Islamic Banking: $300 billion scam

"Hi Miss P:
You blogged on the RUSI [Royal United Services Institute]
report but I did not see a link to the actual report; in case you did not here is the PDF. Fascinating reading.
Mark Safranski"
[ZenPundit]

Dear Mark:
Thank you for sending the RUSI link; I was terribly rushed with all the Canada Section 13 issues and so I just hurled the gist of the report findings into a post. I will find time to read the entire report but I don't need to read it to know it came years too late.

Bottom line is that Britain is going to survive this era of globalization by becoming the world's major center for Islamic banking and business deals. The price tag is the philosophical and moral linchpins of their culture. End of story.

February 17, The Mail -- A new sharia law controversy erupted last night over Government plans to issue special "Islamic bonds" to pay for Gordon Brown's public-spending programme by raising money from the Middle East. Britain is to become the first Western nation to issue bonds approved by Muslim clerics in line with sharia law, which bans conventional loans involving interest payments as "sinful". [...]

(H/T Free Mark Steyn!)

"Pundita:
The Mail article is also fascinating. Does anyone in Britain realize how easy it is for the "Islamic authenticity" of these bonds to be challenged sometime downstream? [The challenge] won't have to make sense or even prevail -- just kicking up a theological s-storm will deal out financial pain to bondholders.

I'm going to have to find out more about this -- thank you Miss P.!"

Yes, Mark, the British government's intention to support Islamic bonds is a very serious development. I blogged on it earlier; I linked to a speech that Gordon Brown gave a couple years ago.

I dusted off the speech to explain what I believe is the true reason for the Archbishop of Canterbury's willingness to accept elements of Sharia for Britain -- and his eagerness to quash free speech. Brown's speech underscores that Britain's involvement in Islamic financial instruments did not arise overnight.

Once you read Brown's speech you can understand why I termed the archbishop's recent pronouncements "the Rise of Mordor." I invoked Mordor because it struck me as a good metaphor for the rise of a particularly venal form of neo-mercantilism that's set to overtake many national governments.

(Later it occurred to me that readers might assume I was demonizing Islam or Rowan Williams, which is why I dropped the Mordor reference until I could clarify it, but I was quickly overwhelmed again by the Section 13 situation.)

In addition to the severe downside you observe about Islamic bonds, the situation is giving a huge boost in authority to Muslim religious preceptors with terrorist connections who 'halal' banking and financial instruments -- not to mention lining their pockets.

You'll be interested in the following critique of halal banking/mortages by the Muslim Canadian Congress (MCC), which contains much information and cites highly informed critiques of the halal financial instruments/banking.

Islamic Banking -- a $300 Billion Deception is the book to read if you want to do an in-depth investigation; if a ZenPundit essay results, it would be a great help and I'll certainly link to it.

From the MCC article you can see that Muslims who are not part of the scam are its biggest victims. It's the same story for Muslims who went to the UK looking for relief from societies that had fallen to Saudification; now they're finding themselves facing the Saudification of British society.

I should add that India recognizes Sharia courts and that this predates the Saudification of Islam. So multiculturalism policy is not just a Western problem; India has paid a very high price for its way of managing the nation's highly diverse ethno-religious population.

January 29, 2008
So-called Sharia Mortgages are a Deception
MCC asks CMHC to drop $100,000 study to introduce Islamic banking in Canada

TORONTO - The Muslim Canadian Congress (MCC) has asked the Canadian Mortgage and Housing Corporation (CMHC) to abandon its $100,000 study to introduce so-called Islamic Banking in Canada, saying there should be no room in Canada for Saudi inspired Islamist political doctrines dressed up as innocuous religious requirements.In a letter to Karen Kinsley, Chief Executive Officer of the Canada Mortgage and Housing Corporation, the president of the Muslim Canadian Congress Farzana Hassan said, "Islamic Banking is nothing more than an attempt by Islamists, with backing from Middle Eastern Financial Institutions and their Western partners, to scare Muslim Canadians into believing that they should pay more to the banks and demand less in return as an act of religiosity. "

"Sharia Banking is an obscene attempt to fleece an already marginalized Muslim community while promising them the exact opposite. On the one hand Imams are warning Muslims of hellfire if they deal with the existing banking systems, and on the other the same clerics are being paid by banks to herd Muslims towards a system that is based on lies and deception.

What we need is a better deal from the banks for all Canadians, rather than dividing us up into religious groups and pacing obstacles in the way of better integration of all Canadians. Our banking system has developed in Canada over the last 200 years, and there is no need to adapt it to the failed economies and medieval systems modeled on Saudi Arabia and Iran," added Ms. Hassan.

In the letter, Ms Hassan said it was unfortunate that some Canadian Banks are succumbing to the lure of easy money that comes from supposed interest-free banking where customers receive zero interest on their deposits while paying more to the banks.

"While the banks and their paid Imams and sheiks will make handsome returns, Muslim Canadians will end up as losers, with promises of rewards in the afterlife," she wrote. "Religion has no place in the banking or mortgage industry and banks should desist from employing imams or sheikhs who sanctify so called Islamic bank products and mortgages. We are not living in the middle ages to get our financial cues from clerics claiming guidance from the divine," she added.

Explaining the deceptive workings of interest-free Sharia banking, as practised by Saudi and other Islamic banks, Ms Hassan said: "Muslim bankers and their hired clerics claim they indulge in interest-free banking, but in reality they hide this interest.

So-called Islamic banking institutions claim they operate on "zero interest." However, the fundamental characteristic of charging interest is never truly eliminated in Islamic banking, but rather is hidden.

The MCC president referred the CMHC president to Muhammad Saleem, a former president and CEO of Park Avenue Bank in New York, who has written a book, Islamic Banking — A $300 Billion Deception.

Mr. Saleem, who was a senior banker with Bankers Trust where, among other responsibilities, he headed the Middle East division and served as adviser to a prominent Islamic bank based in Bahrain, dismisses the founding premise of Islamic banking, saying, "Islamic banks do not practise what they preach: they all charge interest, but disguised in Islamic garb. Thus they engage in deceptive and dishonest banking practises." [...]

Even a cursory look at the names, affiliations and views of popular shari’a scholars, such as Sheikh Yusuf Qaradawi, Sheikh Muhammad Taqi Usmani, Sheikh Mohamed Ali Elgari, Faysal Mawlawi, Sheikh Nizam Yaquby, Suleyman al-Maniya and others , many of whom sit on the shari’a advisory boards of dozens of Islamic banks and get paid princely sums from each, would make it clear that most are hard line Islamists and, in at least some cases, open supporters of terrorism. [...]

Read the rest of the MCC article here.