Science a GoGo's Home Page Forums General Discussion Not-Quite-Science Forum MONEY: What is it, anyway? Why the money crisis?

MONEY, AS PERCEIVED BY MARSHALL MCLUHAN
An essay on the political economy of Marshall McLuhan--and what he failed to mention.
by Rev. Lindsay G.King (1997) (revised in 2008)
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In his great book, Understanding Media (1964)---extensions of man, Marshall McCluhan wrote about money. He defined money as: THE POOR MAN'S CREDIT CARD (CHAPTER 14).

http://en.wikipedia.org/wiki/Marshall_McLuhan

Makes sense, eh? If you were a merchant and a poor man gave you, a dollar bill, providing it was not counterfeit, you would accept it without question, wouldn't you? However, if he gave you a credit card, you would swipe it to verify he had real credit.

In his book, McCluhan points out that Samuel Butler, in his book, EREHWON (which spells NOWHERE backwards) refers to money as a type of sacrament---an outward and visible sign of an inward and invisible grace. It is a social medium which you and I can use to extend ourselves to mediate valuables back and forth. It expresses, externally, our internal wishes and motives.

OTHER THINGS MONEY DOES, ACCORDING TO MCLUHAN
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"Money talks." He writes. "It is a metaphor, a figure of speech, which likens one object to another. It is a bridge from one thing to another. It can even be understood as a form of transportation which carries one thing to another."

It is a storehouse of values such as work. It stores the work of one trade to that of another. It speeds up the exchanges between the trades and, therefore, tightens the bonds of interdependence between one person and/or one community and another. Creating community, it operates in space and time so that both can be looked upon as forms of money.

He says that there are two kinds of money: COMMODITY MONEY AND REPRESENTATIVE MONEY. As I point out below, he failed to see that there is a third kind--fiat money, which is based on debt and a promise to pay in the future.

He defines REPRESENTATIVE MONEY as the paper money that you and I have in our Wallets. It has no obvious or intrinsic value. For example, how many $100.00 bills would it take to make a fire and boil long enough to cook an egg?

However, depending on the number on the piece of paper, it can go far and buy the power needed to get the job done. Coupons issued by stores and backed by products are a form of representative money. This means that any corporation, or even individual, can create this kind of money--backed with goods and/or services.

THE REAL VALUE OF MONEY IS DETERMINED BY WHAT IT WILL BUY.
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In short, MONEY IS WHAT MONEY DOES. Even the classical economists agree that this is only one definition of money. The full definition of it is a complex matter.

Interestingly, this kind of money has, in recent times, supplanted gold and silver and most other forms of commodity money. In the light of this, consider this question: When was the last time you saw gold, or even silver, circulating as a form of currency?

WHAT IS COMMODITY MONEY?
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Even today, any product that is in demand, or has practical value, can be used as money. For example, animal skins. It can also be tobacco, alcohol, gasoline, you name it. Most certainly, it does not have to be gold, silver or other form of precious metal, exclusively. Commodity money, because it is useful, also has the habit of going out of circulation.

When, for example, the tobacco user gets the tobacco and smokes it, he takes it out of circulation. Gold and silver are no longer in general circulation. Perhaps the copper cent---which I believe will soon be replaced---is the only coin with a real commodity value. In the U.S., attempts have been made to replace the copper coin with ones made out of aluminum.

In my possession I have an aluminum French franc which I found on a visit to Paris in 1972. It was minted in 1944 and was obviously issued by the Vichy government set up under German occupation. It has no value as a commodity. It was obviously not a commodity coin at all, but just like paper.

Regardless of its value it worked. Why? Because it was issued, by fiat of the Nazi-controlled government in power, was accepted by the people as a transfer of value. It didn't have to have any real or intrinsic value of itself. It was the community that gave it its value. When the nature of the French community and those in authority changed following the war, a whole new system had to be put in place.

MONEY AND COMMUNITY GO TOGETHER
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All of this goes to show the powerful and important role of community in the creation and use of money. It also shows the important role that is played by those who govern (locally and/or nationally) the community. As McLuhan points out, all forms of money are powerful expediters and transmitters of goods and services. As such it is one of the main tools of modern civilization. It is also one of the main tools of THE GLOBAL
VILLAGE as well the LOCAL VILLAGE, OR COMMUNITY.

The story of Robinson Crusoe illustrates what the lack of community does to money.

As McLuhan points out (p.125), when Crusoe found himself alone on what he thought was a deserted island he discovered something about money he hadn't thought of before. On visiting his wrecked ship he found some coins--copper, gold and silver, I presume. It suddenly occurred to him that he had no use for them; that a knife he found was far more valuable.

However, he failed to discover---I should say that Jonathan Swift failed to write about it---what we all need to discover: There is a real difference between commodities--copper, silver and gold-- used as money, and commodities--iron, steel, animals, skins, cotton, wool and the like--of intrinsic and real value.

MORE ABOUT REPRESENTATIVE MONEY
One of the functions of commodity money--such as copper, gold and silver, real estate, whatever--the so-called financial experts tell us is that it can store value. As prices go up, if you have your money in the form of such a commodity, it is supposed to go up.

For example, in the 1970s we were told the this about already-mentioned real estate. It did go up. But it soon became a dangerous bubble. Then it to burst. In the late 80's and early 90's, bang. (By the way, I wrote this in 2005)

THE CRISIS OF 2008--not just real estate
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IT IS CRUCIAL FOR US TO UNDERSTAND THE FOLLOWING, IF WE ARE TO DEAL WITH THE CURRENT FINANCIAL CRISIS OF OCTOBER 2008 (Dec. 2008)
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Now, in 2008, that we all know what false booms are, and what the inevitable busts, can do to all of us, at any time, it's time we took a look, a close look, at the money game and got some understanding as to who set it up and how it is played.

As McLuhan pointed out: "Representative money acts more like a language, as a translator and transmitter of current valuables. As a agent of exchange or translator of values, it can move with greater and greater speed and ever greater volume."

It is important, therefore, not to confuse the two kinds of money.

THE THIRD KIND OF MONEY
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Also, in my opinion we need to understand that there is a third kind of money. It is A debt-based fiat money, which, with the cooperation of our federal government, the central bank--In Canada it is the Bank of Canada--creates, as the wholesaler, virtually out of nothing but the debtors ability to pay. This fiat-money is retailed to the debtor by the chartered banks, which makes money on what is called "the spread"--the interest it charges above what they pay the BOCanada, which is now down to 0.

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As indicated, Marshall McLuhan never mentioned the nature and function of our central banks and the role of the Bank of Canada in the creation of a debt-based fiat-money. The banks give loans that put people into debt and call it credit.

FALSE BOOMS, THE MAIN CAUSE OF DEVASTATING BUSTS.
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Over the last number of decades, which I have witnessed, here, in my sincere opinion, is what I feel has been the three main failures which has promoted all false booms and caused all devastating busts.

1. The failure of our government regulators to prevent thieves from getting into high-paid positions of high authority in the financial industry.

2. The failure of governments and central banks to work together to create a transparent, balanced and democratic money-system, one designed to serve the total needs of the all the people, not just the privileged few. But this is another story.

3. The failure to see the value of a well-regulated commodity-based barter system, using monetized barter, in cooperation with all governments, tax systems, and all registered charities, including the churches.
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The Family Life Foundation uses tradeBux:
http://www.viatrade.ca/aboutus.htm

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Now, December, 2008.

Very Interesting! I wonder how many see the economic point you are trying to make. I hope that anyone with any kind of training in economics agrees to dialogue with you. Good luck!

Once again I will say that money is just a medium of exchange. It is a mutually agreed upon item and can be a cheque, a credit note, or today, a piece of plastic card, amongst other things. These items have a notional value, and it is important to realise that the money we regard as ours does not really exist- unless we try to remove it from a bank. In our society we think of jewels and metals as being valuable. That is because we have agreed within our society that they should be so. Other societies have used shells, feathers and other items as mediums of exchange.

Barter requires the exchange of goods of seemingly equal value to the participants, and probably predates the concept of coinage. Historically gold and silver coins appear in many ancient civilisations, and it was the Romans who initiated a system of mutually agreed banking which used gold stored in one place to be credited in a personal note of credit redeemable at another place. This meant that Roman travellers (and the famous armies) could travel without having to lug around masses of heavy money.

Money used to be backed by gold, or other precious metal. This is no longer the case, as we are finding now, when the funds in banks are inadequate to repay the depositors who left it there. Our money now can be totally an illusion. When we use a credit card there is no money involved. I can even spend money I don't have, and the banks can lend my non-existent money to others, who also have money that only exists on a computer screen as it is transferred arouns the balance sheets. It's enough to make you dizzy!

But it all works reasonably well if people who are careful and honest. We are now living with the consequences of carelessness and corruption. It is deeply ironic that the money of we 'little people', the ones despised by the banks, is bailing out the financiers and manufacturers. Maybe greed is not good after all.

That said, I am not sure barter is an answer. However, living in Zimbabwe today, the rich person will be someone who has a garden or some chickens to trade, not a person with $10, 0000, 000. Maybe that will happen in Canada too, Rev!

Interesting comments, Ellis. You say that
THE EVOLUTION OF MONEY. Perhaps we can agree that, like life itself, money came into being by the process of evolution.

As I understand it, and as you say elsewhere, money used to be many things; but over time it evolved--certainly among the noble and merchant classes--and became metals, especially gold, silver, copper and bronze, as the most convenient forms of money.

However, I am sure you will agree that this did not prevent skilled artisans, hunters, farmers, the servant classes, including slaves, from bartering with one another. Historians tell us that in Bible times, and up to fairly modern times, the lower classes earned 90% of their needs in the barter economy.

PLEASE TAKE NOTE: IT IS NOT EITHER/OR, BUT BOTH/AND
With the use of the personal computer and the modern Web system we can return to using more and more barter, without rejecting cash. We can use cash dollars and barter dollars. This could help us overcome the current cash crisis.

Meanwhile, the powerful kings and their nobles--that is, the ones who by dint of force actually controlled most of the metal money--turned to those who were smart enough to build strong warehouses with vaults. They rented the vaults to store the valuable metals which they owned. Such warehouses, later became what we call banks.

Naturally, the owners of the vaults charged a fee for services and gave the depositor a receipt for the number of pounds of metal deposited. Metal bars and coins went by weight, not by denomination--hence the European pound. Coins with numbers came much later.

THE EVOLUTION OF FRACTIONAL RESERVE BANKING
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There is no record of when this first happened, but A quantum leap forward was made in the evolution of money when someone--perhaps a smart mandarin servant of a king somewhere in China--came up with the idea of using warehouse receipts, made of paper invented by the Chinese, as a way of doing business. Imagine the following scene:

Mandarin, speaking to one who had done some work for his lord:
"You see this piece of paper. It is worth a pound of gold. It will pay the debt my lord owes you. Take it to the warehouse used by my lord. There you can pick up your gold whenever you wish."

However, the artisan is also smart: Instead of bothering to go and get the gold and risk having it stolen from him, he uses the note to pay a debt he owes. Over time, this one pound note goes from hand to hand buying all kinds of things and paying many bills while the metal remains in the warehouse vault.

THE BEGINNING OF "BANKING'
Smarter still is the "banker"--the one who owns the warehouse with a strong. He notices this. Many months go by, sometimes years, before anyone comes to actually get the gold or other metals. Though it belongs to someone, a larger percentage of the metals never leave his vault--now diminished in value because of the rent.

So what does he do? Taking inventory of his personal wealth, plus the amount he has in the vault which belongs to others, he begins to offer loans at interest, in the form of notes. Of course there is no need for him to tell anyone what he is doing. And he is free to make up his own rules. Sound familiar?

To start with, quite safely, he can loan out all his own money. If he is prepared to take a risk, and as he makes money on his own money, he can also loan our quite a percentage of the other metals on deposit. Within no time he is making enough profit to cover any number of withdrawal demands. He can take more and more risk as long as he can keep ahead of the game.

Eventually, the banker gets to the point whereby, instead of charging rent--to encourage the owners of metal to store and keep their gold in his vault--he can afford to pay interest on the deposit.

SOUNDS LIKE A PONZI GAME TO ME
http://news.google.ca/news?q=ponzi+scheme&ie=utf-8&oe=utf-8&rls=com.mandriva:en-US:official&client=firefox-a&um=1&hl=en&sa=X&oi=news_group&resnum=4&ct=title
http://en.wikipedia.org/wiki/Charles_Ponzi

THE BANKER HAS A PLAN
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Now, all the "banker", has to do is to persuade the king to grant him a charter to be his "servant", and the modern banking system is born.

BTW, books on general economics and the story of banking state clearly: " Modern banking began as a fraud..."

Ellis this I why what you write makes sense.

National Post (Canada, a national paper)
I wrote the following, today. It is about CAPITALISM, SOCIALISM and an OPTION--A Feathers Approach--neither left-wing, nor right wind.
Editor:

Re letters: Capitalism works just fine ... or does it?

In his recent letter, Patrick O'Donnell makes the dubious claim that, "in their ideological pure forms, both Marxism and capitalism are perfect systems for any economy."

This is like saying: If we had a benevolent, all wise and almighty god as the emperor of the Earth, and if he had perfect angels as his assistants, we would have a perfect form of government.

Mr. O'Donnell quickly admits that, in the real world, we have too many people who, in their search for power and wealth, are too easily corrupted.

So, when it comes to who controls the political economy--let's call it the body of the bird, feathers and all--what do we really have?

As I see it, in the real world we have an ongoing game-like struggle between two powerful wings--each claiming to have the best system for the creation and distribution of all wealth.

RIGHT-WING CAPITALISM
As I understand it, right-wing capitalists want us to treat the political economy as an enjoyable almost game-like competition, from which all of us--that is, producers (owners), players and spectators--will profit depending on how hard we are willing to compete. The game is played in the market place--the owners and managers of which will decide who gets paid when and how much.

Ask capitalists: Okay, what about those of us, who for whatever reason, are unable to compete? How does your system handle this problem?

Depending on the level of their compassion the usual response is: With the help of the churches, charities, plus an adequate tax-credit system, those incapable of competing will be looked after. No mention is made as to how adequate that is.

As capitalists: What then is the role of government--made up of democratically-elected representatives from all classes?

The answer: Its role is to create and apply an agreed on set of rules for all concerned. That is, the role of government is to referee the competition so that the game is played fairly--whatever that means.

LEFT-WING SOCIALISM
On the other hand, serious left-wing socialists look on the political economy, not as a game-like competition owned and managed by highly-paid and corporate leaders, but as a government-organized co-operative market place. The place and the co-op must be designed and managed by salaried and government-appointed central planners.

Believing that the ownership of the means of production rests in the hands of the people at large--whatever that means--the role of the central planners, ideally speaking, is to make sure that those who do the actual labour, including the professionals, get a bigger share of the economic pie than they would under a competitive system.

Left-wing socialists see no role for charities, especially of the church-kind so familiar in western democracies. Socialists argue that those unable to do productive work ought to be looked after out of government-based taxes. The same is true for those involved in government-approved sports, cultural and church activities.

Is there any option to the above?

THE FEATHERS OPTION
I like to think that there is. I call it the feathers option to governing the political economy. After all, feathers cover the whole bird, not just the wings. Especially important are the tail feathers, humbly situated right over the anus of the bird--the perfect place for government.

The tail feathers play several essential roles: They help keep the wings in balance; they enable the bird to take off and land, and they help point the bird in the right direction. Without the humble tail feathers no flight-dependent bird would survive for long. Also, tail feathers economists see a role for every feather, including governments, businesses, individuals, churches, and charities.

For tail feathers economists democratic and compassionate capitalism and socialism are not just competitors to be overcome, but valuable wings to be employed in the production and distribution of real wealth for the whole body.

May you never lose your tail feathers.

Rev. Lindsay G. King
905- 764-1125, Thornhill

FEATHERS AND ECONOMICS IN ANCIENT EGYPTIAN MYTHOLOGY
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Notice the interweaving of religious symbols--HAVING TO DO WITH MORAL AND ETHICAL QUALITIES--and economic activities in ancient Egypt.
Interestingly, ancient Egyptians used the FEATHER
(shut) as a powerful symbol for human consciousness and conscience.

Because of its name, "shut", the feather was a symbol of Shu--the Egyptian god of the air--probably similar to what the Hebrews had in mind when they spoke of ruah--the air, wind, breath, spirit of God. The Greek translation for ruah is pneuma--the Greek for air, etc. Keep in mind that feathers enable birds to fly in the air.

Shu was the father, the creator of the earth (Geb) and the sky (Nut). Shu was often shown wearing a feather in his hair. Occasionally Geb was shown dressed in feathers, a representation of the air which covers him.

Usually, the feather was a symbol of Ma'at, the goddess of moral truth and order--righteousness. The goddess was always shown wearing an ostrich feather in her hair. The feather by itself was her emblem.

JUDGMENT DAY OF THE ANCIENT EGYPTIANS
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In ancient Egyptian art, the feather is shown in scenes depicting the Hall of Ma'at--goddess of righteousness. This hall is where the deceased was judged to determine his moral and ethical worthiness to enter into the afterlife. The judging process involved taking the embalmed heart--which they believed to be the seat of the soul--and placing it on a balance scale. It was weighed against the feather, the symbol of righteousness--just and humane behaviour.

Any heart which was was free from sin and evil was, therefore, lighter than the feather. Such a light heart enabled the dead person to enter the afterlife. Other gods in the judgment hall, who were part of the tribunal overseeing the weighing of the heart, were also pictured as holding a feather.

Another ceremony, during the feast of the god, Min, men would erect a ceremonial pole. These men would wear four ostrich feathers on their heads. Symbols of Min are the phallus, lettuce, bull. Min was a fertility god. It was believed bestowed sexual powers to all men.

He also was a god of the rain--a generative force of nature. In one of the most important Min festivals, the Pharaoh would hoe the fields as Min looked on. At the harvest festivals,the Pharaoh would ceremoniously hoe the fields, under Min's supervision. When the Pharaoh begot his heir, he was also identified with Min.
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The National Post (Canada) recently published a series of articles by business leaders who were asked: Tell us what happened to cause the current economic crisis and financial meltdown? Almost all critics responded: The chief cause is the lack of moral and ethical integrity--rooted in greed and the lust for power--among too many of our corporate leaders. In other words, their hearts are much heavier than the feathers of consciences.
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http://www.egyptianmyths.net/feather.htm
ABOUT MIN, THE CHIEF GOD OF THE HEAVENS:
http://www.egyptianmyths.net/min.htm

We can also add a third reason: THE LACK OF COMMON SENSE
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BTW, I credit the following gem to one of the Anon family:

A Modern Parable.

A Japanese company ( Toyota ) and an American company (Ford Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale-boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced to India

Sadly, the End.

Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses...

IF THIS WEREN'T SO TRUE, IT MIGHT BE FUNNY.

It may be even simpler than that Rev. Maybe Toyota are producing the cars people actually want to drive, that is, smaller, environmentally cleaner ones. Personally I am happy to see that the huge angry-looking 4-wheel drives are becoming rarer. It makes for easier parking of my small Asian hatch-back!

I remember getting that Spam mail story about 2 months ago from my mom. Being retired she doesn't have much to do.

pffft! I dont know and I dont know much but I do know that over this side of the planet,Australia, we've had a boom for 10 years.

Majors in mining, housing, commercial enterprise, increased wealth lowered our unemployment and empowered our employed with real job options.

Our interest rates compared to the rest of the world were high which has given our banks some leeway in this crisis, sure things have slowed down now, but little wonder. If growth continued at this rate, there would soon be nothing to mine, no timber to mill, no land left to farm.

I'd hate to see my yearly bonus dwindle but it is probably time things slowed down a little.

If someone says there's a recession going on it must be so.

You must Bow to the voice of authority

What actually is a recession, anyway? What actually happens?
Does it mean that there is a lot less work to be done?
As a child, I lived through the so-called GREAT depression-- 1930-1939. Check out http://www.bellisland.net The history of the times and how we were attacked, by submarines, during WW 2 is interesting.

THERE WAS NO LACK OF WORK, JUST LACK OF CASH--AND THE BRAINS TO CREATE A BETTER SYSTEM THAN THE ONE INVENTED BY THE BANKS.
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As I recall, it was hard work living in an iron-ore mining town in the 1930's. I also recall my father telling me: When he first went to work in the iron-ore mines on Bell Island, he earned the big sum of 10¢ an hour--a dollar a day. Miners had to live in hovel-like shacks.

It is recorded that the first miners' strike was on August 24, 1896. 180 workers struck for 12¢ an hour. That strike failed to get results. In 1900, another strike resulted in miners 11¢ per hour. WOW! In 1936, it was 32¢, but often there was only three day work per week.

WAR IS NOT ALWAYS BAD FOR EVERYONE, EH?
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BTW, WW 2 was good for the Bell Island miners and their families. It brought the miners full employment. But keep in mind, because of mining accidents, it was safer to go to war than work in the mines. And though miners helped win the war they did not get any kind of post-war aid as veterans did to help them get a better education.

Not long after the war, in 1947, I earned 58¢ an hour, which helped me get my start on a university education.
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When the King family was not busy working in the mines there were busy growing things, catching fish, mending shoes and boots, building boats, cutting each others hair and the like. In 1937-1938 we even built the first house we owned. And I am proud to say that that year I did my share, and the house we built is still in the King family.

The point I make here is this: There was no lack of supply and demand; no lack of work to be done. What was lacking was the imagination to create a better money system.

The real problem was--and, for many, still is: there was not enough cash to encourage, and compensate, people to work for each other and to buy things which had to be imported. Things like imported goods, luxury foods, cars, clothing, bicycles, sports equipment, and the like, were only for the few well-to-do.
BTW, using http://www.viatrade.ca a group and others like it, a group of us are developing systems which will help people do more than talk about it.

WAY BACK, WE MENTIONED http:www.transaction.net
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Long before the current crisis, a group of us, who make no claim to being professional economists, here have been saying in this and other forums: The current debt-based and fiat monetary system, created by the central banks, is the basic cause of the false booms and devastating busts. So we ask: When are we going to learn?

We challenge any readers who are trained in economics to refute the above and please check out the following:
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http://mises.org/story/3146

THE CENTRAL CULPRIT IS FRACTIONAL-RESERVE BANKING
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VERY INTERESTING:E-Barter Versus Fiat Money: Will Central Banks Survive?

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=530686

Recently, I wrote an article based on chapter 14 of the book, Understanding Media (1964), by the late media guru, Marshall McLuhan.

Chapter 14 is about money--a very important medium--an extension of the self, which we all use. Interestingly, McLuhan--then a professor of English at the University of Toronto, made no mention of fiat money.

Rather than post the full article here, you may like to check out the following link where it, plus responses, is posted:


http://ragingdebate.com/economy/in-the-beginning

UFANA -- USURY FREE ASSOCIATION OF NORTH AMERICA
www.ufana.org

A week ago I participated in a two-day conference, to which I was invited to speak both days, on the nature, function and value of usury-free--that is zero interest on the use money over time money.

THE MUSLIMS WERE NOT THE FIRST
By the way, the interest-free loaning of anything, including gold, silver and bronze coins was forbidden by the ancient Hebrews (Deuteronomy 23:19 & Psalm 15); the Christians, until modern times, and of course Islam (622 CE).

USURY-FREE IS NOT COST FREE
Keep in mind that usury-free financing does not mean cost free money. It is a method of sharing wealth so that all who participate have a fair chance of making an honest profit and get to contribute to the common good. In the light of what I heard at the UFANA CONFERENCE, In my opinion: had this system been the place in North America, and other wealthy areas of the world, the recent FINANCIAL CRISIS AND MELTDOWN--the root cause of so much soffering-- would not have happened.
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Post-Conference Report

UFANA Conference Successfully Showcases Growth and Potential of Islamic Finance in North America

TORONTO – April 5, 2010 – The Canadian market is ready for Islamic Finance concluded global bankers, politicians and lawyers who attended the Usury Free Association of North America (UFANA) conference in downtown Toronto last week.

Senior representatives from four of the five big Canadian banks attended the conference, as did representatives from the Ontario Ministry of Finance and the Federal Ministry of Finance who are busy preparing reports which will be shared internally on the growth and potential of this alternative financing industry. Among the other dignitaries in attendance were representatives from the Ontario Division of Federal Trade Commissioner's Office and the Toronto Financial Services Alliance (TFSA) both preparing soon to be released reports.

“Islamic financial products should not present any particular difficulties under Canadian accounting standards,” says Guy David, a speaker at the conference representing the Canadian law firm Gowling, Lafleur Henderson LLP. Mr. David helped write an 88-page study which was done at the direction of Canada Mortgage and Housing Corp., in association with his law firm.

The conference was very well received as close to 300 participants attended the two-day affair. Over 30 speakers shared their insights into one of the world’s fastest growing financial industries as experts from Malaysia, Singapore, Bahrain, Qatar, UAE, UK and Italy all spoke on the huge potential of Islamic finance globally and in Canada.

Many presenters were also invited to speak at the ninth annual Harvard University Forum on Islamic Finance held at the storied university's law school just prior to the UFANA conference.

The conference was sponsored by 12 institutions, including some of North America’s most successful Islamic financial firms: Guidance Residential, which has financed just under $2 billion in Islamic residential mortgages in the United States; University Islamic Financial Corporation (USA) – which offers an Islamic finance window in its conventional bank; and Canada’s leading Islamic financial institution, UM Financial.

CANADIAN FINANCIERS NOW INTERESTED
Bay Street law firms Cassels & Brock chaired the day- long session on Capital Markets, while Gowlings and Blakes sponsored and had legal experts at the conference. Allen and Overy, Scotia McLeod and Abu Dhabi Commercial Bank were other noteworthy sponsors.

UFANA Conference 2010 included announcements by Canada’s leading Islamic financial institution, UM Financial, regarding its advising role in the possible issuance of close to $2 billion in Sukuk, its multicultural bank project and the official launch of theiFreedom Plus MasterCard.

The morning session on the first day was opened by Liberal MPP and Ontario Liberal Party President and Parliamentary Assistant to the Minister of Revenue, Yasir Naqvi (Ottawa Centre). Attendees were also welcomed by federal NDP MP Brian Masse (Windsor West).

Keynote addresses were given by retired United Church Minister Reverend Lindsay King.

The conference included leading Shariah scholars such as Sheikh Nizam Yaqoobi (Bahrain), Dr. Aznan Hassan (Malaysia) and Mufti Barkatullah (UK). Islamic economist Dr. Nejatullah Siddiqui was also present.

The conference spurred media attention on Islamic finance, with the National Post covering the product launch of the iFreedom Plus MasterCard on the front page of its Wednesday edition and Investment Executive publishing a feature online report on the conference.

Experts at the conference appeared on CBC News Network, CBC Radio, Radio-Canada, OMNI News and the Business News Network. Meanwhile, reporters from Dow Jones, Reuters, Forbes, Canadian Business magazine, Religion News and other outlets will be covering the event in their future issues. UFANA’s website will be updated with a quarterly newsletter, presentations and video of the lectures over the next week.

UFANA also hosted a community event attended by over thirty community leaders on Monday night and held a free public event on Tuesday night which was attended by close to 200 people.

MEDIA COVERAGE:

Investment Executive:
Potential for Islamic finance in Canada is huge

BNN (TV):
Investing in Gulf Bonds
Huge Potential for Islamic Finance in Canada
North America's First Shariah-Compliant Interest-Free Credit Card

National Post (National Newspaper):
Muslims offered interest-free plastic
Banking opportunity: Products target growing pools of cash

CBC News Network (TV):
iFreedom Plus MasterCard on Politics with Evan Soloman

CBC Radio:
iFreedom Plus MasterCard on Metro Morning (Toronto)

Radio-Canada (French TV):
Une carte compatible avec l'Islam

CBC.ca:
MasterCard offers card aimed at Muslims

Montreal Gazette:
Muslims disconnected from retail banking

Ottawa Citizen:
MasterCard offers card aimed at Muslims

Calgary Herald:
MasterCard offers card aimed at Muslims

Edmonton Journal:
MasterCard offers card aimed at Muslims

Vancouver Sun:
MasterCard offers card aimed at Muslims

Anglican Journal:
Muslims in North America probe growing Islamic financial sector

TESTIMONIALS:

"This was an important conference that deepened our understanding of Islamic finance. We appreciated the opportunity to hear from highly-regarded Shari’ah scholars and from leading practitioners in law and finance."

- Patrick Deutscher, Assistant Deputy Minister and Chief Economist, Office of Economic Policy, Ontario Ministry of Finance

"As the editor of the UFANA newsletter, I was very impressed with the conference and it was well organized and well attended. It was one of the more stimulating Islamic finance conferences I have attended. There will be more information, including all of the presentations with video available on the UFANA website shortly. It is an honor of mine to work with an organization working to promote Islamic and other usury-free financial services within North America.

"One of my most interesting conversations was with the Rev. Lindsay King who shared his interpretation of the Biblical verses in Deuteronomy that restrict interest-based lending by Christians and Jews. I look forward to continuing to work with UFANA as the organization builds on this recent conference."

- Blake Goud, North American Islamic Finance Expert

"Over the past few days, I've described the conference to my friends and family as an amazing experience with a lot of useful takeaways. I benefited greatly from the breadth of topics covered and the invaluable advice provided by the speakers and other attendees who have made strong strides in this field around the world. Thank you for all organizing such an amazing event and bringing together such a fantastic panel of speakers."

- Sumaiya Tasneem, Consultant, Enterprise Risk, Deloitte

UFANA
Tel: (416) 786-9296
Fax: (416) 424-4199
www.UFANA.ORG