User eregowdvml


Member for:	2 years (since Aug 8, 2022)
Type:	Registered user
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Website:	https://www.myvidster.com/profile/samirihaot
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About:	In a world where debt and interest are prohibited, a brand new alternative to traditional finance is being developed in the form of Islamic finance. This form of finance does away with any complexities related to interest or other kinds of transactions within the financial sector, and instead treats the people who provide funds as partners and joint-venturers in the venture. Islamic finance treats money as "potential capital" until it is joined by other resources, such as bonds, stocks or any other asset. Islamic finance acknowledges time values money when it is used as capital and prohibits gambling, speculation, and taking risks in the process. Because Islamic finance is founded on the concept of supply-and-demand, it is immune from the large fluctuations in economics caused by financial instability. Actually, it can even stop any economic growth in the case of financial crisis. By contrast, conventional banking practices must suspend the conversion of currency in the event of a crisis and demand large amounts of new liquidities from central banks. In this model, the stock of money or M, grows in proportion to the real income (P), but the price level will rise more slowly. Another distinction in conventional and Islamic banking is the fact that Islamic banks do not engage in interest-bearing loans or speculation. In contrast to conventional banks, Islamic banks engage in direct trade and investment activities and their obligations are backed by real savings. This means that money flows from sales, not through the stroke of pen. Furthermore, Islamic banks invest their deposits in real assets and don't create their own money. This way, they do not create excessive purchasing power.

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