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Friday, December 08, 2006

Commodities and Islam

We've been hearing more about this -- commodities (and other trading) deals structured to follow Islamic law. For example, Citigroup created an Islamic Currency Swap.

Funny thing is they use metal to get around the ban on paying interest. If you hold an investment instrument for a certain period of time, the bank gives you metal to sell. That's a trading profit -- not interest.

One metal that can't be used is gold, but gold is money in Islam. But steel, copper, whatever.

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