AlHuda CIBE - presentation of J.D Hardword in Dubai conference

1. An Islamic Solution
to the Financial
Crisis
Dubai, 8th Dec2012
Jamal Harwood (Twitter @Jamal_Harwood)

2. Greece

3. Spain

4. London

5. World Debt

6. Growth of Derivatives

7. US House Price crash

8. US Govt Bailouts
Facility Total (Billion, $) Percent
of total
Term Auction Facility $3,818.41 12.8%
Central Bank Liquidity Swaps 10,057.40 34.0
Single Tranche Open Market Operation 855 2.9
Terms Securities Lending Facility and Term Options Program 2,005.70 6.8
Bear Stearns Bridge Loan 12.9 0.0
Maiden Lane I 28.82 0.1
Primary Dealer Credit Facility 8,950.99 30.2
Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility 217.45 0.7
Commercial Paper Funding Facility 737.07 2.5
Term Asset-Backed Securities Loan Facility 71.09 0.2
Agency Mortgage-Backed Security Purchase Program 1,850.14 6.3
AIG Revolving Credit Facility 140.316 0.5
AIG Securities Borrowing Facility 802.316 2.7
Maiden Lane II 19.5 0.1
Maiden Lane III 24.3 0.1
AIA/ ALICO 25 0.1
Totals $29,616.4 100%

9. Money Supply Growth

10. Total Liabilities out of control…

11. Islam’s Solution
• Non Interest – and most derivatives contract
forbidden
• Gold & Silver currency – a real stable currency
• True Financial reform – where is the change
since 2008?
• No Growth obsession – basic needs not GDP
• Radical taxation policy – tax under utilised
wealth not income/consumption
• Social welfare – arise the family
• Land reform – use it or lose it

12. Gold and Silver Standard
• The gold basis necessitates the free circulation, import and export of
gold, which leads to monetary, financial and economic stability.
• The gold standard ensures the stability of exchange rates between
countries, and the stability of the exchange rates in turn leads to a boom
in international trade, for traders would no longer fear the uncertainty
of exchange rate instability.
• Central banks and governments are prevented from the issuance of
banknotes not backed by gold or silver and therefore prevented from
eroding the value of money through inflation.
• Each of the currencies used all over the world would be fixed by a
specific amount of gold. As a result, the movements of commodities,
money and people from one country to another would be easier, and
the problems of hard currency would disappear.

13. Gold Silver and no Interest
• Borrowing is encouraged and interest free which does not
increase the debt burden
• Gold and Silver money give prices a strong anchor bringing
price stability throughout the economy and creates a stable
economic environment for business investment
• The Gold and Silver Standard has historically been associated
with no or low inflation which means peoples’ money holds
value and is worth more not less year on year

14. Equity Investment and Tax
• Businesses invest based on equity finance that encourages risk
sharing and rewards profits
• Taxation is wealth based and defined so the government
cannot increase and create new taxes
• There are no income taxes so work is incentivised and disposal
income is higher boosting spending
• There are no expenditure taxes which lowers prices and
increases affordability. Wealth tax encourages spending
• Hoarding is prohibited

15. Wealth Circulation
• Taxes are on wealth so the poor don’t pay
• There is active redistribution of income via paying Zakat (wealth tax)
so the poor and needy are lifted out of poverty
• There is active and fast circulation of money through the prohibition
of hoarding gold and silver, no interest and a wealth tax of 2.5%
which encourages equity finance
• The state is prohibited from fixing prices of goods and services or
wages allowing prices and wages to fall as well as rise and thereby
stimulating the economy even when overall demand is low.
• There are restrictions on derivatives trading and other harmful
business activities

16. Gold Silver Standard
www.thegoldreport.co.uk
Twitter @Jamal_harwood