TLAR Commentary ~

8 days left until the parliamentary elections in Iraq. Maliki is still fighting to get a third term but all the blocks have basically turned their backs on him,. Maliki has even tried to negotiate his way into some political position after the elections like VP or President. He has tried to get any Shia block to recommend him for another position saying he would be willing to step aside and not run for PM if they did. He is extremely fearful of not being in some political position after the elections because if he is not, he looses his immunity. He has only his hard core supporters in the SOL that would like to see him get another term but even the SOL is in trouble with many not wanting to support him and they are experiencing defections by the droves. The NA, the Shia conglomerate party is not interested in supporting him and they have made no committments to him, but behind the seens the Shia party says that there is no chance for Maliki to get them to back him. Maliki has stated that if he can't win the PM job for a third term that he will leave Iraq. The list of blocks against him is getting longer by the day. The citizen block (projected largest Shia block), the Kurdish block, the Sadrists, the Sunni's (Iraqiya), the Islamic Supreme Council (Shia), the Turkmen and many smaller blocks have all banded together to make sure Maliki does not get a third term. Maliki sees the writing on the wall and IMO is just going through the motions until the last minute as are most of his hardcore followers. It is my opinion they will all run before election day is over as the first of the straw polls come out.

Maliki tried to give a speech in Bagdad last week, a Shia stronghold. He did not get a chance as attendees threw things at him and booed him off stage. He also tried to give a speech in Basra last week but it too ended in a simular way with articles of hats and shoes being thrown at him with boos from the crowd. A poll taken recently that is supposed to be representative of the people of Iraq showed Maliki getting 11% of the vote. The Sadrists were in the 30 percentile range but the citizen Block took over 40%. Maliki is finished in Iraq and if he does not escape the country, many are now stating he will end up being prosecuted and hung as was Saddam. He will be accused of crimes against the state as well as murder, extortion, theft, corruption and stealing from Iraq.

The blocks just stated that they want to pass the budget right after the election and the likely hood of it getting passed before the elections is all but gone. The problem with the budget the way it stands is the punitive language written into it that specifically punishes the Kurds by taking away their share of the revenue if they don't hit a 400 thousand bpd quota imposed on them by Shahristani. In 2012 Shahristani put a 200 thousand bpd quota on Kurdistan that they had to hit and maintain before the end of the year. The Kurds had no problem with this quota feeling that they could hit the target easily. About three months into the target date, the end of 2012, Shahristani quit paying the oil companies in Kurdistan. The way the oil deal works in Iraq, is Bagdad is supoposed to pay all the bills of the independent companies producing oil. All revenues go to Bagdad and then Bagdad dispurses the shares to the provinces. By discontinuing the payments to the oil companies working in Kurdistan, those companies mostly quit producing oil in protest to not being paid. Kurdistan missed their target and Shahristani kept Kurdistan's share of the budget. IMO Shahristani planned to do this in order to attempt to make Kurdistan knuckle under as Shahristani was also trying to reduce Kurdstan's share of the budget from a total of 17% down to 10% since he was appointed to the Oil Ministry by Maliki. That stalemate of no production in Kurdistan and no payments from Bagdad has lasted almost through today. The Kurds also want the monies from the production to be handled either by them or a reliable third party and then split according to agreement. They refuse to let Shahristani a known thief, handle the money. They have even asked the UN to control the monies giving everybody their fair share. The UN agreed. Shahristani, the largest thief in Iraq refuses to let anybody but him handle the money. So we have a mexican standoff on the budget. Shahristani is standing his ground on both issues saying no to the removal of the punitive language and no to anyone but him handling the monies, as well as the Kurds are stating no changes in the mechanics in the budget, they will not vote on the budget.

It is my opinion eventually Sharistani will ultimately be hung by the neck side by side with Maliki. He was known to have stolen 6 billion USD (Maliki's previous slush fund) when he ran the Electricity Ministry and was about to be prosecuted by parliament when Maliki saved him by appointing him to head up the Oil Ministry, Iraq's largest "Maliki Slush Fund." The good news is the blocks want this budget passed immediately following the election and have already agreed on the Kurdish issues to make sure it does.

The CBI has let the contracts to reprint the 250, 500 and 1000 notes. It is my belief that until these notes are printed and we begin to see large number of notes being swapped out we will not see an RV. The old 250, 500 and 1000 were printed in 2003 and they have all the same ease of being counterfeited by Iran. That would make the next time we might see the currency move as July 1st, 2014 the start of the third quarter. The original plan had called for these old notes (250,500,1000) to be left in circulation for up to two years following a change in the currency. Iran is a state sponsered counterfeiter and I am sure they know the plan because they have been extremely close to the present Iraqi government. We have seen government and private individuals use the phrase "mafias are prepared to rig the currecy". IMO they are talking about Iran. Iran has been counterfeiting the 5000, 10,000 and 25,000 notes since the end of 2009. They are very proficient and prolific counterfeiters and if I'm right they have had the plates ready for quite a while of the old 250, 500 and 1000 notes, anticipating the deletion of the zeros project to start. Up until now they have not counterfeited these notes because a (1000 note) is only worth 85 cents and a (500), 42 cents and a (250), 21 cents. It is not worth printing with the cost of transportation and distribution in Iraq when compared to risk. They would have to move 25 x's the paper to make the same as selling (1) discounted bogus 25,000 note. They today can print a 25,000 note worth $21.50 before they discount the bill. If the CBI were to pull the trigger without the new 250, 500 and 1000 notes already going into circulation, Iran would be sucking billions and billions within a few days of the project implementation. A 1000 note would have a value of $860. It does not take a rocket scientist to see the currencies vulnerability here. They must reprint these notes making them also the new not counterfeitable notes to assure that they too are not compromising the project. They must reprint them before these notes have value. I see this as a change to the plan but it is an aboslutely necessary change to protect the currency.

The CBI since 2007 and through two different governors has steadfastly protected the reserves. Recently I sent you an article where the CBI announced their cash reserves are $100 billion USD equivalency. They have also announced their gold reserves were 90 tons. In November they told us the gold reserves were equal to their cash reserves which wthe cash reserves at the time were standing at 89 billion USD. Why the discrepancy and what happened to the rest of the gold? In October if I remember accurately, the CBI announced that because Iraq was now released from Chapter VII UN Sanction that the CBI would be getting 82 billion of released funds from banks around the world. These funds would be slowly being released and the CBI was going to add them to the reserves. In December BIS announced they would be acceting deposites from Iraq and that these deposites would be converted to dinar. No more has been mentioned on the released funds until day before yesterday when again 82 billion in released funds were mentioned in an article. We know the CBI has been receiving them but where are they going. My guess is that the CBI has been having them shipped and deposited directly in BIS as well as some being turned into gold purchases and deposited with BIS. I have called these "the hidden reserves" because they do not show up on the CBI website. We know there is funds in an Iraqi account at BIS and that Iraq is continuing to make deposites with at least another billion in cash going in this year. Why would Iraq hide these funds? When it was announced that these funds would be released from banks around the world Maliki stated he was going to get the funds. The CBI got into a back and forth argument and then we heard nothing else until the article a couple of days ago. I believe Turki, in order to keep Maliki from getting these funds, has diverted them directly to BIS. They are part of the reserves but have yet to be accounted for on the CBI website. These funds added to Iraq's known reserves and gold holdings makes the CBI one of the strogest banks in the world. Kuwait has one of the strongest currencies in the world but only has 32 billion in reserves. If we count the CBI's potential reserves, they have almost 250 billion holdings they claim as reserves once the entire 82 billion is brought in house.

Maliki made another run on the CBI. He attempted to use as his excuse salaries need to be covered and with the budget tied up they needed to borrow billions from the CBI to cover them. Turki again stood his ground based on the constitution, declaring the banks independence and the constitution obligation not to make loans to the government. Turki basically said no way to Maliki only this time it was obvious in the way he said it that there was recognition of Maliki loss in statue and power in Iraq. The bank hopefully will be completely independent without all the verbal and physical attacks it has had to endure for the last 8 years by Maliki and his thieves attempting to get their hands on the reserves. As Maliki slips in power Turki has grown in power. It is my belief that Turki is now educated in banking and is starting to act as a confident Governor and good things are finally at hand. Things look like they are finally falling into place. Enjoy the articles and if you would like to see a specific article detailing anything I have said above, please email me.

~ tlar