User eferdosdjo


Member for:	2 years (since Aug 6, 2022)
Type:	Registered user
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Website:	https://docs.google.com/forms/d/e/1FAIpQLSe10nxJ_ESaH5wcg-GRQS2hJ4RFE1yydGpnXcnC4x8uXkMUxw/viewform
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About:	In an era where debt and interest are prohibited, a brand new alternative to traditional finance is being developed in the form of Islamic finance. This type of finance avoids the issue of interest as well as other types of complications in the financial sector and instead considers the people who provide funds as joint-venturers and as partners in the venture. Islamic finance considers money to be "potential capital" until it joins forces with other resources, like bonds, stocks and other investments. Islamic finance recognizes that time values money when it acts as capital, and prohibits gambling, speculation, and taking risks in the process. Because Islamic finance is based on principle of supply-and-demand, it is insulated from the massive economic fluctuations caused by financial instability. Actually, it could even wipe out the growth of economic activity in case of financial instability. Contrary to this, traditional banking practices must suspend conversion into currency in case of a run and will require massive amounts of liquidities from central banks. The money stock or M, grows in proportion to the real income (P) but the price level will be lower. Another distinction between conventional and Islamic banking is that Islamic banks do not engage in interest-bearing or speculation. Contrary to conventional banks, Islamic banks engage in direct trade and investment activities and their liabilities are backed by savings. This means that the money is generated through sales and not through the stroke of a pen. Further, Islamic banks invest their deposits in real assets and don't make their own money. This means that they don't generate excess purchasing power.

Activity by eferdosdjo

Score:	10 points (ranked #189)
Title:	Newbie
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