Intrest (Halal ya Haram)

Society Religion & Philosophy
21

If you do not understand economics you are most welcome to go to the mullah of your choice and keep things simpler for your own personal matters, for a society it is another stuation as no society can run without a viable financial system which has the capability of bringing idle resources in to productive channels...and such societies will always be backward and poor...as generation of business will be grossly hampered..

If buying and selling is taking place outside market system it is haram. There is a possibility of exploitation in this scenario.

Buying and selling money like a commodity based on market system is not haram...and this time I am not adding my personal opinion.

Again to understand any law you have to understand the intention of the law maker. For that you refer to my earlier post. I have read all the ayah and hadees on the subject and read different versions on the subject and for me the intention of the law maker is to avoid exploitation. For more theocratic/rigid answer without any suggestion for a viable alternate I am sure a lot of posters specially in this section will be adding their valued comments/opinions...

22

Now here's the thing that bothers me...

Who is the lawmaker u are referring to?
Plus, what market system are u implying here?

You see, when i read about Jews, their expulsion from Britain and their re-settlement, in the 17th century, I feel increasingly bound to accept the fact that the baking system that most orders are working these days are invented, classed and reinserted by none other than the Jews. From Rothschild's first bank of US, to the Federal Reserve Bank and all the way to the Federal reserve Act in the congress... That doesn't mean that the whole system is actually their contraption, but i can surely say that it is influenced. And when Islam says OPENLY that any sort or :RIBA: is haram, i feel obliged to seek further, and dwell for whats right and what's not... rather than ask for directions from an economics book.

That's why I was asking you, what system??...what lawmaker??? What market?

I hope u understand.

23

Re: Intrest (Halal ya Haram)

And its really inappropriate when people re edit their posts multiple times just to chuck a pebble. Reference to Mullah's was uncalled-for.

24

Of course Allah has defined laws in quran and He is the law maker in this case...that's what we believe, don't we???

When we try to understand His laws we have to understand the intention of the law maker..I repeat again:

1) The intention of the law maker is to avoid exploitation.

2) The intention of the law maker is not to stagnate the circulation of wealth.

3) The intention of law maker is not to discourage productive channels and resultantly create backward poor societies.

[quote]
You see, when i read about Jews, their expulsion from Britain and their re-settlement, in the 17th century, I feel increasingly bound to accept the fact that the baking system that most orders are working these days are invented, classed and reinserted by none other than the Jews. From Rothschild's first bank of US, to the Federal Reserve Bank and all the way to the Federal reserve Act in the congress... That doesn't mean that the whole system is actually their contraption, but i can surely say that it is influenced. And when Islam says OPENLY that any sort or :RIBA: is haram, i feel obliged to seek further, and dwell for whats right and what's not... rather than ask for directions from an economics book.
[/quote]

It depends on what you understand from riba..for me riba means any lending of money based on exploiting the other party...and a market based system which functions on demand and supply and trades money like any other commodity is not riba..

In any case if you do not agree on this system please suggest a viable alternate financial system???

[quote]

I hope u understand.
[/QUOTE]

I'll understand better if you suggest a viable alternate financial system which has the capability of bringing idle resources in to productive channels...thus avoiding backward and poor societies!!!

25

Re: Intrest (Halal ya Haram)

but the house with cash money.

My love for Hadeel!
26

I think you mean to say "buy the house with cash money"..

Please consider the demand for housing will come down by 90% resulting in a total collapse of the industry thus making millions of people jobless/beggars...needing charity!!!

If you are rich enough to buy on cash please do so...if you try to implement cash system in a society you have to take care of a whole bunch of beggars putting extra burden on Islamic Zakat system>>

CJ issues contempt of court notice to Imran Khan
27

Re: Intrest (Halal ya Haram)

waiting to hear from you, dxted or any of the ahmedi, qadiani, mirzai

Time Pass-August 2013
Time Pass-August 2013
28

Look sir, we are not discussing routes to any viable system, as I have mentioned earlier, i am not an economist. The sole reason of the discussion was... what's what and what's not. It's good that you have explained yourself...TWICE... but both of the times, u have said what's right ACCORDING to your views... Am I incorrect?

So yet again... we'll try to discuss stuff like normal people would do... And i'll again repeat the scenarios i have mentioned earlier...

1- Interest on fix deposit boxes?
2- Interest on loan.
3- Interest on mortgages like property or houses or e.t.c.

And there are a dozen different scenarios that I can come up with, and all we need here is an answer to the specific problem at hand. So a simple answer would probably do.

[QUOTE]

I think you mean to say "buy the house with cash money"..

Please consider the demand for housing will come down by 90% resulting in a total collapse of the industry thus making millions of people jobless/beggars...needing charity!!!

If you are rich enough to buy on cash please do so...if you try to implement cash system in a society you have to take care of a whole bunch of beggars putting extra burden on Islamic Zakat system>>
[/QUOTE]

Now now, let's see what we have here...

Housing business is a supply and demand market...correct?

Usually, price-2-income and price-2-rent are two yardsticks that have been taken into consideration to judge the house value in a certain economy. But both to an extent fail to deliver the exact measure without taking the INTEREST in the market into consideration...

The higher the interest rate, the higher the cost of mortgage interest payment. Consequently leading to less purchasing of houses, as the buyer will not be inclined to spend that much with interest. Similarly higher interest rates lead to slow economic growths, slow overturns on G.D.P... Lower growths mean less profits and lower turn overs... economies fuse and wilt. The only way the prices of houses will increase will be the reciprocal to the demand in that area. The higer demand, higher prices,,easy.

And,... yes, with lower house prices there are some sequential problems that will arise in a community...but...the wrath of it will be faced by companies dealing with extravagant interest only. Like banking system and credit card companies. On the other hand, inflation will either fall or halt... thus leading to lower incomes, but better life styles as much of the consumer products will be easily available, thus leading to less beggars on street...

You should have a look at Dubai's economic slumber. And it's a recent catastrophe.

29

Sir, I don't know how much simpler I can get.

We have to sort out if a market based buying and selling of a commodity known as money is haram or halal. It is just like saying if beef is halal than is beef steak also halal? Once we have sorted out this problem your question regarding specific products will also be answered...

[quote]
Now now, let's see what we have here...

Housing business is a supply and demand market...correct?
[/quote]

It's over simplification of the scenario.

Basic economic rule is " if you want to induce demand in any sector you have to inject money in that particular sector "...

Means if you want to build more houses you have to inject money in to construction sector as well as you have to make money available to the consumers to buy the same. Same goes on anyother sector and housing is being quoted only to explian things in a simpler format..

[quote]
Usually, price-2-income and price-2-rent are two yardsticks that have been taken into consideration to judge the house value in a certain economy. But both to an extent fail to deliver the exact measure without taking the INTEREST in the market into consideration...

The higher the interest rate, the higher the cost of mortgage interest payment. Consequently leading to less purchasing of houses, as the buyer will not be inclined to spend that much with interest. Similarly higher interest rates lead to slow economic growths, slow overturns on G.D.P... Lower growths mean less profits and lower turn overs... economies fuse and wilt. The only way the prices of houses will increase will be the reciprocal to the demand in that area. The higer demand, higher prices,,easy.
[/quote]

Basically you are confirming what I said in my post. To stimulate the economic activity and business generation you have to bring idle resources in to productive channels. Without doing this any finacial system will not generate sufficient business to upgrade the general well being of society al large.

[quote]
And,... yes, with lower house prices there are some sequential problems that will arise in a community...but...the wrath of it will be faced by companies dealing with extravagant interest only. Like banking system and credit card companies. On the other hand, inflation will either fall or halt... thus leading to lower incomes, but better life styles as much of the consumer products will be easily available, thus leading to less beggars on street...

[/quote]

Let me try to explain you all with some simple examples..

Suppose You lend me 100 rupees for one year..

1) This instrument i.e rupee is constantly depreciating. For example the real value of this 100 rupees will be 90 rupees after one year. Now it will be unfair if this depreciation is payed by you and will be an exploitation of the lender.

2) When you are lending money there is a risk factor and cover this risk factor there is a cost involved. Lender will never lend money if this risk factor cost is not borne by the borrower.

3) There is an opportunity cost for that money. The system of bringing these idle resources in to productive channels can not function on charity basis. Therefore this opportunity cost must be payed by the borrower to make the financial system to become viable.

Now who will determine the value of all the three factors mentioned above. Only free market forces and trading of money like a commodity can ensure that there will be no exploitation on your part or mine. If these three valuation are done by free market mechanism there is no exploitation therefore it is not haram riba.

The so called hypocrite Islamic banking system is more unislamic as it is just an exploitation in the name of Islam. The same products with just Islam attached for the namesake cost 30/40% higher for both depositer and borrwer.

Exploitation=haram riba..

[quote]
You should have a look at Dubai's economic slumber. And it's a recent catastrophe.
[/QUOTE]

I am glad you brought the case of Dubai in the discussion. And why only Dubai, the banking system all over the world is facing a crisis situation today. Let me bore you a little furthur with some more economic jargon and you will realise why I am putting so much stress on exploitation...

May be you have heard the name of Mr. Alan Greenspan who was the chairman of Federal Reserve USA from 1987 to 2006. He basically believed in keeping interest rates low to give stimulus to the economy through central bank interventions artificially. His policies suited the political governments who get elected for five years only and on a short term basis Greenspan economics was ideal for them to get reelcted. Therefore every government from 1987 to 2006 retained him.

Now in this case the depositers were being exploited for a long period of time and were not being compensated fairly against the cost of their money. They were forced to buy more risky, unregulated investment portfolios to get any meaningful return on their investments. It was due to this artificial demand of low quailty securitized products that the fiancial and banking systems today are in such a deep crisis. Basically the system of market orientation to value the money was breached...

Only a market based system where neither depositer nor borrower is exploited is most viable system in the long term and is exactly according to the spirit of Islam which is against this kind of expolitations...

[quote]
So a simple answer would probably do.
[/quote]

I have tried to answer as simply as I could without giving you all the story about derivatives, securitization, financial regulation. Things are not as simple as they sound therefore you need a more deep understanding of the subject. Bottomline:

Exploitation=Haram Riba....

30

.

31

Re: Intrest (Halal ya Haram)

This is one area where again religious folks can't seem to think rationally. EXCESSIVE interest is and should be haraam (and illegal IMO).

An interest rate equal to inflation is justifable (there are some other aspects to that as well but i dont want to get into an economics/finance lesson here). The value of money generally goes down with time. For example, a friend of mine loaned me 1000 Rs back in 1950. Now in 2009, should I just repay him Rs 1000? is that fair to my friend? would my friend be able to buy the same things in 2009 with his 1000 Rs as he was back in 1950?

32

[quote]
Suppose You lend me 100 rupees for one year..

1) This instrument i.e rupee is constantly depreciating. For example the real value of this 100 rupees will be 90 rupees after one year. Now it will be unfair if this depreciation is payed by you and will be an exploitation of the lender.

[/quote]

Here you go...
Isn't that interest right there??? What do u mean by UNFAIR here? That's exactly the opposite what ISLAM tells... if u lend the money to someone... the borrower should give you exactly the same amount back...and not any depreciation or stuff... irrespective of the time limit, but should give back on the time both parties have decided. If the borrower doesn't deliver it on time, then u can take him to court... take what's rightfully yours.

I guess that's why you just couldn't answer my very simple questions...

All this crammed mumbojumbo you have laced in your replies tells exactly why.

[quote]
Basically you are confirming what I said in my post
[/quote]

No sir i don't, that's why i had to come via a long route to explain my point, which i guess u haven't really noticed.

The term exploitation that u have been raving about all the time... is also ill defined. It's not according to the conjugations reserved in our religion sorry to say. Yes, there are definitely systems out there which are up and running, and which have their own rules and regulations but they most likely don't fall in the limitations of Islam. Simple.

Now please don't go around replying me with more of what YOU THINK is right. WHAT YOU SEE VIABLE.

33

Re: Intrest (Halal ya Haram)

[quote]

2) When you are lending money there is a risk factor and cover this risk factor there is a cost involved. Lender will never lend money if this risk factor cost is not borne by the borrower.
[/quote]

Again, this is pure modern economics, and nothing to do with our religious beliefs... Again u have failed to deliver Sir. That's not what the thread is about, and that's not what we r supposed to do as Muslims.

34

[quote]
This is one area where again religious folks can't seem to think rationally. EXCESSIVE interest is and should be haraam (and illegal IMO).

An interest rate equal to inflation is justifable (there are some other aspects to that as well but i dont want to get into an economics/finance lesson here). The value of money generally goes down with time. For example, a friend of mine loaned me 1000 Rs back in 1950. Now in 2009, should I just repay him Rs 1000? is that fair to my friend? would my friend be able to buy the same things in 2009 with his 1000 Rs as he was back in 1950?

[/quote]
.

First of all, please go and have a look at how inflation really happens...
Secondly, what u are saying is exactly what's opposed in Islam... Now u guys can go around hunky dory extracting and inserting what YOU THINK IS RIGHT or WRONG... which i guess is a definite thing, 'cos most of us really don't follow anything except what WE think is suitable for our demands...but here the discussion was about simple folks, perhaps as u say rational religious guys... which was a bit categorical of u...but it's ok. As expected from u guys.

35

I have made my point in the last post that pray to Allah that he gives Muslims the power to rule again so we can remove this corrupt financial system of interest.

36

Okay sir, if you want to live in stone ages and call it Islam please do whatever you like. This kind of Islamic mullahism aap ko mubarak ho!

I did not realise all this discussion is way beyond your intellectual capacity...I am sorry once again!

I have nothing more to add here..

Celebrity pics
37

U see, now u have chucked a pebble again... "Intellectual capacity"

When you don't know the least of what i am capable of. But then again, as expected.

Anyways, u don't have to be rude... anxious, or abysmal. We are not doing whatever we like to, we were just discussing... and the discussion became quite wayward when we have different opinions... And Islam came quite LONG after stone ages so .....God Bless us all.

38

Bhai maaf kar do!

It's all my mistake!!!

I apologise for any inconvenience caused>>>

39

And i have forgiven you.

Haha... just kiddin'. Seriously, there's nothing wrong so why should u be apologetic at all. I on the other hand ask for ur forgiveness if i may have caused any nuisance to you.

Hopefully, this ends right here. Take cares. :)

40

Re: Intrest (Halal ya Haram)

Cannot expect simple straightforward answers from Ahmedis. :)