Riba and the Pakistani Economy
Musa Sami June 7, 2006
#35 Posted by bbabu on June 9, 2006 12:10:25 pm
zeemax #29
`` Regarding interest and growth, let`s take the recent example. Below is the unemployment rate in the USA:
Unemployment began to creep up from below 4% in 2000 to 6.4 % in 2003. The US cut interest rates in response from 6.5% to 1% by June 2003. That created an asset price boom (stocks, real estate) and people started to `feel` rich because of their increased equity and HamidmJi tucked more dollar bills in his stripper`s g-string. The economy grew and the unemployment as of last month was 4.6%. The US didn`t perform any miracles. It just manipulated interest rates to achieve growth. It is actually nothing more than creating a `self-fulfilling prophecy` through artificially inflated wealth. This, in essence is what Islam prohibits i.e. creation of wealth from thin air without the backing of tangible and intrinsic value. ``
There is something called ``gold standard``. America followed it until 1971. You do not need an Islamic economic system for this.
A lot of you dudes suffer from NIH (not invented here) syndrome.
`` Regarding interest and growth, let`s take the recent example. Below is the unemployment rate in the USA:
Unemployment began to creep up from below 4% in 2000 to 6.4 % in 2003. The US cut interest rates in response from 6.5% to 1% by June 2003. That created an asset price boom (stocks, real estate) and people started to `feel` rich because of their increased equity and HamidmJi tucked more dollar bills in his stripper`s g-string. The economy grew and the unemployment as of last month was 4.6%. The US didn`t perform any miracles. It just manipulated interest rates to achieve growth. It is actually nothing more than creating a `self-fulfilling prophecy` through artificially inflated wealth. This, in essence is what Islam prohibits i.e. creation of wealth from thin air without the backing of tangible and intrinsic value. ``
There is something called ``gold standard``. America followed it until 1971. You do not need an Islamic economic system for this.
A lot of you dudes suffer from NIH (not invented here) syndrome.
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#34 Posted by bbabu on June 9, 2006 12:07:16 pm
`` TVM, inflation and interest are the terms used in capitalistic system. These terms do not exist in Islamic economic system. ``
Do you believe in paper currency ? If you print too much paper currency and produce too little goods/services you have inflation. Interest rates are meant to offset inflation. Not the other way around.
`` Lets take communistic economic system. The terms you have defined are non-existant in communistic system. AND yes this system is thriving ecen today and lending about $500 million to the best capitalistic society of the world. Talk to a Chinise and ask him about these terms. ``
China is not communist. It is giant low cost production base for MNCs of the world. If you think China is great please emulate them.
`` On the same issue, I like to be a little sarcastic at this point. Pointing fingures to others religion is very easy.
Clean up your own closet before looking at others. Swami Shardananda said this to all Hindus.
I hope you know who Swami Shardananda is?
Can you even name all your sacred religious books? ``
Religion is for deciding what is right and wrong. It is about ethics, morality. Religion does not decide economics, science, technology and political science. You are free to disagree.
How many pages is the Quran ? Do you know how many pages of research in finance/economics exist ?
#33 Posted by bbabu on June 9, 2006 11:54:26 am
zeemax #14
`` Just for the sake of argument, China did it for 50 years ... didn`t it? So it can be done if really necessary. ``
When did Chine close for 50 years ?
They have extensive trading relationship with Soviet Union until mid-1960s. No one in China looks fondly at the Great Leap Forward or the Cuktural Revolution.
`` I don`t see it as a problem. It is forbidden in Islam, and for good reason. Without interest, there can be no inflation. Trouble is there can be no growth either as far as the modern economic theories go. That in my opinion is the real point to ponder i.e. how to achieve growth in a non-interest-based economy. Not how to keep relations with the rest of the world because there isn`t any. ``
Inflation is related to money supply and supply of material goods. Interest rate exists because of inflation. It is meant to offset your losses due to inflation.
`` Just for the sake of argument, China did it for 50 years ... didn`t it? So it can be done if really necessary. ``
When did Chine close for 50 years ?
They have extensive trading relationship with Soviet Union until mid-1960s. No one in China looks fondly at the Great Leap Forward or the Cuktural Revolution.
`` I don`t see it as a problem. It is forbidden in Islam, and for good reason. Without interest, there can be no inflation. Trouble is there can be no growth either as far as the modern economic theories go. That in my opinion is the real point to ponder i.e. how to achieve growth in a non-interest-based economy. Not how to keep relations with the rest of the world because there isn`t any. ``
Inflation is related to money supply and supply of material goods. Interest rate exists because of inflation. It is meant to offset your losses due to inflation.
#32 Posted by hamidm2 on June 9, 2006 10:44:59 am
... what`s wrong with interest ?
.......... today anyone with half a pea for a brain can go out and borrow money at 1.9-2.9%, put it in a money market account at 3.9-4.9% and make 1-2% just like that ............. now what is wrong with this picture ?
........... sometimes smart people think too much and worry about all sorts of silly things that could-would-should happen ......... the simple minded guy just does the obvious and whistles merrily past these imaginary graveyards ......
...... nowdays a lot of peoople are worried about the interest rates going up .... why? what the heck did they do when interest rates were low ?........... my guess is that as far as these folks are concerned it doesn`t really matter one way or the other - they are just chronic whiners who can`t figure out which way is up because they say stupid things like, `` well up is a relative term depending on your position in relation to the object being observed``....... now that is genius ! ........... as far as a common (and simple) man is concerned, interest is a good thing one way or the other - if it is high you lend it, if it is low you borrow it ........ that simple, really ......
#31 Posted by hamidm2 on June 9, 2006 10:13:27 am
Re: # 29
zeemax,
.......... i also tucked some bills into warren buffet`s underpants; put some money into the emerging markets dhotis, kimonos or whatever it is that they wear over there; gave some money to bob the carpenter and his alcoholic cousin, the electrician, to remodel my kitchen and finish my basement; gave some money to bill gates so that he could put some more bugs into his software; stuck some hundred dollar bills into steve job`s jeans by buying the minis and nanos and then replacing them when they got stolen (i don`t hold a grudge against the slacker who stole them - we wouldn`t have this problem if the government issued them along with food stamps and cheese !); and with the money i gave bob he bought a nano for his kid while his cousin supported the mexican economy by buying many many bottles of cuervo gold (i call that cross border trickle-down); ........... then they jacked up the interest rate on my home equity loan which had financed all this economic activity ......... but no need to panic ! ...... i just called up all those nice bankers who keep on sending me those little plastic cards and they promptly gave me loans at 1.9% ........ now, since i am sure that warren buffet can do better than 1.9% i am still happy even though interest rates are climbing up and the sky is falling ........
............ but i must admit, of all this economic activity the most enjoyable is stuffing dollar bills into g-strings ....
zeemax,
.......... i also tucked some bills into warren buffet`s underpants; put some money into the emerging markets dhotis, kimonos or whatever it is that they wear over there; gave some money to bob the carpenter and his alcoholic cousin, the electrician, to remodel my kitchen and finish my basement; gave some money to bill gates so that he could put some more bugs into his software; stuck some hundred dollar bills into steve job`s jeans by buying the minis and nanos and then replacing them when they got stolen (i don`t hold a grudge against the slacker who stole them - we wouldn`t have this problem if the government issued them along with food stamps and cheese !); and with the money i gave bob he bought a nano for his kid while his cousin supported the mexican economy by buying many many bottles of cuervo gold (i call that cross border trickle-down); ........... then they jacked up the interest rate on my home equity loan which had financed all this economic activity ......... but no need to panic ! ...... i just called up all those nice bankers who keep on sending me those little plastic cards and they promptly gave me loans at 1.9% ........ now, since i am sure that warren buffet can do better than 1.9% i am still happy even though interest rates are climbing up and the sky is falling ........
............ but i must admit, of all this economic activity the most enjoyable is stuffing dollar bills into g-strings ....
#30 Posted by burpinder on June 9, 2006 3:24:57 am
This has all been done before...Nabendu whatsisname wrote a piece on Islamic banking not that long ago and it had the same ole same ole.
Running out of topics are we?
Running out of topics are we?
#29 Posted by zeemax on June 9, 2006 12:28:25 am
Oak: {Growth is dependent upon productivity not interest.}
Urstruly:{So I think, growth is possible without making money from money.}
Regarding interest and growth, let`s take the recent example. Below is the unemployment rate in the USA:
Unemployment began to creep up from below 4% in 2000 to 6.4 % in 2003. The US cut interest rates in response from 6.5% to 1% by June 2003. That created an asset price boom (stocks, real estate) and people started to `feel` rich because of their increased equity and HamidmJi tucked more dollar bills in his stripper`s g-string. The economy grew and the unemployment as of last month was 4.6%. The US didn`t perform any miracles. It just manipulated interest rates to achieve growth. It is actually nothing more than creating a `self-fulfilling prophecy` through artificially inflated wealth. This, in essence is what Islam prohibits i.e. creation of wealth from thin air without the backing of tangible and intrinsic value.
Your points re partnership, raising funds from stock markets etc are fine at a micro level, but partnerships require pooling of hard earned funds and cannot be leveraged, thus slow growth only from reinvestment of profits; while cheaply borrowed money can not only be leveraged but also independant from need of profits for investment. Thus fast growth. It does concentrate wealth in a few hands, as well as creates bubbles from time-to-time which when burst, leave the disinfomed holding the bag, but that is the trade-off as of now for `prosperity`.
Oh well .. anything to keep Hamidm happily tucking away greens on eight mile ....
Cheers!
Urstruly:{So I think, growth is possible without making money from money.}
Regarding interest and growth, let`s take the recent example. Below is the unemployment rate in the USA:
Unemployment began to creep up from below 4% in 2000 to 6.4 % in 2003. The US cut interest rates in response from 6.5% to 1% by June 2003. That created an asset price boom (stocks, real estate) and people started to `feel` rich because of their increased equity and HamidmJi tucked more dollar bills in his stripper`s g-string. The economy grew and the unemployment as of last month was 4.6%. The US didn`t perform any miracles. It just manipulated interest rates to achieve growth. It is actually nothing more than creating a `self-fulfilling prophecy` through artificially inflated wealth. This, in essence is what Islam prohibits i.e. creation of wealth from thin air without the backing of tangible and intrinsic value.
Your points re partnership, raising funds from stock markets etc are fine at a micro level, but partnerships require pooling of hard earned funds and cannot be leveraged, thus slow growth only from reinvestment of profits; while cheaply borrowed money can not only be leveraged but also independant from need of profits for investment. Thus fast growth. It does concentrate wealth in a few hands, as well as creates bubbles from time-to-time which when burst, leave the disinfomed holding the bag, but that is the trade-off as of now for `prosperity`.
Oh well .. anything to keep Hamidm happily tucking away greens on eight mile ....
Cheers!
#28 Posted by majumdar on June 8, 2006 8:42:40 pm
Maulana Urstruly (pbuh)
(But in either case the business enterprise pays back earned money back to financial institutions as interest or it pays dividends to its shareholders. In the first case the payback goes into the pocket of select few and in second case a large segment of economy benefits. )
Not really. Companies can also borrow from the bonds (publicly placed) market in which case the society can participate at large. Then again you must remember that when a company pays interest to a few institutions, these institutions in turn pay interest/dividend to debt/deposit/shareholders who are public at large. OTOH very often equity investors are a closed group- privately held companies, private equity, few large individuals etc.
(In the first case, the payback is a must, no matter how the business does; so the business owners are under constant negetive pressure to perform well - and if need be lying and cheating, and cooking the account books is a inevitable, as we have seen in the Enron case; where not only the business managers but also the financial institutions robed share holders of their money in complacence with each other. But in the second case not only profits but losses are also shared. Since a large number of people have stake in the enterprise it is harder to cook books. )
It is more likely that books would be cooked to fool equity investors as these investors are more interested in profit fugures. Debt holding institutions are more inclined to look at cashflows and asset cover rather than just profits. In my opinion, FIs/banks being large organisations are more difficult to fool unless they intend to get fooled or ripped off in any case.
Regards
(But in either case the business enterprise pays back earned money back to financial institutions as interest or it pays dividends to its shareholders. In the first case the payback goes into the pocket of select few and in second case a large segment of economy benefits. )
Not really. Companies can also borrow from the bonds (publicly placed) market in which case the society can participate at large. Then again you must remember that when a company pays interest to a few institutions, these institutions in turn pay interest/dividend to debt/deposit/shareholders who are public at large. OTOH very often equity investors are a closed group- privately held companies, private equity, few large individuals etc.
(In the first case, the payback is a must, no matter how the business does; so the business owners are under constant negetive pressure to perform well - and if need be lying and cheating, and cooking the account books is a inevitable, as we have seen in the Enron case; where not only the business managers but also the financial institutions robed share holders of their money in complacence with each other. But in the second case not only profits but losses are also shared. Since a large number of people have stake in the enterprise it is harder to cook books. )
It is more likely that books would be cooked to fool equity investors as these investors are more interested in profit fugures. Debt holding institutions are more inclined to look at cashflows and asset cover rather than just profits. In my opinion, FIs/banks being large organisations are more difficult to fool unless they intend to get fooled or ripped off in any case.
Regards
#27 Posted by sri on June 8, 2006 6:50:24 pm
Oh boy! here we go again.... the entire world has moved on... and still the dumasses are splitting hairs on sermons given in some 7th century book....
geez Einsteins!!! why don`t y`all join Taliban in reviving your Utopian kingdom in Afghanistan and spare us all from your stupid existence in western lands....
#26 Posted by samosa on June 8, 2006 6:39:37 pm
Re: # 19 asfand,
Let me give you a lesson that might not be in your book but it might be a revelation.
The communist system you talk about certainly does not exist in china. Its a totalitorian and autocratic government in china. You emphatize with it and just like your religion you cannot discover its true nature of the beast.
Let me give you a lesson that might not be in your book but it might be a revelation.
The communist system you talk about certainly does not exist in china. Its a totalitorian and autocratic government in china. You emphatize with it and just like your religion you cannot discover its true nature of the beast.
#25 Posted by hamidm2 on June 8, 2006 4:26:08 pm
urstruly,
`` know it will drop many jaws but I think the institution of bank as a lender has no role in interest free economy`` .........
.......... my jaw would actually drop if you told me that you don`t have a mortgage and still live in a trailer park after years of toiling for the man .......... i also assume you keep your money in a tin can under your bed ......... the economy IS interest free - nobody is forcing you to pay or take interest .........
`` know it will drop many jaws but I think the institution of bank as a lender has no role in interest free economy`` .........
.......... my jaw would actually drop if you told me that you don`t have a mortgage and still live in a trailer park after years of toiling for the man .......... i also assume you keep your money in a tin can under your bed ......... the economy IS interest free - nobody is forcing you to pay or take interest .........
#24 Posted by wiseguyin on June 8, 2006 4:03:39 pm
Re: # 23
But are fertilizer bombs allowed in this cult ???
I thought beheadings were halal ....
but then u know .... most things that are unmentionable are legit here ...
But are fertilizer bombs allowed in this cult ???
I thought beheadings were halal ....
but then u know .... most things that are unmentionable are legit here ...
#23 Posted by bharath on June 8, 2006 3:31:38 pm
#22 by mohar11
>>>>And what are you doing in sacramento anyway? I mean - that`s dar-ul-herb[land of kafir]... isn`t that against the laws given in koran? how are you going to implement laws given in koran living in kafir land under kafir system?...<<<<<
And how do you know he is not working on his plans to implement this politico-socio-economic system in the kafir land?
he is learning how to build fertilizer bombs and is in touch .......with his brethern in Toronto:-))
#22 Posted by mohar11 on June 8, 2006 3:17:50 pm
Re: # 20 asfand
[...And thanks for pointing that we Muslims read Quran many times a day....]
You are welcome....:)))... So how long is it going to take for you guys to fully understand the laws given in koran and implement ``the alternative politico-socio-economic system``?... Any guesstimate on the timeline?... couple of years or decades or centuries?...
And what are you doing in sacramento anyway? I mean - that`s dar-ul-herb[land of kafir]... isn`t that against the laws given in koran? how are you going to implement laws given in koran living in kafir land under kafir system?...
[...And thanks for pointing that we Muslims read Quran many times a day....]
You are welcome....:)))... So how long is it going to take for you guys to fully understand the laws given in koran and implement ``the alternative politico-socio-economic system``?... Any guesstimate on the timeline?... couple of years or decades or centuries?...
And what are you doing in sacramento anyway? I mean - that`s dar-ul-herb[land of kafir]... isn`t that against the laws given in koran? how are you going to implement laws given in koran living in kafir land under kafir system?...
#21 Posted by asfand on June 8, 2006 2:51:39 pm
Reply to Number 13
``Re: # 12 oak
[...Islam is by its very nature a Faith which looks forward not back....]
LOL... I actually laughed out loud when I read that.... Tell me you are kidding.... :) ``
This is what I call RSS/BJP mentality. Check RSS/BJP website. They claim that Islam is a stagnant religion. How wrong they are.
Yes Islam is a progressive DEEN not a religion. Although we use the word interchangeabily but the two words have different meaning. Islam is a Deen meaning besides basic faith and rituals it provides an alternative politico-socio-economic system. No other religion does that.
Asfand Siddiqui
``Re: # 12 oak
[...Islam is by its very nature a Faith which looks forward not back....]
LOL... I actually laughed out loud when I read that.... Tell me you are kidding.... :) ``
This is what I call RSS/BJP mentality. Check RSS/BJP website. They claim that Islam is a stagnant religion. How wrong they are.
Yes Islam is a progressive DEEN not a religion. Although we use the word interchangeabily but the two words have different meaning. Islam is a Deen meaning besides basic faith and rituals it provides an alternative politico-socio-economic system. No other religion does that.
Asfand Siddiqui
#20 Posted by asfand on June 8, 2006 2:45:58 pm
Reply to Number 11
``How long do you think it will take?.... I mean - it`s just one book and you guys have been reading it from page to page 5 times a day, everyday, for all your lives.....
But keep trying.... someday you will find out the bitter truth... that the book has no answers to your problems... the book is obsolete, has been so for a very long time....``
Oh Phaleeeeeeese
Lets not worry about Muslims. Go mind your own business. Read your own religious scriptures and stop trying to point fingures at others. Clean up your own closet before looking at others.
What Muslims are trying today is to implement laws given in Quran. Most of the debates you see or hear are about ``trying to understand Islam`` is about implementation. Basic faith matters are very well understood among Muslims. And thanks for pointing that we Muslims read Quran many times a day.
Asfand Siddiqui
``How long do you think it will take?.... I mean - it`s just one book and you guys have been reading it from page to page 5 times a day, everyday, for all your lives.....
But keep trying.... someday you will find out the bitter truth... that the book has no answers to your problems... the book is obsolete, has been so for a very long time....``
Oh Phaleeeeeeese
Lets not worry about Muslims. Go mind your own business. Read your own religious scriptures and stop trying to point fingures at others. Clean up your own closet before looking at others.
What Muslims are trying today is to implement laws given in Quran. Most of the debates you see or hear are about ``trying to understand Islam`` is about implementation. Basic faith matters are very well understood among Muslims. And thanks for pointing that we Muslims read Quran many times a day.
Asfand Siddiqui
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