NIE media dramas aside, the beat goes on

Islamic scholars have been seeking to devise a global banking system that would serve as an alternative to the usury-based scheme now in control internationally, and Iran has led the way in devising that model. Iran is characterized as a democratic Islamic republic, which enforces Islamic principles not only morally but legally and politically. The American-backed Shah of Iran was overthrown in 1979, ending 2,500 years of monarchical rule. All domestic Iranian banks were then nationalized, and the government called for the establishment of an Islamic banking system that would replace interest payments with profit-sharing. Iran's state-owned central bank issues the national currency, with the seigniorage accruing to the government rather than to private banks.16 The Iranian government is among the few to have very little foreign debt. It uses its state-owned banks to make loans and credits available to industrial and agricultural projects. The most unique feature of the Iranian banking system, however, is that it follows the Islamic proscription against usury. That means loans are made interest-free.17

At least, that is true in principle. To make their system work with the prevailing scheme, Islamic economists have had to come up with some creative definitions of "interest." Assuming Iran can develop a workable alternative model, however, it might well threaten the usury-based banking system that now dominates international finance and trade. If governments were to start doing what banks do now – advancing "credit" created out of nothing with accounting entries – they could sidestep the hefty interest that is the principal cost of most government programs today. It has been estimated that eliminating interest charges could cut the average cost of infrastructure, sustainable energy development, and other programs in half.18 Third World economies might finally escape the iron grip of the international bankers, bringing a 300-year global banking empire crashing down.

The size of the stakes was suggested by Tarek El Diwany, a British expert in Islamic finance and the author of The Problem with Interest (2003). In a presentation at Cambridge University in 2002, he quoted a 1997 United Nations Human Development Report which said:

Relieved of their annual debt repayments, the severely indebted countries could use the funds for investments that in Africa alone would save the lives of about 21 million children by 2000 and provide 90 million girls and women with access to basic education.

El Diwany commented, "The UNDP does not say that the bankers are killing the children, it says that the debt is. But who is creating the debt? The bankers are of course. And they are creating the debt by lending money that they have manufactured out of nothing. In return the developing world pays the developed world USD 700 million per day net in debt repayments." He concluded his presentation:

But there is hope. The developing nations should not think that they are powerless in the face of their oppressors. Their best weapon now is the very scale of the debt crisis itself. A coordinated and simultaneous large scale default on international debt obligations could quite easily damage the Western monetary system, and the West knows it. There might be a war of course, or the threat of it, accompanied perhaps by lectures on financial morality from Washington, but would it matter when there is so little left to lose? In due course, every oppressed people comes to know that it is better to die with dignity than to live in slavery. Lenders everywhere should remember that lesson well.19

That could explain the big guns trained on Iran, and the tightening of economic sanctions against it. Dominoes that won't fall into the debt trap must be pushed. Like in the brutal attacks in Lebanon in July 2006, the military targets in Iran are liable to be economic ones – ports, bridges, roads, airports, refining infrastructure.20 The threat posed by Iran's alternative economic model will be obliterated by blasting it back into the Stone Age.

BEHIND THE DRUMS OF WAR WITH IRAN:
NUCLEAR WEAPONS OR COMPOUND INTEREST?
Ellen Brown, November 13th, 2007, The Web of Debt