Fiat Money and the Shariah?

[hammadrizwan]

Yes, that is what our current system is. Money is no longer backed by gold, so its no longer a promisory note, or receipt note etc. So there is no point digging old argumentation of last centuries about the trade of debts. It does not apply to our currency anymore.
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Asalam WR WB Shaykh.

As you mentioned that it is not a promissory or a receipt note anymore. How is it possible to trade similar species in unequal amounts. 10 papers for 1 paper. or utilizing 1 paper to buy a bundle of 100 papers, etc. Doesn't this violate the advice of teh Prophet S regarding trading similar species like for like and that being one of the aspects of riba(e.g. the trading of dates by Bilal R). Could you please explain.

Jazakallah Khayr

H

[seekeroftruth2]

So why don't we stop dealing in paper currency and deal only in gold and silver? Why can't we demand from our employers to pay us only in gold or silver and offer only gold and silver when we are buying stuff? That is more closer to Islam don't you think.

[abuhajira]

So why don't we stop dealing in paper currency and deal only in gold and silver? Why can't we demand from our employers to pay us only in gold or silver and offer only gold and silver when we are buying stuff? That is more closer to Islam don't you think.

make your demand today and have a retirement cake with your family this evening. No company in world has that much gold and silver to pay you out, unless you are working as a butler for the rothschild family

Br. hammad, a brilliant question. I will inshAllah answer it shortly. I need to rush to the Darul Iftaa at the moment.

[Joshimitsu]

Most of those objections were answered in that very thread, though. I also addressed a couple of those points in one of my earlier posts.

Salam,

What I found interesting about that thread is that it seems fractional reserve banking would not be stopped simply by using gold-backed currency, which I guess is obvious given that FR banking began back when gold was still being used. If that's the case, then the answer has to be a political/regulatory one, not necessarily the nature of the money itself.

If governments reclaimed the right to issue money, and then controlled inflation via taxation, this would solve the problem, no? You wouldn't necessarily need to have stocks of gold for the system to be fair.

[pawlak]

Salam,



If governments reclaimed the right to issue money, and then controlled inflation via taxation, this would solve the problem, no? You wouldn't necessarily need to have stocks of gold for the system to be fair.

Some insight on the government for issuing money.

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http://www.webofdebt.com/articles/bankrupt-germany.php
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Stephen Zarlenga suggests in The Lost Science of Money that this was because he temporarily rescued Germany from English economic theory — the theory that money must be borrowed against the gold reserves of a private banking cartel rather than issued outright by the government.3 According to Canadian researcher Dr. Henry Makow, this may have been a chief reason Hitler had to be stopped: he had sidestepped the international bankers and created his own money. Makow quotes from the 1938 interrogation of C. G. Rakovsky, one of the founders of Soviet Bolsevism and a Trotsky intimate, who was tried in show trials in the USSR under Stalin. According to Rakovsky, Hitler had actually been funded by the international bankers, through their agent Hjalmar Schacht, in order to control Stalin, who had usurped power from their agent Trotsky. But Hitler had become an even bigger threat than Stalin when he had taken the bold step of printing his own money. Rakovsky said:

[Hitler] took over for himself the privilege of manufacturing money and not only physical moneys, but also financial ones; he took over the untouched machinery of falsification and put it to work for the benefit of the state . . . . Are you capable of imagining what would have come . . . if it had infected a number of other states . . . . If you can, then imagine its counterrevolutionary functions.

[janaveronikazahra]

Some insight on the government for issuing money.

##########################
http://www.webofdebt.com/articles/bankrupt-germany.php
########################
Stephen Zarlenga suggests in The Lost Science of Money that this was because he temporarily rescued Germany from English economic theory — the theory that money must be borrowed against the gold reserves of a private banking cartel rather than issued outright by the government.3 According to Canadian researcher Dr. Henry Makow, this may have been a chief reason Hitler had to be stopped: he had sidestepped the international bankers and created his own money. Makow quotes from the 1938 interrogation of C. G. Rakovsky, one of the founders of Soviet Bolsevism and a Trotsky intimate, who was tried in show trials in the USSR under Stalin. According to Rakovsky, Hitler had actually been funded by the international bankers, through their agent Hjalmar Schacht, in order to control Stalin, who had usurped power from their agent Trotsky. But Hitler had become an even bigger threat than Stalin when he had taken the bold step of printing his own money. Rakovsky said:

[Hitler] took over for himself the privilege of manufacturing money and not only physical moneys, but also financial ones; he took over the untouched machinery of falsification and put it to work for the benefit of the state . . . . Are you capable of imagining what would have come . . . if it had infected a number of other states . . . . If you can, then imagine its counterrevolutionary functions.

interesting indeed...
w salam

[pawlak]

More insights on usury based fiat money.
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http://www.henrymakow.com/the_destin...nd_hinges.html

don't forget the other problem of ANY KIND OF MONEY. If it is loaned into circulation at usury it is a dysfunctional medium of exchange but an effective conveyor belt of all wealth into the hands of whomever owns the money. Makes no difference what it is composed of. That's exactly what Rothschild's gold did to the American colonies bringing on the war for independence from Rothschild's already impoverished England.

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I believe that there is nothing wrong with fiat money if it is properly put in use and without usury. If the US Treasury printed 'Treasury Notes' without usury instead of private, usury attached 'Federal Reserve Notes' the USA would have very little debt.

The big problem is that most of the worlds fiat money is in the hands of oligarchy families (Anglo-American-Jewish) who control The Fed, IMF, World Bank and most central banks around the world. They create fiat money out of thin air (debt) and charge usury (interest) on it. With this they use to enslave us. They have a private, monopoly on this.

Woudn't it be great if the Bank of Canada created usury free notes that paid for the countries infrastructure, hospitals, schools. Taxes would be low and our debt would also be low. Why does the government borrow from private banks ? The Bank of Canada issues the countries fiat money but the big 5 Bay Street banks create 95% of the countries fiat money through loans with usury added. Something is very wrong here.

Gold and silver make great backing of a countries currency but having a gold standard is not completely necessary as long as the fiat money is printed in sufficient quantity by the countries treasury and usury free. Bring the money back to the people for the people. Gold and silver should also be made legal tender.

The way things are going know we are paying for our own enslavement by a group of satanic psychopaths who are at the helm of the wheel.

[aliymeoc]

There is a very interesting seminar coming up on the subject of Islamic Finance and Banking by Shaykh Dr Mohammad Akram Nadwi and Tarek El Diwany. Details are given below.

http://www.sunniforum.com/forum/show...Tarek-elDiwany

Islamic Banking & Finance - A Myth or A Reality?
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[imran1976]

essentially can one of your post in bullet form why should the current currency not be counted as viable shar'i means of transaction. That will save me some time.

Pak rupees has almost lost 80% of it's value in the last 20 years. Pakistanis holding, say 1 billion rupees in 1992 are worth only 200 million rupees in 2012. Pakistanis would like to know that they didn't undertook any business venture in which they suffered huge loss, so where 800 million rupees got disappeared.

Whose pocket got filled with our 800 million rupees-- This 800 million rupees has gone in a fraudulent way, someone manipulated ; my question is what Islam says about devouring people's wealth by false pretense, does Islam legitimize a system where people are robbed off their wealth overnight?

[imran1976]

Yes, that is what our current system is. Money is no longer backed by gold, so its no longer a promisory note, or receipt note etc. So there is no point digging old argumentation of last centuries about the trade of debts. It does not apply to our currency anymore.

Yes, money is merely printed. Tomorrow US can print 2 billion more notes, and it will have 2 billion more dollars in circulation. But the money market will devalue the dollar because of the excess of dollars in the market. Suply increases, the demand decreases. Although its not as simple. The strength of dollar is not only because of it being printed or being in abundance etc, its primarily because of the high dependence on it in the global market. The demand you will have for dollar in international market, the more leverage you will give america to carry on printing it. This is why America was against the concept of Euro. because euro provide a more stable currency for the world market to rely on.

Hence, the idea of bringing gold and silver back is definitly a noble one. It will crush this fiat money. The only contention has been the way to go about it.

If money is no longer a promissory note than why it's written "Payable to bearer on demand" on Pak rupees note, there's got to be an explanation for this?

Though the printing of paper money- dollar is being considered, why no consideration is given to the major source of money supply (almost 80%) in the form of magical Fractional reserve system. This mechanism can be equated with the Jews who used to issue more (paper receipts) compared to the Gold they had in possession. It's obvious that with this Money Supply- M2, it's not possible for the paper money to retain it's real worth.

And if the paper money can't hold on to it's worth, there are few consequences:

a) it ceases to perform the function of store of value-- what good a money is which can't even perform one of it's own function.

b) the proponents of interest based banking takes the plea that interest is just a form to compensate the lender for the loss in the real worth of the money.

c) Pressure is developed on the Islamic Scholarship to devise ways to compensate the debtors for the loss in purchasing power in paper currency. This was hinted by Mufti Taqi Usmani Sahab in his Riba' judgement Point# 186-187