[See News Article Below]
Let me get this straight. The Federal Reserve Bank, which is a privately owned, held, and run bank, and to quote Dennis Kucinich is "as federal as Federal Express," is allowed the sole perrogative to, among other ridiculous things, print US Currency.
This printing of currency, they do at NO cost to themselves, and without any outside authority to regulate their actions.
They have just recently and "most magnanimously" decided to issue ONE TRILLION DOLLARS (again, at no cost to themselves), and LOAN it to the seemingly moronic government of our country at interest.
This will supposedly somehow help out our economy (in the same way that a brigand in Karachi, when he robs you of your money and cell phone, will help you out by returning your SIM card to you so that you don't lose your phone numbers).
Recap: $1,000,000,000,000 when divided by a population of about 305,000,000 comes out to a magically wonderful $3278.69 per person "Stimulus Check" that this private bank has magically cut itself (plus interest).
Many people criticize the Shari'ah conception of an economy in which transactions must be conducted in real commodities and assets, and in which there can be no usury. They call it medieval and say that it is not practical in the modern world. I say to them, that if this is modernity, then they are more than welcome to foot my half of the bill that this fradulent "loan" will see me incurr.
This brings up another point. That is that "Islamic Finance." Without entering the debate on whether or not certain products out on the market are compliant or not, I would like to say that, ultimately, "Islamic Finance" doesn't mean going to a conventional bank and getting a "Shari'ah-Compliant" product. It means having a different market place which from day one operates on shar'iah-based principals and transacting in it.
THIS IS AS IMPORTANT AS BUILDING A MASJID AND PRAYING IN IT, RATHER THAN HOLDING JUMU'AH (Friday Prayers) IN A CHURCH OR SYNAGOGUE.
It comes that our Messenger, may the peace and blessings of Allah be upon him, after first arriving in Madinah, the radiant city, made arrangements for the masjid to be built. That much is well-known.
Slightly less well-known, is that after that, he asked the Ansar, may Allah be well pleased with them all, where they traded. They responded that they had no market of their own, rather they would go to the markets of the local Jewish community, where the Jews would fix their own prices for goods and buy and sell according to their laws and interests. Note that doing so was their right, and a smart and wise thing to do as well.
As the Hadith goes: "Wisdom is the lost property of the believer; wherever he finds it, he has a right to it," so the messenger of Allah, upon whom be peace, then proceeded to establish a separate market place for his believing companions, Allah be pleased with them, so that they could establish a system that reflected the virtues of a divinely-ordained system of ethics, justice, and fairness.
[taken from Reuters: http://www.reuters.com/article/topNews/idUSTRE52H5YE20090318]
Fed to buy long-term U.S. government debt
By Mark Felsenthal and Alister Bull
WASHINGTON (Reuters) - The Federal Reserve on Wednesday said it would pump an additional $1 trillion into the U.S. economy to try to pull it out of a deep recession, partly by buying longer-term government debt for the first time in more than 40 years.
In a statement at the end of a regular two-day policy meeting, the central bank's panel said it would buy up to $300 billion in longer-term Treasuries.
The decision caught many off guard. While the Fed has said it was considering such a move, it had seemed to be backing away from it recent weeks. As recently as March 6, New York Fed President William Dudley had said such a move would not be the most efficient way to ease market conditions.
The surprise announcement jolted markets. U.S. stocks shot higher and yields on U.S. government bonds took their biggest one-day tumbled since 1987, while the dollar plunged to a two-month low against the euro.
"When the Fed said it would 'employ all available means' to jump-start the recovery and prevent deflation it wasn't kidding," said Sal Guatieri of BMO Capital Markets in Toronto.
In addition to purchasing Treasury debt, the Fed said it would expand by $850 billion to $1.45 trillion an existing program to buy debt and securities issued by mortgage finance agencies.
The expansion of the program, which already had lowered mortgage rates, immediately pushed borrowing costs down further. Quicken Loans said rates on 30-year mortgages fell as much as 0.375 percentage point to 5 percent.
RATES NEAR ZERO
The Bank of England's recent success in driving interest rates down by buying government debt may have been a factor in the U.S. central bank's decision to buy longer-term Treasuries -- a strategy it last deployed in the 1960s.
By driving down yields on benchmark government debt, the Fed hopes to lower a wide array of borrowing costs for consumers and businesses.
"This is a pretty dramatic move ... They are trying to bring down all consumer rates," said James Caron, head of global rates research at Morgan Stanley in New York.
In addition to ramping up its efforts to pump money into the recession-struck economy, the Fed unanimously decided to hold its target for overnight interest rates in a zero to 0.25 percent range -- the level reached in December. One Fed official, Richmond Federal Reserve Bank President Jeffrey Lacker, returned to the fold after dissenting in January.
The Fed said rates would stay low for "an extended period," a more explicit vow to stay on hold with rates for a prolonged time than it had offered in recent months.
CREDIT EASING IIWith benchmark interest rates virtually at zero for months, the Fed has turned its focus to flooding stressed credit markets with cash in the hope of restarting lending and restoring growth -- a policy Fed chief Ben Bernanke has dubbed "credit easing."
"Bottom line is the Fed is adding a trillion dollars to their balance sheet and that's a lot of taxpayer money," said Greg Salvaggio, vice president for trading at Tempus Consulting in Washington.
Bernanke on Sunday said repairing the tattered financial system was necessary to secure a recovery for the U.S. economy, which has been stuck in recession for more than a year.
The Fed this week began taking bids for a program designed to spur student, auto, credit card and small business lending, and it said on Wednesday it would consider expanding that program to cover a wider array of assets.
The consumer and small business credit program will initially aim to inject $200 billion into the market for securities backed by these loans, but the Fed has already said that program could be ramped up to $1 trillion.
While the Fed has gone to extraordinary lengths to try to get credit flowing, the economy is still in a nose dive.
U.S. gross domestic product shrank at a 6.2 percent annual rate in the fourth quarter, the deepest contraction since early 1982, and economists expect a decline of 5 percent or more in the first quarter. The unemployment rate, which has already hit a 25-year high of 8.1 percent, is expected to climb through the year.
(Additional reporting by Glen Somerville; editing by Tim Ahmann and Chizu Nomiyama)