Archive for February, 2014

Few nations have a Hajj saving scheme, however the potential to do so is within the reach of all states, especially those with swelling populations. Indonesia, which has the worlds largest Muslim population stands to benefit greatly with the growing wealth and population of its citizens.

This development expands upon the benefits of having Muslims buy into the concept of ‘halal’ based financing, however by the state using these funds as a means to pay for spending, and an alternative to selling to the international bond markets, it seems to have taken an intriguing turn. Ultimately it exposes the humble pilgrim to more potentially toxic government debt (Sukuks in this case), and also further emphasizes how the holy duty of Hajj can be a massive money generator not only for the Saudi’s, but for all governments, Muslim or otherwise

Pilgrim Funds give Indonesian banks a boost

Indonesia taps $5.4bn Hajj fund for financial salvation

As the below quote shows, this means transforming the way method of, and the tolerance to, managing wealth and the feasibility of certain investments. Make the personnel more attuned conventional/capitalist investment practices and use sharia scholars for dollars who will rubber stamp any of these ideas

“I’m trying to teach my staff to follow the yield curve, but it’s not easy because they are religious affairs experts, not financial experts,” said Mr Abimanyu. “The new agency will improve our institutional capacity.”

Those who watched the documentary included in an earlier post may also be interested in a follow up debate held to discuss the issues raised by the piece. Featuring the documentary maker on the panel, I found this open discussion of constructive value in hearing from commentators of different standpoints, raising a number of thought provoking ideas some of which merit further research. The contributions of the audience are also noteworthy.

View the discussion here

Oscar-winning documentary by Charles Ferguson, narration by Matt Damon, on the causes, effects and most shockingly, the men who were responsible for one of the greatest recessions of all time. A powerful analysis of the crisis – some of the best material I have seen on this subject matter

Blame must be shared amongst a number of parties, but this film shows just how many of these ‘separate’ institutions are simply run by those from the same circle, who remain in and around the halls of power regardless of which party sits in office. The failings by regulators, boardroom executives, government and ratings agencies were not as genuine as has been made out, for we must understand that in this system, there is always someone benefiting whichever direction the trade goes – rise or fall, the opportunities to profit are endless….


Understanding Poverty

Posted: February 12, 2014 in Poverty
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A thought provoking animated film which explores the changing definition of poverty as well as the factors that contribute to it. This film makes an attempt to understand how poverty has changed through the ages..has it always existed in its current form, what defined poverty in years past, has the level of inequality always been this severe? Does our ability to eradicate certain elements of poverty give it a different complexion in today’s world?

In my continuing look at whether the concept of a return to a commodity based monetary system based of the precious metal of gold, I have recently read the following article which captures what I believe to be one of the biggest dilemmas in seeking a return to the gold standard in contemporary times.

I quote;

Gold would also be a more viable basis for the money supply if its price wasn’t subject to manipulation by commodity speculators, but this happens on a routine basis. Currency instability driven by self-interested financial markets is one of the greatest problems facing the global economy. A return to gold could make it worse

I conclude; unless the modern structures of markets and their participants, which include governments and corporations, are not radically altered in terms of their power and control of this infrastructure, any return to the gold standard would simply keep the playing field unequal and in the vested interests of those who currently gain from the fiat system.

Unless we fully understand proposed solutions we risk simply re arranging the failed construct that is part of the problem

What worked yesterday, will not necessary work tomorrow

It is also worth noting where the most gold is currently located. The biggest owners by far are governments and global institutions, as the link below shows;

A return to this standard would therefore give distinct advantage to the many European and American owners of this metal. Don’t forget that in the past, governments have decreed that private ownership of gold is illegal and have been able to confiscate it from the hands of individuals – again showing that unless a radical power shift occurs the world will not be ready to reinstate commodity money