They squeezed!
Six months ago I hopefully noted an intention by UK government to issue infrastructure bonds that would meet Islamic standards.

Amazingly, the UK gov't has actually carried through on its expressed intention!

Via London's City AM:

Britain could become the first truly global Islamic finance centre if the government sets its mind to attracting infrastructure investment.

Chancellor George Osborne is raising £200m with a sharia-compliant bond, a sukuk, and is trying to encourage investors to move to London. Gatehouse Bank [an Islamic bank] expects this bond issue to show the extent of pent up demand in Britain. The bank alone expects to buy £30m to £40m of the sukuk, and predicts bids for the debt to run into the billions of pounds.

In part the problem is finding investment opportunities which meet stringent sharia standards. This requires the return on investment to be based on a hard, tangible asset – for instance, a rental property, or industrial machinery.

Repeating what I wrote earlier, which now applies definitely instead of hopefully:

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(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.

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Well, it wasn't a gimmick. It was genuine! BRAVO!

Labels: Natural law = Sharia law

  ¶ 3:34 AM