From: hubey@pilot.njin.net (Hubey)
Newsgroups: soc.culture.turkish
Subject: Re: ERBAKAN HOCA ve EKONOMIK PROGRAMI (Islamcilardan secmeler)
Date: 23 Dec 92 12:59:28 GMT
Organization: Rutgers Univ., New Brunswick, N.J.

In article <29829@castle.ed.ac.uk> emev02@castle.ed.ac.uk (H Oral) writes:


> Turkey does not have resources, so Turkey is paying by reducing the value of 
> its money.  

Turkey is paying by selling its renewable resources. Whatever it
produces, it can keep re-producing. This is how wealth is created.


>In the long run, as long as the bank is powerful enough as they
> are now, they have no risk and are able to get back what they have given in
> multitudes of time.  

I suppose it would not be considered impolite to ask why the Islamic
Banks of Iran, Kuwait and Saudi Arabia have not lent any money to
Turkey (at no interest and no commission).

> Do you have any idea how much money has Turkey paid to the World Bank as
> interest, let alone the amount towards the principal loan?  These international
> loan sharks are even controlling the White House.  Just think how much
> it costs to run an election campaign and an ordinary person no matter who he is,
> can he run such a campaign?

Campaign money is a drop in the bucket for a trillion dollar economy.
I still haven't seen anything substantive here. You borrow, you pay
interest. Period. 

Why doesn't Iran lend some bucks to Turkey. They can pay off the
IMF loan in one shot. And hundred years later, they can pay back Iran
with Turkish Liras that inflated at rates of over 100% per year ?


> If I have a money machine, and I print money and give it to people
> as a loan expecting them to pay me more than what I have given them,
> and they do not have that money machine and they have to actually
> work and gain money to pay me what I produced falsely, and extra money
> (which will ensure that they can not prosper and they will be paying me
> for the rest of their life), do you think this is fair?

It still seems as if something is missing. Let's look at it like this.



Some workers in Turkey get together and pool their money. They lend
this to themselves. Who ever needs it most can borrow and pay back
over time. The workers do all the work and don't get paid for
accounting work etc.  So no one makes a profit. In fact they get
free work done. Should the borrowers pay interest ???

Yes or No ?

(Obviously YES. If not, why would anyone put his money in a bank
when a month or 6 months later it will be worth maybe half of its
value ? Interest must be charged. At what rate ? Exactly equal to
the inflation rate if break-even (no-profit) is desired. OK ?
What about the people who put their money in the bank? They must
be paid exactly the same rate. REmember, no profit. So we also
make a simple assumption here. All the money is lent. So, the
interest paid by the borrowers goes directly to the people who
deposited the money. Remember, no expenses or operating costs.)


If the answer is Yes, we continue.  A vakif, sets up a bank, hires
accountants, computer programmers, pays for a building, electricity,
phones, etc.  The Vakif charges interest just like above, except for
a few more percentage points to pay the expenses and the workers.

Is this unfair ? Yes or No.

(NO, it's not unfair. The vakif makes no profit. It must pay the
workers and expenses. It must also pay some kind of interest to
the people who deposit their money there.  So if they pay the 
depositers the inflation-rate, then they have to charge more
for the borrowers because the extra is going to the expenses
and operating costs and salaries of workers.)



Ok, now we have a Commercial/For-Profit Bank. HOw much more can it
charge without losing out to all these other wonderful options
open to would be borrowers (without even counting the wonderful
Islamic Banks who charge no interest, no commission and don't
want to be your partners) ?

HOw much do these banks charge ? How much should they charge ?
Why ? Is it fair? Why or why not? The answers were already given
above ?


Let's look at the scenario painted before:

So the world is full of money. Petrodollars all over the place.
Commerical banks dying to lend money and-- guess what-- people
are dying to borrow too (IMF doesn't give money to everyone
who requests it) and now we complain that the interest rate is
too high. Is this believable ? Or is it supposed to be
believed just for the hell of it?

Well, why is everyone lining up outside IMF's doors. Where are
all the Islamic Banks ?  Neither SAudi Arabia nor Kuwait has
any problems with buying US Treasury Bills and accepting the
interest on them. Do they ?  And where does all their money go?

Why aren't they rushing to fill in the supposed void created by
the outrageous interest rates demanded by the IMF? 

Does anyone have answers or is this kind of stuff being
repeated just for fun? Or is it sloganeering ?
-- 

	mark	

   hubey@amiga.montclair.edu         hubey@apollo.montclair.edu
   hubey@pilot.njin.net               ...!rutgers!pilot!hubey