1973 oil crisis

The 1973 oil crisis began on October 17, 1973, when the members of Organization of Arab Petroleum Exporting Countries (OAPEC, consisting of the Arab members of OPEC plus Egypt and Syria) announced, as a result of the ongoing Yom Kippur War, that they would no longer ship oil to nations that had supported Israel in its conflict with Syria and Egypt (the United States, its allies in Western Europe, and Japan ).The same time, OPEC members agreed to use their leverage over the world price-setting mechanism for oil in order to raise world oil prices, after the failure of negotiations with the "Seven Sisters" earlier in the month. Because of the dependence of the industrialized world on crude oil and the predominant role of OPEC as a global supplier, these price increases were dramatically inflationary to the economies of the targeted countries, while at the same time suppressive of economic activity. The targeted countries responded with a wide variety of new, and mostly permanent, initiatives to contain their further dependency.

The "New Seven Sisters"

On 11 March 2007, the Financial Times identified the "New Seven Sisters": the most influential and mainly state-owned national oil and gas companies from countries outside the OECD. They are:

1. Saudi Aramco (Saudi Arabia)
2. JSC Gazprom (Russia)
3. CNPC (China)
4. NIOC (Iran)
5. PDVSA (Venezuela)
6. Petrobras (Brazil)
7. Petronas (Malaysia)

The FT article notes that Pemex of Mexico is excluded from such a list.

"This article purpose for knowledge sharing taken from relevant source" -redzuank

Lowering Dollar Reserves Important

"This is what should most countries do in order to prevent a decrease in the value of their foreign reserves. There are so many solution that so many blind to see (in other word - FEAR except Ahmadinejad) ." - redzuank

Iranian Presidential Advisor: Lowering Dollar Reserves Important

06/19/2008

The Iranian government's decision to convert its dollar-denominated foreign reserves to non-dollar reserves is critical and needs to be properly publicized by the country's officials, Mujtaba Samereh-Hashemi, Iran's Senior Presidential Advisor, told reporters at the end of a cabinet meeting.

The conversion prevented a decrease in the value of Iran's foreign reserves, considering the more than 20% depreciation of the dollar against major currencies, Samereh-Hashemi added.

Since last year, Iran's oil transactions have been conducted in euro and yen, as the dollar has been completely replaced by these two major currencies.

PRESSTV, Iran, June 18, 2008

Ahmadinejad Says Glut In Oil Market, Calls For Setting Up Oil Bourse, OPEC Bank

Iranian President Mahmoud Ahmadinejad said today that there was a glut in the oil market, and called for an oil bourse and an OPEC bank to be set up in order to optimize the situation in energy market.

Ahmadinejad was speaking at the 29th meeting of the Council of Ministers of OPEC Fund for International Development, currently underway in Isfahan, in which high-ranking officials from 12 OPEC member countries are participating.

Ahmadinejad added, "I repeat my suggestion made six months ago at the OPEC summit in Riyadh, to create a basket of credible currencies which would be the basis for oil transactions.... A combination of the world's valid currencies should become a basis for oil transactions or OPEC member countries should determine a new currency for oil transactions."

He noted that the final way to solve existing problems was establish a justice-based political and economic system.

Source: IRNA, Iran, June 17, 2008

"It is a great relevant suggestion from Ahmadinejad isn't it? A JUSTICE-BASED POLITICAL & ECONOMIC SYSTEM. Until today we heard no respond from OPEC especially Saudi Arabia. Just imagine if oil transaction or international trading are no longer or lesser conducted in USD. It is main reason Iraq was invaded. And now Iran face a same problem as Iraq. The good thing is, it is not easy for US to invade Iran as what they did in Iraq. The main factor why too many country still using USD for international trade is simple; US military threat."-redzuank

Please see this video http://www.youtube.com/watch?v=EEpp9E6aJGw&feature=related

from wikipedia:
"Since currently worldwide oil sales are denominated in U.S. dollars, changes in the value of the dollar against other world currencies affect OPEC's decisions on how much oil to produce. For example, when the dollar falls relative to the other currencies, OPEC-member states receive smaller revenues in other currencies for their oil, causing substantial cuts in their purchasing power. After the introduction of the euro, pre-invasion Iraq decided it wanted to be paid for its oil in euros instead of US dollars causing OPEC to consider changing its oil exchange currency to euros, although after Iraq's invasion, the interim government reversed this policy, and the subsequent Iraq governments stuck to the US dollar.^[17] Member states Iran^[18] and Venezuela^[19] have undergone similar shifts from the dollar to the Euro."

How the Banks are Subverting Islam's Ban on Usury

By Tarek El Diwany
Financial Times July 14 2006
www.ft.com


In about 1220 a canonist named Hispanus proposed that, although usury
was prohibited, a lender could charge a fee if his borrower was late in
making repayment. The period between the date on which the borrower
should have repaid and the date on which he did repay, Hispanus termed
"interesse", literally that which "in between is".

Soon, the money lenders of Europe were adding to the church's
theological dilemmas with the Contractum Trinius. Here, the lending
party would invest money with a merchant on a profit and loss sharing
basis, insure himself against a loss of capital and sell back to the
merchant any profit above a specified amount. In isolation each of these
contracts was viewed as permissible by the church scholars, but their
combination produced an interest-bearing loan in all but name.

Today, those who wish to make a living from lending money are adopting
the same approach to defeat the usury prohibition in Islam. Combining
Islamically permissible contracts to produce interest-bearing loans has
become the specialism that is "Islamic banking". The fact that some
leading Islamic scholars are being paid hundreds of thousands of dollars
to give religious judgments by the very institutions whose products they
are judging is, to say the least, a conflict of interest. But the
problems run deeper than this. Even if 98 out of 100 scholars judge that
a product is prohibited, an Islamic bank can employ the two who permit
it. In effect, the banks are able to choose the rules of the game while
telling everyone else that they are only following scholarly advice.

Overarching these issues of moral hazard and legal semantics, looms the
more fundamental question of whether Islamic finance can be practised
within an interest-based monetary framework.

Today's monetary system developed from the practices of European
goldsmiths in the 17th century who accepted deposits of gold coins for
safe-keeping. Receipts for such deposits would often be issued in
"bearer" form and, with growing public familiarity, these came to be
accepted in payment for goods and services. The receipts had become an
early form of "bank money".

The goldsmiths were now in a position to transform themselves into money
lenders, but when the public came to borrow money it was paper receipts
not gold coins that the goldsmiths loaned them. This policy had the
great advantage that receipts could be manufactured at almost no cost,
while gold itself could not be. William Paterson, a founding director of
the Bank of England, was well aware of the commercial implications. "The
Bank hath benefit of interest on all moneys which it creates out of
nothing", said Paterson of his new bank in 1694.

Why, if the banker truly had the power to manufacture money, did he not
simply print receipts and spend them on his own consumption? The answer
was largely one of commercial risk. Spent receipts would in due course
return to the bank for redemption in gold, gold which never existed in
the first place. By lending the receipts instead, the banker could
charge interest on the amount lent. Upon repayment, the receipts could
be destroyed as easily as they had been manufactured, but the interest
charge would remain as revenue. Thus, loans at interest and private
sector money creation became the two core components of commercial
banking.

The gestation of products within this very un-Islamic framework has
resulted in the ultimate mutant, an Islamic personal loan at 7.9 per
cent annual percentage rate courtesy of the Islamic Bank of Britain. How
different this is from the original vision of Muslim economists.

I propose that by segregating the payment transmission and money
creation functions, and by sharing profits and losses instead of seeking
interest payments come-what-may, bankers' motivations would be much more
closely aligned with those of their clients. A link would be
re-established between the financial sector and the real sector, with
beneficial consequences beyond the economic domain.

The resources and infrastructure of whole nations are increasingly being
sacrificed on the altar of interest-bearing debt. If Islamic banking
adopts a genuinely Islamic paradigm it can offer a solution to a world
hungry for alternatives. If it does not, it will enjoy a brief life as a
get rich quick bandwagon and then disappear into the relics of financial
history.

The writer is author of The Problem With Interest
(www.theproblemwithinterest.com)

Supremacy of Currency

"I would like to discuss in this subject 'Supremacy of Currency' which refer to Bretton Woods system. The system which is money backed by gold value. Since it is no longer used today, REVIEWING/REVISITING it is one of the option to stabilizing the world economics. Are you agree?"
-redzuank


Bretton Woods system

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states.

Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire for the United Nations Monetary and Financial Conference. The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944.

Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Bank for Reconstruction and Development (IBRD) (now one of five institutions in the World Bank Group) and the International Monetary Fund (IMF). These organizations became operational in 1946 after a sufficient number of countries had ratified the agreement.

The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold and the ability of the IMF to bridge temporary imbalances of payments. In the face of increasing strain, the system collapsed in 1971, following the United States' suspension of convertibility from dollars to gold.

Until the early 1970s, the Bretton Woods system was effective in controlling conflict and in achieving the common goals of the leading states that had created it, especially the United States

The MAD COWs of USA

US beef dispute grows into larger crisis in South Korea

"By BURT HERMAN, Associated Press Writer

SEOUL, South Korea - What began with high school students worried about the safety of U.S. beef has swelled into a major challenge to the government of new South Korean President Lee Myung-bak — culminating in protests of 80,000 people Tuesday who failed to be placated by his entire Cabinet offering to resign.

In weeks of street rallies by angry critics of Lee, what had been seen as the former businessman's strengths have instead been blasted as weaknesses. Nicknamed "The Bulldozer" for decisively pushing through projects as a Hyundai construction CEO and Seoul mayor, Lee has instead been labeled by protesters as a "dictator" who fails to heed public opinion and panders to American interests.

His December election win ended a decade of liberal rule and was seen as bringing more professionalism to the presidency, and also healing strained ties with the United States. But a string of Cabinet appointments in which nominees were forced to resign amid allegations of real estate speculation and other irregularities even before he took office in February made for a political honeymoon that went by with blinding speed even for South Korea, a country where rushing is a way of life.

That rush to succeed was why South Koreans elected Lee in a campaign where he cruised to a landslide victory on hopes he would inject new life into the country's economy. But with the global slowdown dragging on South Korea's export-driven economy and rising food prices fueling inflation, Lee found himself quickly hedging promises that the country could soon regain its earlier dynamism.

He planned to dig a canal down the center of the peninsula in a showpiece project to boost transport and tourism, but professors and environmentalists lined up against the idea.

Given all that, disappointment was already simmering when Lee's government pushed through a last-minute agreement to resume U.S. beef imports just before he met for his first summit with President Bush in April. Beef imports had been banned for most of the time since 2003, when a case of mad cow was discovered in cattle in the U.S., closing what had once been the third-largest market for American exports.

A sensational report on a popular news show raised worries about U.S. beef, even claiming that Koreans were more genetically susceptible to the human variant of mad cow disease.

High school students were concerned that the cheaper U.S. imports would be used in their school lunches without their knowledge, despite government pledges to enforce labeling of meat for the country of its origin.

Both Seoul and Washington insist U.S. beef is safe, citing the Paris-based World Organization for Animal Health.

"I certainly feel comfortable in assuring the consumers in the United States, as well as abroad, that this product is as safe as safe can be," U.S. Agriculture Secretary Ed Schafer said Tuesday.

The thousands of uniformed high schoolers carrying candles in calm vigils quickly grew into daily rallies — sometimes violent — as more groups latched on to the anti-Lee cause, raising issues about a range of policies including reforms for health care and the educational system.

Protests are a way of life in Korea and riot police are a common sight in the city center.

Still, Tuesday's protest — the largest-yet over the beef issue with 80,000 people — was on a scale not recently seen here. Police used shipping containers to block the capital's central thoroughfares to prevent crowds from marching to the nearby presidential Blue House.

Rallies continued until early Wednesday and police said they arrested about 20 protesters on charges of occupying major Seoul streets and causing traffic congestion. Candlelight vigils were planned for Wednesday night, according to police and protest organizers.

Tuesday's protest came on the anniversary of pro-democracy struggles that intensified in the late 1980s and eventually caused the downfall of South Korea's military-backed regime.

Earlier in the day, thousands of conservative, pro-government activists demonstrated near the site of the anti-U.S. beef rally.

The entire Cabinet offered to resign earlier Tuesday, but Lee did not say whether he would accept their departures. The president is accorded a healthy amount of power in the constitution, and the government reshuffle was not expected to affect Lee's ability to serve out his single, five-year term.

But even before he really got going, "The Bulldozer" is stuck in neutral and what he will be able to accomplish in office has been thrown into doubt.

___

Burt Herman is chief of bureau in Korea for The Associated Press."

Another unfair policy. Are we going to feed these Mad Cows?

What Do We Know About GOLD DINAR?

Gold Dinar

• •

A Gold Dinar is a gold coin first issued in 77 AH (696-7 CE) by Caliph Abd al-Malik ibn Marwan. The name “dinar” is derived from denarius, a Roman currency. The weight of the dinar is 1 mithqal (4.25 grams).

First Dated Coins

The first dated coins that can be assigned to the Muslims are copies of silver Dirhams of the Sasanian Yezdigird III, struck during the Caliphate of 'Uthman, radiallahu anhu. These coins differ from the original ones in that an Arabic inscription is found in the obverse margins, normally reading "In the Name of Allah". The subsequent series was issued using types based on drachmas of Khusru II, whose coins probably represented a significant proportion of the currency in circulation. In parallel with the later Khusru-type Arab-Sasanian coins first issued under the Well-Guided Caliphs of Islam, a more extensive series was struck with Khusru's name replaced by that of the local Arab governor or, in two cases, that of the Caliph. Historical evidence makes it clear that most of these coins bear Hijra dates. The earliest Muslim copper coins are anonymous and undated but a series exists which may have been issued during the Caliphates of 'Uthman or 'Ali, radiallahu anhum. These are crude copies of Byzantine 12-nummi pieces of Heraclius from Alexandria.

The First Silver Dirham

Silver Dirham

By the year 75 AH/ 695 CE Abd al-Malik had decided on changes to the coinage. A scattering of patterned pieces in silver exist from this date, based on Sasanian prototypes but with distinctive Arabic reverses. This experiment, which maintained the Sasanian weight standard of 3.5-4.0 grams was not proceeded with and in 79 AH/698 CE a completely new type of silver coin was struck at 14 mints to a new nominal weight of 2.97 grams. Unlike the contemporary gold coinage, this figure does not seem to have been achieved in practice. The average weight of sixty undamaged specimens of 79-84 AH is only 2.71 grams, a figure very close to that for a unique coin of 79 AH struck with no mint name (as was the standard procedure for the gold Dinars produced in Damascus). These new coins which bore the name of 'Dirham', established the style of the Arab-Sasanian predecessors at 25 to 28 mm. in diameter. Their design is composed of Arabic inscriptions surrounded by circles and annulets. On each side there is a three or four line legend with a single circular inscription. Outside this are three line circles with, at first, five annulets surrounding them. The side normally taken as the obverse has as its central legend the Kalima or shahada: "There is no god except Allah alone, there is no partner with Him'. Around it is the mint/ date formula reading "In the Name of Allah: this Dirham was struck in [mint name e.g. Damascus] in the year [e.g. 79 AH]". The reverse has a four line central inscription taken from the Surah 112 of the Quran; "Allahu Ahad, Ahallu-Samad, Lam yalid wa lam yulad wa lam yakul-lahu kufu-an ahad"'. The marginal legend states: "Muhammad is the Messenger of Allah, he was sent with guidance and the religion of truth to make it prevail over every other religion, averse though the idolaters may be" (Quran 9:33)

The First Gold Dinar

The gold coins were first struck to the contemporary standard of 4.4 grams and with one or more Arabic Standing figures on the obverse and an Arabic legend on the reverse. Dated coins exist from 74 AH and are named as 'Dinars'. These experimental issues were replaced in 77 AH, except in North Africa and Spain, by completely epigraphical designs very similar to the designs adopted for the silver pieces but with a shorter reverse legend and no annulets or inner circles. This type was used without appreciable change for the whole of Umayyad period, the coins being struck to a new and carefully controlled standard of 4.25 grams. This weight was reputed to be based on the average of the current Byzantine solidi, was called a mithqal, a term used earlier for 1/72 of a ratl. Evidence of the importance attached to the close control of the new Dinars is provided by the existence of glass weights, mainly from Egypt. They usually show the governor's name, sometimes the date but all marked with coin denomination.

The issues in gold from North Africa began as copies of the coins of Heraclius and his son (but with an abbreviated Kalima in Latin), the reverse 'cross on steps' losing in most cases its cross piece. Dinars, halves and thirds were struck, all to the new weight standard. Later coins are dated by the Indiction Number Method, from Indiction II (85/4) changing to the Hijra date in Roman numerals in 94 AH with Arabic phrases appearing in the field from 97 AH. In the year 100, North Africa came into line with the eastern issues although the mint is named as Ifriquiyah. The legends are shorter and the reverse has a new central inscription: "In the Name of Allah, the Merciful, the Compassionate". This was used also on the coins from Al-Andalus, and on the half and third Dinars, most of which show no mint but may well have been struck in Al-Andalus.

Specifications

Gold Dinar

Face Value	Purity	Weight	Weight Toz*	Diameter
1 Dinar	91.7% Gold	4.25 grams	0.1367 Toz	23 mm
2 Dinars	91.7% Gold	8.50 grams	0.2733 Toz	26 mm
8 Dinars	91.7% Gold	34.00 grams	1.0932 Toz	32 mm
1 Dirham	99.9% Silver	3.00 grams	0.0965 Toz	25 mm
5 Dirhams	99.9% Silver	15.00 grams	0.4823 Toz	27 mm
10 Dirhams	99.9% Silver	30.00 grams	0.9646 Toz	41 mm
* The exact weight of the coins is defined in grams; conversion to approximate troy ounces is given for informational purposes.

What are the Dinar & Dirham

The Islamic Dinar is a specific weight of 22k gold equivalent to 4.25 grammes.	The Islamic Dirham is a specific weight of pure silver equivalent to 3.0 grammes.

According to Islamic Law...

The Islamic Dinar is a specific weight of 22k gold (917.) equivalent to 4.25 grams.

The Islamic Dirham is a specific weight of pure silver equivalent to 3.0 grams.

Umar Ibn al-Khattab established the known standard relationship between them based on their weights: "7 dinars must be equivalent to 10 dirhams."

"The Revelation undertook to mention them and attached many judgements to them, for example zakat, marriage, and hudud, etc., therefore within the Revelation they have to have a reality and specific measure for assessment [of zakat, etc.] upon which its judgements may be based rather than on the non-shari'i [other coins].

Know that there is consensus [ijma] since the beginning of Islam and the age of the Companions and the Followers that the dirham of the shari'ah is that of which ten weigh seven mithqals [weight of the dinar] of gold. . . The weight of a mithqal of gold is seventy-two grains of barley, so that the dirham which is seven-tenths of it is fifty and two-fifths grains. All these measurements are firmly established by consensus." Ibn Khaldun, Al-Muqaddimah

How are the Islamic dinar used?

1.- The Islamic Dinar can be used to save because they are wealth in themselves.

2.- They are used to pay zakat and dowry as they are requisite within Islamic Law.

3.- They are used to buy and sell since they are a legitimate medium of exchange.

How much we produces (Petroleum)?

"Roughly Malaysia produces 650,000 barrels of crude per day. We consume 400,000 barrels leaving 250,000 barrels to be exported.

Three years ago the selling price of crude was about USD30 per barrel. Today it is USD130 – an increase of USD100. There is hardly any increase in the production cost so that the extra USD100 can be considered as pure profit.

Our 250,000 barrels of export should earn us 250,000 x 100 x 365 x 3 = RM27,375,000,000 (twenty seven billion Ringgit).

But Petronas made a profit of well over RM70 billion, all of which belong to the Government.

By all accounts the Government is flushed with money."

TDM

I would like to present the data (above) from EIA (Energy Information Administration) for your kind perusal.

Yeah we are the Nett Exporter.

Price Oil Hike What Say Ya?

Price Oil Hike What Say Ya?

“But be that as it may what could the Government have done to lessen the burden on the people that results from the increase in petrol price.

In the first place the Government should not have floated the Ringgit. A floating rate creates uncertainties and we cannot gain anything from the strengthened Ringgit. Certainly the people have not experienced any increase in their purchasing power because of the appreciation in the exchange rate between the US Dollar and the Ringgit. “ - Tun Dr Mahathir Mohamad : Price Oil


I made my findings above (table).Compared to Nett Exporter (petroleum) countries rather than Nett Importer (petroleum) countries such as Thailand and Singapore.