Gold Standard in Islamic Finance ‘Almost There’ for Submission

[MachineGhost]

Reub would weep.

[quote=http://www.bloomberg.com/news/articles/ ... submission]Gold products used in Islamic finance would need to be physically-backed and allocated to the underlying asset, according to a draft of a standard for Shariah gold being developed.

“We are almost there” with a final proposal, said Mohd Daud Bakar, a Shariah scholar who is writing the draft for the Accounting and Auditing Organisation for Islamic Financial Institutions, the Bahrain-based industry group that sets Shariah standards in finance. The committee formed to develop the gold standard will meet once more next Sunday and then submit the proposal to AAOIFI’s Shariah Board, he said in an interview in Dubai on Sunday.

A gold standard stands to boost demand for the metal as most Shariah buyers can only invest in real estate, Islamic bonds and some stocks. Because of the physical backing requirement, Comex gold futures wouldn’t qualify to be Shariah-compliant while the Singapore gold contract would, according to Matthew Keen, founder of Evidens Consultancy in Dubai.

“Hundreds of tons” of new demand could be created, said Natalie Dempster, a managing director of the World Gold Council. “The standard would fill an important gap in the market.”[/quote]

[FarmerD]

Arab countries have always been great place to buy gold.  As I understand it, at least in Saudi Arabia and Oman, it's the law (the Koran may mandate this) that every gold seller is required to explicitly state the amount of gold in their product and the exact dealer markup.  As a result nobody gets ripped off and margins are always razor thin. 

[dualstow]

Seems like gold would be a popular investment in a place where interest is still "usury", although modern "Islamic banking" has a way around that, I guess.

[MachineGhost]

Seems like gold would be a popular investment in a place where interest is still "usury", although modern "Islamic banking" has a way around that, I guess.

They sell forward gold futures contracts and the yield earnings is their non-usury "interest".  They also add on markup fees to consumer loans for their non-usury "interest".  Apparantely, "usury" being evil is a modern invention and has nothing do with The Religion of Peace at all.  Just more lunatic religious irrationality as you would expect.  How's the fight going against the RIFFF's these days?

[dualstow]

I don't think that's right, MG. In Islam alone, it goes all the way back to the Koran, and of course it also predates the Koran outside of Islam.

Reading Is Fundamental Freedom Fighters?

[MachineGhost]

Seems like gold would be a popular investment in a place where interest is still "usury", although modern "Islamic banking" has a way around that, I guess.

They sell forward gold futures contracts and the yield earnings is their non-usury "interest".  They also add on markup fees to consumer loans for their non-usury "interest".  Apparantely, "usury" being evil is a modern invention and has nothing do with The Religion of Peace at all.  Just more lunatic religious irrationality as you would expect.  How's the fight going against the RIFFF's these days?

Whoops, I meant "Islamic banking" not "usury".  You know, banking with usury but none dare call it "usury"!

I'm surprised you forgot so quickly in my absence.   RIFFF = Radical Islamist Fanatical Fundamentalist Fascist (or maybe it was Radical Islamist Fundamental Fanatical Fascist or Radical Islamist Fascist Fundamental Fanatic?  I can't even remember my own term!)

I miss Reub.  It's too left wingy around here.  When exactly is he getting unbanned???

[Xan]

Whoops, I meant "Islamic banking" not "usury".  You know, banking with usury but none dare call it "usury"!

So you meant to say:

Apparantely, "Islamic banking" being evil is a modern invention and has nothing do with The Religion of Peace at all.

?

[MachineGhost]

Whoops, I meant "Islamic banking" not "usury".  You know, banking with usury but none dare call it "usury"!

So you meant to say:

Apparantely, "Islamic banking" being evil is a modern invention and has nothing do with The Religion of Peace at all.

?

Yup!