(Source: Movement for Monetary Justice FB Page)
We look at debt and no longer think it is a strange thing for us to take and for a country to incur. There is nothing wrong with debt if it is to be repaid without interest or any add on by whatever name. Such a debt is called a benevolent debt and can forever be repayable as long as it is owed, and we can even take collateral for it.
If we arrived at the date of payment and the borrower cannot repay we are absolutely entitled to take the collateral and disposed of it. But we are not to retain anything above the amount borrowed and to return the balance to the borrower.
Is this such a difficult transaction to implement amongst countries? The detractors will say its risky, but then so is a loan with interest. The detractors will say what if the borrower dont pay, but under the law it is still as repayable as a loan with interest.
The detractors will say inflation will reduce the value of money when nothing is paid above the principal. Now this is where we talk about the monetary system we should be practising.
In a gold or gold backed monetary system there is no inflation. In the now famous statement of fact, the fiat money price of one gold dinar still buys one goat now as it did 1400 years ago; and the fiat money price of one silver dirham still buys one chicken as it did 1400 years ago.
Inflation is totally a fiat monetary system phenomenon.
Inflation is the end result of the over creation of fiat money. Who over creates the amount of money in today’s monetary system? Is it the government? Strangely enough, no! They only create 3% of a nation’s money supply. 97% of a nation’s money supply are created by banks when they loan money to people and institutions. How is this done? Please visit Movement for Monetary Justice website at mmj.my to understand this situation.
The problem here is, for a fiat monetary system to work, the total money supply must at best remain constant, then at least prices will remain constant. But this is not so in the current monetary system adopted where we have outsourced the creation of money to the private sector ie the banks.
The country’s money supply then depends on the banks’ mood as to whether they want or not to give out loans. If they loved giving out loans, as they are wont to do always as a principle of business, there will be a huge creation of money.
This huge creation of money is then not met by a similar increase in goods and services, since creation of money is easily done and increase in goods and services takes time to materialize. We will then have what is called inflation.
To the rich and wealthy inflation is hardly an issue but to the poor it is a major issue. Inflation to the poor and to those on fixed wages and salaries, which generally covers the majority of a country’s population, inflation is a major issue.
When someone or something steals the purchasing power of one’s salary then there will be less food that can be put on the table, less clothes and less daily necessities that can be bought, lower quality of food, lower quality of accommodation for the family, less petrol that can be bought for the family car, lower quality of education for the children, and generally lower quality of life for the family.
These are major issues. These are thefts. The only thing is we don’t see the banks as robbers, and we don’t see the government as derelicting their duty to protect citizens from the thieves, because the thieves are not seen as thieves, and thefts are not seen as thefts,
That is why knowledge is crucial, understanding is important, and thinking is vital. The Quran constantly reminds us to think.
And so the public began to think. But there exist people who discourage the public from thinking. They say nothing can be done about it, so live and let live. Really?! Is that what is taught by our religion? To condone thefts? To do nothing when people are stealing our property?!
Is it really true we cannot do anything about it? Or is this a case of the ahli (“expert’) not given the opportunity to do what they are ahli in, and the non ahli not willing to give up a role they are not ahli in?!
Yes a world can exist without debt. It is absolutely and perfectly possible. Humans merely need to put their minds to it. And to be aware also of the evil forces that will work equally hard to prevent them doing this.
Debt truly is a luar tabii (“abnormal”) transaction, that has been wrongly mainstreamed. We are glad we are not the ones to answer to the Almighty for the Muslim legitimization of debt as an economic way of life; but we still fear we have not done enough to make ourselves heard.
Please join us and support us at Movement for Monetary Justice / Gerakan Keadilan Monetary @ www.mmj.my, @ FB Movement for Monetary Justice, @ email@example.com