Economy and All That

[Maripat]

Dajjal theology is interesting in itself and brother Zahed's post has got me interested more in that. Having said that I feel that economic issue is more important and that is what I wanted to focus upon. I personally can not count many Muslims who have the qualifications to talk about world economy with Muslim and Islamic perspective. Imran Sahab is one of those who is eminently qualified to speak on these matters and, as I said earlier, he belies expectations - at least that is what I felt. This is very sad because we have so few qualified people to tackle such issues. Benjamin Netanyahu can blurt ,"The Jewish state of Israel can not allow a nuclear Iran". US can incessantly talk about American interests. Why can we not have a few people who can talk about Muslim interests. Economic matters are just one example of that. By the grace of Allah(SWT) Mufti Taqi Usmani Sahab(DB) is an expert on Islamic view about financial and economic matters but so far I have not got any indication that he has a grip over the current business, economic and financial environment and the forces and powers and their functioning and Muslim stakes in such matters. Then I know some Jama-at-e-Islami type economists but they too do not illuminate the things much. And these matters are imporatant enough and these deserve our attention.

[pawlak]

It sounds like a solution may lie in getting these various voices together. Rather than focusing on what is lacking, focus on what they do bring. Besides, the economic landscape is constantly shifting and sliding, almost deliberately out of reach of so many people. How can anyone make complete sense of it all, conclusively?

The solution is simple if you follow the Quran. Check this.

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http://www.sunniforum.com/forum/show...atanic-bankers
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[transitory]

Why can we not have a few people who can talk about Muslim interests. Economic matters are just one example of that. By the grace of Allah(SWT) Mufti Taqi Usmani Sahab(DB) is an expert on Islamic view about financial and economic matters but so far I have not got any indication that he has a grip over the current business, economic and financial environment and the forces and powers and their functioning and Muslim stakes in such matters.

The current financial system is based on two pillars - speculation and interest (debt). Most of the financial instruments such as derivatives and CDSs are about betting, with same counterparties on many side of the trades. Other intsruments such as SIV - strucutred investment vehicles, are opaque and the prices are determined using some arbitrary formulas such as for ABSs and MBSs. With almost all corporations even those who are sitting on billions of dollars of cash, use debt for financing to that they can leverage and optimize the existing capital, by deducting interest in their corporate income tax etc. Just like why people buy houses on interest today knowing well that they will get deductions in income tax on their interests. So even the technology (or any other sector) company stocks in which you are an investor is indirectly playing with these interest and speculation.

Remember, all above setups are structured in such a way that an individual small investor are the one who loses, because he has no insider information and is playing a blind hand and will not recieve a bail out. Speculation has caused the prices of commodities to skyrocket and made the cost of living (energy + food) very expensive. GOverment subsidy and incentive such as tax breaks on production of ethanol etc, has also contributed to increase in prices of agricultral commodities.

The coporate and individual tax rates are structured in such a way that it provides maximum benefits to those in the financial setup. Individual income tax on capital gains and dividends are normally placed in the lowest tax bracket - remember these folks makes the most money. The whole system is setup such that the rich becomes richer, while middle class are hooked on their month-month living so that they have no time to analyze anything, and poor become more poor and are no longer considered a part of civilized society.

Now the need of the hour is for Islam to present a fair and just economical system as an alternate to this baised casino of so called free market system. But, I do not see any effort being made whatsover by any section of Muslim society, most I see is that Muslims who are very religious go to Islamic banks for mortgage financing and thats about it. Imam Hosien does list all the ills of western "free market system" but he does not provide a solution as to what people can do at the micro level. Yes one could have bought gold and silver, but its not practiccal as you will still have to deal with "fait" paper currency.

I know that there are some halaal investment vehicles (both equity and bonds) in Malaysia and in some parts of the gulf, but I am not sure how they do their investments and what sort of returns they generate.

[pawlak]

Now the need of the hour is for Islam to present a fair and just economical system as an alternate to this baised casino of so called free market system. But, I do not see any effort being made whatsover by any section of Muslim society, most I see is that Muslims who are very religious go to Islamic banks for mortgage financing and thats about it. Imam Hosien does list all the ills of western "free market system" but he does not provide a solution as to what people can do at the micro level. Yes one could have bought gold and silver, but its not practiccal as you will still have to deal with "fait" paper currency.

I know that there are some halaal investment vehicles (both equity and bonds) in Malaysia and in some parts of the gulf, but I am not sure how they do their investments and what sort of returns they generate.

At the mirco-level , several groups are resisting againt the internation satanic bankers . One such group is active in Indonesia.
Check this.
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http://www.google.com/hostednews/afp...UFKXgi2SGK-s2g

Indonesia group prefers gold as dollar loses shine

Guided by a Scottish-born convert to Islam, a group of devout Indonesian Muslims is shunning "worthless" paper money in favour of gold and silver coins for their daily transactions
The followers of Sheikh Abdalqadir as-Sufi -- born Ian Dallas -- trade goods like food, medicine, clothes and phone cards with gold dinars and silver dirhams in line with a strict interpretation of Islamic law.

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For other groups . check this.

http://www.sunniforum.com/forum/show...ional-Bankers-!!

[transitory]

At the mirco-level , several groups are resisting againt the internation satanic bankers . One such group is active in Indonesia.

Indonesia group prefers gold as dollar loses shine

Guided by a Scottish-born convert to Islam, a group of devout Indonesian Muslims is shunning "worthless" paper money in favour of gold and silver coins for their daily transactions
The followers of Sheikh Abdalqadir as-Sufi -- born Ian Dallas -- trade goods like food, medicine, clothes and phone cards with gold dinars and silver dirhams in line with a strict interpretation of Islamic law.

Bro, with price of gold going up in the last decade, we have started to see a lot of gold bugs nowadays, with almost all speculating further rise in gold price. The gold has already gone up from about $220-240 /ounce (2001) to $1686 /ounce (today closing). Whereas silver has gone from about $1-2 /ounce to $ 32 /ounce. Both these items are in bubble territory.

Bro Pawlak will not tell you that, but let me tell you that the biggest investor in silver commodities is no other than JPMorgan Chase, go figure. Both gold and silver are purely speculative play at this moment, with hedge fund and Investment Bankers betting big time (the best way tofigure it out is to take any stock and look at its investment holdings) . But imagine what will happen to the poor investor when these speculators withdraw from this market space?. However, there are chances that gold might fall by about 50% (to say $900 /ounce), if that happens than those investing in gold/silver or are buying gold and silver coins will get badly hurt. It always good to be diversified in your investments, that what I learned in graduate school.

Another thing is that for anyone to trade gold and silver coins with another commodities, they need to have an exchange like CME (Chicago Merchantile Exchcange), so incase if the prices of gold and silver plunges, there can still be a fair trade between commodities (gold vs rice etc).

[zahed73]

Bro Pawlak will not tell you that, but let me tell you that the biggest investor in silver commodities is no other than JPMorgan Chase, go figure. Both gold and silver are purely speculative play at this moment, with hedge fund and Investment Bankers betting big time (the best way tofigure it out is to take any stock and look at its investment holdings) . But imagine what will happen to the poor investor when these speculators withdraw from this market space?. However, there are chances that gold might fall by about 50% (to say $900 /ounce), if that happens than those investing in gold/silver or are buying gold and silver coins will get badly hurt. It always good to be diversified in your investments, that what I learned in graduate school.

Well put. this is exactly whats going to happen within short period of time.
The Gold market is going through a 'mania' phase right now. It will drop significantly .

[zahed73]

transitory

Now the need of the hour is for Islam to present a fair and just economical system as an alternate to this baised casino of so called free market system. But, I do not see any effort being made whatsover by any section of Muslim society, most I see is that Muslims who are very religious go to Islamic banks for mortgage financing and thats about it. Imam Hosien does list all the ills of western "free market system" but he does not provide a solution as to what people can do at the micro level. Yes one could have bought gold and silver, but its not practiccal as you will still have to deal with "fait" paper currency.

Well I have been reading some of the other posts on SF after seeing this one. It makes me depressed to see in reality there is no real solution given by anyone. Everyone is analyzing the problems of usury.

I am not sure if we do have a fair and just Islamic system in place . Even the concept of Islamic banking as it exist at present is viewed as flawed by some.

Radical ideas of cutting off from the rest of humanity to start a new system is bordering on fiction. I must say after seriously studying the matter I think we are already beyond help.

[transitory]

Okay, can someone please explain to me what diversified and Islamically sound investments look like:

• [1]What would they be?
  [2]How would they work?
  [3]How accessible would they be - would everybody have equal access or would the current system carry through (with only a small percentage of people holding vast amounts of wealth, resources and power)?
  [4]How sustainable would they be?

[edit: preferably those investments that would allow and promote halal exchange between Muslim and Muslim (and anyone else we would need to deal with) and would allow and promote the communal health and stability of our entire ummah. In brief/point-form, plain, easy to understand, layman's terms please.]

Look here if you are looking for a MF or group of investments that are sorta Islamically OK;

http://www.amanafunds.com/

[Aseatic]

Bro, with price of gold going up in the last decade, we have started to see a lot of gold bugs nowadays, with almost all speculating further rise in gold price. The gold has already gone up from about $220-240 /ounce (2001) to $1686 /ounce (today closing). Whereas silver has gone from about $1-2 /ounce to $ 32 /ounce. Both these items are in bubble territory.

Bro Pawlak will not tell you that, but let me tell you that the biggest investor in silver commodities is no other than JPMorgan Chase, go figure. Both gold and silver are purely speculative play at this moment, with hedge fund and Investment Bankers betting big time (the best way tofigure it out is to take any stock and look at its investment holdings) . But imagine what will happen to the poor investor when these speculators withdraw from this market space?. However, there are chances that gold might fall by about 50% (to say $900 /ounce), if that happens than those investing in gold/silver or are buying gold and silver coins will get badly hurt. It always good to be diversified in your investments, that what I learned in graduate school.

Another thing is that for anyone to trade gold and silver coins with another commodities, they need to have an exchange like CME (Chicago Merchantile Exchcange), so incase if the prices of gold and silver plunges, there can still be a fair trade between commodities (gold vs rice etc).

Yes, the prices of silver and gold have tumbled before, sometimes from an arbitrary change in trading laws. Suddenly some types of transaction are forbidden and the prices tumble unbelievably. There may be other causes.

I read there are "alternative economists" who therefore propose "alternative currencies" backed not by just petroleum or gold or silver or a few precious commodities, but by a whole bucketload of commodities. I get the idea that it's intended to smooth out extremes of price due to fluctuation and speculation in a few commodities, making a more stable system.

I've been curious about it since my lecturer made me read Schumacher's "Small is Beautiful" more than ten years ago.

Also some science fiction books I've read with concepts like "gift economy" and "eco-economics". One science fiction book I read proposed an innovative "negative interest rate" so that some portion of hoarded wealth returns to the community... it made me laugh because it's an OLD idea. It's just our Zakat system! Zakat, normally described as charity or tax, can also be thought of as "negative interest"!

But mainly those books made me realize how much of modern economics is arbitrary rather than natural. It's there just because people in power say so.

[Aseatic]

Bro, with price of gold going up in the last decade, we have started to see a lot of gold bugs nowadays, with almost all speculating further rise in gold price. The gold has already gone up from about $220-240 /ounce (2001) to $1686 /ounce (today closing). Whereas silver has gone from about $1-2 /ounce to $ 32 /ounce. Both these items are in bubble territory.

Bro Pawlak will not tell you that, but let me tell you that the biggest investor in silver commodities is no other than JPMorgan Chase, go figure. Both gold and silver are purely speculative play at this moment, with hedge fund and Investment Bankers betting big time (the best way tofigure it out is to take any stock and look at its investment holdings) . But imagine what will happen to the poor investor when these speculators withdraw from this market space?. However, there are chances that gold might fall by about 50% (to say $900 /ounce), if that happens than those investing in gold/silver or are buying gold and silver coins will get badly hurt. It always good to be diversified in your investments, that what I learned in graduate school.

Another thing is that for anyone to trade gold and silver coins with another commodities, they need to have an exchange like CME (Chicago Merchantile Exchcange), so incase if the prices of gold and silver plunges, there can still be a fair trade between commodities (gold vs rice etc).

Yes, the prices of silver and gold have tumbled before, sometimes from an arbitrary change in trading laws. Suddenly some types of transaction are forbidden and the prices tumble unbelievably. There may be other causes.

I read there are "alternative economists" who therefore propose "alternative currencies" backed not by just petroleum or gold or silver or a few precious commodities, but by a whole bucketload of commodities. I get the idea that it's intended to smooth out extremes of price due to fluctuation and speculation in a few commodities, making a more stable system.

I've been curious about it since my lecturer made me read Schumacher's "Small is Beautiful" more than ten years ago.

Also some science fiction books I've read with concepts like "gift economy" and "eco-economics". One science fiction book I read proposed an innovative "negative interest rate" so that some portion of hoarded wealth returns to the community... it made me laugh because it's an OLD idea. It's just our Zakat system! Zakat, normally described as charity or tax, can also be thought of as "negative interest"!

But mainly those books made me realize how much of modern economics is arbitrary rather than natural. It's there just because people in power say so.