User travenqchl


Member for:	2 years (since Aug 8, 2022)
Type:	Registered user
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Website:	https://www.skk-pravo.ru/user/glassayate
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About:	In a world where debt and interest are forbidden, a alternative to traditional finance is being developed in the form of Islamic finance. This form of finance avoids any complexities related to interest or other kinds of transactions within the financial sector and instead considers the fund's suppliers as joint-venturers and partners in the venture. Islamic finance views money as "potential capital" until it is joined by other resources, including stocks, bonds or other assets. Islamic finance acknowledges time is a factor when it is used as capital and prohibits gambling, speculation, and taking risks with it. Since Islamic finance is based on the theory of supply-and-demand, it is insulated from the large fluctuations in economics due to financial instability. Actually, it can even wipe out the growth of economic activity in case of financial instability. By contrast, conventional banking practices must suspend the conversion of currency in the event of a crisis, and require large quantities of liquidities from central banks. The money stock or M, rises in proportion to the actual income (P) however the price will be lower. Another difference between conventional and Islamic banking is the fact that Islamic banks are not involved in speculation or interest-bearing loans. In contrast to conventional banking, Islamic banks engage in direct investment and trade and their obligations are backed by savings. This means that cash flows through sales and not the stroke of a pen. Additionally, Islamic banks invest their deposits in real assets and don't create their own money. This means that they do not create excess purchasing power.

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