Posts Tagged ‘Interest’

This praiseworthy organisation is known for providing free, all accessible learning for everyone on a range of core topics.

It does a sterling job of condensing hard to understand subjects, into bite size, digestible knowledge

Few areas have escaped its coverage, and I was fascinated to discover a number of sessions on Banking and Money.

The attached video is one of a three part series explaining how money is created by the private banks, something most people still know little about. This touches many key areas such explaining what Money is, how it actually works and raising valid questions about alternatives.

It doesn’t stop there, you can search for further tutorials on more how banks work, and again how they create money, as well as other technical aspects of the money supply, to name one example.

Its always good to see those of understanding laying bare these facts in a plain manner demonstrating just how easy it is to lift the veil which seems to cover these elements of a modern economy.

Too good not to share….you would think the public at large would notice something that big….guess not

Poor countries don’t need charity. They need justice.

Is this another deception with our perception of ‘The World’?

One of the most comprehensive reports into the real financial transfers into and out of the developing world shows that the extraction of wealth from the third world, much of it former colonies, continues apace.

Rich countries aren’t developing poor countries; poor countries are developing rich ones

How Poor Countries Develop Rich Countries

I find the fact that some $4trillion since 1980 is attributed to debt interest repayments fascinating. The scale of this particular transfer is testament to the continued servitude of many nations states.

When many times more is sent back in exchange for every dollar received in aid, does this not sound like a familiar profit making enterprise at work?

Reading the original report, I find this sentence especially on point…

Much improved statistical compilation and reporting is required in order to have a more adequate picture of global financial flows; a task that urgently needs to be undertaken collaboratively by the International Monetary Fund, World Bank, United Nations, Organization of Economic Cooperation and Development, and the Bank for International Settlements.

Is this a list of the usual suspect organisations?



Please refer to my previous posts for an understanding on the workings and indications of the money supply. I enclose a link for another insightful article about this topic, especially pertinent at a time when expectations have been in flux regarding the hiking or cutting of record low interest rates;


A few of my previous posts have covered attempts by various parties to introduce their own versions of a financing method closer to what is perceived as genuinely riba-free.

To name a couple, Ansar Finance in the UK, Grameen Bank from Mohammed Younus have made an effort to shed light on alternative models which are closer to interest-free financing, in that an interest derived rate is not charged to the customer.

Ofcourse, the wider context of this should not be forgotten – the money itself, the paper (or digits) we use as a means of transaction – is of interest and IS interest itself. Given this fundamental fact, one cannot escape true defined RIBA in any such method outlined in these endeavors.

However, designing alternative models can expose the wider audience to the weaknesses of the mainstream Islamic Banking practices, which are all in name not in spirit, and I find it refreshing and worthwhile to introduce different forms which may be used as a stepping stone to something widely accessible and equitable in future, Insha Allah.

Contributing to this intiative, are LARIBA, a US based institution who have introduced their own version of what they feel is a RIBA-free mechanism. Judge for yourselves weather you feel their method is actually viable, however this company has been established since the late 1980’s and I favour their understanding of the monetary system, even though they still resolve to make use of it. They too understand and are upfront with their clients about the debt enslavement aspects of interest based loans, and also draw attention to the wider Islamic Banking industry which still uses interest rates in their products.

Their website has a number of worthy materials on related topics which I would also like to recommend.

Allah (SWT) knows best about their intentions and actions.



A long standing concern with using Gold as sound money is the market in which it operates. Please see previous posts exploring this however a current article from the Telegraph sheds more light on the workings of these mechanisms, further highlighting the extent of the manipulation possible and the lack of transparency – it is a wonder that we still call it a market, since it arguably doesn’t even meet some of the fundamental proponents, namely efficient information and price movements based on real participants trading the commodity.

It is telling how much speculators were able to move the market recently. Some commentators have often ridiculed the extent of their influence when markets work in the right way….whenever that is.

Note also the reference to how controlled the price is relative to the US Dollar – the world’s (great fiat) reserve currency – any thoughts the days of the Dollar were numbered should be tempered. This demonstrates the ability to control Gold through the ‘tool’ of paper currencies and interest rates, let us not think merely changing the base of money will solve our problems, we must reconstruct the entire market and all it stands for.

Emerging markets have borrowed $4.5 trillion in US dollars. The borrowers are vulnerable to a double squeeze from both higher US rates and a dollar spike.

What threatens to become a “margin call” for dollar debtors could ricochet through gold markets as a secondary effect. It may have begun already.

I find it remarkable how many non-familiar observers can quite easily spot the obvious spade in Islamic Finance practices, and call it a spade. However, for them to then completely ignore the issue that the source guidance (the final proclaimation and criterion; The Qur’an) never accepted any favourable position on RIBA (not interest, in any form, simple or compound), and that the deceit or falacy here should be put only at the doorstep of the commercial banking industry and its proponents who invented this fraud.

There seems to be too much of an impression that underlying islamic principles are in someway contradictory; with one hand they oppose ‘interest’ and with the other hand, it is condoned in another form, under another name.

This post will not go into the essential issue of what RIBA is (a more fuller all encompassing term) and not interest, however suffice to say, those who are of the above opinion have only a crass, superficial understanding of what they reject whilst at the same time, plenty of effort is put into unearthing great myths from other elements they wish to debunk – that is what I find odd.

One such guilty party would be the Adam Smith Institute. Their article found here, which references Islamic Finance practices makes this obvious mistake. In a partial response to the issue of time value if money and the innate nature of things, I would also like to refer readers to this piece by Tarek El Diwany

But I want to instead highlight an aspect which once again exposes the current industry for its flaws in constructing alternatives which are not too different from the products they are based upon;

For they all (things like Sukuk bonds and so on) depend upon the absolute rejection of interest, that very thing that we insist is part of the fabric of our reality. The reason we so like Islamic finance is because all of he (sic) successful forms of it are actually constructs that, in the face of the religious insistence that there should be no interest, actually operate in a manner to ensure that there is a time value to money and that there is an interest rate, interest which has to be paid 

Another cat let out of the bag, but wait there is more. The article referenced in the above quoted piece, by Jon Fasman reading a book by Harris Irfan, also provides us with more of the truth;

Yet by the end of the book, Irfan seems genuinely conflicted about his industry. Most of these instruments were reverse-engineered from their secular counterparts, and so devised to comply more with Shariah’s letter than its spirit. His protests against such moves echo those of American politicians who condemn “tax inversions”

….Many of the instruments Irfan discusses were sold by major banks that saw them as just another opportunity. This is not surprising: Governments and wealthy individuals wanted financing that complied with their religious requirements, and banks gave it to them….