A World View from a Contractor

The Iraq Dinar Revaluation

Iraq Currency in Dubai MarinaJust last week, the Iraq Ministry of Commerce announced that the Iraq government is preparing to enter the third round of negotiations for joining the World Trade Organization (WTO). The meeting was held at the Ministry of Commerce building in the International Zone. The meeting was very productive. Different department heads were in attendance, the Ministry of Planning representatives, Ministry of Health, General Authority for Customs, Iraqi Federation of Industries, Federation of Iraqi Businessmen, General Company for Trade and the Import and Expert Commercial Services. This was the pre-meeting before they meet with the WTO officials in the fall. There are still some obstacles that the Iraqi’s have to take care of first before the meeting with the WTO.

The Iraq government is prepared to make good on its debts to the Paris Club members. Yes, Iraq still owes debts and it will be settled as soon as the U.S. government has lifted the protection for the Development Fund for Iraq (DFI). The scheduled date is 22 May and it appears like everything is going according to plan. I would not be surprised if this is delayed another year. Considering this will happen when the Iraq government is still trying to come to grips with another four years of Prime Minister Nuri Maliki.

Oil exports are at 2.5 million barrels a day and all from the southern oil fields. The Kirkuk oil pipeline has been damaged by terrorist attack. The Kirkuk oil pipeline to be down in May. Iraq should have no problem in getting the oil exports above 3 million a day very soon.

Another milestone is that the Central Bank of Iraq (CBI) has introduced a banknote with enhanced features. No, this is not the “delete the zeros” type of Iraq currency. That may come in the year 2015 if we’re lucky. The CBI has a huge problem with the criminal gangs counterfeiting the Iraq dinar. Fake Iraq dinars are showing up in the 10k notes and 5k notes being that they are used the most often. The response from the CBI is to increase the security features and enhance the paper that the Iraq currency is printed on. The CBI has added features on the bank notes to assist the blind to help understand the value of the dinar currency. These new bank notes have increased the money supply in Iraq. The CBI mentioned that there would be no removing of any Iraq dinar currency during the time that they are rolling out the new specially enhanced currency. Since 2003, there has not been any Iraq banknotes removed from circulation. The CBI web site shows how the money supply has increased over the years.

The upcoming election is just a few days away being held on 30 April. There are 9,045 candidates all competing for 328 seats in the Iraq government. The forerunner for the Prime Minister position is Nuri Maliki, with the help of the Iraq Parliament Speaker, Osama al-Nujaifa who may be the next Iraq President.

The Iraq federal budget of 2014 has not even passed in the Iraq parliament, they will meet in May 2014. It appears that they will try and approve the 2014 and 2015 budgets at the same time. Or possibly just skip the 2014 budget. This is not done by any other country but Iraq.

They do as they wish, they’re not worried about protocol or policies. There is one particular guru who is always talking about policy. I always say watch what they do and forget about their policies.

The CBI has eliminated the exchange brokers who were once involved with the currency auctions. The CBI has changed the rules and now allows the currency exchange vendors to deal directly with the Central bank in the currency auctions. The CBI would like to have the exchange vendors uphold to regulations and standards just like the banking sector. You will see the US dollars flying off the shelves with this new move by the CBI. The CBI foreign reserves will climb over 100 billion in no time at all.

You can see the great milestones that Iraq has accomplished in 2014.  This is all helps in the future with the Iraq dinar re-evaluation or follow suit of what other countries have done with their hyper inflated bank notes. Only time will tell. Thanks for reading.

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Iraq Central Bank invites JP Morgan Bank to open branch in Baghdad

The Iraq Central Bank has sent an invitation to the JP Morgan Bank to open a branch in Baghdad.  This is preliminary and we will see what develops.  Great News!!

Central Bank invites JP Morgan Bank to open branch in Baghdad

Banking System Reform Requirements in Iraq February 2014

Check out this report from the Iraq Council of Representatives Finance Committee.  There is great information on the status of the Iraq banking sector.

Finance Committee Report on Banking System Reform Requirements in Iraq February 2014  – pdf  1 Meg

The Iraq money supply is increasing according to the financial data in this report.

There will be more Iraq reports so check back often.

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Iraq was Considering Revaluation of the Dinar

Iraq was Considering Revaluation of the Dinar

Read the highlighted portion in the picture.  What are your thoughts?  Did the author make a mistake when he wrote reevaluation in his Iraq report.
Comment below.  Make sure you’re on my mailing list so you will receive the 409 page April 2014 Iraq report later.

Iraq Prime Minister Maliki Ahead in Elections

04-17-2014  Iraq has 70 Trillion deposits in banks    – Arabic Version

04-17-2014  Iraq has 70 trillion deposits in banks    – English Version

Saudi Arabia expects Maliki to win more then 90 Seats    – Arabic Version

Saudi Arabia expects Maliki to win more then 90 Seats    – English Version

Brookings Institute article

Gulf Fears of Victory in the Elections – al-Maliki     -  Arabic Version

Gulf Fears of Victory in the Elections – al-Maliki     -  English Version

Countries Moving Away From Dealings With The US Dollar

View of Dubai CreekThe International Monetary Fund (IMF) has stated that Iraq has added 36 tons of gold bullion to its reserves. This has a value of 1.5 billion dollars. The Central Bank of Iraq (CBI) is purchasing large amounts of gold to back the Iraqi dinar currency. The CBI is doing what other countries around the world have done in the past. It is apparent that countries are moving away from the U.S. dollar. There are numerous news articles from credible news sources stating that countries around the world are moving away from the U.S. dollar.

I have shared some of the links/articles below.

In November 2010, the China Daily news organization reported that Russia and China have signed an agreement to conduct all trade in their local currencies. Appears that they are kicking the U.S. dollar to the curb.

The U.S. Federal Reserve has decreased the buying of debt from the U.S. government and China has also decreased their purchasing at the U.S Treasury office.

Russia and China are not the only two countries that have moved away from the U.S. dollar. Germany, a long time ally of the United States, has also made agreements with the Chinese government to conduct trade in yuan and euros.

In Feb 2011, the International Monetary Fund (IMF) called for a U.S. dollar alternative. The United Nations has also called for a new global currency to replace the U.S. dollar. This is all pointing to a global currency reset that the IMF leader spoke of in the past. Clearly, they want to remove the U.S. dollar as the world’s reserve currency. Also, the petro dollar will be no longer be the world’s reserve currency.

China and Brazil have signed agreements to only conduct trade in their local currencies. Moving away from the U.S. dollars.

China and Australia have signed agreements with each other. The article also mentions South Korea, Turkey and Kazakhstan. They all have agreed to conduct trade in a currency swap in their own respective currencies.

China and Japan have signed agreements to conduct trade in yuan and yen. There will be no U.S. dollars in their trade between the two countries.

Iran and Russia have replaced the U.S. dollar
between the two countries. This article states also that Iran replaced the U.S. dollar in its oil trade with India, China and Japan.

China and Chile have also signed agreements to conduct trade in their local currencies.

China and United Arab Emirates (UAE) have currency
swaps in their local currency. They will be conducting trade in yuan and dirhams.

The BRIC nations consist of Brazil, Russia, India, China and South Africa. They have all signed agreements with each other to conduct trade in their own local currency. This once again leaves the U.S. dollar out of all international transactions.

Iraq is following suit. Don’t get me wrong, they are currently still using the U.S. dollar but changes are in the works. Iraq still accepts payment for their oil and gas in U.S. dollars. However, in the future that may not be the case as they continue to back their currency with gold. It looks like they are strengthening the Iraqi dinar reserves with gold in order to move away from the U.S. dollar in the future. They recently signed agreements with India to conduct trade in both countries using local currencies. You will see Iraq conduct these type of arrangements in the future.

Coming July 2014, there will be a new law on the books. I am looking into the law and trying to do more research on this. However, some of what I am learning is that after 1 July 2014 all world wide banks have to comply and report to the Internal Revenue Service (IRS) any transactions made in U.S. dollars. Like I said,…I am still looking into this law and as soon as I get a more information I will share and post here.

Comment below on what you think about the U.S. dollar losing its position in the world.

Contact American Contractor at Email: ac@americancontract.com.  Make sure to sign up to my mailing list by clicking this link.  After signing up check your email for the confirmation.

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Iraq Prints New Iraq Dinar with Security Features For The Blind

New Iraq CurrencyThe Central Bank of Iraq (CBI) has announced that they have re-printed several new Iraq dinar currency denominations.  The new printed Iraq currency denominations are the same as the previous ones in circulation, from October 2003.  The difference between the October 2003 printing of the Iraq dinar and the recent re-print is the addition of more security features as well as Kurdish language and better readability for blind people.

Recent reports say that the new re-printed notes are now going to co-exist with the current bank notes.  They will both have the same exchange rate.  The Central Bank is doing this to counter the criminal gangs that are counterfeiting the Iraq dinar.  The CBI has re-printed the denominations of 250, 500, 1000, 5,000, 10000, 25000.  This new addition of more bank notes will add to what is already in circulation.  Since the printing in October 2003, there has been no coordinated effort by the CBI to remove notes from circulation.  The only notes that have been removed are the ones that are worn out and have been turned in for credit by the Iraqi banks. In the future, the CBI intends to start printing larger denominations such as 50,000 Iraqi dinar banknote.  This is to control the current inflation in Iraq.

The CBI has also announced that they have made arrangements to purchase large amounts of gold.  The reason they are doing this is because Iraqi’s are exchanging their Iraq dinar for U.S. dollars.  This is evident when you observe the Central Banks daily currency auctions, which are in the hundreds of millions of dollars.  The Central Bank has realized that they need to increase the value of the Iraq dinar quickly. The Iraq government is the number one employer in Iraq and most are being paid in Iraqi dinar.  When they are paid they quickly exchange for U.S. dollars at a local bank or go to a currency exchange business.

Last year the CBI tried to halt the smuggling of U.S. dollars out of Iraq.  The CBI seems to be failing despite their policies that have been in place as laundering continues.

In other news, the leader of the Supreme Council on Iraq,(ISCI),  Mr. Ammar al-Hakim and his allies did not have the opportunity to replace the current Prime Minister Nuri Maliki.  There is basically no difference between the two parties. One may just hold slightly more power over the other.  Maliki however, may currently have an advantage as he controls most government functions and ministries and may possibly succeed in his bid for third term.  Maliki currently receives four paychecks each month:

Ministry of Interior
Ministry of Defense
Leader of the Dawa Party
Leader of the State of Law coalition

Maliki has given the armed forces two electoral cards and made it a point to skip the people that are not in support of his third term.  You can say what you want about Maliki but he is clever and he will win his third term on April 30.  Granted, there is still an election.  Maliki has made a daily attempt to get rid of his opponents via the courts system or finds an excuse to arrest and jail them. In regards to the Kurds in the north, it is just a repeat of what happened in 2010 election.  The Kurds were against Maliki originally, then they came around and supported him in the end.

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Al-Warka Bank Paid 20% Of A Depositors Money Back

Central Bank of Iraq

Middle East Online media  just released an article discussing the banking situation in Iraq. It tells of a story about an al-Warka Bank depositor named Saleh Majid. Mr. Saleh happens to own an electrical supply shop in downtown Baghdad. He had previously deposited his hard earned money inside al-Warka Bank prior to the bank going Bankrupt in 2012.  When al-Warka Bank went into receivership with the Central Bank of Iraq (CBI) Majid only received 20% of his deposit back. This is an all too common story these days. There are countless depositors in Iraq that have lost their deposits with al-Warka Bank. The bank was also delisted from the Iraq Stock Exchange (ISX) several years ago and there are no indicators of it being reinstated.

In the past, there have been many misguided guru’s that have pushed the al-Warka Bank agenda. I have written about, commented on and gave warnings on al-Warka since June 2006. Some of you may even recall my recent posting about the medical student that contacted me for help. He had lost his savings of 100k with al-Warka bank. A complete loss of his tuition and his dream of being a physician. I cannot help you once you’ve invested in them and lost. I can only advise you not to or to proceed with caution.

The former deputy of Minister of Finance, Fazil Nabi recently commented about banks in Iraq saying, “Some banks are bankrupt.”  That’s putting it mildly! For this alone, I would be extremely cautious when dealing with any bank in Iraq. I cant advise enough to do your due diligence and be very cautious when sending any of your private information to any foreign bank. Theres no telling what they will do with your personal information.

In other news, the April 30th elections are still on for now.  Although, it was nearly called off after the members of the Iraq Election Commission resigned. The reason being, they protested the written language inside the election law.  The law stated candidates must be “of good reputation.”  This gave political parties leverage to remove opponents from the election political process. The Election board members have withdrawn their group resignation and went back to work. I expect that there will be more incidents like this as we get closer to April 30th.  My prediction is that Prime Minister Nuri Maliki will remain after the elections.  I could be wrong, however, Prime Minister Maliki is working non-stop in keeping his position.

Top 10 Iraq Dinar Questions Asked to American Contractor

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