Standby Agreement Ends, sequestration, fiscal cliff, budget cuts… smoke and glass

copy right Dr. Israel Molina Coincidence or fact? The United States employs numerous strategies in dealing with countries. Grand Strategies are Diplomatic, Economic and Military. Diplomatic strategies involve negotiation, reasoning resolving issues to the equal benefits of all nations. Economic Strategies involve sanctions devaluing a country’s currency to affect the county’s ability to wage war against the U.S. Military Strategies involve the use of military power against a nation. In 2003 the U.S. used the Economic Strategies against Iraq and through the U.N. and the IMF devalued the Iraq Dinar. Cutting the purse strings of a nation is critical in waging war; a country has no financial means to wage war against the U.S. As the U.S. destroyed Iraq’s military it also destroyed its economic infrastructure. In order to make the country whole again the U.S. agreed to a currency exchange securing 4 Trillion Iraqi Dinar. The U.S. and the E.U. currently make up almost 90% of Iraq’s Foreign Currency Reserves which for all practical purposes should put the Iraq Dinar at almost 1.5 to the U.S. dollar. To insure that Iraq rebuilds their economic structure both macro and micro the IMF impose a Stand By Agreement which will provide capital to the nation. In 2010 the Stand By Agreement (SBA) included a “Exchange Rate Program” which allowed the Central Bank of Iraq to revalue the Iraq Dinar to 1170 to one U.S. dollar although better than the 2000 to one U.S. Dollar but well under its real value. In July 2012 the IMF extended the Stand By Agreement to 23 Feb. 2013. 23 Feb. 2013 the Stand By Agreement ended, the U.S. faces Sequestration and major budget cuts that will bring down the debt. Will the budget be reduced because of cuts or is it that the U.S. is on the verge of profiting on its 4 trillion Dinar which will be worth $12 trillion U.S. Dollars? It’s all about the money, follow the money…