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Like Sands Through the Hourglass, So Are the Days of Our Lives: Today's Episode - Mystery of the Iraqi Gold Purchase
by Marla Singer and Geoffrey Batt
Perhaps you might not expect to find much interesting in data published by the Central Bank of Iraq. In fact, it is a treasure trove of interesting mysteries right smack in the middle of the nexus between international economic relations and nation building. For example: Between October 22nd and October 29th of this year Iraq's central bank appears to have acquired IQD 1.874 trillion ($1.6 billion) in "Gold and SDRs," adding to their existing stash of IQD 726 billion (or about $620.5 million). This wouldn't normally be unusual. SDR's are often the unit of choice for countries accepting loans from the IMF, for example. But after just a little bit of digging, one thing seems pretty apparent: they ain't SDRs. Around this time gold peaked at $1061 an ounce. If it was, in fact, gold that Iraq bought, that's around 1.5 million ounces (or more depending on the actual clearing price).
On the face of it, it is possible that this isn't actually gold bullion, given the "SDR" line. But, in the same period the Central Bank of Iraq saw a spike in "Foreign Liabilities" of IQD 2.1 trillion, specifically in the "Foreign sector foreign currency current account." A corresponding entry in the "Domestic currency deposits of MOF" account (MOF is the Ministry of Finance) made us wonder if the central bank didn't just convert a large cash deposit from the MOF to gold or SDRs.
Supporting the gold theory, certainly, this wouldn't be the first time Iraq has sought to distance itself from the Dollar. As it does for several central banks, the New York Fed holds tens of billions of dollars of reserves for Iraq in U.S. Dollars. Last year, Iraq sought to switch the reserves into, for example, Euro (for reasons that should by now be quite obvious to everyone) a move that was quickly vetoed by the U.S. Treasury. Want to guess why?
Iraqi officials say that, last year, they wanted to diversify their holdings out of the dollar, as it depreciated, into other assets, such as the euro, more likely to hold their value. This was vetoed by the US Treasury because American officials feared it would show lack of confidence in the dollar.1
No way, seriously?
Still, it seemed possible that these transactions were related to a "stand-by" loan agreement Iraq had long sought with the IMF. That arrangement was to provide $5.5 billion in a five year loan to Iraq in tranches of $1.2 billion worth of SDRs each. Interestingly, however, there are no press releases from the IMF on the subject, or iraq generally, since late 2008. In fact, the last press release from the IMF's website dealing with Iraq at all was in December of 2008- indicating that the arrangement "...is being treated as precautionary by the authorities (see Press Release No. 07/301), and no disbursements are planned."
A bit more digging reveals this October 6, 2009 article from Dow Jones:
ISTANBUL (Zawya Dow Jones)--Iraq has been granted $5 billion by the International Monetary Fund to support the government's budget, Iraqi Finance Minister Baker al-Zubaidy said Tuesday.
"We reached an agreement on an IMF loan for about $5 billion," he told reporters in Istanbul, speaking on the sidelines of the IMF's annual meeting.
The funds will be disbursed between 2010 and 2011, he said.
As recently as last month, however, the IMF's Caroline Atkinson was tight lipped on the topic:
QUESTIONER: Can you give us any update on loan talks with Jamaica and with Iraq, please?
MS. ATKINSON: Thank you. On Jamaica, there is a mission in the field now. We expect they’ll be wrapping up in some days’ time and we will give you an update then.
In Iraq, I’m sorry. I’ll have to come back to you on that one.2
Seeking clarification, Zero Hedge contacted the IMF directly today. IMF representatives told Zero Hedge that, in fact, and contrary to the Dow Jones release, the IMF is no where near agreement with Iraq on any stand-by arrangement. The representative further commented that it was "highly unlikely," that Iraq had purchased or otherwise acquired any SDRs.
If the entries in question aren't IMF SDRs, one wonders exactly what is actually going on over there in the sandbox. Is Iraq flexing a bit of independent monetary muscle, to the chagrin of the United States? If even Iraq wouldn't touch the dollar with someone else's Federal Reserve Bank, what does that say about the dollar? (Or the Federal Reserve Bank?)
- 1. Patrick Cockburn, "US issues threat to Iraq's $50bn foreign reserves in military deal," The Independent, June 6, 2008.
- 2. "Transcript of a Press Briefing by Caroline Atkinson, Director of External Relations," IMF Website, November 5, 2009.
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Babylon.
well done
Yea seriously. Like how does go over there at zh, who decides oh lets look at Iraqs Reserve Bank numbers and keep digging!?
Good shit guys!
I heard from the grapevine that clients states are often used for money laundering, torture and other nefarious shenanigans. After all, why do your own dirty laundry or other "black arts" when there are so many "rouge" or "emerging" states who don't quite have that Democracy thing down yet, willing to do your bidding.
Just a thought.
Damn, dude, you blew their cover. Now they'll need to go through the whole cycle of propping up and then taking down a dictator, invading and destroying his country, then pillaging it and setting it up to be the replacement for their lost Iraqi laundering system.
Damn you, Cognitive Dissonance!!!
I am Chumbawamba.
I believe Iran is next on the menu.
Not only that, CD.
IMF + SDRs = a subtle method of global currency arbitrage.....
My tax dollars sent to Iraq to fight a war of discretion and underwrite their purchase of physical gold while my dollars have lost 17% of their purchasing power since February of this year, and my kid will spend the rest of his life paying interest on the money we borrowed from the Chinese to accomplish all this.
American leadership on display for the world to see -- go ahead -- give Bernanke a second term, and while your at it, give Barry "Change you can believe in, hope is my strategy" Obama a second term right away.
Un-freaking-believable.
...and by the way, this has to be the best t-shirt ever: http://www.freshjive.com/propagandist
How about a ZeroHedge/Freshjive partnership where we incorporate the ZH logo -- that would be perfect!
Second term? Make him Dictator for Life, ala Rome. May as well throw out all pretense of a republic already. That old worn out and hackneyed description of our empire is so passe these days.
I am Chumbawamba.
"Second term? Make him Dictator for Life, ala Rome."
Heck, why not? Caesar was a "community organizer" as well, although I don't anticipate that Obama will have to invade France this time around to enrich himself.
Negative, economessed.
Your tax dollars were sent to Iraq so that all their oil operations could be privatized, and their central bank treasury could be relocated to the NY Fed and JPMorgan Chase (hence those SDRs).
The oil motive has been clear to me since the Supreme Court picked George to be President, but I hadn't given the SDR angle consideration. Interesting.
Absolutely amazing story. Kudos for finding and publishing it.
and I used to think I kept my scruples well maintained. looks like it only took TD, Marla, et al., two whole days to get me prone - I think I will click the donate button, as methinks it to be a wise investment.
Thanks.
Oh, the memories! I used to hear that jingle as a small kid in my Grandma's house. The economy is as wacky as that soap!
Cheers everyone!
GOLD, BITCH?
Dear Uncle Sam,
Thanks for removing Saddam, but we have enough problems without compounding them with your (soon to be worthless) paper.
Sincerely,
Iraq
I'd check Fort Knox if I were you, maybe them towelheads got uppity and Uncle Sam decided to give them their diversification by the back door. I mean seriously, you can't turn round to a sovereign nation that you are supposed to have "liberated" and tell them what fucking currency their reserves should be.
Somehow I doubt 'liberation' is what we're doing there.
OK, perhaps the Iraqi MoF requested permission from the US to switch out its Dollars, but the US said no, so instead China lent them the corresponding amount of US Dollars (probably interest free in exchange for access to oil, or maybe just "a sign of friendship") which they used to buy gold and SDRs.
Iraqi MoF 1, US Treasury 0.
I read these stories and then all I want to do is hop in the roddymobile and travel up to where the Au stash is buried and hope those scheming chipmunks haven't dug it up...
When the lights come on the cockroaches scatter. I'm just wondering why you didn't call them direct? It's our god damm money that they're playing with.
+964-1
* 8165170
* 8165171
* 8165172
* 8165173
* 8165174
* 8165175
Here is a training film if you decide to call the CBI:
http://www.youtube.com/watch?v=OaiSHcHM0PA
"why do your own dirty laundry or other "black arts""
Hasn't seemed to slow down Ben and Timmay any.
Some think that JP Morgan-Chase is operating the Bank of Baghdad and laundering Afghanistan herion funds for the CIA. Surely, this is not what has become of America. However, under the Taleban, heroin production was 130 metric tons a year. Today it's 15,000 tons.
Well, JPMorgan certainly was awarded, during the Bush Administration, the no-bid contract for managing their central bank.
That is public domain information.
Bribe money...that all.
Excellent digging.
The real investigative journalists are on the blogs!
One point to consider. Iraq's largest trading partner is Iran, and Iran largely does not accept dollars. So Iraq has much less use for dollars than before the war.
And to all those who say that the US is benevolent in our military action because we don't seek to conquer: the fact that our Treasury was deciding how Iraqis conduct their economic affairs because it didn't suit our interests should settle that debate. That had nothing to do with protecting America and everything to do with the Treasury protecting their ponzi. So we're not occupying Iraq, its just that if they try to do something our bureaucrats don't like we'll bring the hammer down on them. Technically its more like we're holding them hostage.
"And to all those who say that the US is benevolent in our military action because we don't seek to conquer:.."
WTF????? Who dares speak such drivel?
Point me in their direction, Steak, and I'll stomp them good.
Anyways, I firmly believe the Bush family is still in control of the White House. They simply went out and, for public relations diversity sake, hired an Afro-Saxon as their front guy.
Bushies are near the top, but they're not the Alpha dog (god spelled backwards).
Agreed, Rollerball!
Just a little bit of levity to make the insanity bearable.
Iraq is no longer a sovereign nation. as long as the american mercenary army is there occupying their land and running their affairs, they are not in charge of anything, much less their own bank. this deal smells to high heaven. any gold shipped to iraq, you can almost be assured will not go to the government of iraq, but to tel aviv by way of the green zone in baghdad. the only reason we are there in the middle east is to occupy arab lands and do the fighting for israel who wants to expand its borders to the euphrates river. therefore being the mercenary army for the jews as we are now anyway, one can extrapolate that this gold purchase found its way to the coffers of the zionist state, much like the pallets of american money that were shipped over to iraq, never to be seen or heard of again. the whole thing makes me sick to my stomach. while rome is burning what are we doing? well what else? watching football and thinking we are free men and women.
“My people are destroyed for lack of knowledge: because thou hast rejected knowledge, I will also reject thee, that thou shalt be no priest to me: seeing thou hast forgotten the law of thy God, I will also forget thy children” (Hosea 4:6).
so we have rejected knowledge and truth and hide behind lies. we drink from the cup of stupidity. so drink up folks. see if it gets any better no matter who you vote for. it won't and never will. when the body has cancer, you must operate on it and cut that cancer out of the body. we have enemies within the walls now. fail to see this at your own peril.
the founding fathers warned us many times. history can be a teacher if you let it. but will we? doubtful. we never have before. after the dumbing down in our schools that has taken place over the last 60 years or so, is it any wonder why johnny marches off to war and fights wars that never end, chasing a enemy that can never be found or caught???
beam me up scotty, wherever you are now....
Israel buys its weapons from the USA. We wouldn't take posession of gold from Iraq, give said gold to Israel, and have Israel then give us BACK the gold for weapons.
To your point about enemies within, I would direct you to the ever prescient Chris Rock:
They keep trying to scare us. They keep telling us to be on the lookout for Al-Qaeda. I aint scared of Al-Qaeda! Im from Brooklyn... I dont give a fuck about Al-Qaeda! Mother fuck Al-Qaeda. Did Al-Qaeda blow up the building in Oklahoma? NO! Did Al-Qaeda put anthrax in your mail? NO! Did Al-Qaeda drag James Byrd onto the street till his eyes popped out of his fuckin head? NO! I aint scared of Al-Qaeda! Im scared of Al-Cracka!
Marla,
Those are DE FACTO WORLD CURRENCY according to this link... Rothechild in the news. A great read too.
http://euro-med.dk/?p=9101
Marla, great article.
Again, watch Live Free or Die Hard, try and break through the hype, and see the message not the story... was someone trying to tell us back on in '06?
hint: world wide false flag fire sale...
How do you say, GOLD BITCHES!!!!! in in Arabic?
Maybe they listening Chumbawamba
Nothing to see here, move along now.. those SDRs aren't the ones you are looking for...
10 bucks says that all they're really getting is gold-plated tungsten bars. Seems like the perfect destination for them!!
-JR-
JPM is in there. Trust me they have one set of books that reflect the truth, and one set for the world to see.
Their buying of gold is old, in public domain. Caused an outcry some years ago as to why they bought gold with trade balances as US paid for war. On the incongruity of it all.
Have we actually confirmed these purchases? I mean, couldn't this have come from simply warehousing the plumbing fixtures in Saddam's 48 presidential palaces?
Do you honestly think the Treasury would allow Iraq to take possession of gold from anyone other than us? I wouldn't be surprised if they actually did buy gold, and it came from Ft. Knox. The deal was probably structured such that the assets couldn't physically leave US borders, and any claims would be settled in the currency du jour at prevailing prices (not much different from the precious metals exchanges right now, except they get to report gold on their books and we don't have to carve out their portion in our inventories - hell, according to Canada that's almost rounding error). In exchange, they get all the 64oz STFU they can drink.
I am not an expert on the IMF but you may remember back at the end of August the IMF 'allocated' new SDRs to all countries - about $300 billion US worth. I wouldn't call it an allocation but free fiat money courtesy of the IMF.
Anyway these show up in the October 31 IMF statement (I do not know why they do not show up earlier). Iraq appears to have been 'allocated' $1 billion SDRs.
Iraq's position was $1 billion SDRs at the end of October. Therefore it looks like Iraq had not spent its new IMF on gold by October 31. However they could have spent older reserves on gold.
maybe they're buying for the anunnaki
http://www.darkstar1.co.uk/gold.html
Zh asks "If even Iraq wouldn't touch the dollar with someone else's Federal Reserve Bank, what does that say about the dollar?"
That is the essence of wit.
What? so you try to buy gold from the IMF and they give you the runaround.
Well we don't actually have gold but we have these things called SDR's which you can put on your books AS gold. You see we POOL all our gold and give out these things called Gold Certificates. That way it's all kept safe. Of course we don't allow external auditing as it would be a "security" breach.
TRUST US. Because we are TRUST WORTHY.
You all know that since we took over iraq. We simply "handle" all their finances and give thier "government" and allowance right?
The most recent Key Financial Indicators spreadsheet available from the CBI's website include a footnote against their "Gold and SDRs" column. The footnote explains:
Starting from October 2009, the increasing in SDR is according to the IMF revised treatment of SDR Allocations in Monetary Statistics.
Without having looked into the IMF revised treatment, it seems that this is a statistical correction.