MazharShafiq
New member
i was thinking about about paper currency that is it real money ? will it cheat us at the end ? is it a slip of gold ? etc
dear i think you know nothing about history of paper currency . i know that this topic is boring but when you know all facts you will be entrusted . in start people buy and sell against gold or other expensive things but carrying of gold and other expensive things was very risky . so people gave their gold to jewelers and jewelers write a slip against that gold and people can buy anything by giving that slip to seller and that slip is called nowadays paper currency . now if we have 10k usd we cant get gold for which 10k usd are slip ......Go to the shop near you and buy something with your paper money. If your paper money can be used to buy something, it's mean your paper money is the real money.
dear i think you know nothing about history of paper currency . i know that this topic is boring but when you know all facts you will be entrusted . in start people buy and sell against gold or other expensive things but carrying of gold and other expensive things was very risky . so people gave their gold to jewelers and jewelers write a slip against that gold and people can buy anything by giving that slip to seller and that slip is called nowadays paper currency . now if we have 10k usd we cant get gold for which 10k usd are slip ......
Yes, for as long as it is. It cannot last, though.i was thinking about about paper currency that is it real money ?
Yes, always.will it cheat us at the end ?
Wa'alaikumsalam sister MuslimInshallahAssalaamu alaikum,
(smile) Ardianto, indeed, knows something about running a business. But Mazhar raises an interesting point, in that using things such as paper money that have no intrinsic value, as a means of trading with one another, depends on the belief and trust that people put into this paper money. If people lose trust, then the whole system breaks down (and this has happened in the past). Furthermore, it seems to me that with all the abuses being committed by all too many people in high finance, that the trust in the system is being eroded.
May Allah, the Wise, Help us to restrain our fears and desires.
People will interested to buy a company shares from current investor in secondary stock market because this company gain much profit or predicted will gain much profit. But if this company gain losses, not only people will not interested to buy, but the current investors will gain loss too.You see, the enormous mass of new money just keeps going into the stock exchange. As long as the stock exchange keeps going up, the investors don't care, because they expect that their holdings will become worth more, not because these companies are making more profits and paying out more dividends, but because the next investor will agree to pay more for the current investors' shares.
Ponzi scheme is scheme for money game that often 'camouflaged' as investment. But what you describe above is not Ponzi scheme. If you buy shares from the investors, then the money will not go to the company. It same like you buy used car from the current owner which the money does not go the dealer.So, it is effectively a Ponzi scheme.
If investing in stock market is no longer interesting, then people will go to few specific commodities or stuff, like gold or land. Only few, not all commodities. Foodstuffs can be a good choice for business, but considered as suicidal choice for investment because foods have an expired time. If you cannot sell your food until the expired time, then you will gain big loss.If this mechanism no longer works, these investors will flee into commodities: gold, silver, wheat, rice, oil, other foodstuffs, and so on. That means that the prices will suddenly go through the roof. That means that paper money will only be able to buy a fraction of what it could buy before. That means that the money has become worthless.
Wa'alaikumsalam sister MuslimInshallah
In marketplace where multiple currencies are used, trust determine a currency will be accepted or not. In place like this, like in stores in some border area, the seller prefer to receive currency from one country than currency from another country. But in market where single currency is used, then no matter how low this currency value compared with other currencies, people will still use it, due to the money "liquid nature".
If a seller receive paper money, then he will be easily to use this money to buy something. Different than if the seller is paid by a commodity that maybe is not accepted when he want to buy something. The only thing that will make people leave this low value currency is 'infiltration' of the stronger foreign currency. People will not stop using paper currency. They just move from the weaker currency to the stronger currency.
Nowadays economics is huge, and we don't have enough gold to cover economic activities if we want to move from paper currency back to gold.
Assalaamu alaikum MuslimInshallah,You are right that we need to have some sort of method of exchange.
I disagree. We must fundamentally NOT have faith in anything that is man-made.But we also need to have some faith that the method that we use is worth something, and that it is stable and at least somewhat fair.
A man-made system must be expected to be fraudulent.The incredible levels of fraud in our current system, it seems to me, is undermining our faith in this system.
i agree , today we see this issue boring but when some people (Jews) who are collecting gold more and more , want to destroy this financial system ,they will force us third world war and current financial system which based on paper money will be destroyed then all paper money will be as white paper no value and then who have gold (real money ) will be lead all the world and all the people who have no gold will be slaveYes, always.
You see:
[1] money_in_circulation = debt ..... because that is how money is created by the banking system
[2] to_repay = debt + interest ..... because they do not lend it for free
[3] to_repay = money_in_circulation + interest ..... because of [1]
[4] to_repay > money_in_circulation
So, if the banking system does not keep creating new money, you will see defaults and bankruptcies all over.
However, if the banking system keeps creating new money, you get more money chasing the same amount of goods and services. That means: inflation. That means: the money becomes gradually worthless.
This system could only possibly work if the growth of the income/production is larger than the growth of the volume of money.
Reality check 1: The economy has stopped growing.
Reality check 2: They keep creating enormous amounts of money.
You see, the enormous mass of new money just keeps going into the stock exchange. As long as the stock exchange keeps going up, the investors don't care, because they expect that their holdings will become worth more, not because these companies are making more profits and paying out more dividends, but because the next investor will agree to pay more for the current investors' shares. So, it is effectively a Ponzi scheme. If this mechanism no longer works, these investors will flee into commodities: gold, silver, wheat, rice, oil, other foodstuffs, and so on. That means that the prices will suddenly go through the roof. That means that paper money will only be able to buy a fraction of what it could buy before. That means that the money has become worthless.
At the core of the banking system and its money creation process, you have riba/interest. That is exactly the reason why it will collapse. Seriously, there are good reasons why riba/interest is haraam. The fact that riba/interest will completely destroy the existing financial system is only just one of them.
The financial system is a large collective belief. As such, it competes with the one, true belief. All large, collective beliefs that are not the belief in the one singular, true God, are despicable, pagan depravities. These pagan beliefs must be destroyed. Only the one, true belief in the singular God should be allowed to be large and collective.... some people (Jews) who are collecting gold more and more , want to destroy this financial system ...
I show my disapproval of the false pagan belief in paper money and its riba/interest origins by accumulating bitcoin. I do not really accumulate gold, because it is difficult to protect, and difficult to transfer around the world. My alternative is not perfect, but it is still a strong statement against this massive, false, pagan trust in paper money. Some day, we will discover what the one, singular God wants us to use as money. Up till then, we must just keep looking.... then who have gold (real money ) will be lead all the world ...
If you are a slave of the one, singular God already, how can you simultaneously be the slave of someone else?... and all the people who have no gold will be slave ...
If you are a slave of the one, singular God already, how can you simultaneously be the slave of someone else?