Why riba is haram

Dear reader,
Here is an easy explanation why religions ban usury

  1. To satisfy demand for loans and market operations (purchasing financial assets), banks create money out-of-nothing. They do not need our savings.
  2. The money is lent as debt (claims on your assets and labour) at interest (which is not created along with the principal).
  3. Payment of interest exhausts the money supply* requiring ever more loans for money to transact in the economy.

Corporations are forced to keep growing (chewing up the planet) to pay interest. The single largest government expense (all governments) is interest payments.

Compound interest and exponential borrowing inevitably leads to bankruptcies, ie., transfer of wealth to the hands of the very few.

Business cycles (intentional credit contraction by banks) accelerates bankruptcies and dispossession of individuals, corporations, and governments.

The end of a currency cycle (Kondratieff) means that the system is bankrupt, and wealth transfer negotiations take place on a grand scale (comparable to grand theft from wars) before a new cycle of dispossession is started all over again.

The credit for this insight goes to Michael Rivero, Sarah Emery, Imran Hosein, and Richard Werner, (please view the links)

Here is a telling verse from the Torah (Deuteronomy 23:20)

Margrit Kennedy and Bernard Lietaer have demonstrated that almost half of retail prices are the accumulation of interest.

Solutions include debt jubilees explained by Prof’s Michael Hudson and David Graeber, while Islam mentions charity on excess wealth (Zakat), and insists on intrinsic money like the Austrian school. But for us to be free of the parasitic monetary system we need to develop interest-free (crypto) credit.**

Thank you

*Please note we are typing about the demand side (main street) money supply, not reserves not borrowed (the reason QE does not lead to CPI inflation) typically used to purchase financial assets and ownership (hypothetically throttled by CB reserve requirements (borrowed anyway) and insolvency (bail-outs and bail-ins)). Unlike the loan principal which is canceled on repayment, interest does not disappear but is income used to pay expenses and taxes, distributed to shareholders, and retained earnings, like any other company.

**Interest differs from profit (which may be participated in under Sharia and Halakhah) in that profit does not compound and bears risk to the investor, unlike interest which leads to indebtedness and servitude. Furthermore profit is on products and services rendered, while interest is on money which should simply be the unit-of-account (UoM for bookkeeping (how does one charge interest on metres or hours?)) and means-of-exchange (to facilitate trade). Money is only a store-of-value only due to its tradability for products or services (proxy for stuff). 

Compounding interest leads to exponential wealth disparity.

https://upload.wikimedia.org/wikipedia/commons/5/5d/Wealth_distribution_by_percentile_in_the_United_States.png

Crypto wallet

Private banks have made enormous progress at improving technologies for our convenience such as online banking, easy payments, etc. What does it matter if our money is not in our pockets, but in a bank?

Does it even matter that it is not even money, but a credit (called currency) lent to the bank? What we want is convenience and ease-of-use.

The security of the monetary system is hardly our responsibility.

Continue reading “Crypto wallet”

Removing the constraint of currency for full employment

It is common knowledge that banks do not lend out savings, but rather create money out of nothing when a contract is signed.

For example, the currency (account balances) for a mortgage does not exist until the contract is signed. Then a bookkeeping entry gives the bank an asset and the borrower a liability.

This newly created currency can then be used to purchase a house, materials, contractors, etc.

But there’s a catch …
Continue reading “Removing the constraint of currency for full employment”

The magic of money

Once upon a time a little village had merchants such as the baker and brewer who provided bread and beer to the carpenter and farmer, knowing that in exchange the carpenter kept the furniture and fittings in order, while the farmer supplied grain at harvest time.

Friday afternoons in the pub they often pondered on how to trade with the village up the slope for grapes and wine, and the village downstream for beef and milk. The dilemma was coinciding the availability of products to barter, for eg., milk was available daily while wheat could be offered only at harvest time.

It would be difficult to establish the required trust to settle what is owed with strangers, or even neighbours who were not friends or family. So trade was stalled.
Continue reading “The magic of money”

The laughing lion and the doves

Perhaps the ashes of the labour guilds will be the phoenix that will form the nucleus of an alternative to bureaucracies, both corporate and government.

Phoenix

There is a thin layer of capable, productive people preyed upon by pyramids of parasites, whose livelihood depends on subjugation and exploitation of those few capable of wealth creation.

Parasites who live in a world where scraping and homage pays more than quality and production.

This is a world where human rights and freedoms do not exist. Indeed humans are considered resources and HR departments there to enforce corporate policy on those subjects.

However, the system won’t fix itself; it will have to be replaced.

Continue reading “The laughing lion and the doves”

Financing

Once upon a time an entrepreneur envisaged a watermill in a village with all the resources and skills to construct one.

https://www.flickr.com/photos/75894308@N03/7657361676The mill’s construction drew on forests and quarries for raw materials, and on carpenters and masons for skills, stimulating demand and thus economic activity.

Once the mill was completed, the village could reduce costs of flour and products such as bread and pastries which could be sold beyond the town limits. Cereals from neighbouring towns were also milled, making the enterprise a success, and the town prosperous.

Continue reading “Financing”

It is our duty to be free

It is our duty to be free

If a soldier is imprisoned by the enemy, don’t we consider it his duty to escape?. . .If we value the freedom of mind and soul, if we’re partisans of liberty, then it’s our plain duty to escape, and to take as many people with us as we can!”
― J.R.R. Tolkien

Do not use this money to pile up needless junk you don’t need. Use it to build your catapult. The one which will launch you over the walls of the corporate prison. Money gives you leverage. Build enough leverage, and you can pretty much do whatever you want all the time.

https://www.toddbrison.com/the-6-step-guide-to-selling-your-soul-for-money/