The process of making money is so simple that mind is repelled. Whenever we think about the process of creation of money the only thing that comes into our mind is mint. That the government issues authorization to mint to make (print) money. This is true to some extent, but the majority of money is created by the banks in the form of loan and interest. Most of the people believe that the banks lend money on interest from the money that is deposited in the bank by the depositors. But that is not true. In fact banks create the money they loan, directly from the borrowers promise to repay the money with the interest. So, in other words, the banks create money out of thin air. So what gives value to the money that is made by the banks. It is the existing money. The new money loaned takes the value from existing money in circulation, thereby reducing the value of existing money. This is the reason the value of paper money depreciates with time. This is what we call inflation. Inflation is the rise in prices of products. But this rise in value of products is because of decrease in the value of money. The value of money keeps going down because each hour, every day day, every month, every year, someone is borrowing money from the bank and bank creates that money from thin air. Furthermore the interest paid on the money borrowed further reduces its value. This system of economy has a fundamental flaw in it, it makes the rich (people running the banking system) grow richer and a common man who remains poor, because he keeps on working harder to balance with inflation. This is the reason why Allah has cursed such a system. A money loaned on interest (riba) and furthermore made out of thin air is the root cause of inflation. When too much money goes into circulation, it causes hyperinflation. To balance hyperinflation, a depression period is followed where new regulations are made and basically the same system is again restarted. The history of such a monetary system is filled with inflation followed by a recession period. People don't recognise this flaw in the system. People can not save earning in such a monetary system, yet no one speaks against it. Allah says in the Quran, surat Al-Imran 3:130 "O you who believe! Eat not Riba doubled and multiplied, but fear Allah that you may be successful". Prophet Muhammad (PBUH) prophesized that a time will certainly come over the people when none will remain who will not devour usury. If he does not devour it, its vapour will overtake him.
Not really, but I know he got Master's Degree from Copy & Paste faculty of Corner University fastreplies
It's your threads putting it to sleep. WTF is the purpose of this drivel? You don't know what you're talking about, we don't care, and it isn't like the guys that run the world's economic policies are sitting around monitoring DP for an answer. Get a life and quit starting moronic pointless threads.
Try to think that through again. Simple inflation hurts saves and lenders and helps borrowers. If I loan you $1 today and you pay me back $1 next month, you have really given me back less than I loaned you -- due to inflation. In this way, inflation hurts the rich (those of us with money) and helps the poor (those of you with debt). There are a couple additional levels of complexity, but you are completely wrong on the very basic level. Try to think that through until you understand it. Actually, Muhammad forbid interest (not inflation) because he didn't have a good understanding of basic economics. This is not surprising, as he earned his money robbing caravans and taking slaves. Caravan robbing isn't a capital intensive business. If Muhammad had been in retail or manufacturing instead, he would have been able to easily understand the value of investment capital. Muhammad's lack of basic economic understanding is one root cause of the fact that most people in Islamic nations are dirt poor. In modern nations like the United States, there is a significant amount of turnover between rich and poor people. In America, your parents might be poor, but you can be rich. If you show any sort of talent in business, people will almost force investment capital upon you. In Muslim nations, if you are poor, you are likely to stay poor. Muhammad's rules against interest keep the rich rich and the poor poor. This made sense for Muhammad, as he was already rich from robbing caravans. For him, this was an excellent method of maintaining the status quo. That is Muhammad again, effectively saying "Don't work and save for a living, take up the sword and rob caravans with me to be successful." He wasn't banning interest for religious reasons, he was banning it to help recruitment for his caravan raids.
You obviously did not bother to do the most basic analysis of what you posted. The less interest is charged on lent money, the more common it becomes, thus inflating the monetary supply. In other words, the more usurious loans are, the less inflation there will be. If you oppose inflation, you should favor charging interest on loans. This is a really basic observation and your inability to observe it yourself shows just how incapable severely religious people are of engaging in critical thinking.
Well, caravan robbing was a great business in his day. I just don't think people should be considering it as a good business these days. There have been some changes to the business environment which make engaging in more peaceful ventures a better long-term strategy.
dear Betaturn don't try to help them! let them stay in their poverty! devote your knowledge and science for believers!
ZOMG... betaturd didn't understand a word of what either I or Law-Dude explained to him in the most simple terms possible. Often times I cannot help but believe that this species is doomed.