Islamic Finance-U.S. Style
The U.S. government today sold 4-week Treasury bills for 0.00%, yeah that's right zero, and afterwards it was actually trading at a negative 0.01%. Why anyone would want to pay to put money in something beyond me, but these are really crazy times of course. Even so, this is likely basically as low as it gets.
This is one explanation for why the interest cost for the U.S. government actually fell during the first two months of fiscal 2009 despite a soaring debt level.
Zero interest rates should mean that financing of the U.S. deficit has now become at least partially sharia-compliant (Islamic Sharia law forbids the taking of interest, in case you didn't know). I don't know if this will really make al-Quaeda and similar groups much less pissed off at the U.S. government, but it is interesting to see how the U.S. government is now introducing a new version of Islamic finance (usually in Islamic finance, interest is de facto charged, only it is formally made to look like rent or profit)
This is one explanation for why the interest cost for the U.S. government actually fell during the first two months of fiscal 2009 despite a soaring debt level.
Zero interest rates should mean that financing of the U.S. deficit has now become at least partially sharia-compliant (Islamic Sharia law forbids the taking of interest, in case you didn't know). I don't know if this will really make al-Quaeda and similar groups much less pissed off at the U.S. government, but it is interesting to see how the U.S. government is now introducing a new version of Islamic finance (usually in Islamic finance, interest is de facto charged, only it is formally made to look like rent or profit)
posted by stefankarlsson at 8:40 PM
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