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User gabilehjdo
Member for:
2 years (since Aug 8, 2022)
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https://filmeast.pro/user/ceallacrfp
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In a world where debt and interest are prohibited, a brand alternative to traditional finance is emerging in the form of Islamic finance. This kind of financing does away with interest and other forms of complication within the financial sector and instead considers the people who provide funds as partners and joint-venturers of the venture. Islamic finance treats money as "potential capital" until it is joined by other resources, like stocks, bonds, and other investments. Islamic finance is aware that time is a factor when it functions as capital and prohibits gambling, speculation, or taking risks in the process.
Because Islamic finance is founded on the principle of supply-and-demand it is not impacted from the massive economic fluctuations due to financial instability. Actually, it could even block economic growth in the event of a financial crisis. In contrast, conventional banking practices must suspend the conversion of currency in the event of a crisis, and require large amounts of new liquidities from central banks. In this model, the stock of money or M, rises proportionally to the real income (P) but the price of the stock will increase more slowly.
Another difference that distinguishes conventional from Islamic banking is that Islamic banks are not involved in interest-bearing loans or speculation. Unlike conventional banks, Islamic banks engage in direct investment and trade, and their liabilities are backed by savings. This means that new money flows through sales and not through the stroke of pen. Additionally, Islamic banks invest their deposits in real assets and do not make their own money. This way, they do not create excessive purchasing power.
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