Britain is set to become the first non-Muslim country to sell a bond that can be bought by Islamic investors in a bid to encourage massive new investment into the City. David Cameron will say in a speech on Tuesday at the World Islamic Economic Forum in London that the Treasury is drawing up plans to issue a £200m Sukuk, a form of debt that complies with Islamic financial law. The new sharia-compliant gilt will enable Britain to become the first non-Muslim country to tap the growing pool of Islamic investments that is forecast to top £1.3 trillion by next year.(1) Tapping new investors is only a small part of the advantage. The big part is the plain fact that Islamic economics works, while the US/UK/EU Goldman System fails. (Of course Goldman economics succeeds magnificently for Goldman. The parasite destroys the host country to enrich itself.) (2) When you disconnect the bond's return from LIBOR and those other Goldman-invented measurements and derivatives and options and futures and indexes and puts and calls, you also disconnect the power of Goldman. LIBOR was invented solely to provide a single control knob for the entire banking system, a knob that Goldman turns. (3) When you treat government more like a business with the goal of producing a natural profit, you end up with a government that can do its proper job. When you keep a reserve and stay on the savings side of the ledger, you're not vulnerable to Goldman's crashes and commands. Failed governments operate solely on the borrowing side, which means they must obey their creditors instead of their people. Polistra has discussed this in detail before. Islam requires investments to be based on real profit or increase from a real enterprise, not on abstract counterfeit numbers that Goldman can dial up or down. I can't find details on the nature of the 'enterprise' for this sukuk; it could be just a gimmick so the big Qatar sultan types can give lip service to sharia. Unfortunately there's a lot of gimmickry in these things. But if this sukUK isn't fake, it's an interesting start toward a sane economic system in one of the craziest countries on Earth. Now let's have MORE SANITY, PLEASE.
Labels: Natural law = Sharia law
Polistra was named after the original townsite of Manhattan (the one in Kansas). When I was growing up in Manhattan, I spent a lot of time exploring by foot, bike, and car. I discovered the ruins of an old mill along Wildcat Creek, and decided (inaccurately) that it was the remains of the original site of Polistra. Accurate or not, I've always liked the name, with its echoes of Poland (an under-appreciated friend of freedom) and stars. ==== The title icon is explained here. ==== Switchover: This 2007 entry marks a sharp change in worldview from neocon to pure populist. ===== The long illustrated story of Polistra's Dream is a time-travel fable, attempting to answer the dangerous revision of New Deal history propagated by Amity Shlaes. The Dream has 8 episodes, linked in a chain from the first. This entry explains the Shlaes connection.