Fiat backed by “Men with Guns”

Posted: January 22, 2014 in Economics, Fractional Reserve Banking, Geo Politics, Paper money
Tags: , , , ,

Previous posts which referred to fiat currencies not having any intrinsic value as they are not supported by commodities such as precious metals, lacked one vitally important point.

These currencies are indeed backed by something… I learnt through RT’s Max Keiser;


This certainly brings into light the ideals of liberty, freedom and democracy.

  1. Zubair says:

    Reference to Intrinsic value poked and brought me to comment section.

    I really do not understand finance well, yet money and value are some terms everybody comes across. I have’nt yet understood the term “Intrinsic Value” though have heard it a few times in debates on “Riba”. It is said to be a value that a commodity has on its own. What does this mean?? I have no idea. How does it effect price of a commodity and how is it related with Riba?

    What puzzled me more is that Allah Almighty has forbidded Riba yet allowed Trade i.e. if I buy a residentail place for say 1,000,000 currency units and say rent is for 10000 currency units it is not forbidden. The annual return is 12%. On the other hand if I rent my money for the same rate of return it is forbidden, as is Riba or Interest. (I do not know how our scholars would fit-in Instrinsic value here).

    One Scholar Mr. javaid Ahmed (commonly known as Ghamdi) cleared the confusion. According to him in case of rent of Durables, the one paying rent can at any time leave the rented property of Goods whereas in case of Consumables the user would be required to produce the consumed goods as well; this is Riba and is forbidden.

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