Fiat Standard And Fractional Reserve Banking Amd Home Loans
If it was not clear in first par than let me rephrase it. Please I request you to read all and then reply. You said that whatever people collectively agree on money is money. That is the point i am making here. I will number my points for structured response 1. Whatever people collectively consider money is money. State has no authority to dictate. Now for barter to silver and gold people have collectively freely traded with mutual consent. From 19th century government introduced paper money backed by gold. That was for convenience of the people. Gold in first place already was accepted global currency at that time. Paper was just representation of what gold is. But from 20th century onwards governments started to remove the gold backing from their paper money, to fund their wars they knew that gold backed currency is on control of people and private entities. So they were unable to fund their operations and wars. Gradually that ended in 1971 gold as standard being removed and now government paper money without any backing imposed as standard. Here state has dictated a monetary standard totally from its authority and people had no say on that. During that time people protested and also usa and many europian government banned gold purchasing and transaction at that time to make paper money as standard. Once that standard being implemented chaos and public anger gets cool down. But that doesnt change the fact that government has authoritize the paper money. I am not against the convenience of paper money, but to remove gold backing which was public consensual standard, is what I am saying This point 1 is to make case: original of government paper money was against human freedom and dictation from state. Divine guidance is against it. I dont have to prove that, because snatching human freedom and dictation requires proof, not other way around. Point 2: We can still buy gold and do purchase with barter. Wrong. This partial allowance on transactions has no point. If someone want to open up a bank right now which has gold as backing of paper money, will not be allowed. I will be forced to use governments dictated money as standard of my bank. So there is no freedom of regarding something as money. This is not for convenience, people will issue paper money also backed by gold, that is convenient, but is not allowed by government at any part of the world. This is against freedom of choice, to which we need to prove fron Divine guidance that state has this power kf dictation. Which is not the case and islam is strictly against it. Point 3: complete control over supply: Now as government has complete control over it, they print as much they want. They have first access to this newly printed money. When this money gets printed, before it starts circulating in the market, government and private elites sponsored by govt spends it with current value of money. When that extra money supply gets circulated then value of money gets down. This is inflation. Which is form of tax. Government specifically mention this as strategy of taxing people, print monre money to spend and eventually down value the existing supply people had. And according to even ghamidi sb, taxing other than zakat is haram. It has major 2 problems which is: complete monopolize control over supply and taxing people. Point 4: Back to the Banking loans. In this paper money Era, banking loans doesnt issued from existing supply. It gets credited. When i take home loan of 20 lakh. 20 lakh is new money being created and given to me. Question is, first bank didnt have money, they created it out of nothing(as there’s no gold backing this is how Banks works, before it wasn’t like that) and they gave me and charging interest on it. Do anyone have authority to print money out of nothing and give it to people. Its completely analogical to, we 5 friends open up a bank and someone needs 20 lakh we gave them fake 20 lakhs, they in return over 10 years gave us 30 lakh real money. This practice of creation of money out of nothing just to give loans, is it permissible? No. It cant be. I can give money only if i have, if i would allowed to be create money like that just to give its complete injustice. And its the part of government dictation. So according to ghamidi sb, mortgage loans were permissible both ways, from bankers perspective and from receiver perspective. But on above all discussed point I conclude that in current Practice of banking system, all around the world, loans, be it mortgages or not, is inherently haram All in all this topic requires very detailed response and study. In meezan, burhan, maqamat, whereever ghamidi sb discussed this topic, they overlooked this point of working of banking system and monetary practices and original. They didnt discussed this in any of their books or videos. So mistake and overlooking has been done. Please let me talk on this point to any of the members of al mawrid, especially if they have background in economics.