Monday, January 16, 2012

RIFCON Seminar - Surviving 2012 Economic Meltdown


Attending this seminar last Saturday has opened my eyes and mind about something. 

The topics was interesting enough to know and that was the main points for me to attend the seminar – how to survive in this year 2012. 

Ok, first of all, this is my personal observations, opinions, notes taken from the seminar. I don't want to influence others nor to have a hugh extensive debate on this. You might agree and you might disagree on contents published here. Hopefully, this notes will bring much benefits to my friends and others.

Why 2012? And why not last years or the year after. Why the world economics are predicted to melt down this 2012 and not other years? Will we experience the economic recession and downturn again since 1997? Can we survive…and most precisely, can we…ordinary people with medium income range survive when the inflation rise and recessions are at their worst??? 

I have no answer on that and I’m not the expert to discuss or give solutions on that….but, there are few tips given by the speakers on how to handle and the most important is, to survive during the economic meltdown. 

I am not am economists nor a predictor to predict the economic conditions this year 2012. But, somehow…as an ordinary person, I can feel the economics stress in life. The price of basic needs are rising and government have to control tightly on certain basic goods to protect needy people and those who have low income. That is why…those middle income people did not feel the effect of price rise tremendously. The rich and richest will definitely doesn't feel the heat unless their price of luxury goods are rising too. I don’t know if they care so much on the price hikes of basic needs. That, u will need to ask them personally J 

Well, you may agree or you may disagree on the points and tips below given by the honorable speakers:

The 1st speaker was Prof. Dr. Ahmed Kameel Mydin Meera from UIA. I can’t remember his face and even I can’t remember whether he has taught me economics in my degree years there…hmmm, i think he has never been my lecturer those days :-) 

In his speech: 
  1. There is an imbalance in the monetary sector;
  2. Derivatives market absorb most of the money;
  3. Failure of Capitalism where the growth of money is more that the growth of real money where nowadays money = debt/loan. The more people require and ask for loans, the more money gain from commercial banks thus money eventually grows highly;
  4. Recessions is a destruction of money – any further explanations on this u can refer to Prof. :-)
There are several recommendations suggested by Prof. on what to do and what others including government, commercial and people can do?

What government can do?
  1. Food stamps – control the basic necessities; 
  2. Agriculture sector should be given the 1st priority; 
  3. Encourage complementary and community currencies; 
  4. Establish real money systems – GOLD as a measure of value; 
  5. Nationalized banks instead of commerciliazed banks; 
  6. Debt relief and eliminate RIBA. 
  7. In the long-term: 
    • Lowering the tax; 
    • Have a negative interest rate; 
    • Use GOLD based electronic credits. 
The 2nd speakers were Puan Hajjah Nik Mahani Mohamad (Director of Kelantan Golden Trade). The topic presented was about Dinar & Dirham. Why Dinar and Dirham and not fiat money??? Why RIBA is prohibited and why ALLAH s.w.t declares war on RIBA? 

In her speech:
  1. Predicted that gold and silver will rise in the economic meltdown
  2. Malaysian standard of gold has been set by Sulthan. However the best method to follow is the standard of Saiyidina Umar Al-Khattab r.a on setting the standard of dinar and dirham. The questions arised??? – will Sulthan stands up for this solutions??? – Personally, I don’t know, i preserve my opinion on this. You will have to ask the Sulthan on this issue.
  3. Quoting (Surah Al-Baqarah 2: 278-279) in her speech,
“O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers.” 
Malay 
“Wahai orang-orang yang beriman! Bertaqwalah kamu kepada Allah dan tinggalkanlah (jangan menuntut lagi) saki baki riba (yang masih ada pada orang yang berhutang) itu, jika benar kamu orang- orang yang beriman. 
And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.” 
Malay 
“Oleh itu, kalau kamu tidak juga melakukan (perintah mengenai larangan riba itu), maka ketahuilah kamu: akan adanya peperangan dari Allah dan RasulNya, (akibatnya kamu tidak menemui selamat). Dan jika kamu bertaubat, maka hak kamu (yang sebenarnya) ialah pokok asal harta kamu. (Dengan yang demikian) kamu tidak berlaku zalim kepada sesiapa, dan kamu juga tidak dizalimi oleh sesiapa.” 
The verses clearly stated that ALLAH and His Messenger will declare war on those believers who practicing Riba. But why we still practising the Riba in our daily live? We have loans with riba’, we have credit cards with riba’ inside if we don’t pay full amount of what we spend, we practising riba in our spending intentionally or unintentionally. 

Riba’ is the 2nd biggest sin after syirik, but why we extensively promoting riba in our life??? – this is the major points to ponder, it struck my heart and I’m wondering if I’m extensively practising riba in my whole life. May ALLAH s.w.t safe my soul and forgive me for all my mistakes and wrong doing! 

She explained further on how the exercise of riba’ will eventually collapsing the economy as a whole. – this one, I cannot be able to elaborate more. It’s in the recording or in her speech notes. This is for us to think further.

The 3rd speakers, are Tuan Haji Aman Tahir. Well, this one is interesting :-). He has given tips and tricks on how to survive during the economic meltdown. Some of you might agree and some might disagree on his recommendations: 
What you should keep in for your family???? 
  1. RICE (basic food) – keep a lot of rice. He told us that he has hundreds of bags of rice in his home….well, having said this, if you are a rice taker, then buy more rice NOW! And standby the stocks for a few years. (Beras ada tarikh luput ke? Saya rasa takde…betul tak?) 
  2. Buy more GOLD 
  3. But more SILVER. 
Whenever, money has no value in the future, gold and silver will be the most valuable things to trade for food or basic needs. Both of the commodities will eventually rise high and those who have no gold and silver, even though they have millions of money will be the poor. What more to those who have no money, no gold and no silver like us??? We will be the most poorest people in the whole world when money, I mean the fiat money is no longer valuable. Your 1 millions USD might turn to 1USD when money is no longer valuable. So, buy gold and silver nowww. 

Is it too late to plan and act during this brink of the world??? Nope! 
Then, starts planning now. He suggested us to re-concile, re-plan the income received monthly or yearly: 
  1. The income received should be greater than the liabilities; 
  2. Reduce your liabilities – pay your loans A.S.A.P and not to pay only the minimum outstanding on your credit cards, pay your utility billss; 
  3. Reduce your utility expenses – if you have internet, use internet to get in touch with your family and not with calling. U can use voice call, video calls etc, reduce your electric bills, less tv’s and more reading books; 
  4. Reduce your un-necessary expenses such as new shoes, new handbags, new tvs, new cars, new on everything that u doesn't need, entertainments-movies etc; 
  5. Spend only on basic needs such as food and beverages; 
  6. Eating in and not eating out. Cook your daily meal; 
  7. Increase your assets – at least assets vs liabilities will slightly balance out your lifestyle. Do not engage in more liabilities when your liabilities is greater than assets. 
It is not true that when you have more income, you will have more purchasing power, thus you will have more savings. In this case, you will tend to buy unnecessary things mostly to please others and not to fulfill your basic needs. You will tend to drive Mercedes instead of kelisa, you will tend to buy large tv’s at home while you are rarely at home. You will buy big house but you only have 2-3 people inside living in the house etc. 

Tuan Haji Aman Tahir quotes, “It is not how much money you earn, it is how you spend the money that makes you rich!” – so, have more assets and not liabilities.

Last but not least, an interesting lectures given by Sheikh Imran N. Hosein. This one is in the recording. I hope I have more time to extract the "intipati" from his lecture next time...InsyaALLAH.

And now! what is my actions towards this??? -  I might buy silver and gold after this or I might leave it to the government to settle this economic meltdown....i don't know. It might take me sometimes to digest this. Personally, I might want to settle loans with riba' first as it is the 2nd biggest sin after syirik. While collecting gold and silver as an assets, for me personally, it is useless if you have loans with riba'. You might want to settle all the loans with riba' first or shifting your riba' loan to Islamic loan before adding up your assets with gold and silver. Well, you might agree or disagree with me on this.

My friend advice me to buy gold and silver now as a preparations for our rainy days. Most of the speakers also advice the same thing. Currencies and stocks will no longer an investment in the future. It is the time for gold and silver. If you have money...i mean, extra money you might need to invest in gold and silver. Buy more gold and silver rather than buying stocks, put the money in ASB or other commercial banks that exercising and practicing Riba' extensively, or putting the fiat money in Islamic Banks that have very minimal profit sharing to the investors.

While collecting our gold and silver, do not forget to pay our zakat on gold and silver. 

Allah s.w.t says in Quran (Surah At-Taubah:34)
"Wahai orang-orang yang beriman! Sesungguhnya banyak di antara pendita-pendita dan ahli-ahli ugama (Yahudi dan Nasrani) memakan harta orang ramai dengan cara yang salah, dan mereka menghalangi (manusia) dari jalan Allah (ugama Islam). Dan (ingatlah) orang-orang yang menyimpan emas dan perak serta tidak membelanjakannya pada jalan Allah, maka khabarkanlah kepada mereka dengan (balasan) azab seksa yang tidak terperi sakitnya."
 Wallahu Ta'ala A'lam.
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