Posts Tagged ‘commodities’

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Sharia goon blames corn futures for recession

November 11, 2011

Grain futures contracts were traded as early as the 1840s in the United States.  Were the commodities futures a monstrous invention of godless financial speculators that doomed America to nearly two centuries of economic ruin?  Far from it.  One source explains:

Before the North American futures market originated some 150 years ago, farmers would grow their crops and then bring them to market in the hope of selling their commodity of inventory. But without any indication of demand, supply often exceeded what was needed, and unpurchased crops were left to rot in the streets. Conversely, when a given commodity such as soybeans were out of season, the goods made from it became very expensive because the crop was no longer available, lack of supply.

In the mid-19th century, grain markets were established and a central marketplace was created for farmers to bring their commodities and sell them either for immediate delivery (spot trading) or for forward delivery. The latter contracts, forwards contracts, were the fore-runners to today’s futures contracts. In fact, this concept saved many farmers from the loss of crops and helped stabilize supply and prices in the off-season.

Commodities markets and their predictions of future supply and demand have, generally speaking, helped bring relative stability to food markets and avoid famine.  But what does Islamic law have to say about Western commodities markets that have helped stabilize food prices and avoid starvation?  Just watch this clip from known jihadist Taqi “Ugly” Usmani, one of the world’s foremost sharia finance scholars and Islamic jurists, denigrate the system during a speech in August:

Keep in mind, malnutrition plagues countries across the Islamic world today.  Few, if any, societies have ever made so much food available to the world at such an affordable price as has the United States of America.  Yet sharia law declares the financing behind this unique historical accomplishment to be a haram (filthy) sin.

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10% ag tax “a relic of barbarism”

November 29, 2009

In the 800s, Islam enshrined the 10 percent ushr tax rate on farm yields in the Hadith.  The tax may have been appropriate for the Middle East in the Ninth Century, but it hasn’t worked out so well since then.

As I have pointed out on Money Jihad several times, my concerns about the ushr are its use to fund jihad (especially as ushr collections on poppy yields by the Taliban in Afghanistan today), its imposition by religious fiat rather than by the consent of the governed, its excessive penalties for non-payment, the difficulty it presents for making accurate assessments of crop yields after expenses, its discriminatory impact against farmers, and its overall anachronistic nature.

As it turns out, the America South had its own brief flirtation with a harvest tax during the Civil War.  Beset with increasing war debts, the Confederate Secretary of the Treasury Christopher Memminger proposed a 10 percent in-kind tax on agriculture.  The Confederate Congress added various rates for income and ad valorem taxes to constitute the Tax Act of April 24, 1863.  Given the legislation’s focus on the crop tax, the act was usually called the “Tithe Tax.”  The following is a remarkable passage from Richard Cecil Todd’s 1954 book, Confederate Finance:

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