The biggest scam in the history on mankind, 'The debt Ceiling'

Scary!

Is this a video about how banks create money out of thin air?

Thanks for sharing this video. Now, it is more clear why Qur'an prohibits 'interest'.


Since the Qur’an’s principles and laws have come from pre-eternity, they shall go to post-eternity. They are not condemned to grow old and die like civilization’s laws. They are always young and strong. For example, despite all its societies for good works, all its establishments for the teaching of ethics, all its severe discipline and regulations, civilization has been unable to contest the All-Wise Qur’an on two of its matters, and has been defeated by them. These two matters are:

Be steadfast in performing the prayers, and give zakat, (Qur'an 2:94)

and,

God has permitted trade and forbidden usury. (Qur'an 2:61)

We shall describe them, this miraculous victory, by means of an introduction. It is like this:

As is proved in Isharat al-I’jaz, just as the source of mankind’s revolutions is one phrase, so another phrase is the origin of all immorality.

First Phrase: “So long as I’m full, what is it to me if others die of hunger.”

Second Phrase: “You work so that I can eat.”

Yes, the upper and lower classes in human society, that is, the rich and the poor, live at peace when in equilibrium. The basis of that equilibrium is compassion and kindness in the upper classes, and respect and obedience in the lower classes. Now, the first phrase has incited the upper classes to practise oppression, immorality, and mercilessness. And just as the second has driven the lower classes to hatred, envy, and to contend the upper classes, and has negated man’s tranquillity for several centuries, so too this century, as the result of the struggle between capital and labour, it has been the cause of the momentous events of Europe well-known by all. Thus, together with all its societies for good works, all its establishments for the teaching of ethics, all its severe discipline and regulations, it could not reconcile these two classes of mankind, nor could it heal the two fearsome wounds in human life.

The Qur’an, however, eradicates the first phrase with its injunction to pay zakat, and heals it. While it uproots the second phrase with its prohibition on usury and interest, and cures that. Indeed, the Qur’anic verse stands at the door of the world and declares usury and interest to be forbidden. It reads out its decree to mankind, saying: “In order to close the door of strife, close the door of usury and interest!” It forbids its students to enter it.

Alright, I watched the video this morning while drinking morning coffee since I had a 30-minute timeslot and nothing else to do. And it was exactly as I suspected. The same old ----- that manages to fundamentally and catastropically misunderstand the nature of fractional reserve banking, denies or is clueless about the fact that it would make no difference for fractional reserve banking if money was gold-based, and manages to equally badly misunderstand the "private" nature of the federal reserve.

About the only thing it gets right is that the federal reserve creates money out of thin air, lends it at (currently) low interest to banks, who then lend it at higher interest to the federal government. Making, as Jon Stewart put it, the US government the stupidest loan shark ever. Which is why nowadays the federal reserve actually buys most of those bonds directly.

I can explain where the video gets it wrong for those who are actually interested to know, but it seems many would rather take its word for it just to be able to get warm fuzzies about how this somehow proves how evil riba is and how Islamic financial wisdom is the best.

Assalamualaikum, greeting everyone.

format_quote Originally Posted by Futuwwa

Is this a video about how banks create money out of thin air?

Creating money out of thin air is common practice among many government in the world. Indonesian government too.

We use Rupiah for domestic transaction that printed by govt's money printing company (Peruri). Sometime when govt need more money to pay their employees, or their projects, or only to 'chase' inflation, govt ordered peruri to print more money. so they have enough money to pay the bill.

What I feel from this policy?. When I was teen I could enjoy noodle and meatball with less than Rp 400, but now I must spend more than Rp 10,000 for noodle and meatball.

format_quote Originally Posted by Eric H

the video is sponsored by the 'gold and silver channel, it appears they might want to make the next biggest scam in the history on mankind.

Gold and silver channel?. Hmmm, it's remind me to Dinar and Dirham society among Muslims that want to use Dinar (gold) and Dirham (silver) as currency among Muslims.

Dinar is popular enough among some Muslims in my place. However, not as means of payment but only as investation instrument. They buy Dinar as a kind of saving, and when they need to buy something they sell their Dinar, and use paper money to buy what they need.

By the way, due to my computer speaker problem I haven't watch that video, but I have read several articles about US Debt Ceiling. It's remind me to Plafondering practice that was popular in Indonesian banks to save certain debtors. In Plafondering practice, when a debtor debt had reach its ceiling (plafon), then the bank could lift up the ceiling. So, the debtor still could get loan. But this practice has been prohibited by Central bank.

format_quote Originally Posted by Futuwwa

I can explain where the video gets it wrong for those who are actually interested to know

Please explain. I don't get warm and fuzzy as it is rather disturbing. But it is put in a very simple way and easy to understand, correctly or not. SO, I am interested about 'mpney out of thin air' as you put it.

Peace

Okay, here goes.

A central bank does indeed create money out of thin air. It's a central bank, a government institution. It prints or otherwise creates money and lends it to banks at a certain interest rate chosen by it. The interest rate is a tool of macroeconomic policy. Sometimes it is considered to be beneficial to the economy to make loans available for cheap, which is achieved by setting a low central bank interest rate. The downside is that inflation speeds up when the interest rate is low. A higher central bank interest rate causes there to be less demand for loans from the central bank, slowing down the rate at which money is produced, and slowing down inflation.

Hence, it is money printing and lending that causes inflation. Not interest. Interest is what restrains inflation, not causes it. If the central bank actually lent out money at no interest, there'd be no reason not to borrow, the money supply would explode, and hyperinflation would ensue.

Then, the part about (ordinary) banks supposedly creating money out of thin air by money getting deposited and loaned over and over again. Well, they don't. Money that is deposited and reloaned over and over again in a chain like that doesn't increase in amount, it just gets passed onwards. If you added up all the bank account balances of all people in the chain (but failed to subtract their debts to each other) you'd see that the sum is indeed many times larger than the original amount of money. Bank account balances are, however, strictly speaking not money. You don't "have money in the bank". What you have is a legal claim to get money from the bank, subject to the terms pertaining to your account. This makes all the difference in the world, since it means that the money isn't somehow everywhere simultaneously, not everyone can simultaneously cash in their money, nor can all of them go out and simultaneously spend a total amount much larger than the original amount. So even if it appears like money has been created out of thin air, it's virtual rather than real. Only an amount corresponding to the original amount of money is actually free to be spent at any one time, so there will be no inflation from money supply increase.