Posts Tagged ‘inflation’


Muslim Brotherhood: fight inflation with Islam

April 29, 2011

Talaat al-Shennawy, the head of the Muslim Brotherhood in Dakahlia Governate, has announced that rising prices can be combated by following the laws of Allah.

Perhaps nobody has informed the Egyptian Muslim Brotherhood that perhaps most dutifully orthodox Islamic country–Iran–has the most Islamized sharia economy in the Middle East, and is currently suffering from rampant inflation.  It has become so bad that Iran will simply decapitate three zeroes from their currency in order to “reduce” inflation (see here and here).

Or the Muslim Brotherhood is perfectly aware of Iran’s experience, but attributes their economic failures to their heretical Shia existence.

It’s not unusual for Islamists to blame inflation on Western, infidel financial systems.  They believe that fiat paper currencies do not retain their value like the precious gold dinars used by the profiteer Muhammad.  If you don’t want to use our currency, Talaat, please, by all means, don’t, even though I’m willing to wager you have some Ben Franklins stuffed in your sock drawer.  And tell your agents operating in the U.K., U.S., and Canada to renounce any of the welfare benefits they are receiving from their host governments if denominated in their pesky, heathen currencies.

From Al-Masry Al-Youm (h/t Jihad Watch) on Apr. 27:

A Muslim Brotherhood member presented Islam as an economic solution during a conference in Daqahlia Governorate Tuesday. 

Talaat al-Shennawy, head of the Brotherhood’s Daqahlia office, said Egypt could curb price increases by following God’s rules.

Shennawy said the greatness of Islam lies in it being a comprehensive religion that embraces all fields of life. He said people should apply all Islamic orders rather than just the ones they like.

In apparent conflicting messages, the Brotherhood said during another conference in Minya that it does not want religion to govern the state.

“The Brotherhood will opt for a civilian state and is seeking a strong parliament, as well as municipal councils free of bribery and nepotism, that can address citizens’ needs,” said Supreme Guide Mohamed Badie.

Brotherhood member al-Sayyed Talaat also called on all Egyptians to participate in rebuilding the country and said the group is always ready for cooperation.


Shia economics

April 20, 2011

The Ayatollah Khomeini once famously said “economics is for donkeys.”
Khomeini’s comments proved to be prophetic–the Iranian economy today certainly looks to be run by jackasses.
Iran’s recipe for an economic turnaround is as follows:
1.  Dub the current year “The Year of Economic Jihad.”
2.  Take more statist, government control of private businesses and bazaars and call it “cooperation” (see details below).
3.  Eliminate three zeroes from the currency to “reduce” inflation.  Seriously.
It has been said that over the centuries, Muslim leaders have often taken a dismissive view of fact-based economic scholarship because they have focused more strictly on the legal or jurisprudential traditions of Islamic financial law.  That seems to be the case in contemporary Iran, and a turnaround looks unlikely.  Poor Iranians are paying the price for their leaders’ anti-intellectual sharia socialism.
From Zawya on Apr. 14:

Minister of Economy and Finance Affairs Seyyed Shamseddin Hosseini said cooperation between the state-run and private sector would create an economic turning point in the current Iranian year (started March 21).

Speaking in the unveiling ceremony of Negotiation Council of Government and Private Sector, he noted that last year was the year of endeavors and challenges and those involving in economic activities took extensive efforts, ISNA reported.

He noted that following the targets envisaged in Vision 2025 caused domestic economy to flourish.

Referring to naming the current year as the Year of Economic Jihad by supreme leader Ayatollah Seyyed Ali Khamenei he said that the measure aims at realizing the objectives set by Vision 2025 in under the general policies of Article 44 of the Constitution.

The minister said that the leader has paid special attention to the economic issues during the recent years, noting a large number of forums, mostly political, have been formed during the past years.
Hosseini stated that the expenses of the political forums are higher that their income.

He called for the members of council to join hands and cooperate with each other in order to create new economic capacity for the country.

The economic structures of the country should be developed, he said, adding experiments show that public and private sector should collaborate to achieving the purpose.

He hoped that the council would help enhance cooperation between the government and private sector and remove the distance between them.

Mutual Understanding
Pointing to the lack of mutual understanding between public and private sector, he said that for example those involving in the industrial activities believe that the profit rates of banks’ saving account are high in the country but when the Money and Credit Council lowered the rate, the private banks wrote a letter to complain about the issue.

The minister said that this year should be a turning point in the economic jihad process and average annual economic growth rate, which stood at 5 percent in the past, should increase this year.

“In order to realize the economic growth envisaged in the fifth development plan, at least, $1000 billion worth of investment should be absorbed. We didn’t have such experience because financial resources have been restricted”, he noted.

Hosseini said that improving the business environment and enhancing productivity are among the necessary measures which should be taken in the industrial sector, adding in line with the same policy the Commerce Ministry lowered final cost of products.

Talking to the reporters on the sideline of ceremony, he said that Money and credit Council would study banking development plan which aims at establishing good relation between money and investment.
Criticizing the way of issuing participation bonds for financing projects, he said that banks themselves are in charge of repurchasing the bonds and paying back the original sum plus profit.

“It is actually like paying profit to saving accounts “, he noted.

He stated that nothing has so far been ratified about new national monetary units and the number of zeros that are to be eliminated from national currency.

Looping 3 Zeros Off
Slashing several zeros from national currency was put on agenda of Central Bank of Iran (CBI) several years ago. But, recently practical moves have been adopted to this end. It seems that upon implementing this plan, at least the volume of bills used in current transactions of the people will be reduced.

Read the rest of this entry ?


Islamic economics: cut zeroes to stop inflation

January 21, 2010

Nobody likes inflation.  But Muslims really don’t like inflation.  They have a saying that one silver dirham (coin) during the time of Muhammad would buy one chicken, and that one dirham today would buy you… one chicken.  That is why the movement within the Islamic world to buy gold coins has skyrocketed, as I have blogged about here.

Iran’s rial is supposedly pegged to the dollar, so the mullahs can’t quite figure out why they would experience inflation.  No matter.  Just behead the zeroes from the currency itself.  That will solve it.  Here’s the news from AP, via MSNBC:

TEHRAN, Iran – President Mahmoud Ahmadinejad said Wednesday his government is planning to lop off zeros from its currency in an apparent fight against Iran’s double-digit inflation.

Ahmadinejad’s government is preparing to enact a law in April that would sharply slash energy and food subsidies. The move could provoke more unrest in a country already struggling under international sanctions, high inflation and a government crackdown on the opposition.

“It is planned to remove zeros off currency and make the rial value real,” Iran’s government website quoted Ahmadinejad as saying. “The value of rial, under the law, is calculated on the basis of the price of gold. For some reason, the rial has been devaluated and we have to return its value to the one existing in the law.”

The Iranian rial is now traded at 10,000 rials to one U.S. dollar. That compares to 70 rials against the dollar in 1979, the year an Islamic revolution toppled the pro-Western Shah Mohammad Reza Pahlavi.

The governor of Iran’s Central Bank, Mahmoud Bahmani, last month said three or four zeros will be removed from the currency, depending on the results of the government’s subsidy cuts.

But don’t worry.  Sharia finance and Islamic economics are more ethical, equitable, and sustainable than Western capitalism.  That’s what we’re told, anyway.


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:

Read the rest of this entry ?