First before I proceed again terms need to be defined, what is an acceptable practice in Islamic Finance and what is not?
For example Reserve ratios. Are Islamic Banks allowed to have more money lent out as debt then they have actual deposits?
This classifies as a 'Fundemental' concern. I went on the assumption that such a concern would be understood. Capitalist growth is powered largely by credit, the current financial crisis proved this, especially in America. Screwing with the banks ability to hand out loans has EPIC consequences on the economy. The American Financial system for one relies on the Ability of business, but more importantly the consumer to get themselves into debt.
Now I don't think you can deny that in order for banks to remain privately owned, they need to be profitable. Agreed? Or do you think banks are just in it for the lulz? If banks cease to be profitable, they must be nationalized, or they just go under. Banks remain profitable by maintaining a constant cycle of debt and interest, that is attracting new deposits with interest, and giving out a significantly larger amount in the form of a loan, debt, which brings more money in the form of interest back into the bank.
Is this legal under Islam?
Similarly, even if the answer to the above was 'yes' if it is illegal to have more money out on loan then you have actual cash on hand, would not the banks similarly have a hard time operating at all, yet alone operating profitably?
And as mentioned earlier since the Capitalist economy runs on debt, and since nationalization from what I understood is out of the question in Islam, and the banks must therefore go under, and hence lose their ability to provide the loans to the people that actually buy the commodities and drive the entire economy, is it not logical to assume that a sudden conversion of a country like the United States to Islam would send the country to hell in a handbasket?
Also Are public Offerings and stock trading not all the same as gambling?
You Invest in a stock (you put your money forward) hoping it will gain value, yet knowlingly taking a risk that may well put you out of your home. Investing is no different then playing poker when you get down to the bottom of it.
You are right, I do not understand the principles of Islamic finance, because this depends entirely on what exactly is legal or illegal under Islam.
For example Reserve ratios. Are Islamic Banks allowed to have more money lent out as debt then they have actual deposits?
This classifies as a 'Fundemental' concern. I went on the assumption that such a concern would be understood. Capitalist growth is powered largely by credit, the current financial crisis proved this, especially in America. Screwing with the banks ability to hand out loans has EPIC consequences on the economy. The American Financial system for one relies on the Ability of business, but more importantly the consumer to get themselves into debt.
Now I don't think you can deny that in order for banks to remain privately owned, they need to be profitable. Agreed? Or do you think banks are just in it for the lulz? If banks cease to be profitable, they must be nationalized, or they just go under. Banks remain profitable by maintaining a constant cycle of debt and interest, that is attracting new deposits with interest, and giving out a significantly larger amount in the form of a loan, debt, which brings more money in the form of interest back into the bank.
Is this legal under Islam?
Similarly, even if the answer to the above was 'yes' if it is illegal to have more money out on loan then you have actual cash on hand, would not the banks similarly have a hard time operating at all, yet alone operating profitably?
And as mentioned earlier since the Capitalist economy runs on debt, and since nationalization from what I understood is out of the question in Islam, and the banks must therefore go under, and hence lose their ability to provide the loans to the people that actually buy the commodities and drive the entire economy, is it not logical to assume that a sudden conversion of a country like the United States to Islam would send the country to hell in a handbasket?
Also Are public Offerings and stock trading not all the same as gambling?
You Invest in a stock (you put your money forward) hoping it will gain value, yet knowlingly taking a risk that may well put you out of your home. Investing is no different then playing poker when you get down to the bottom of it.
You are right, I do not understand the principles of Islamic finance, because this depends entirely on what exactly is legal or illegal under Islam.
