Monthly Archives: January 2008

How to Include Employees in the Credit Clearing Process

Since employees are also consumers, and since labor is a major component at every level of the supply chain from retail to wholesale to manufacturing to basic commodity production, it is essential that ways be be found to include wages and benefits in the process of cashless exchange. The matter is complicated by the various legislative restrictions on how, and in what form, employees must be paid. While it may not be possible in many cases to substitute local currencies or trade (“barter”) credits for cash wages, it probably IS possible to pay employee bonuses and benefits in alternative exchange media.

In his comment to an article on this topic that appeared in Bob Meyer’s BarterNewsBlog, Harold Rice says, “Barter however IS a good way to pay staff benefits, thereby allowing you pay for chiropractic, dental, optometric expenses Etc. with before tax trade dollars.”

This is a topic that merits much more research and discussion.

When Soros Speaks, It’s Best to Listen

In a recent article that appeared in the Financial Times, George Soros describes “The Worst Market Crisis in 60 Years.” He concludes by saying, “Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse.”

David Pidcock’s View on the State of Islamic Money, Banking, and Finance.

David Pidcock is a leading member of the Islamic Party of Britain. His views expressed below were provided in a recent exchange of emails. – thg

Having spent the last 32 years searching for the right country and the right “Sharia compliant” government – I can say that they do not exist – being as unlikely to find – indeed – as rare as hen’s teeth.

Pakistan – which was “allegedly” established as an Islamic State has never implemented a Sharia Friendly monetary system in the past 60 years. The Pakistani Economist / Senator Professor Kursheed Ahmed admitted as much in a seminar at the Islamic Foundation at Markfield, entitled THE DEATH OF RIBA/INTEREST : “we have all been cowards in this regard”

In a live show on ARY TV, Ken Palmerton, ask(ed) General Quraishi – a spokesman for the Musharaf/Busharaf government that now that the Sharia Court of Pakistan had issued its Fatwa condemning Interest – in that the banking system of Pakistan must become more “user” than “usurer friendly” – he snorted : “We are not a backward country!”.

Ken and I had already travelled (sic) to Pakistan to give evidence to Justice Taqi Usmani – which included a screening of THE MONEY MASTERS video – which convinced him that a just, workable monetary system could be established in the 20/21st century in any sovereign state regardless of it’s size – be it Large or Small.

Similar resistance is to be found everywhere in the so-called Islamic States/Countries including Saudi Arabia, Sudan, etc, etc, etc. In a seminar at the Bank Feisal, Khartoum, some 10 years ago (I have a 3 hour video of the proceedings) we (the Islamic Party of Britain) addressed the entire banking establishment of the country – including the head of the Central Bank (appointed – we subsequently found out – by the Federal Reserve of New York) which had also appointed Sudan to host the Central Banker’s Conference that same year – Not bad, considering Sudan was already being categorised by the U.S. as being a “terrorist state”.

Attending the meeting was Dr. Hassan Al Turabi – Who Chaired the session – with Ali Al Hajj, Hajj Noor, Dr. Abdul Raheem Hamdi (Minister of Finance and Founder of Al Baraka Bank). We pointed out that the 5 year plan would fail because it was written by a Thatcherite Economist and that the problems for Sudan originated in the fact that their much vaunted Murabaha System was both fraudulent as well as interest bearing – being entirely based on the fractional reserve model.

Dr. Hassan Satti – the head of Al Shamail bank – stood up and confirmed my statement. He said that he had been sent to study Central Banking in London – that what the Sudan had established was in fact – “The Bank of England with an Islamic Tarbush (Hat) on it…and that the system was irredeemable”

Our parting shot was. If the Hudud (cutting of hands) sections of the Sharia Law was to be applied in the Country, then all the bankers in the room would leave minus one or both hands.

Next day people came to our rooms in the hotel admitting that all the money involved in the Murabaha schemes were created through the fractional reserve mechanism

I then gave evidence to the Ullema Council and Murabaha was suspended. I drew their attention to the fact that the suicide rates in the Sudan could be traced to the growth of unrepayable debt compounded by a rate of interest measuring some 76% in real terms.

I quoted Thomas Jefferson’s observations and those of Imam Ali on this issue:

Jefferson said – “The modern theory for the perpetuation of debt, has drenched the earth with blood, and crushed it’s inhabitants under burdens every (sic) accumulating…”

Imam Ali said: “We withstood the weight of the iron, the stone and the lash, but found the hardest thing to endure was the burden of debt..” circa 650.AD

In 2008 in India, on average, 11 farmers commit suicide every week for the same reasons.

As the correct translation of the Lord’s Prayer makes the solution abundantly clear: “Forgive us our Debts (not trespasses) as we forgive our debtors..

Unfortunately – as predicted – just like the Children of Israel before them the Children of Ishmael have produced the Islamic equivalent to the Kosher Pork Chop – the Halal Kinzir.

# # #

Impending Destruction of the US Economy

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan Administration, and is the author of several books. His article on the Impending Destruction of the US Economy is both insightful and, in my opinion, accurate. No one can dismiss his statements as being the ranting of a liberal Democratic partisan. He sees clearly the dire situation faced by Americans as we see the limits being reached in the ability of our federal government to finance its debt. Here are a few excerpts from his article. I urge you to read it in its entirety. – thg

“Hubris and arrogance are too ensconced in Washington for policymakers to be aware of the economic policy trap in which they have placed the US economy. If the subprime mortgage meltdown is half as bad as predicted, low US interest rates will be required in order to contain the crisis. But if the dollar’s plight is half as bad as predicted, high US interest rates will be required if foreigners are to continue to hold dollars and to finance US budget and trade deficits.”

“Which will Washington sacrifice, the domestic financial system and over-extended homeowners or its ability to finance deficits?”

“Superpower America is a ship of fools in denial of their plight. While offshoring kills American economic prospects, “free market economists” sing its praises. While war imposes enormous costs on a bankrupt country, neoconservatives call for more war, and Republicans and Democrats appropriate war funds which can only be obtained by borrowing abroad.”


Toward an Independent Money System – The Role of Gold and Silver

For several reasons which I’ve explained before, I don’t see silver or gold as viable exchange media, but I DO see them as:

1. a useful store of value and inflation hedge, and

2. possibly serving as non-political, concrete measures of value and units of account. I would prefer a “market basket” of commodities for that purpose but, as I told the Gold Dinar conference in Malaysia in July 2007 (, precious metals might serve as interim standards.

When the global financial crisis reaches the acute stage, we can be sure that the international banking establishment will come forward to offer their own “solution,” which in reality will effect a further tightening of the chains upon the people. At that point, we need to be ready with a real solution.

That real solution, in my opinion, will be an extensive (eventually, global) network of locally controlled credit clearing exchanges that will be using an independent unit of account. That unit could perhaps be a specified weight of silver, and what better weight specification than the silver content of the U.S. dollar as specified in the original coinage act of the U.S. Congress, i.e., 371.25 grains of fine silver. That unit should appeal to widely diverse political and economic viewpoints in the U.S., as well as internationally.

A silver coin minted to that specification would be useful in establishing that standard. It need not be used in daily commerce, but it will be traded sufficiently to establish its value on a daily basis relative to political currencies like the Federal Reserve dollar, the euro, the yen, etc.

In retrospect, the issuers of the private “Silver Liberty” might have been more effective in achieving their basic objective, and encountered less harassment by the Federal government, if:

  1. their silver coins had been designed to look less like the silver coins historically issued by the United States Mint, and
  2. they had avoided using the word “dollar,” and the dollar sign ($) on the coins, and
  3. they had called the coin by a different name and denominated it in some other unique unit, say a “liber.”

So this is, I believe, an approach worth implementing. Who would be willing to undertake it?