Highlights/Thoughts
This is Enoch8's perspective on the article from yesterday (click on the link below to get to the original article):
1. The ruling defines Parliament has no Executive Power.
2. It is a moot point that the CBI is under the authority of the Legislature
3. Parliament can't legislate without the seal of the President's executive pen
4. The CBI does work with the minister of finance and planning and oil directly
5. These ministries are under the direction of the Executive Branch, or the PM
6. MOP has had a plan for several years and the feasibility study ended 12/2008
7. They set a 5 yr plan on monetary policy, exchange rates and value
8. Articel XIV of the IMF, Article IV agreements with the GOI and CBI and the terms and conditions that must be met, state 3 primary goals:
1. Control inflation
2. Work to combat money laundering
3. Work toward parity and stability of the currency, regionally and move away from the practice of Multiple Currency Practices, which are defined as Currency Manipulation.
9. CBI has done well at controlling inflation
10. They are still allowing money laundering and multiple currency manipulation to take place, however because of the refusal to adjust the values for the last 2 years
11. It is clear that without the CBI being forced to adopt the MOP models for currency exchange rate mechanisms, the CBI has the power to do so
12. The IMF is showing that the CBI has held the nominal value to less than 25% of the real equitable exchange rate (REER)
13. CBI has refused to allow the nominal rate to increase in the natural value to the REER, which is over 4 times the nominal value as of 2 years ago and according to the IMF
14. The MOF models show the values from 2005-2008 would be stable at $1.13
15. The years 2009-2010 show the adjustments to the feasibility study to be closer to $1.72, considering the basis year of 1988 rate of $3.22
16. The models show a dramatic increase of values allowable by the IMF rules to use the previous 2 years. It also allows for a 2 year stated projection
17. The models show that the CBI can easily show increasing stability of the exchange rates in excess of $1.72, and increasing dramatically over the 5 year plan
18. It also allows for the rate to be set at the 2011 and 2012 projections, which are significantly higher than $1.72
19. However, the CBI has refused to allow the nominal rate to increase
20. Enoch concludes that the CBI is not in compliance and that the Court ruling was desperately needed and that the independent bodies are constitutionally part of the Executive Powers, designated to the lawmaking of the Legislative branch, the Parliament
21. The ruling has the effect of freeing the log jam caused by the lack of legislation to monetary reform and the equalization laws for fiscal federal 2011
22. The ruling will healthily force the CBI to comply with the will of the people of Iraq, the international community, and the IMF
23. The Court ruling is just the remedy needed so the RV can happen
Original article
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At first look, at the argument Shabibi and Al-Saleh were presenting, the court ruling looked like a Coup de 'etat of some kind.
But the reality, is, that the ruling defines that the Parliament has no Executive Power, so it is really a moot point, that CBI is under the authority of the Legislature.
The Parliament can't legislate, witout the seal of the President's Executive pen.
So the argument is moot.
The Court ruled.... so lets move on Mr Shabibi.
The next thing I would point out, is that the CBI does work with the Ministers of Finance, Planning and Oil, directly.
These are Ministries under the direction of the Executive Branch..... the Prime Minister.
What is interesting to me, in all this, is the fact that the MOP, has had a plan, for several years and the Feasibility Study ended Dec. 2008, as I recall. Furthermore, they have set a 5 year plan on monetary policy and Exchange Rates and Values, which even the IMF recognizes as meetingthe requirements of the IMF.
Article XIV of the IMF, Article IV agreements, with GOI and CBI, and the terms and conditions that must be met, are 3 primary goals. Those are as follows:
1. Control Inflation
2. Work to combat Money Laundering
3. Work toward parity and stability of the currency, regionally and move away from the practice of Multiple Currency Practices, which are defined as Currency Manipulation.
CBI has done well at controlling inflation..... but because of the refusal to adjust the values for the last 2 years, is still allowing Money Laundering and Multiple Currency Manipulation to take place.
It is becoming painfully clear, that without the CBI being forced to adopt the Ministry of Planning models for Currency Exchange Rate Mechanisms..... CBI has power to do so.
Even the IMF is showing that the CBI, has held the nominal value to less than 25% of the REER, shown by the 2009 IMF values. 2010 is even higher, yet CBI has refused to allow the nominal rate to increase in the natural value, to the Real Equitable Exchange Rate, which is over 4 times the nominal, as of 2 years ago, according to the IMF.
The Ministry of Planning models show that the values from 2005-2008 would be stable at $1.13.
The years 2009 - 2010 show, the adjustments, to the Feasibility study, as of end of year 2010 from there projections released in Sept. 2010, to be closer to $1.72..... based on the formulas arrived at, considering the Basis year of 1988 rate of $3.22 to the economic models of the years of the study, and the planning projections to 2014.
The models show dramatic increases of values, allowable by IMF rules, to use the previous 2 years, to show current stability, and also allows for a 2 year stated projection, as a basis for valuation of currency.
Those models show, clearly that CBI and Iraq, can easily show increasing stability, of Exchange Rates, that average well in excess of the 2010, Devaluator divided by the 4 to one ratio of the Qualitative vs Quantitative Distributions, for 2010, to be in excess of $1.72 and increasing dramatically over the 2011 to 2014, 5 year plan..... and allows the Rate to be set at the 2011 and 2012 projections, which are significantly higher than that.
Yet.... the CBI has refused to allow the nominal to increase, proportionately to the growth and studies.
My conclusion, is that the CBI is not in compliance and that the Court Ruling was desparately needed, that the Ministries are indeed, Constitutionally part of the Executive Powers, designated to the Lawmaking of the Legislative Branch, the Parliament.
This Ruling, has the effect of freeing the log jam, caused by the lack of legislation to monetary reform and the Equilization Laws for Fiscal Federal 2011.
The ruling has the effect of a bank reform enema, of sorts, healthy to force CBI to comply with the will of the people of Iraq and the international community and the IMF, to which they have clearly been dragging their feet.
I do not fault CBI..... because the law was not clear.
It is as though the CBI has been suffering from a form of constipation, caused by the lack of supplement, only the Legislators and Executive Representation can provide.
That will have the effect of keeping the bankers from their own Coup de 'etat.
Checks and Balances.
The Court Ruling is just the remedy needed, for a constipated CBI. Now things will start to happen and move along.... (Pardon the Pun), Just sayin' !!! .
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