Archive for September, 2013

Classical thinking on usury

Posted: September 26, 2013 in Debt
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Some of the greatest acknowledged minds in history had thier views on the subject of usury/interest and the dangers to society;

Leaving interest – The classic argument

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Please find below a link to a slide presentation by Mary Mellor of Lancaster University, UK

Crucial to the search for a solution to an alternative economic framework is the complete understanding of the underlying problem

This piece sheds more light in this direction; it covers the history, workings and nature of debt in this monetary system

http://www.lancaster.ac.uk/cperc/docs/2012-07%20CPERC%20DebtWorkshop%20Mellor.pdf

Continuing my look at the basis for currency and the part precious metals such as gold may play, please read this post by Barrister Ahmad Thompson, which discusses the fiqh regarding paper currency and its implications for Islamic Banking, Zakat and the economic system

Gold and Silver: The colour of the shariah compliant money

The above blog site by Umar Vadillo has much relevant content regarding these topics and is of recommended value.

The $49,000,000,000 Loan

Posted: September 18, 2013 in Debt, Economics, Paper money
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Last week, US telecoms giant Verizon raised a record $49 billion in debt capital through the sale of bonds, in order to finance the purchase of Vodafone’s share of the Verizon Wireless joint venture between the two transatlantic rivals.

This is the most any company has ever issued in corporate history, effectively taking out a loan to this value. It shows that debt really has few limits (ever multiplying exponentially), this article says it all really, note the statistics mentioned, especially those demonstrating the magnitude of this debt pile.

http://www.cityam.com/article/1378949813/debt-mountain

Many have attempted to find a genuine alternative to interest based lending

Please listen to an informative audio discussion with Tarek El Diwany on the true nature of home finance within the so called ‘Islamic Finance’ industry in the context of money creation and debt based fiat money.

An extract of the the audio which can be listened to here;

“…Islam is supposed to be built on issues of justice and on a belief in Allah and following His rules and if we suddenly ignore Allah’s rules and start making fraud permissible then nothing else that we do after that is going to be correct, especially if we build our entire financial structure on an act of fraud which is money creation. So I was quite disappointed really to find that this issue wasn’t being addressed at all in the Islamic banking sector. For the last thirty years we’ve assumed that we should copy western models of banking and finance, and that has involved copying the money creation system as well as copying the system of advancing money now in return for more money later. And again if we try to copy a structure which is built on usury or structure which is built on fraud, and more particularly if we copy both and try to put them together, then we are not going to be successful…”

A possible solution ( as discussed in the above material, while appreciating that as long as this system is still in existence, any solution within the current framework will only be a short term alternative still subject to boom and bust factors, not a complete and permanent answer) could be Ansar Finance

Please view this website and share with other interested parties

http://www.ansarfinance.com/

Ludwig Von Mises and his Austrian school of economic thinking have been a prominent voice in promoting discourse around the Gold Standard and its value today.

Use this link to access some material from the Mises Institute on this subject;

http://mises.org/books/goldstandard.pdf