End of capitalism and the rise of Islam

How banks make money out of thin air:

 














End of capitalism and the rise of Islam:

I am NOT an economist. Just a layman who is curious to find some answers which are never told and nobody knows how it works. Ignorance is a bliss, some times.  One has the liberty to ask some questions and let others explain it for us.

We all know govt prints paper fiat money. Can some one tell us, how much it prints and who monitors it?. What if, they make a deal and keep few billions aside for themselves, every time they print?.

Why Interest(usury) is the source of all evils?:

Let me try to explain the basics in layman's language.

Banks give interest on deposits and take interest on loans. To sustain the operation, they have to earn more interest from loans than the interest they pay for the depositors.

If the interest earned is lesser than the interest paid, what will happen to the bank?.

A private bank will go bankrupt and a nationalized bank will ask the central bank to print more paper money(fiat money) to pay for the interest. The fiat paper money has no gold backup. 

 

The fiat money is created as debt on citizens and distributed as tax.

"The guarantee for the fiat money is tax, tax and tax". Same goes with IMF loans and various aids packages also. The net per capita debt is collected through tax, tax, and tax from the citizens.

In short, "Nothing comes free. 

End of the day, every citizen becomes a debtor for the fiat paper money printed by central banks.

So, the root cause of all the evils is interest. If interest is abolished, banks have to earn money only through service charge and investment. This will openup direct investment opportunities between investors, skilled workers and businessmen on profit/loss sharing basis.

Profit/loss is the natural law of business transaction. A nation's wealth is determined by Gross National Produce which is generated by the labor.

Interest is NOT linked with any labor in the economic model. What will happen if every capable investor takes the easy path of risk free money-making through interest?. The nation's wealth will go out, no more jobs and the youth will stand under the hot sun for job visas in front of Muslim and Christian nations. 

 

What is Islamic economy:

a. Economy should be Halal, which means money should not be produced from thin air. Islam recommends Gold as standard.  

b. Usury(interest) is forbidden. Since banks can NOT make money through interest, it will open up the gateway for profit and loss shared investment opportunities. Otherwise, they can't survive.

In short, this will abolish labour exploitation and create millions of jobs and opportunities between the skilled workers and investors. 

c. 2.5% annual wealth tax called Zakat from every capable citizen.

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The  foundation of capitalism is "Use power for wealth accumulation".

The foundation of Islamic economy is "Use power for wealth distribution".

Collapse of capitalism will eventually pave the way for "The rise of Islam".