Boatloads of money luring Western economies onto the rocks of Islamic finance

While the mainstream media focuses on the cost of oil, the slipping American economy, the 2008 election cycle, the War in Iraq, and violence in the "War Against Terror," few even notice the stealth Jihad being perpetrated against the United States and the rest of the West through the implementation of so-called "Islamic Finance," or "Islamic Economics," now mostly in the form of sovereign wealth funds, that

Sovereign wealth funds, as defined by the U.S. treasury (PDF), are government investment funds, funded by foreign currency reserves but managed separately from official currency reserves. Basically, they are pools of money governments invest for profit. ...

But as they are funds of sovereign governments, their interests reflect those that run, or own the government, as in the case of Saudi Arabia, or the U.A.E. And when these governments are pushing a particular ideology, whether it be Communism, Socialism, Wahabbism, or Islamism, the fund can be used as a weapon as well as a source of income.

Islamic finance does not go back to the time Mohammed, but originated during the 1940s in India. The idea was primarily the brainchild of an Islamist intellectual, Abul-Ala Mawdudi (1903-1979), for whom Islamic economics served as a mechanism to achieve many goals: to minimize relations with non-Muslims, strengthen the collective sense of Muslim identity, extend Islam into a new area of human activity, and modernizing without Westernizing.

As an academic discipline, Islamic economics took off during the mid-1960s, acquiring "institutional heft" during the oil boom of the 1970s, when the Saudis and other Muslim oil exporters, for the first time possessed sufficient and substantial amounts of money so that they could provide the project with "vast acceptance."

Duke University professor and author Timur Kuran wrote in his book Islam and Mammon:

Proponents of Islamic economics make two basic claims: that the prevailing capitalist order has failed and that Islam offers the remedy. To assess the latter assertion, Kuran devotes intense attention to understand the actual functioning of Islamic economics, focusing on its three main claims: that it has abolished interest on money, achieved economic equality, and established a superior business ethic. On all three counts, he finds it a total failure.

1) "Nowhere has interest been purged from economic transactions, and nowhere does economic Islamization enjoy mass support." Exotic and complex profit-loss sharing techniques such as ijara, mudaraba, murabaha, and musharaka all involve thinly disguised payments of interest. Banks claiming to be Islamic in fact "look more like other modern financial institutions than like anything in Islam's heritage." In brief, there is almost nothing Islamic about Islamic banking – which goes far to explain how Citibank and other Western majors host far larger Islam-compliant deposits than do the specifically Islamic banks.

2) "Nowhere" has the goal of reducing inequality by imposition of the zakat tax succeeded. Indeed, Kuran finds this tax "does not necessarily transfer resources to the poor; it may transfer resources away from them." Worse, in Malaysia, zakat taxation, supposedly intended to help the poor, instead appears to serve as "a convenient pretext for advancing broad Islamic objectives and for lining the pockets of religious officials."

3) "The renewed emphasis on economic morality has had no appreciable effect on economic behavior." That's because, in common with socialism, "certain elements of the Islamic economic agenda conflict with human nature."

Kuran dismisses the whole concept of Islamic economics. "[T]here is no distinctly Islamic way to build a ship, or defend a territory, or cure an epidemic, or forecast the weather," so why money? He concludes that the significance of Islamic economics lies not in the economy but in identity and religion. The scheme "has promoted the spread of antimodern … currents of thought all across the Islamic world. It has also fostered an environment conducive to Islamist militancy."

Indeed, Islamic economics possibly contributes to global economic instability by "hindering institutional social reforms necessary for healthy economic development." In particular, were Muslims truly forbidden not to pay or charge interest, they would be relegated "to the fringes of the international economy."

A "substantial and malign political danger"...

Thus the news that by 2010, the total number of Islamic funds could rise to 1000, and that they are to be set up according to Shari'a law is more than troubling. In my view, this is in the interest of America or of the West.

Sovereign wealth funds now are considered to be the world's "new economic engine," perhaps even a "New Wall Street." Here is a list of about 40 funds. The Sovereign Wealth Fund Institute (SWF Institute) gives a ranking by dollar amounts:

UAE -Abu Dhabi, $875 billion, outstripping Norway's "Government Pension Fund" and Saudi Arabia's "SAMA foreign holdings" that both hold about $395+ billion. However there are separate listings for other funds from Saudi Arabia, Kuwait, Qatar, Algeria, UAE - Dubai, UAE - "Emirates Investment Authority," Brunei, Malaysia, Kazakhstan, Iran, Bahrain, UAE - Abu Dhabi, Saudi Arabia - "Public Investment Fund," Azerbaijan - "State Oil Fund," Oman, UAE - "RAK Investment Authority," and Mauritania, a worth totaling more than an staggering $1 trillion dollars.

Representative Marcy Kaptur spoke on June 11, 2008 [Includes a C-Span video clip 14 minutes]:

Abu Dhabi's investments are particularly alarming, because in addition to the Authority and Council being state-run and perhaps the largest such funds in the world, they are among the least transparent sovereign wealth funds. According to the Sovereign Wealth Fund Institute, there is a ranking of the transparency of who really owns these funds and whose money is in there and what is that money doing.

Abu Dhabi and the UAE are at the very bottom, at the very bottom. They are the least transparent of global sovereign wealth funds. The Authority in particular has a reputation for intense secrecy, without even an internal communications department. The fund is state-run and ``does not answer to a wide public at home,'' said David L. Mack, a former United States Ambassador to the United Arab Emirates.

How would this fund stand up to the regulations we have in place here in our own country? Would this fund be legal in the United States? How is this fund supportive of democratic principles? Abu Dhabi and the UAE are not democratic places. Without even asking these questions, this oil-hungry administration courts these investors personally.

Of course, sovereign wealth funds are not just in the UAE. Kuwait, Qatar and Boston Properties purchased the GM Building earlier this week. Do you see the pattern? Nor are these funds limited to the oil-rich Middle Eastern countries. In fact, one of the largest funds is Norway's. But that country, a democracy, has perhaps the most transparent and conventional investment strategy. They are at the top in terms of transparency and normal Western business and law practices.

Here is the Linaburg - Maduell Transparency Index for sovereign wealth funds: Norway and New Zealand are at the top with a rank of "10," and Qatar, Libya, Algeria, UAE - Federal, Brunei, Nigeria, Kiribati, Mauritania, and Angola are at very bottom with the rank of "1."

The other Islamic funds begin in the middle and proceed down the list, beginning with Malaysia with a rank of "7," Kuwait, UAE - Mubadala, and Bahrain, "6," UAE - Dubai - "5," Saudi Arabia funds - "4," UAE - ADIA, Kazakhstan, UAE - RAK, at "3," Iran and Oman at "2."

Although these funds are interested in making investments, they insist that the West should not expect to regulate them in a manner that would be considered "un-Islamic."

It's also shocking to see how Western banks and other financial institutions are falling all over themselves to have access to the billions of dollars in Islamic sovereign wealth funds and other instruments, giving foreign individuals and governments access to all sorts of places, institutions, and people that should be held off limits for security purposes.

"One country's spare cash could be another's trojan horse." [Dan Chapman, "Hope, suspicion as countries fat with cash invest in America," Atlanta-Journal Constitution, May 4, 2008.]

The Sovereign Wealth Institute is holding a conference in August 2008. Their purpose is to

"study Sovereign Wealth Funds and their impact on Global Economics, Politics, Financial Markets, Trade, and Public Policy. We strive to be a leading educational resource regarding these funds."

They aren't the only one holding conferences and intent on education. A problem Muslims saw was the lack of human resources to manage the enormous amounts of money that are being funneled into various funds and other instruments is rapidly being overcome by stampede of candidates globally attending courses and conferences such as the continuing series of the Islamic Banking & Finance Conference 2008 held in Kuala Lampur-Malaysia and the May 2008 Bridgewater, NY conference.

According to the "new statutes" of Islamic finance, every transaction must follow the rules and regulations as set down by Muslim scholars. One such scholar is No fund or instrument could be considered legal, or halal, without the approval of a Shari'a scholar such as Shaykh Yusuf, based in the Washington, D.C. area, he serves as a Shari'a advisor to over 20 global financial entities, including index providers, banks, mutual funds, real estate funds, leasing funds, institutional investors, home finance providers, alternative asset managers and others. Author of A Compendium of Legal Opinions on the Operations of Islamic Banks, the first English reference on the fatawa issued by Shari'a board, a standard reference for Islamic financial institutions, and Islamic Bonds, the 2003 book that introduced Sukuk, the Arabic term for financial certificate, the Islamic equivalent of financial bond that comply with Islamic law and investment principles in accordance with their tradability and non-tradability in the secondary markets. According to the Wikipedia

American institutions Islamic Finance in the United States">explaining the rules and regulations to their finance officers. [See also: El-Gamal, Mahmoud A.,"Introduction" of Islamic Finance Law, Economics, and Practice, Cambridge University Press, 2006.]

Even Dow Jones has a Shari'a Supervisory Board. And the Wall Street Journal's financial reporting seems to have no understanding of the political ideology of Islamism, and neither addresses the role of Shari'a as part of the Islamist' political ideology , or the role of Islamist political ideology in promoting Jihad. The WSJ and Dow Jones efforts "are effectively legitimizing the political Islamist ideology by defining Shari'a as 'Islamic Law' and developing financial vehicles based on that ideology -- one that is not shared by Muslims that view Shari'a law as neither 'Islamic' nor compatible with the norms of modern society." [See also: Islamic Finance or Financing Islamism?

Alex Alexiev of The Center for Security Policy points out in his article, "Islamic Finance or Financing Islamism?" that Shari'a law is not "Islamic law," except as interpreted by Islamists. It's a "politicized interpretation of the Muslim scriptures and other non-revealed sources." He also points out that "the word shari'a is mentioned only once in the Quran, and not at all as a system of jurisprudence, but in its traditional meaning of 'the right path.' "

One does not expect ideological issues to be the strong point of financial reporters working for the Wall Street Journal or financial analysts working for the Dow Jones Company. But one could hardly imagine the Wall Street Journal in 1967 holding a conference on "Communist Finance" vehicles, because without a doubt, the financial world and the American public understood Communism to be a political ideology. Moreover, it was understood as an enemy ideology inimical to the United States. In 2007, however, Wall Street has been persuaded by Wahhabists and Islamists that political Islamism is a religion, not a political ideology.

[Jeffrey Imm at Counterrorism Blog]

Frank Gaffney notes that "Americans are furious" because we are "being taxed without representation" once again by the supply-manipulating OPEC oil cartel:

OPEC is able to effect an oil levy worth hundreds of billions of dollars each year for basically one reason: Currently, our transportation sector is almost entirely dependent on oil-derived gasoline and diesel fuels. As a result, our citizenry, economy and society today have no choice but to pay the tax and hope that the Saudis and their friends will recycle the national wealth thus expropriated by buying up our financial sector and other strategic assets for pennies on the dollar.

As Robert Zubrin, author of the best-selling Energy Victory: Winning the War on Terror by Breaking Free of Oil, puts it: "OPEC will clear $1.5 trillion in net export profits this year. The entire worth of the US Fortune 500 is $18 trillion . So at their current rate of looting, OPEC will accumulate enough cash to buy majority control of the entire Fortune 500 within 6 years."

As outrageous as the present pass may seem with the price of oil at over $140 per barrel, U.S. and foreign capital markets are being rocked by the prospect that there is – under present circumstances – no end in sight. Panicked selling on Wall Street followed a recent warning that gasoline could soon sell for $7.00 a gallon. Why stop there?

["Tax Revolt," Frank Gaffney, Townhall, June 30, 2008.]

Between the Sovereign Wealth Funds and OPEC, the manipulating oil cartel, and all the other Islamic financial instruments and banks that are making their way into this country, how will we have a chance to fend off the creation of an Islamic state as the Muslim Brotherhood has vowed will happen?

Everything will be one sided: the Muslim side. Western culture values, American culture and values will be abrogated, erased. It's sad and amazing to watch Westerners do it to themselves.

With approximately one-third of the world's proven oil reserves located in Qatar, the small Gulf State country has seen windfall oil profits as oil has surged to reach a record high of $143 a barrel today on world markets.

Last week, NYSE Euronext beat out the London Stock Exchange to purchase 25 percent of Qatar's stock exchange, the Doha Securities Market, for an investment of £127 million, approximately $250 million.
NYSE Euronext is an American-European corporation that operates several stock exchanges, including the New York Stock Exchange in New York City and Euronext N.V. in Paris.

The move positioned the Doha Securities Exchange to operate as a global exchange, while giving NYSE Euronext a stake in the Middle East.

Qatar announced today a plan to join the United Arab Emirates and Kuwait in refusing to increase oil output in an effort to force oil prices lower on world markets.

In an interview with Bloomberg in Madrid, Qatar's oil minister Abdullah bin Hamad al-Attiyah said, "I never heard any panic about a shortage of supply, just about the high price. We see in the market there are lots of cargoes."

Bloomberg reported Saudi Arabia has decided to raise its production by 300,000 barrels a day in June and will add a further 200,000 barrels a day in July.

["Qatar acquires stake in UK's 3rd-largest bank," Jerome Corsi, WND, June 30, 2008.]

When our enemies speak, we should listen. And when oil sheiks in tiny Gulf countries offer billions of Pounds Sterling to buy shares in banks, should we believe they really doing us a favor?

We should realize that Islamic supremacy and the bankrupting the West is the true objective.

At least now we know their real intentions. Sacrifice will be required to wean ourselves from their malignant enterprises.