thursday Morning 4-2-26
Good Morning Dinar Recaps,
De-Dollarization Accelerates: China Settles $1.3 Trillion in Yuan With ASEAN
BRICS momentum builds as China expands yuan-based trade across Southeast Asia, signaling a growing shift away from U.S. dollar dominance.
Good Morning Dinar Recaps,
De-Dollarization Accelerates: China Settles $1.3 Trillion in Yuan With ASEAN
BRICS momentum builds as China expands yuan-based trade across Southeast Asia, signaling a growing shift away from U.S. dollar dominance.
OVERVIEW (KEY POINTS)
A major financial shift is unfolding as China reports settling 8.9 trillion yuan (≈ $1.3 trillion USD) in cross-border transactions with ASEAN countries.
This marks a more than 50% year-over-year increase, highlighting a rapid acceleration in the use of local currencies over the U.S. dollar in regional trade.
The development reflects a broader trend tied to BRICS efforts to reduce reliance on the dollar, as emerging economies increasingly prioritize monetary independence and regional financial stability.
The key shift: Trade is no longer automatically defaulting to the U.S. dollar
KEY DEVELOPMENTS
1. $1.3 Trillion Settled in Yuan Signals Massive Shift
China’s trade settlement data reveals a significant milestone.
8.9 trillion yuan used in ASEAN trade settlements
Equivalent to $1.3 trillion USD in value
Represents a 50%+ annual increase
This scale confirms that de-dollarization is no longer theoretical—it is actively happening
2. ASEAN Increasingly Adopts Local Currency Trade
Regional economies are shifting payment preferences.
ASEAN nations are favoring local currencies over the dollar
The Chinese yuan is becoming a primary settlement currency
The Indonesian rupiah is also gaining traction
This reflects a move toward regional financial autonomy
3. Yuan Expands as a Regional Anchor Currency
China is strengthening its monetary influence.
The yuan is being positioned as a regional trade currency
Officials highlight its role in financial stability and security
Cross-border yuan usage is rapidly expanding across sectors
The yuan is evolving from a trade tool into a strategic financial instrument
4. Multi-Currency Trade System Emerging
The shift goes beyond just China.
Other BRICS currencies gaining usage include:
Indian rupee
Russian ruble
South African rand
This signals the rise of a multi-currency global trade system
5. Pressure Builds on U.S. Dollar Dominance
The implications for the dollar are significant.
Reduced reliance on the dollar in trade settlements
Gradual erosion of global reserve currency dominance
Increased competition from regional currency blocs
The dollar is not collapsing—but it is facing growing structural pressure
WHY IT MATTERS
This development represents a fundamental shift in how global trade is conducted.
For decades, the U.S. dollar has been the default currency for international transactions. Now:
Countries are diversifying currency exposure
Trade is becoming regionally aligned
Financial systems are becoming less centralized
This is a slow but powerful transformation of the global monetary system
WHY IT MATTERS TO FOREIGN CURRENCY HOLDERS
Currency diversification: More currencies are gaining global relevance
Dollar exposure: Reduced dominance may impact long-term dollar strength
Exchange volatility: Multi-currency trade increases FX fluctuations
Investment shifts: Capital may flow into emerging market currencies
IMPLICATIONS FOR THE GLOBAL RESET
This is a clear example of de-dollarization moving from concept to execution
Trade settlement behavior is the foundation of currency power
Pillar 2: Rise of Regional Financial Systems
ASEAN and BRICS are building parallel financial ecosystems
Local currency trade
Regional liquidity networks
Reduced dependence on Western systems
This points toward a fragmented but more balanced global system
CONCLUSION
China’s $1.3 trillion yuan settlement with ASEAN is not just a data point—it is a signal of structural change.
The global financial system is gradually shifting from:
One dominant currency (USD) to a network of competing regional currencies.
This transition will not happen overnight—but it is clearly underway.
The dominance of the U.S. dollar is no longer being assumed—it is now being challenged in real time through trade, policy, and strategic alignment.
Seeds of Wisdom Team
Newshounds News™ Exclusive
SOURCES
Watcher Guru — "BRICS: China Settles $1.3 Trillion in Chinese Yuan With ASEAN Nations"
Jakarta Globe — "China-ASEAN Cross-Border Yuan Settlements Surge"
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🌱A Message to Our Currency Holders🌱
If you’ve been holding foreign currency for many years, you were not foolish.
You were not wrong to believe the global financial system would change.
What failed was not your patience — it was the information you were given.
For years, dates, rumors, and personalities replaced facts, structure, and proof. “This week” predictions created cycles of hope and disappointment that were never based on how currencies actually change.
That is not your failure.
Our mission here is different: • No dates • No rates • No hype • No gurus
Instead, we focus on:
• Verifiable developments • Institutional evidence
• Global financial structure • Where countries actually sit in the process
Currency value changes only come after sovereignty, trade, banking, settlement systems, and fiscal coordination are in place. History and institutions confirm this sequence.
You will see silence. You will see denials. That is not delay — that is discipline.
Protect your identity. Organize your documents. Verify everything.
Never hand your discernment to anyone who cannot show proof.
You deserve truth — not timelines.
Seeds of Wisdom Team
Newshounds News
~~~~~~~~~~
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Thank you Dinar Recaps
Iraq Economic News And Points To Ponder Thursday Morning 4-2-26
An analytical comparison between the central bank's support for the national economy and Iraq's qualification for the World Cup
Samir Al-Nassiri Economy News – Baghdad On April 1st, Iraqis everywhere, from the far north to the far south, and those living abroad, erupted in a frenzy of joy that defied all logic as their national team qualified for the World Cup, the highest tournament in which nations can participate. Iraq's name echoed across news agencies, newspapers, and media outlets worldwide.
An analytical comparison between the central bank's support for the national economy and Iraq's qualification for the World Cup
Samir Al-Nassiri Economy News – Baghdad On April 1st, Iraqis everywhere, from the far north to the far south, and those living abroad, erupted in a frenzy of joy that defied all logic as their national team qualified for the World Cup, the highest tournament in which nations can participate. Iraq's name echoed across news agencies, newspapers, and media outlets worldwide.
The true reason for this was that the team represented all Iraqis and had qualified after being restructured and developed by an experienced coach who refused to accept defeat and whose goal was always to overcome challenges. This success was further fueled by players who loved Iraq and possessed the spirit of challenge and determination to reach the World Cup.
In an analytical approach that some may find strange, I find it consistent with the reality that the world is currently experiencing in complex political, security and, most importantly, economic circumstances.
Especially the countries of the geographical region and Iraq directly, and its suffering from the effects of the current situation on our economy and the cessation of Iraq’s main revenue, which is oil exports, along with the lack of liquidity in the government and a financial situation and challenge that threatens the imminent collapse of the Iraqi economy if the current war continues.
Here, the Central Bank of Iraq emerged to announce its commitment to confronting the crisis and its determination to overcome the challenges, steer the economy away from collapse for as long as possible, and address the shortcomings in other sectors. This was clarified in its statement on March 8th.
So the Central Bank is now steering the ship of the economy towards the shore of rescue and real reform through wise measures it has taken for the years 2023-2025 and is currently taking through its implementation of the economic reform strategy, achieving monetary and financial stability, and building foreign currency and gold reserves, which ensures the smooth running of the economy and confirms that it is always the savior in all the economic shocks that Iraq has suffered in the past and present.
This is what will make all Iraqis rejoice, just as they rejoiced when our national team qualified for the World Cup.
Therefore, the belief is that Iraqis will always triumph in the economy, sports, and other fields because they believe that they create opportunities from challenges.
O God, protect Iraq and its noble people, and let us proclaim this with the loudest voices.
Hold your head high, you are Iraqi. https://www.economy-news.net/content.php?id=67429
A Massive Oil Pipeline Project Linking Iraq To Three Seas Amid Regional Crises... And A Silence That Raises Questions
Reports Economy News – Baghdad In a remarkable development with significant economic and strategic dimensions, information has emerged that Heritage Funds LPF, based in Hong Kong, has submitted a formal offer to the Iraqi Ministry of Oil to implement and finance two giant oil and gas pipeline projects, within the framework of barter contracts in exchange for a share of crude oil.
This offer comes at a very sensitive time, coinciding with the repercussions of the Iranian-Israeli-American war, and the accompanying regional turmoil that led to the cessation of Iraqi oil exports as a result of the closure of the Strait of Hormuz, which doubled the need to find alternative and safe outlets for oil exports.
Despite the importance and size of the offer under these circumstances, the surprising and controversial aspect is that the Iraqi Ministry of Oil has not yet issued any official response to the proposal, which raises questions about the fate of one of the most prominent potential projects in the Iraqi energy sector.
In this regard, economist Nabil Al-Marsoumi presented details of a new proposal to extend oil pipelines in Iraq, in a move aimed at enhancing export capabilities and diversifying the country’s oil outlets.
According to the information presented, Heritage Funds LPF, based in Hong Kong, submitted a proposal to the Iraqi Ministry of Oil to implement and finance a strategic project to lay oil and gas pipelines, based on an Engineering, Procurement and Construction (EPC) system, and in the form of barter contracts in exchange for a share of crude oil.
The proposal includes the implementation of two main projects: The first: extending a pipeline starting from the port of Basra to the modern city, and then extending to the port of Aqabain Jordan, or to the port of Latakia on the Mediterranean Sea in Syria.
The second project, according to Al-Marsoumi, is the construction of a pipeline extending from the port of Basra to the Turkish border.
These projects, if implemented, are expected to reduce reliance on traditional outlets, enhance the flexibility of Iraqi oil exports, and open new horizons for regional cooperation in the energy sector.
Innovative Financing In Times Of Crisis
According to the details of the offer, the company relies on the Engineering, Procurement and Construction (EPC) system, where it undertakes the financing and implementation in full, in exchange for recovering costs through a share of crude oil, which may constitute a practical solution in light of the financial crises and pressures facing the country.
A Chance For Salvation Or A Disturbing Silence?
With exports through the Gulf halted, observers believe that these projects are no longer just development options, but have become a strategic necessity to ensure the continued flow of Iraqi oil to global markets.
However, the absence of an official response from the Iraqi Ministry of Oil remains the most prominent issue, which puts this offer between two possibilities: either a real rescue opportunity under consideration, or a project that may be lost amidst complications and delays.
Between a crippling export crisis and a huge investment opportunity, the most pressing question remains: Why is the Iraqi Ministry of Oil remaining silent so far?
Does this silence foreshadow an upcoming decision, or does it reflect a hesitation that could cost Iraq a historic opportunity at one of the most critical moments in its oil history? https://www.economy-news.net/content.php?id=67300
Oil Prices Rally 6% Following Trump Address On Iran War
2026-04-02 Shafaq News Oil prices climbed more than $5 on Thursday, as President Donald Trump said the United States would keep up attacks on Iran without committing to a specific timeline to end the war, fanning investor fears about sustained disruptions to supply.
Brent crude futures rose $6.33, or 6.3%, to $107.49 per barrel by 0407 GMT. U.S. West Texas Intermediate crude futures were up $5.28, or 5.3%, to $105.40 per barrel.
The gains followed an earlier fall of more than $1 in both benchmarks prior to Trump's televised speech to the nation, after having settled lower in the previous session.
"We are going to finish the job, and we're going to finish it very fast. We're getting very close," Trump said, adding that the U.S. military had nearly achieved its goals in the conflict which would end in two to three weeks, but giving no specifics.
Markets are reacting to the fact that "no clear mention of ceasefire or diplomatic engagement," figured in the speech, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"If tensions intensify or maritime risks increase, oil could test fresh highs as markets price in potential supply disruptions."
Threats to maritime traffic have grown as the regional conflict intensifies. On Wednesday an oil tanker leased to QatarEnergy was hit by an Iranian cruise missile in Qatari waters, its defence ministry said.
The head of the International Energy Agency also cautioned that supply disruptions would start to affect Europe's economy in April. The continent had previously been shielded by cargoes contracted before the start of the war.
"Without any mention of a solid ceasefire plan or material off ramp, markets are left continuing to digest the administration's statements," said Claudio Galimberti, Rystad Energy's chief economist. (REUTERS)
https://www.shafaq.com/en/Economy/Oil-prices-rally-6-following-Trump-address-on-Iran-war
Basrah Crude Drops Over 9% Despite Global Oil Rise
2026-04-02 Shafaq News- Basrah Basrah crude fell more than 9% on Thursday, diverging from rising global oil prices.
Basrah Heavy dropped $10.96, or 9.79%, to $98.46 per barrel, while Basrah Medium fell by the same amount, 9.61%, to $100.56 per barrel.
Global benchmarks rose, with Brent at $107.49 per barrel and US West Texas Intermediate (WTI) at $105.40, recovering part of the previous session’s losses.
Iraqi crude is priced by destination: exports to Asia track the average of Dubai and Oman crude, shipments to Europe are benchmarked to Brent, and exports to the United States follow WTI, each with premiums or discounts based on market conditions.https://www.shafaq.com/en/Economy/Basrah-crude-drops-over-9-despite-global-oil-rise
Fiat Collapse Incoming? MacLeod Warns of Bond, Dollar & Gold Shock
Fiat Collapse Incoming? MacLeod Warns of Bond, Dollar & Gold Shock
Liberty and Finance: 4-1-2026
Are we witnessing the final act of the fiat currency system?
Join Dunagun Kaiser and Alasdair MacLeod as they break down:
The coming surge in U.S. and G7 bond yields
Fiat Collapse Incoming? MacLeod Warns of Bond, Dollar & Gold Shock
Liberty and Finance: 4-1-2026
Are we witnessing the final act of the fiat currency system?
Join Dunagun Kaiser and Alasdair MacLeod as they break down:
The coming surge in U.S. and G7 bond yields
How the dollar and other major currencies are losing purchasing power
Why gold and silver demand is exploding globally, especially in Asia
The risks for Western investors, pensions, and 401Ks
INTERVIEW TIMELINE:
0:00 Intro
1:30 Bond yields
12:30 Dollar debasement
28:30 Gold outlook
32:30 Macleod Finance
“News Tidbits From TNT” Thursday AM 4-2-2026
TNT:
Tishwash: The US embassy warns of attacks in central Baghdad.
The US Embassy in Baghdad warned on Thursday morning that Iraqi factions may carry out attacks in the center of the Iraqi capital “within the next 24 to 48 hours.”
The embassy issued a security alert to its citizens, published on the X platform, stating that attacks were expected in central Baghdad within the next 24 to 48 hours, and reiterating its call for its citizens to leave.
TNT:
Tishwash: The US embassy warns of attacks in central Baghdad.
The US Embassy in Baghdad warned on Thursday morning that Iraqi factions may carry out attacks in the center of the Iraqi capital “within the next 24 to 48 hours.”
The embassy issued a security alert to its citizens, published on the X platform, stating that attacks were expected in central Baghdad within the next 24 to 48 hours, and reiterating its call for its citizens to leave. link
Tishwash: Parliamentary Finance Committee reassures: Iraq has sufficient cash reserves to cover salaries for six months.
Jamal Kojar, a member of the Finance Committee in the Iraqi Parliament, confirmed on Wednesday that Iraq has a cash reserve of around $97 billion, which allows it to secure salaries for 6 months even if revenues stop completely.
In a televised interview, which was monitored by Al-Ghad Press, Kujer said: "There is no doubt that the repercussions of the war have already begun to appear globally.
If you ask a citizen in America, Italy, or even China about fuel and energy prices, you will find a clear impact because energy sources and trade routes have become threatened. As for Iraq, talking about the state's inability to pay salaries at the moment is inaccurate, because the war is still in its early stages."
He pointed out that "Iraq has gone through more difficult crises, such as the war against ISIS (2014-2018) and the Corona crisis, and salaries were not cut."
He added: "If the war continues for more than two additional months, or if Iraq becomes directly involved as a state in the conflict, then the economy and the bank reserves will be exposed to real risks, and we may see an impact on the value of the currency and difficulty in cash withdrawals."
Kojo stressed that "closing the Strait of Hormuz is a catastrophic scenario for global trade routes, not just for Iraq," adding, "We are also awaiting a speech from Trump, which may change the balance of power; he will either push for de-escalation or increase the severity of sanctions, and both will affect the global economy." link
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Tishwash: Oil production has stopped, and the public is asking, "Where is the liquidity?
The delay in paying employee salaries in recent days has sparked widespread concern among the Iraqi public, especially as the payment coincided with a long Eid holiday followed by heavy rains that disrupted work in several institutions. This has led to various interpretations, some pointing to a potential liquidity crisis amidst the current regional pressures.
This comes after the suspension of official work for two consecutive days, Wednesday and Thursday, as part of the government's celebrations of the national team's qualification for the World Cup finals.
While this move was described as having a popular character and a message of moral support to the public, it also ignited a broad debate among political and economic circles regarding the limits of using official holidays as a tool for responding to events, and whether it aligns with the country's work and production needs.
This comes after a series of government-announced holidays in recent days, following the Eid al-Fitr holiday, due to severe weather and heavy rainfall.
This has increased the number of official holidays in a short period, prompting observers to warn of the repercussions of accumulating holidays on institutional performance and public services.
The official weekend (Friday and Saturday) will exacerbate the suffering of employees already facing long waits for their salaries.
The salary delays come at a highly sensitive time, coinciding with the escalation of the regional conflict, which has directly impacted the Iraqi economy. This is particularly true given the near-complete halt in oil exports due to disruptions in supply routes through the Strait of Hormuz. Many are linking the salary delays to the decline in state revenues, as oil is the primary source of funding for the national budget.
In a country heavily reliant on oil revenues to cover operating expenses, especially salaries, any disruption to exports immediately affects public sentiment and heightens anxiety among citizens, especially in the absence of immediate clarifications to determine the nature of the situation and distinguish between administrative shortcomings and a potential financial crisis.
He pointed out that "the alternatives currently available are not as easy as expected. We have the Kurdistan route and the Aqaba route through Jordan, which are available options, but their capacity is limited compared to Basra. Even Saudi Arabia may open its borders, but the question is: Will these routes remain safe from being targeted in the event of a full-scale war?"
Kujer continued: "I assure citizens that salaries will not be affected in the foreseeable future. Iraq has a cash reserve (about $97 billion) that allows it to secure salaries for 6 months even if revenues stop completely." link
Tishwash: A delegation from the Kurdistan Democratic Party arrives in Baghdad to discuss three issues with political parties.
A high-level delegation from the Kurdistan Democratic Party arrived in the capital, Baghdad, on Tuesday afternoon, March 31, 2026.
According to information obtained by Kurdistan 24, the delegation includes: Fadhil Mirani, head of the working body of the party’s political bureau; Fawzi Hariri, head of the Kurdistan Region Presidency’s office; and Nawzad Hadi and Omid Sabah, members of the party’s central committee.
The party delegation is scheduled to discuss the following topics with Iraqi political parties:
Missile and drone attacks targeting the Kurdistan Region.
The formation of the new Iraqi government.
Election of a new president for Iraq.
The Kurdistan Region has been subjected to several missile and drone attacks in the past period, which has caused great concern among the Kurdish political leadership.
The Kurdistan Democratic Party (KDP) consistently seeks, through dialogue, to urge the federal government to uphold its responsibilities in protecting the sovereignty of Iraqi territory and the Kurdistan Region. This delegation's visit is part of ongoing efforts to pressure decision-makers in Iraq to prevent the recurrence of such attacks and maintain security and stability in the region. link
Seeds of Wisdom RV and Economics Updates Wednesday Evening 4-1-26
Good Evening Dinar Recaps,
CLARITY Act Nears Breakthrough: Stablecoin Reward Deal Could Unlock U.S. Crypto Regulation
Lawmakers appear close to resolving a critical dispute over stablecoin rewards, potentially clearing the path for landmark crypto legislation.
Good Evening Dinar Recaps,
CLARITY Act Nears Breakthrough: Stablecoin Reward Deal Could Unlock U.S. Crypto Regulation
Lawmakers appear close to resolving a critical dispute over stablecoin rewards, potentially clearing the path for landmark crypto legislation.
OVERVIEW (KEY POINTS)
Momentum is building around the Digital Asset Market CLARITY Act, as a key sticking point—stablecoin rewards (yield)—may soon be resolved.
According to comments from leadership at Coinbase, a compromise between regulators, banks, and crypto firms could be reached within days, raising expectations that the bill could advance in the Senate this month.
However, despite this optimism, market participants are becoming more cautious, with reduced confidence that the bill will be signed into law in 2026, reflecting ongoing political and regulatory uncertainty.
At the center of the debate is a high-stakes conflict between traditional banking and the crypto industry, with implications for the future of money, payments, and financial control systems.
KEY DEVELOPMENTS
1. Stablecoin Rewards Dispute Nearing Resolution
The biggest obstacle to the bill may soon be resolved.
Disagreement centers on whether crypto platforms can offer rewards (yield) on stablecoin holdings
A deal is reportedly close, with negotiations intensifying this week
This single issue has delayed the entire U.S. crypto regulatory framework
2. Banks vs Crypto: The Core Battle for Deposits
The conflict is fundamentally about who controls money flows.
Banks argue rewards act like interest-bearing accounts without regulation
Crypto firms argue banning rewards would stifle innovation and adoption
At stake: trillions in potential capital migration from banks to digital assets
3. Proposed Compromise: Limited Rewards Structure
Lawmakers are exploring a middle-ground solution.
Allow activity-based or peer-to-peer rewards
Restrict passive interest-like payments on idle balances
This would protect banks while still allowing crypto ecosystem growth
4. Market Reaction Signals High Stakes
Financial markets are already responding to the uncertainty.
Crypto-related stocks dropped sharply when reward restrictions were proposed
Stablecoin incentives are a core driver of user adoption and platform revenue
This is not a minor feature—it is central to the crypto business model
5. CLARITY Act Defines Future Regulatory Structure
Beyond rewards, the bill reshapes the entire crypto landscape.
Defines whether assets fall under SEC or CFTC jurisdiction
Establishes rules for exchanges, custody, and investor protection
This is the foundation for integrating crypto into the U.S. financial system
WHY IT MATTERS
This is one of the most important financial developments underway right now.
The outcome will determine:
Whether crypto becomes fully integrated into the regulated system
Or remains restricted and fragmented
The stablecoin reward debate reveals a deeper truth:
This is not just about crypto—it is about control of deposits, liquidity, and financial influence
WHY IT MATTERS TO FOREIGN CURRENCY HOLDERS
Dollar dominance: Stablecoins extend the U.S. dollar into digital global markets
Yield competition: Crypto rewards challenge traditional banking returns
Capital flows: Money could shift rapidly between banks and blockchain systems
Currency evolution: Stablecoins may become a parallel monetary layer
IMPLICATIONS FOR THE GLOBAL RESET
Pillar 1: Battle for Control of Money Supply Channels
Banks and crypto platforms are competing for where value is stored and how it earns yield
This determines who controls liquidity in the next financial system
Pillar 2: Regulation as the Gateway to System Integration
The CLARITY Act represents a transition point:
From uncertainty and enforcement
To structured, regulated digital finance
Once defined, crypto can operate at institutional scale
CONCLUSION
The potential breakthrough in the CLARITY Act is not just legislative progress—it is a turning point in the evolution of finance.
At its core, the debate over stablecoin rewards reflects a larger shift:
Who will control the future of money—traditional banks or blockchain-based systems?
A compromise may unlock the next phase of crypto adoption, but the outcome will shape how value moves, where it is stored, and who benefits from it.
This is not just regulation—it is the restructuring of the financial system in real time.
Seeds of Wisdom Team
Newshounds News™ Exclusive
SOURCES
Yellow News — "CLARITY Act Stablecoin Deal Could Come Within 48 Hours, Coinbase CLO Predicts"
Reuters — "The Clarity Act and the future digital asset market"
~~~~~~~~~~
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Thank you Dinar Recaps
Iraq Economic News And Points To Ponder Wednesday Evening 4-1-26
IEA: Middle East War Erases 12M Barrels Daily
2026-04-01 Shafaq News- Paris Major disruptions to Middle East energy infrastructure have already withdrawn more than 12 million barrels per day (bpd) from global oil supply, the International Energy Agency (IEA) reported on Wednesday, as ongoing conflict in the region continues to damage key assets.
IEA: Middle East War Erases 12M Barrels Daily
2026-04-01 Shafaq News- Paris Major disruptions to Middle East energy infrastructure have already withdrawn more than 12 million barrels per day (bpd) from global oil supply, the International Energy Agency (IEA) reported on Wednesday, as ongoing conflict in the region continues to damage key assets.
The agency estimated that roughly 40 major energy facilities have been hit, describing the scale of the losses as more severe than the combined impact of the 1970s oil shocks and the 2022 reduction in Russian gas exports.
Warning that supply pressures are expected to intensify in April, with losses likely to match the pace seen in March, the IEA indicated it is assessing further use of strategic oil reserves to help offset the shortfall and support stability in global markets.
On March 11, member countries of the IEA agreed to release a record 400 million barrels of oil from strategic reserves to counter a surge in global crude prices following the closure of the Strait of Hormuz.
https://www.shafaq.com/en/Economy/IEA-Middle-East-war-erases-12M-barrels-daily
Nearly 300 Iraqi Fuel Trucks Cross Into Syria Via Al-Tanf
2026-04-01 Shafaq News- Damascus The first convoy of Iraqi fuel oil arrived in Syria through the Al-Tanf crossing on Wednesday, heading toward the Baniyas oil terminal, a Syrian official told Shafaq News.
Safwan Sheikh Ahmed, director of corporate communications at the Syrian Petroleum Company, said the convoy includes 299 tanker trucks, adding that technical teams began unloading operations to prepare the shipments for export via maritime tankers.
“The move is part of efforts to restore Syria’s role as a regional energy transit corridor and boost transit revenues, with plans to expand the route to include the transport and export of various petroleum products through Syrian ports.”
According to Mujahid Mardhi Al-Dulaimi, the head of Al-Waleed subdistrict in Iraq, more than 150 tanker trucks are waiting to enter Syrian territory, expecting daily crossings to reach around 500 tankers.
Earlier, oil expert and former Oil Ministry spokesperson Asim Jihad told Shafaq News that the shipments involve fuel oil rather than Iraqi crude, noting that “exporting through this method is a temporary necessity with limited volumes.”
https://www.shafaq.com/en/Economy/Nearly-300-Iraqi-fuel-trucks-cross-into-Syria-via-Al-Tanf
Read more: Iraq's energy vulnerability: When a petro-state has no buffer
USD/IQD Exchange Rates Fall In Baghdad And Erbil
2026-04-01 Shafaq News- Baghdad/ Erbil The US dollar closed Wednesday’s trading lower in Iraq, hovering around 154,000 dinars per 100 dollars.
According to Shafaq News market survey, the dollar traded in Baghdad's Al-Kifah and Al-Harithiya exchanges at 154,500 dinars per 100 dollars, down from the morning session’s 154,750 dinars.
In the Iraqi capital, exchange shops sold the dollar at 155,000 dinars and bought it at 154,000 dinars, while in Erbil, selling prices stood at 154,450 dinars and buying prices at 154,250 dinars.
https://www.shafaq.com/en/Economy/USD-IQD-exchange-rates-fall-in-Baghdad-and-Erbil-6
IEA: Middle East War Erases 12M Barrels Daily
2026-04-01 Shafaq News- Paris Major disruptions to Middle East energy infrastructure have already withdrawn more than 12 million barrels per day (bpd) from global oil supply, the International Energy Agency (IEA) reported on Wednesday, as ongoing conflict in the region continues to damage key assets.
The agency estimated that roughly 40 major energy facilities have been hit, describing the scale of the losses as more severe than the combined impact of the 1970s oil shocks and the 2022 reduction in Russian gas exports.
Warning that supply pressures are expected to intensify in April, with losses likely to match the pace seen in March, the IEA indicated it is assessing further use of strategic oil reserves to help offset the shortfall and support stability in global markets.
On March 11, member countries of the IEA agreed to release a record 400 million barrels of oil from strategic reserves to counter a surge in global crude prices following the closure of the Strait of Hormuz.
https://www.shafaq.com/en/Economy/IEA-Middle-East-war-erases-12M-barrels-daily
Iraq Drops To Last Place Among Turkiye Importers In February
2026-04-01 Shafaq News- Baghdad/ Ankara Iraq fell to the bottom of Turkiye’s top importers list in February, with imports dropping to $774 million from $1.009 billion a year earlier, according to Turkish statistical data (TURKSTAT).
Germany ranked first with $1.855 billion, followed by the United Kingdom at $1.245 billion, and the United States at $1.238 billion. Italy came fourth with $1.111 billion, while France and Spain followed with $928 million and $839 million, respectively.
The data showed Turkish exports were largely driven by manufacturing, alongside agriculture, forestry, fishing, and mining sectors, which together accounted for 94% of total exports.
https://www.shafaq.com/en/Economy/Iraq-drops-to-last-place-among-Turkiye-importers-in-February
Everything is Crashing, When will it Bottom?
Everything is Crashing, When will it Bottom?
Heresy Financial:4-1-2026
The current stock market collapse has left many investors feeling lost and uncertain about the future. With the S&P 500 in correction territory, down about 10%, it’s natural to feel a sense of fear and doubt. However, as a seasoned investor, it’s essential to look beyond the noise and focus on the facts.
Missed expectations can be a significant source of doubt and anxiety for investors, even when the fundamentals are sound. As the video highlights, using the biblical parable of the wise and foolish builders, it’s essential to be aware of the expectations that drive market sentiment.
Everything is Crashing, When will it Bottom?
Heresy Financial:4-1-2026
The current stock market collapse has left many investors feeling lost and uncertain about the future. With the S&P 500 in correction territory, down about 10%, it’s natural to feel a sense of fear and doubt. However, as a seasoned investor, it’s essential to look beyond the noise and focus on the facts.
Missed expectations can be a significant source of doubt and anxiety for investors, even when the fundamentals are sound. As the video highlights, using the biblical parable of the wise and foolish builders, it’s essential to be aware of the expectations that drive market sentiment.
When these expectations aren’t met, it can lead to a sharp reaction. By understanding the expectations that are driving the market, investors can better navigate the inevitable ups and downs.
In times of market volatility, it’s easy to get c----t up in the drama and emotional responses to market fluctuations. However, as the video emphasizes, it’s crucial to focus on objective data rather than getting swayed by tweets, news headlines, or hopeful narratives.
By examining key data points such as hedge fund capitulation, extreme fear indexes, and technical indicators, investors can gain a more nuanced understanding of the market’s trajectory.
Some of the data points highlighted in the video suggest that the current selling pressure may be nearing exhaustion, potentially signaling an upcoming market bottom. For example, the percentage of financial stocks above their 50-day exponential moving average can provide valuable insights into market sentiment.
By staying focused on the data, investors can make more informed decisions and avoid getting caught up in emotional responses to market fluctuations.
The video also underscores the importance of maintaining a long-term perspective, even in the face of significant market downturns. By examining historical market data, including periods known as “lost decades,” investors can gain a deeper understanding of the market’s potential trajectory.
While these periods are rare, they are possible, and the video highlights the importance of strategies like reinvesting dividends and dollar-cost averaging to mitigate losses and lead to gains over time.
The example of the 2000-2013 market is a case in point. Despite a “lost decade” in nominal terms, investors who continued to contribute regularly and reinvest dividends did not suffer a lost decade in practical terms. By maintaining a long-term view and sticking to a disciplined investment strategy, investors can weather volatility and capitalize on buying opportunities.
The video also touches on the resilience of certain sectors, such as energy, which has performed well despite the broader market decline. High short interest in these sectors could fuel a short squeeze, providing opportunities for investors.
Additionally, Treasury yields nearing 5% indicate systemic stress that might prompt emergency Federal Reserve intervention, which historically supports risk assets.
In conclusion, navigating a turbulent market requires a disciplined approach, emotional preparedness, and a deep understanding of the underlying market dynamics. By understanding missed expectations, focusing on data over drama, and maintaining a long-term view, investors can better navigate the inevitable ups and downs of the market.
As the video from Heresy Financial highlights, by staying informed and sticking to a well-thought-out investment strategy, investors can capitalize on buying opportunities and achieve their long-term financial goals.
For further insights and information, we recommend watching the full video from Heresy Financial. By staying informed and maintaining a disciplined approach, investors can navigate even the most turbulent of markets with confidence.
The UNTHINKABLE is Happening to the Petrodollar...Right Now
The UNTHINKABLE is Happening to the Petrodollar...Right Now
Taylor Kenny: 4-1-2026
What if the real crisis isn’t oil—but the end of dollar dominance?
The Strait of Hormuz could be a warning sign for the dollar, your savings, and the future of the global financial system.
The UNTHINKABLE is Happening to the Petrodollar...Right Now
Taylor Kenny: 4-1-2026
What if the real crisis isn’t oil—but the end of dollar dominance?
The Strait of Hormuz could be a warning sign for the dollar, your savings, and the future of the global financial system.
CHAPTERS:
00:00 Strait of Hormuz Threatens the Dollar System
00:29 Why This Is Bigger Than Oil
01:27 Iran’s Yuan Toll Changes Everything
01:56 How the Petrodollar System Really Works
03:16 Is the Dollar System a Ponzi?
04:34 The Debt Doom Loop Is Already Here
05:33 This Shift Started Years Ago
06:01 China’s Petro Yuan and Alternative Oil Settlement
07:13 BRICS, SWIFT Alternatives, and Dollar Weaponization
09:03 The Fiat Currency Endgame
10:00 How to Protect Your Wealth Now
Seeds of Wisdom RV and Economics Updates Wednesday Afternoon 4-1-26
Good Afternoon Dinar Recaps,
Trump Faces Major Legal Barrier to NATO Exit: Congress Holds the Key to U.S. Withdrawal
Efforts to withdraw the United States from NATO face significant legal and constitutional obstacles, highlighting limits on presidential authority in global alliances.
Good Afternoon Dinar Recaps,
Trump Faces Major Legal Barrier to NATO Exit: Congress Holds the Key to U.S. Withdrawal
Efforts to withdraw the United States from NATO face significant legal and constitutional obstacles, highlighting limits on presidential authority in global alliances.
OVERVIEW (KEY POINTS)
Recent reporting confirms that any effort by Donald Trump to withdraw the United States from the North Atlantic Treaty Organization (NATO) would face a major legal hurdle: Congressional approval is required.
This stems from legislation passed with bipartisan support that restricts a president’s ability to unilaterally exit NATO, reinforcing Congress’s role in foreign policy decisions.
The issue is significant not just politically, but structurally—because it highlights limits on executive power at a time when global alliances are under pressure and being reevaluated.
KEY DEVELOPMENTS
1. Law Requires Congressional Approval to Exit NATO
A critical legal barrier is now in place.
U.S. law requires either a two-thirds Senate vote or an act of Congress to withdraw from NATO
This was passed to prevent unilateral presidential withdrawal
This means no president can exit NATO on their own authority
2. Constitutional Conflict: Who Controls Treaties?
The issue raises deeper constitutional questions.
The Senate approves treaties under the Constitution
But the Constitution does not clearly define how treaties are exited
This creates ongoing debate between:
Executive authority (President)
Legislative authority (Congress)
3. NATO’s Strategic Role Under Scrutiny
The debate reflects broader concerns about global alliances.
NATO has been a cornerstone of Western military coordination
Critics argue it imposes financial and strategic burdens on the U.S.
Supporters argue it provides collective security and global influence
4. Growing Political Divide Over Global Commitments
The issue is gaining traction among voters.
Some Americans favor reduced involvement in international alliances
Others believe alliances like NATO are essential for national security
This divide is shaping future policy debates
5. Withdrawal Would Have Major Global Financial Impact
Exiting NATO would not just be a military decision.
It could shift global power balances
Impact defense spending and currency flows
Alter trade, energy security, and geopolitical alliances
WHY IT MATTERS
This development highlights a critical reality:
Even major shifts in global policy cannot happen quickly or unilaterally
The requirement for Congressional approval means:
U.S. global commitments are structurally anchored
Sudden geopolitical realignments are slowed by design
This creates stability—but also friction when policy direction changes.
WHY IT MATTERS TO FOREIGN CURRENCY HOLDERS
Global stability: NATO underpins much of the current Western financial system stability
Currency strength: The U.S. dollar is tied to military and geopolitical influence
Capital flows: Alliance shifts could redirect global investment patterns
Risk perception: Reduced U.S. involvement could increase market volatility
IMPLICATIONS FOR THE GLOBAL RESET
Pillar 1: Sovereignty vs Global Alliances
This issue reflects a broader shift:
Nations are reevaluating global commitments vs national priorities
This tension is central to any global financial restructuring
Pillar 2: Institutional Constraints Slow Systemic Change
Even when political momentum exists, structural barriers remain.
Legal frameworks prevent rapid transformation
Change occurs through layered institutional processes
This suggests the reset is gradual, not sudden
CONCLUSION
The idea of the United States leaving NATO is not just a political question—it is a legal and constitutional challenge.
While there may be growing debate about America’s role in global alliances, the system is designed to ensure that such decisions are deliberate, negotiated, and not made unilaterally.
This reflects a broader truth about the global system:
Even in times of major change, institutional structures shape the pace and direction of transformation.
The future of global alliances—and the financial system tied to them—will not be decided by one leader alone, but through a complex balance of power across institutions.
Seeds of Wisdom Team
Newshounds News™ Exclusive
SOURCES
Reuters — "U.S. law limits president’s ability to withdraw from NATO"
Associated Press — "Congress backs measure requiring approval to exit NATO"
~~~~~~~~~~
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Seeds of Wisdom RV and Economics Updates Wednesday Morning 4-1-26
Good Morning Dinar Recaps,
Ripple and the Banking System: Quiet Moves Toward Federal Integration Signal Structural Financial Shift
While viral claims of a U.S. bank charter are unverified, Ripple’s positioning toward regulated banking pathways reflects a deeper transformation underway.
Good Morning Dinar Recaps,
Ripple and the Banking System: Quiet Moves Toward Federal Integration Signal Structural Financial Shift
While viral claims of a U.S. bank charter are unverified, Ripple’s positioning toward regulated banking pathways reflects a deeper transformation underway.
OVERVIEW (KEY POINTS)
Recent viral reports claiming that Ripple has become a federally chartered U.S. bank are not confirmed by regulators. There has been no official approval from the Office of the Comptroller of the Currency or the Federal Reserve supporting this claim.
However, the underlying narrative is not entirely misplaced. Ripple—and firms like it—have been actively positioning toward deeper integration with the regulated financial system, including exploring or pursuing bank-like licensing pathways and institutional access frameworks.
This signals something far more important than a headline:
The gradual convergence of blockchain infrastructure and the U.S. banking system is already underway.
KEY DEVELOPMENTS
1. No Confirmed Federal Bank Charter or Fed Membership
The core viral claim remains unverified.
No official confirmation that Ripple is a federally chartered bank
No evidence of Federal Reserve membership or direct account access
No April 1, 2026 regulatory event tied specifically to Ripple
This is not a completed transition—it is still in the positioning phase.
2. Ripple Has Explored Banking and Regulatory Pathways
Ripple’s strategy has consistently moved toward regulated finance.
Expansion into custody, payments, and liquidity infrastructure
Alignment with regulated institutions and compliance frameworks
Industry-wide trend of firms seeking:
Bank charters
Trust licenses
Access to central bank systems
This is where the “bank narrative” originates—but it has been misinterpreted as already complete.
3. OCC and Regulatory Frameworks Are Opening the Door
The Office of the Comptroller of the Currency has enabled:
Federally chartered banks to custody digital assets
Integration of crypto services into regulated banking structures
This creates a pathway where:
Banks adopt crypto infrastructure
Or crypto firms move toward bank-like status over time
4. The Strategic Goal: Access to Core Financial Rails
The real objective is not branding—it is infrastructure access.
Federal Reserve systems (payments, settlement, liquidity)
Institutional custody frameworks
Integration into global financial plumbing
Control and access to these systems is far more important than the label “bank.”
5. Market Anticipation Is Running Ahead of Reality
The viral claim reflects growing expectations.
Investors are anticipating a breakthrough moment
In reality, the shift is incremental, regulatory, and controlled
WHY IT MATTERS
This is a transitional phase in the financial system.
The key shift is not whether Ripple becomes a bank—it is that:
Blockchain firms are moving into regulated finance
Banks are adopting blockchain infrastructure
This creates a hybrid system, where distinctions between the two begin to blur.
WHY IT MATTERS TO FOREIGN CURRENCY HOLDERS
Payment systems: Faster, blockchain-based settlement may reshape cross-border currency flows
Currency competition: Digital infrastructure increases global monetary competition
Asset custody: Institutional crypto custody expands how value is stored globally
Liquidity flows: Integration with banking systems could accelerate capital movement worldwide
IMPLICATIONS FOR THE GLOBAL RESET
Pillar 1: Infrastructure Over Identity
The real transformation is not about becoming a “bank”—it is about controlling or accessing financial infrastructure layers.
This includes:
Payment rails
Liquidity networks
Settlement systems
Pillar 2: Gradual Integration Before Full Transition
The system is not flipping overnight.
Instead, it is moving through stages:
Regulatory clarity
Institutional adoption
Infrastructure integration
Eventual system-wide transformation
CONCLUSION
The claim that Ripple is now a U.S. bank is not accurate today—but it points toward a very real directional shift.
Ripple and similar firms are not suddenly becoming banks.
They are strategically positioning themselves inside the regulated financial system, step by step.
The bigger story is not a headline—it is a process:
The merging of blockchain infrastructure with traditional banking is already in motion.
And when that process reaches full scale, it will not look like disruption—
it will look like a completely redesigned financial system operating under new rules.
This is how structural financial change actually happens—quietly, incrementally, and then all at once.
Seeds of Wisdom Team
Newshounds News™ Exclusive
SOURCES
Office of the Comptroller of the Currency — "Banks Can Provide Cryptocurrency Custody Services"
Ripple Insights — "Ripple Expands Global Custody Capabilities"
~~~~~~~~~~
🌱A Message to Our Currency Holders🌱
If you’ve been holding foreign currency for many years, you were not foolish.
You were not wrong to believe the global financial system would change.
What failed was not your patience — it was the information you were given.
For years, dates, rumors, and personalities replaced facts, structure, and proof. “This week” predictions created cycles of hope and disappointment that were never based on how currencies actually change.
That is not your failure.
Our mission here is different: • No dates • No rates • No hype • No gurus
Instead, we focus on:
• Verifiable developments • Institutional evidence
• Global financial structure • Where countries actually sit in the process
Currency value changes only come after sovereignty, trade, banking, settlement systems, and fiscal coordination are in place. History and institutions confirm this sequence.
You will see silence. You will see denials. That is not delay — that is discipline.
Protect your identity. Organize your documents. Verify everything.
Never hand your discernment to anyone who cannot show proof.
You deserve truth — not timelines.
Seeds of Wisdom Team
Newshounds News
~~~~~~~~~~
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Iraq Economic News And Points To Ponder Wednesday Morning 4-1-26
The Minister Of Finance Has Directed That The Accounting And Banking Departments Continue Operating To Complete The Payment Of Employee Salaries.
Money and Business Economy News – Baghdad Finance Minister Taif Sami directed on Wednesday that work continue in the accounting and banking departments to complete the payment of employee salaries for the month of March.
The Minister Of Finance Has Directed That The Accounting And Banking Departments Continue Operating To Complete The Payment Of Employee Salaries.
Money and Business Economy News – Baghdad Finance Minister Taif Sami directed on Wednesday that work continue in the accounting and banking departments to complete the payment of employee salaries for the month of March.
Sami told the Iraqi News Agency, as reported by "Economy News," "We have directed the continued operation of the accounting and banking departments to complete the payment of employee salaries for the month of March in the remaining spending units."https://www.economy-news.net/content.php?id=67395
Marvel Technology Shares Jump 11% After Nvidia Acquires A $2 Billion Stake
Money and Business Shares in Marvel Technology jumped more than 11% after Nvidia announced plans to invest $2 billion in the semiconductor company, amid a race among companies to meet the growing demand for artificial intelligence technologies.
The agreement allows Marvel Technology to be integrated into Nvidia's AI ecosystem, making it easier for customers to develop their infrastructure. The two companies will also collaborate on developing silicon photonics technology.
“It’s time for a shift in inference,” said Nvidia CEO Jensen Huang in the statement. “The demand for token generation is mounting, and the world is racing to build AI factories. With Marvel Technology, we are enabling customers to leverage Nvidia’s AI architecture ecosystem and scale to build specialized AI computing.”
In recent months, Nvidia has made a series of $2 billion investments in technology companies, including Synopsys, CoreWave, Coherent, and Lumentum. Most recently, Nvidia invested $2 billion in Nebius Group, where the AI cloud computing company unveiled plans on Tuesday to build one of the largest data centers in Europe.
The leading chipmaker has been one of the biggest beneficiaries of the artificial intelligence boom that has swept Wall Street in recent years, thanks to its graphics processing units (GPUs) that support large language models.
Marvel Technology is another major winner in the race, with its shares surging this month after the company issued strong forecasts and called for accelerated revenue growth through 2027 as demand for artificial intelligence increases.
Marvel Technology CEO Matt Murphy said, "Our expanded partnership with Nvidia reflects the growing importance of high-speed connectivity, optical connectivity, and accelerated infrastructure in scaling AI." https://www.economy-news.net/content.php?id=67374
Syria Is Preparing To Open Its Second Border Crossing With Iraq.
Money and BusinessEconomy News - Baghdad Officials from the Syrian General Authority for Ports and Customs conducted an inspection tour of the Al-Yarubiyah border crossing with Iraq in Al-Hasakah Governorate, as part of monitoring the rehabilitation work and raising operational readiness in preparation for its reopening.
Khaled Al-Barad, the assistant head of the authority, accompanied by a delegation of directors of the central directorates, conducted a field tour to see the reality of the work being carried out at the port, and to follow up on the implementation of maintenance and equipment plans.
The Syrian General Authority for Ports and Customs stated on its Facebook page that the tour included reviewing the infrastructure maintenance work being carried out by the Directorate of Facilities and Maintenance, which includes rehabilitating service facilities and improving the readiness of squares, internal roads, passenger halls and customs, in addition to raising the efficiency of technical and logistical equipment to ensure that crossing traffic is accommodated in an organized and safe manner.
The authority explained that the rehabilitation and maintenance work is expected to be completed during the coming period, with the opening of the crossing scheduled for the beginning of next May, in a step aimed at supporting trade and strengthening economic ties, in addition to facilitating the movement of citizens through this vital crossing with Iraq.
She emphasized that these efforts are part of a plan to rehabilitate border crossings and raise their operational efficiency, in line with the requirements of the current stage and to enhance the readiness of the infrastructure to serve transit traffic.https://www.economy-news.net/content.php?id=67364
60 Oil Tankers Crossed Through The Al-Walid Border Crossing And Headed To Revive The Haditha-Aqaba Pipeline.
Money and Business Economy News – Baghdad Anbar Provincial Council member Adnan al-Kubaisi announced on Tuesday that more than 60 trucks loaded with Iraqi oil have begun crossing through the al-Walid border crossing, expecting the number of trucks transporting oil to rise to between 600 and 700 in the coming period.
Al-Kubaisi said, "There is a trend to resume the mechanism of exporting oil through the Syrian and Jordanian ports in quantities that may exceed 200,000 barrels per day, as was the practice before 2003 using tankers."
He added that "the next stage may witness parliamentary action to compel the government to implement the modern Aqaba pipeline project, given its strategic importance in diversifying oil export outlets."
Al-Kubaisi pointed out that "the project was previously approved but faced objections, but there is currently pressure to reactivate it and proceed with its completion, given the economic benefits it provides, as well as its positive impact on Anbar Governorate, especially with regard to the petrodollar file." https://www.economy-news.net/content.php?id=67362
Qatar Central Bank Issues Government Bonds Worth 3 Billion Riyals With A Return Of 4.5% Annually
Banks The Qatar Central Bank issued government bonds worth 3 billion riyals for terms of 5 and 3 years.
The new issuance was distributed in two tranches, with a value of 1.5 billion riyals for each issuance, and a return rate of 4.5%.
According to a statement from the Central Bank, the first issue is due on August 24, 2030, while the second issue is due on January 16, 2029.
It is noted that the outstanding balance of government bonds in Qatar amounted to 61.98 billion riyals at the end of March 2026, representing 47% of the total value of public debt instruments amounting to 131.5 billion Qatari riyals.
https://www.economy-news.net/content.php?id=67383
The Dollar Index And The Upward Trap Amid The Growing Shock Of Regional War
Dr. Haitham Hamid Mutlaq Al-Mansour Economy News – Baghdad Recent warnings from Morgan Stanley indicate the possibility of the dollar falling into an upward trap during the current regional war, pointing to a clear contradiction in the behavior of financial markets.
The US dollar may rise strongly in crises, but this rise may not necessarily reflect sustainable economic strength, but rather a short-term response to a geopolitical shock whose effects will soon be reversed.
At the outset of crises, investors globally flock to the dollar as a safe haven, a highly liquid asset, and the world's reserve currency. This explains why the US dollar accounts for approximately 58-60% of global central bank reserves and is used in roughly 80% of international trade.
This sudden surge in demand drives the dollar index (DXY) upward, often resulting in gains of 3% to 7% during the initial weeks of major geopolitical shocks.
As the war escalates and oil prices soar—sometimes jumping 15% to 25%—the demand for the dollar, driven by energy demand, intensifies, further bolstering its short-term gains.
Conversely, the euro faces significant pressure, as the Eurozone imports over 60% of its energy needs. Consequently, rising oil and gas prices increase the import bill and strain the trade balance, typically leading to a 2% to 5% decline in the euro in the short term during energy crises.
This disparity widens the temporary gap between the two currencies and creates the impression that the dollar is entering a strong upward trend.
However, according to Morgan Stanley, this rally could be misleading. As the global oil price shock continues, markets are rapidly correcting the inflationary impact of rising energy costs.
With the general price level rising as a reflection of this shock, economic entities anticipate interest rate hikes and continued tight monetary policy, which quickly supports the dollar. At this point, markets will focus on the immediate effect of inflation.
But the more profound impact of slowing economic growth is quickly underestimated. Economic modeling suggests that every 10% increase in oil prices can shave roughly 0.2% to 0.4% off global growth over a year.
If prices remain above $100 a barrel, growth in the Eurozone could fall below 1%, with increasing recession expectations, which would then impact the US economy, slowing it from around 2% to 1% or less.
Herein lies the paradox. The strong dollar, which surged in response to the shock of war, is gradually becoming a source of internal pressure on the US economy. A 5% to 10% appreciation of the dollar leads to a 3% to 5% decline in the profits of multinational corporations due to the exchange rate effect, and it also weakens the competitiveness of exports.
As signs of a slowdown increase, the US Federal Reserve may be forced to adjust its course, either by halting interest rate hikes or even lowering them, which would hinder one of the most important monetary policy tools used to support the dollar.
Historically, data shows that the dollar tends to rise at the start of crises and then lose momentum. In past crises, such as the oil shock or major geopolitical tensions, the dollar made initial gains but subsequently declined by 4% to 8% over three to six months as market focus shifted from fear to economic fundamentals.
Accordingly, the "upside trap" occurs when investors enter at high levels, driven by the momentum of the crisis, while the true supporting factors have already peaked. As attention shifts from inflation to growth, and from the shock to the fallout, investment moves in the opposite direction, signaling the onset of a slowdown and recession.
At present, the dollar appears outwardly stable, supported by three pillars: demand for it as a safe haven, a liquid asset, and a global reserve currency; high energy prices; and the Federal Reserve's continued relatively hawkish stance. However, these same pillars contain elements of their own erosion.
The longer the war continues and the higher oil prices rise, the greater the pressure on global economic growth will become, and markets willgradually begin to reprice away from the crisis and toward fundamentals.
Therefore, if oil prices remain above $100 and growth indicators gradually begin to emerge, the probability of a dollar decline rises to between 60% and 75% within a period of 3 to 6 months. In this scenario, the dollar typically falls by 4% to 8% from its peak.
Domestically, a 5% rise in the dollar leads to a 3% to 5% decrease in US corporate profits, a 2% to 4% drop in exports, and a reduction of approximately 0.2% to 0.4% in overall GDP growth due to increased costs.
If the dollar rises by 10%, these effects nearly double, and the relationship becomes non-linear and reversible, pushing the economy toward recession and prompting the Federal Reserve to ease monetary policy.
In short, the dollar's rise during this war may shift from strength to weakness, as it is driven by temporary precautionary demand rather than a fundamental improvement in economic activity.
If signs of a global slowdown stabilize, this rise could transform from a source of strength into a point of decline, thus reshaping the relationship between the dollar, the euro, and global markets in the post-shock era.