Tuesday, May 12, 2009

Pessimism is the Ultimate Kufr

The news media and the commentators are quite busy making apocalyptic forecasts ranging from the demise of America as a superpower to the imminent collapse of Pakistani state. For example, Gerald Celente, the CEO of Trends Research Institute, has said that by 2012 America will be an undeveloped nation, marked by squatter rebellions by those who refuse to give up their homes or else take over the homes of others. Former Bush administration adviser David Kilcullen has opined that "We're now reaching the point where within one to six months we could see the collapse of the Pakistani state, also because of the global financial crisis, which just exacerbates all these problems. . . . The collapse of Pakistan, al-Qaeda acquiring nuclear weapons, an extremist takeover -- that would dwarf everything we've seen in the war on terror today." The conversation appears to dominated by Chicken Littles screaming "the sky is falling". In my attempts to understand the prevailing pessimism, I found the following article written by American Muslim activist and former Nixon adviser Robert D. Crane which lays out the Islamic perspective. Here is the article published by The American Muslim website late late year:

One of the most astute Saudi investors has expressed concern about the forecast by Gerald Celente shortly before Christmas, 2008, in an interview with Fox News that a social revolution will be sparked during the next four years by the collapse of the American economy followed by an ensuing inflation in a continuing downward spiral unlike anything in American history.

Celente, who is CEO of Trends Research Institute, has the best track record in the professional forecasting industry, so when he speaks people listen. He was almost alone in predicting well in advance the 1987 stock market crash, the 1990 collapse of the Soviet Union, and the 1997 Asian Currency Crisis. More than a year ago, in November, 2007, he told the UPI that the following year would be known as “The Panic of 2008,” adding that “giants would tumble to their deaths,” as indeed happened with Lehman Brothers, Bear Stearns, and other untouchables. He forecast the sub-prime mortgage collapse and a massive 90% devaluation of the dollar from a failed rescue effort.

His credentials are respected by everyone. CNN Headline News says, “When CNN wants to know about the Top Trends, we ask Gerald Celente.” CNBC comments, “There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about.” The Wall Street Journal advises, “Those who take their predictions seriously consider Gerald Celente and the Trends Research Institute.” The New York Times explains that, “Mr. Celente tracks the world’s social, economic, and business trends for corporate clients.” The Atlanta Journal-Constitution adds, “Gerald Celente is always ahead of the curve on trends and uncannily on the mark.” The Los Angeles Times asserts that, “The Trends Research Institute is the Standard and Poors of popular culture.” The New York Post opines that, “If Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.”

What has especially caught the attention of both economic and political leaders around the globe is Celente’s forecast of a social and political revolution sparked by the economic devolution. He predicts food riots, accompanied by a tax rebellion. We may see this as early as April 15th, 2009. He says that by 2012 America will be an undeveloped nation, marked by squatter rebellions by those who refuse to give up their homes or else take over the homes of others. “There is going to be a lot of homeless, the likes of what we have never seen before. Tent cities are already sprouting up around the country and we’re going to see many more.” Christmas as a retail bonanza will be a distant memory, reflecting a situation that he says will be “worse than the Great Depression,” because the so-called safety net will collapse.

As a forecaster of sociological change, Celente warns that “there’s going to be a lot of crime” at all levels “worse than in the last 1929 depression” and that the growing wealth gap between the rich and the middle class will threaten social order because the middle class everywhere in the world will become a revolutionary class using knowledge, resources, and skills “to shape transnational processes in their own class interest.” He warns, “There will be a revolution in this country, and we’re going to see a third party in response to the bloodless coup by Wall Street” supported by “a huge underclass of very desperate people with their minds chemically blown beyond anybody’s comprehension.”

This all sounds like the sky is falling, but the prediction both in its parts and in its whole is fallible and has been forecast before. Celente’s horror scenario was actually expected and welcomed 23 years ago by Norman Bailey, then assistant director for international economics in President Reagan’s National Security Council, who was the principal supporter of the Presidential Task Force on Economic Justice, for which I served as Chairman of the Financial Markets Committee until the necessary remedies were dropped as too controversial and therefore premature.

Norm Bailey said that only a real financial catastrophe could make possible the shift from debt to equity in finance and from concentrated to broadened capital ownership as the only means to narrow the wealth gap and as the only means to avoid a revolution that would take from the existing haves and eventually destroy global civilization.

As a lifetime professional long-range global forecaster, it has amazed me that anyone could be surprised by the “crisis of 2008,” other than by the fact that it took so long. Two and a half years ago, Norm Kurland and I founded The American Revolutionary Party (http://www.americanrevolutionaryparty.us) precisely to reveal the most fundamental flaws of Keynesian economic theory and of NeoCon political theory and to advocate equally fundamental remedies based on the theoretical foundation of binary economics developed by Louis Kelso and Mortimer Adler half a century ago. These have been further developed by the Center for Economic and Social Justice (http://www.cesj.org) during the past quarter century, and in practice by its investment banking arm, Equity Expansion International, of which I was one of the five founding principals.

The problem of Celente and of almost all of the 100 forecasting and 100 planning techniques that I summarized as chairman of a big study on the subject in 1980 for Charles Williams Associates in a contract for the National Security Council is that they rely so heavily on existing trends and on trends that are already so observable that they cannot be ignored. They ignore the exogenous variables that are still under the radar and may be entirely outside the paradigmatic parameters of establishment thinking.

Celente is right on the mark when he predicts the rise of a major third party, but he does not envision any solutions that can make a difference and invalidate his conclusions. More specifically he ignores the universal principles of what may be called Islamic economics, not the glitsy stuff of the so-called Islamic banks but the maqasid al shari’ah or universal and essential purposes of justice as taught principally in the haqq al mal of classical Islamic thought, first revived in the modern era by Grand Mufti Ibn Ashur’s book, Maqasid al Shari’ah, published in 1946 and translated by the International Institute of Islamic Thought in 2007. These provide a new paradigm ready to replace the bankrupt paradigm of concentrated power that dominates in both socialism and capitalism.

At a most fundamental level the catch phrase, “Islam is the Answer,” is true, because it teaches that the spiritual and the material can and should be mutually reinforcing. Without specific content, however, it is meaningless and serves only to marginalize the key role of the human person in the maqsud of haqq al nafs (the duty to respect the human person or soul) as the basis for judging human responsibilities and rights, and the key role of the means of production (capital) in producing wealth, elaborated in the maqsud of haqq al mal, and therefore the need for new institutions to actualize the universal, individual right to capital ownership as the key to both economic and political justice.

Celente’s forecast of the next four years is trend bound, which guarantees that it is wrong, since trends never continue independently of unanticipated events and forces. This is especially true in an era of paradigmatic unraveling, when the negentropic or dynamic power of a new paradigm, according to the laws of chaos theory, suddenly replaces the old dying or entropic one.

Perhaps we are not yet at the point of paradigmatic revolution, because President Obama’s advisers seem inclined to focus on saving the old paradigm of concentrating power in order to achieve stability. Perhaps the paradigmatic shift will come too late to avoid global civilizational collapse, but there is hope in the fact that human beings often deviate unintentionally from the expected, both individually and in groups, as shown by the major study that I directed at Charles Williams Associates for the National Security Council in 1981-82 to determine why all ten of the major, long-range, global forecasts had proved to be grossly wrong.

Predicting the future is playing God, which is why the mathematical modeling that drives Wall Street is so polytheistic. Forecasting the future, on the other hand, can serve merely to warn and/or to inspire by posing and perhaps ranking alternative futures through the use of more holistic techniques, such as scenario building. Since reality exists in quality more than in quantity, quality usually drives quantity over the long run. Since the present is bound by the past, but the future is not bound by the present, Celente’s pessimism is unnecessary. Celente’s warnings may turn out to be accurate over the short run of a single U.S. presidential term of office, because quantitative projections right now are all downward by almost every indicator. Nevertheless, over a longer period of time, and even within as few as four years, the revolution that he forecasts may be qualitatively self-correcting before it becomes destructive of civilization.

Such counter-intuitive optimism, otherwise known by skeptics as naivete, is in accordance with the Qur’anic principle known as “facilitation,” whereby God facilitates both the downward spiral known as istidraj, from which at some point there can be no return, and the upward spiral known as ma’ al usri yusra, “with every difficulty there is relief” Surah al Inshirah 94:5. This is designed to teach us that we have the free will to determine our own future both as persons, as nations, and as entire civilizations. There is no excuse for pessimism, because Allah is beyond time and space and therefore knows the future, which includes our free will to determine it.

Pessimism is the ultimate kufr, because it results from reliance on ourselves as the only power in the world. Optimism is the product of taqwa, which results from divinely given awareness and love of God and leads to our reliance on a transcendent power beyond ourselves, which is the very definition of Islam.

Related Links:

Pakistan's Demise Imminent

The American Muslim

The Trend Research Institute


Anonymous said...


I really would not know whether this is an article by you or reproduced.

I have been following the Gerald for at least now one year. It is no great a prediction by him but his strict following to the economic rules. America has been living on deficit and borrowing from the world.

Source : Time of india 18/01/2009

Gulf states lost $2.5 trillion to credit crisis in four months

Zainab Fattah & Camilla Hall

The global financial meltdown has cost Arab nations $2.5 trillion in four months and led to 60% of development projects in the Persian Gulf region being put off or scrapped, Kuwait’s foreign minister said.

“This just shows the huge damage caused by the crisis,” Sheikh Mohammed Sabah Al-Salem Al-Sabah, also Kuwait’s acting oil minister, said on Friday at a news conference during the Arab Economic Summit in Kuwait City.

Oil has tumbled 75% from a July high, as the global economy sank into recession, straining budgets of crude exporters. Saudi Arabia, Oman and Dubai, the second-largest sheikdom in the UAE, say they’ll run deficits next year as low prices squeeze revenue. Sovereign wealth funds have been hurt by falling stock markets. The New Yorkbased Council on Foreign Relations estimates a fund held by Abu Dhabi lost $125 billion.

Gulf sovereign wealth funds have invested billions of dollars in financial institutions. The Kuwait Investment Authority last January paid $3 billion for a stake in Citigroup Inc and invested $2 billion in Merrill Lynch & Co. Abu Dhabi’s Investment Authority bought a 4.9% stake in Citigroup for $7.5 billion in November 2007.

Builders across the UAE are struggling to finance developments and sell real estate after credit dried up and a five year surge in property prices was halted. BLOOMBERG

I would not know how the islamic finance is going to help the world or america in person. [ offcourse they will be happy to take loan with any interest and in practicality no Islamic finance institution does it. It only wraps the interest in the name of the profit ].

Further if that be the case why the hell the Islamic sovereign fund go and invest their money in USA to loose.

Riaz Haq said...

"America’s economy is set to shift away from consumption and debt and towards exports and saving", says a story in the Economist magazine. Here are some excerpts:

STEVE HILTON remembers months of despair after the collapse of Lehman Brothers in 2008. Customers rushed to the sales offices of Meritage Homes, the property firm Mr Hilton runs, not to buy houses but to cancel contracts they had already signed. “I thought for a moment the world was coming to an end,” he recalls.

In the following months Mr Hilton stepped up efforts to save his company. He gave up options to buy thousands of lots that the firm had snapped up across Arizona, Florida, Nevada and California during the boom, taking massive losses. He eventually laid off three-quarters of its 2,300 employees. He also had its houses completely redesigned to cut construction cost almost in half: simpler roofs, standardised window sizes, fewer options. Gone were the 12-foot ceilings, sweeping staircases and granite countertops everyone wanted when money was free. Meritage is now catering to the only customers able to get credit: first-time buyers with federally guaranteed loans. It is clawing its way back to health as a leaner, humbler company.

The same could be said for America. Virtually every industry has shed jobs in the past two years, but those that cater mostly to consumers have suffered most. Employment in residential construction and carmaking is down by almost a third, in retailing and banking by 8%. As the economy recovers, some of those jobs will come back, but many of them will not, because this was no ordinary recession. The bubbly asset prices, ever easier credit and cheap oil that fuelled America’s age of consumerism are not about to return.

America’s economy will undergo one of its biggest transformations in decades. This macroeconomic shift from debt and consumption to saving and exports will bring microeconomic changes too: different lifestyles, and different jobs in different places. This special report will describe that transformation, and explain why it will be tricky.

The crisis and then the recession put an abrupt end to the old economic model. Despite a small rebound recently, house prices have fallen by 29% and share prices by a similar amount since their peak. Households’ wealth has shrunk by $12 trillion, or 18%, since 2007. As a share of disposable income it is back to its level in 1995. And if consumers feel less rich, they are less inclined to spend. Banks are also less willing to lend: they have tightened loan standards, with a push from regulators who now wish they had taken a dimmer view of exotic mortgages and lax lending during the boom.

Riaz Haq said...

Pakistan is not alone in being targeted by the doomsayers, many othrers, including India's cheerleader Fareed Zakaria, have also been betting against the United States for decades. Here's an excerpt from a Time Magazine Op Ed by David Von Drehle:

Poor U.S. of A., forever in decline. the arrival of public theaters in Boston circa 1790 caused Samuel Adams to despair for the cause of liberty in the face of such debauchery. "Alas!" he wrote. "Will men never be free!" Charles Lindbergh fretted, "It seems improbable that we could win a war in Europe." Long before baseball, hand-wringing was the national pastime. We've never been virtuous enough, civilized enough, smart enough or resolute enough.

I was born into a country reeling from Sputnik, which revealed to the whole world that Americans are as dumb as rocks. John F. Kennedy had just been elected President, in part by bemoaning the "missile gap" between the mighty Soviet arsenal and our paltry few bottle rockets. "The United States no longer carries the same image of a vital society on the move with its brightest days ahead," Kennedy said in his final debate with Richard M. Nixon. That's the same Nixon who declared eight years later, "We are worse off in every area of the world tonight than we were when President Eisenhower left office." Hard to believe we could sink further, but we did, as the nightmare of Vietnam segued into the nightmare of Watergate, while the Japanese exposed the insufficiency of American enterprise. As I stumbled off to college, President Jimmy Carter was warning us about "a crisis of confidence ... that strikes at the very heart and soul and spirit of our national will." Thanks to our horrible schools, we were — according to the title of a major 1983 report — "A Nation at Risk." Then our family values went down the toilet.

You'd think America would be as washed up by now as the Captain and Tennille. So how come we're so much stronger than we were 50 years ago? Somehow, in the 235 years since we got started, Americans have weathered Boston theaters and Soviet science prodigies, violent lyrics and sex out of wedlock. We've survived a Civil War, two world wars and a Great Depression, not to mention immigrant hordes, alcohol, Freemasons and the "vast wasteland" of network television. We've dodged the population bomb, the coming ice age, acid rain and the domino effect. America is to nations what Roberto Clemente was to right fielders. The Pirates legend fretted endlessly about how poorly he felt and how sick he was — while vigorously spraying hits and vacuuming fly balls.

So don't reach for the defibrillator paddles or the rosary beads quite yet.

Read more: http://www.time.com/time/nation/article/0,8599,2056582,00.html#ixzz1Fk9nsZR9