User morianfgds


Member for:	2 years (since Aug 8, 2022)
Type:	Registered user
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Website:	https://www.teachertube.com/user/channel/ortionuxtf
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About:	In the world where debt and interest are prohibited, a brand new alternative to traditional finance is emerging in the form of Islamic finance. This kind of financing does away with any complexities related to interest or other kinds of transactions within the financial sector, and instead treats the fund's suppliers as joint-venturers and partners within the joint venture. Islamic finance treats money as "potential capital" until it joins forces with other resources, like bonds, stocks, or any other asset. Islamic finance is aware that money is valued in time when it is used as capital and prohibits gambling, speculation, or taking risks in the process. Because Islamic finance is based on theory of supply-and-demand, it is insulated from large economic fluctuations that are caused by financial instability. Indeed, it can even block any economic growth in the case of a financial crisis. Contrary to this, traditional banking practices have to stop conversion into currency in case of a crisis and will require massive amounts of liquid assets from the central bank. This model will see the amount of money or M, grows in proportion to the actual income (P), but the price level will rise more slowly. Another distinction between conventional and Islamic banking is the fact that Islamic banks don't engage in interest-bearing or speculation. Unlike conventional banking, Islamic banks engage in direct trade and investment activities, and their liabilities are secured by savings. This means that new cash flows out of sales and not through the stroke of a pen. Further, Islamic banks invest their deposits in real assets and do not create their own money. This means that they don't generate excess purchasing power.

Activity by morianfgds

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