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In the Name of God بسم الله

The Islamic Dilemma On Bank Interest Payment?


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Tell me, how am I meant to take seriously a religion that has no consonance with reality?

 

The same way you take the world, the modern money making REALITY is ironic and you know it. At least the religion tells us to refrain from the thing that is destructive to economies i.e. interest. And it's not like we have no choice, certainly taking any loan is a choice and in most occasions we can do without it. The religion also provides us with good alternatives in the form of zakat, khums and charity - the theory is there, but in practice very few Muslims make proper zakat and do charity therefore the system fails.

 

Besides, the system you are talking about is good too. It would be better than this system, but who's to say if the government wont do the same thing banks do to money. I understand that governments are accountable, but so are banks and still the system goes on, governments back the banks, don't they?

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It starts off with, "I need a loan because I need somewhere to live", then "I need a loan to buy an investment property because i need to have something that will pay my pension", then "I need a loan

What risk? Commercial banks simply type a number in their computer and create money electronically from thin air. The equity they are dependant on in order to remain solvent are public sweat and blood

Yes it is problematic. "Islamic Banking" just renames interest as fees. What do you propose as a solution? As I see it, having a community which help each other and not try to consume each other woul

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To quote a wise gentleman:

"What the heck? Pay attention. This plan is not even going to be something considered for a long time, forget about it happening. I'm talking about NOW. Your dream system DOES NOT EXIST today and will not for decades probably. What are people supposed to do now and until then?"

You were criticising me for being hopelessly idealistic, and yet your alternative is just as hopelessly idealistic, arguably even more so.

 

I didn't criticize you for being idealistic. I criticized you for only having idealism, for having no "in the meantime plan." I criticized you for lacking pragmatism.

 

Listen. Just be honest. Admit that you have no choice but to violate an aspect of your belief system. I would appreciate the integrity at least.

 

 

I honestly see no compelling evidence to suggest that non-usurious interest on varying value money is haram. None in fact. No, I don't have some sharp cutoff rule to offer as a dividng line between the two. No, I don't feel bothered about that.

 

Moreover, I would argue that the evidence usually quoted against interest actually would imply that many zero-interest loans would be forbidden transactions, as the borrower ultimately pays back a lesser value than borrowed, an injustice. Unless it's some charity or government bank that by principle agrees to operate at a loss as a tax funded public service, where it's accepted as part of the deal the borrower needn't pay the full value back.

 

What about you? Are you going to finally admit that your dogmatic, literalist, one-dimensional approach to this issue is lacking due to it's violation of a slew of other Islamic principles when you dig into the details? Or are you just going to leep doubling down?

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I honestly see no compelling evidence to suggest that non-usurious interest on varying value money is haram. None in fact. No, I don't have some sharp cutoff rule to offer as a dividng line between the two. No, I don't feel bothered about that.

That's because you ignore the evidence, kadhim. I haven't a scintilla of doubt that you can't provide me a single religious text that shores up your baseless conviction. It's utter hubris.

Moreover, I would argue that the evidence usually quoted against interest actually would imply that many zero-interest loans would be forbidden transactions, as the borrower ultimately pays back a lesser value than borrowed, an injustice. Unless it's some charity or government bank that by principle agrees to operate at a loss as a tax funded public service, where it's accepted as part of the deal the borrower needn't pay the full value back.

Mainstream economics is largely based on the false premise that "interest fights inflation" when the truth is that "interest causes inflation." Almost everyday, in every financial story of every newspaper and radio or television program, it is repeated over and over the notion that interest (rates) keeps inflation at bay. The layperson has been conditioned to believe such nonsense. "Inflation is coming so we'll have to raise interest rates" is chanted hypnotically like a mantra.

Those who produce are forced to borrow newly created Principal (P) to pay for production costs and then inflate their prices to recuperate both the created Principal and the non-created interest (P+I) from their sales. Because total goods priced at (P+I) can never be sold when consumers only have P money available, a minimum amount of goods must remain unsold and a minimum number of producers must fail and / or suffer foreclosure. The economist Keynes likened the mort-gage (death pledge) to the game of musical chairs. Just as there are insufficient chairs for all to survive the musical chairs death-gamble, so too, there is insufficient money for all to repay (P+I) and survive it.

Am I supposed to believe that servicing a loan, a portion of which ends up in hands of a financial elite is somehow an absolute necessity, without which the entire finance system would be unworkable, even be on the brink of collapse?

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That's because you ignore the evidence, kadhim. I haven't a scintilla of doubt that you can't provide me a single religious text that shores up your baseless conviction. It's utter hubris.

 

 

Bro. Show me a hadith that talks about banks. That would indeed impress me, especially since banks didn't exist until about 500 years ago.

 

 

 
Mainstream economics is largely based on the false premise that "interest fights inflation" when the truth is that "interest causes inflation." 

 

You argued this above.

I challenged and contradicted that above.

You didn't reply, so you ceded the point already. 

You argued already that inflation comes from finance money flooding the economy. Finance money comes from the banks, lent at interest. If interest is higher, money is more expensive, you don't borrow as much of it. That's one reason the rates have been near zero for the lowest rates, to keep the patient's heart pumping.

 

I repeat this only to remind any who might get lost in the thread. As I say, you didn't challenge this earlier, and therefore cede the point.

 

 

 

Am I supposed to believe that servicing a loan, a portion of which ends up in hands of a financial elite is somehow an absolute necessity, without which the entire finance system would be unworkable, even be on the brink of collapse? 

 

 

Bro, I have not yet entered the mortgage market (still paying for my education, 6 years out from school). I have no great fondness for paying interest. I pay a few thousand a year in interest. I could definitely think of more productive ways to use that money in my household. I welcome all credible alternatives to the world of finance, and if I see a credible alternative that is interest free and isn't just sneaking in interest in disguise by the time I get to  a point I'm thinking to buy a home, I will go for it. Why wouldn't someone go for a better deal? Right? I mean, that's part of your argument above with the P and P+i. The alternative will be better for people's wallets? Then you don't need to hunt and stretch for tenuous religious grounds for the alternative. Just bring it to the market and show it can be successful and a better product for borrower. Even non-Muslims will beat down your door if you're selling a better, more user-friendly mortgage. 

Just show up and deliver success. If you're better, you don't need to bash the competitor. You just need to be more attractive as an option.

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  • Advanced Member

You argued this above.

I challenged and contradicted that above.

You didn't reply, so you ceded the point already. 

You argued already that inflation comes from finance money flooding the economy. Finance money comes from the banks, lent at interest. If interest is higher, money is more expensive, you don't borrow as much of it. That's one reason the rates have been near zero for the lowest rates, to keep the patient's heart pumping.

 

I repeat this only to remind any who might get lost in the thread. As I say, you didn't challenge this earlier, and therefore cede the point.

 

Wrong, kadhim. You are simply regurgitating the mainstream pseudo-economic neoliberal notion about the function of interest rates. It is a lot of barmy and bunkum. I apologise for the late reply, but I wanted to ensure that I spent more time learning about the debt-free money system and how to tackle the usual arguments levelled against it. 

Interest rates and inflation

“Thousands of years of sad experience with the concentration of wealth and debt slavery caused all the ancient books of wisdom — including the Bible and the Koran — to condemn the charging of immoderate rates of interest.(...) The conventional wisdom, however, is that inflation is the greatest threat to the economy and must be restrained by raising interest rates. This flies in the face of the common-sense observation that rising prices (inflation) are caused by rising costs, and that interest rates are costs. So raising them will raise prices, not lower them.

 

“Also raised by this policy, of course, is the income of the money-lenders, which explains why they subscribe so fervently to the perverse doctrine that high interest rates are somehow anti-inflationary. Certainly the world's bankers and other money-lenders have gained much from the nonsensical notion that, while giving workers a big raise is inflationary, giving money-lenders a big raise is not.

 

“Many economists rail against «wage push», and it's true that wages have risen by 2,700% over the past 50 years. But in the same period government tax revenue went up by 3,400%, and net interest by 26,000%! Yet, most of the economic textbooks that deplore rising wages don't even mention the tax and interest pushes. And it is not because they are complex ideas — rather, they are simple and obvious — but because it would be so embarrassing for economists to admit they've made a boner of such magnitude: that their theory of monetary policy violates basic principles of scientific logic.

 

Source: http://www.michaeljournal.org/appenB.htm

 

 

Bro, I have not yet entered the mortgage market (still paying for my education, 6 years out from school). I have no great fondness for paying interest. I pay a few thousand a year in interest. I could definitely think of more productive ways to use that money in my household. I welcome all credible alternatives to the world of finance, and if I see a credible alternative that is interest free and isn't just sneaking in interest in disguise by the time I get to  a point I'm thinking to buy a home, I will go for it. Why wouldn't someone go for a better deal? Right? I mean, that's part of your argument above with the P and P+i. The alternative will be better for people's wallets? Then you don't need to hunt and stretch for tenuous religious grounds for the alternative. Just bring it to the market and show it can be successful and a better product for borrower. Even non-Muslims will beat down your door if you're selling a better, more user-friendly mortgage. 

Just show up and deliver success. If you're better, you don't need to bash the competitor. You just need to be more attractive as an option.

 

 

Of course, that entails the ability of the laity to reject the junk economic doctrine of neoliberalism and to, instead, embrace the debt-free sovereign money solution which is not only common sense, but works in the favour of all. There is no competitor involved. Only two enemies: the complicit political establishment and widespread political / economic illiteracy.

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  • Advanced Member

You argued this above.

I challenged and contradicted that above.

You didn't reply, so you ceded the point already. 

You argued already that inflation comes from finance money flooding the economy. Finance money comes from the banks, lent at interest. If interest is higher, money is more expensive, you don't borrow as much of it. That's one reason the rates have been near zero for the lowest rates, to keep the patient's heart pumping.

 

I repeat this only to remind any who might get lost in the thread. As I say, you didn't challenge this earlier, and therefore cede the point.

 

Wrong, kadhim. You are simply regurgitating the mainstream pseudo-economic neoliberal notion about the function of interest rates. It is a lot of barmy and bunkum. I apologise for the late reply, but I wanted to ensure that I spent more time learning about the debt-free money system and how to tackle the usual arguments levelled against it. 

Interest rates and inflation

“Thousands of years of sad experience with the concentration of wealth and debt slavery caused all the ancient books of wisdom — including the Bible and the Koran — to condemn the charging of immoderate rates of interest.(...) The conventional wisdom, however, is that inflation is the greatest threat to the economy and must be restrained by raising interest rates. This flies in the face of the common-sense observation that rising prices (inflation) are caused by rising costs, and that interest rates are costs. So raising them will raise prices, not lower them.

 

“Also raised by this policy, of course, is the income of the money-lenders, which explains why they subscribe so fervently to the perverse doctrine that high interest rates are somehow anti-inflationary. Certainly the world's bankers and other money-lenders have gained much from the nonsensical notion that, while giving workers a big raise is inflationary, giving money-lenders a big raise is not.

 

“Many economists rail against «wage push», and it's true that wages have risen by 2,700% over the past 50 years. But in the same period government tax revenue went up by 3,400%, and net interest by 26,000%! Yet, most of the economic textbooks that deplore rising wages don't even mention the tax and interest pushes. And it is not because they are complex ideas — rather, they are simple and obvious — but because it would be so embarrassing for economists to admit they've made a boner of such magnitude: that their theory of monetary policy violates basic principles of scientific logic.

 

Source: http://www.michaeljournal.org/appenB.htm

 

 

Bro, I have not yet entered the mortgage market (still paying for my education, 6 years out from school). I have no great fondness for paying interest. I pay a few thousand a year in interest. I could definitely think of more productive ways to use that money in my household. I welcome all credible alternatives to the world of finance, and if I see a credible alternative that is interest free and isn't just sneaking in interest in disguise by the time I get to  a point I'm thinking to buy a home, I will go for it. Why wouldn't someone go for a better deal? Right? I mean, that's part of your argument above with the P and P+i. The alternative will be better for people's wallets? Then you don't need to hunt and stretch for tenuous religious grounds for the alternative. Just bring it to the market and show it can be successful and a better product for borrower. Even non-Muslims will beat down your door if you're selling a better, more user-friendly mortgage. 

Just show up and deliver success. If you're better, you don't need to bash the competitor. You just need to be more attractive as an option.

 

Of course, that entails the ability of the laity to reject the junk economic doctrine of neoliberalism and to, instead, embrace the debt-free sovereign money solution which is not only common sense, but works in the favour of all. There is no competitor involved. Only two enemies: the complicit political establishment and widespread political / economic illiteracy.

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