Libya to Ban Interest on Loans

reply to post by predator0187

I take it you have already Read the Following;

www.abovetopsecret.com...

And that's what they got rid of.

Originally posted by WhatTheory

Originally posted by predator0187
Wow, I mean could you imagine not having to pay interest on your mortgages?

Hate to burst your bubble, but that is NOT a good thing.

Anyone with an ounce of common sense would understand this fact.

If you ban interest on loans then there will be no loans. Which means you will NOT be able to buy a house or a car unless you have the money to pay cash in full. Think about it for a moment. The only reason banks or other such companies offer loans is to make money off the interest. Why would YOU risk losing the money you loaned to someone if you are not going to make a profit from the exchange? Nobody would offer loans because it would be to risky without any reward thus the economy will suffer greatly.

I hate to burst your bubble, but in most societies around the world the concept of charging interest is, well, they just don't have one; you pay cash, or trade goats, or whatever. This is one reason why things in bank-run societies are so expensive- it's easier to charge more for something when a person can just borrow more money than they can actually afford at the time.

Edit to add- To take this stupid credit thing further. Right now there is a BofA commercial running where some huge Wendy's franchisee talks about how he gets his financing to keep his operations running from BofA.

My question is why is he borrowing money and paying interest when he has 169 Wendy's stores? It seems insane to me. Yes, I know people will say he has his money working making more money, while borrowing this money at a lower rate that his return, so he has a net income from the loans...Yeah, that's what they all say until the poop hits the fan. Why not just not get into all that borrowing and pay your bills as they come in? These banksters have convinced people that paying them to be middlemen is somehow good.

Double post again. My mouse is messed up.

reply to post by DragonTattooz


Things in bank run societies are expensive because inflation is the siamese twin of a fiat currency. With fiat currencies, there's no way to go but up.

But i bet the fractional reserve system stands

Originally posted by Logarock

Originally posted by Dreamwatcher
One of the typical ways around the "no interest" is for the bank to buy and resell to the buyer.

For example:

Somebody want s to buy a house listed at $100,000. Instead of loaning the money with interest, the bank simply buys the house and resells it to the person for $200,000 with no "interest" loan.

LOL.Yea that sounds good but this isnt a yard sale. You have inadvertently shown why it wouldnt work.
Banks to stay in the game and stay in control must go for the long term interest game. If banks had to buy and the sell back at inflated rates they would be subject to real world economic conditions like the rest of us.....and thats not what they are all about. If it were that easy the banks would go into the real estate business instead of the interest business. Do you thing GMAC gives out loans to help sell cars? No they sell interst packages.

I take it you never even looked at how things are financed under Islamic law.

Murabahah was originally an exchange transaction in which a buyer purchases items from a seller at a specified profit margin payable to the seller. It is assumed that the seller will divulge his costs accurately, such that the profit-margin can be agreed accurately. Hence this type of sale is a form of 'trust sale' since the buyer must trust that the seller is disclosing his true costs. Where a trader acts on behalf of another party in buying goods, the murabahah mark-up may be seen as a payment for the trader's service in locating, transporting and delivering the goods.

The majority of financings arranged in the modern Islamic financial market are based upon murabahah. However, it is often not clear to what extent the providers of such finance undertake risk that is substantially different to that undertaken by interest-based banks in the course of their lending. One reason for the controversy that surrounds murabahah as an Islamically acceptable financing mechanism arises from the differentiation between the price for spot payment and the price for deferred payment that is usually in evidence (see What is Usury?). Scholars accept a transaction in which the aggregate value of the deferred instalments equals the spot price (since even if such a transaction is viewed as a combination of a sale of goods with a loan advanced by the seller to the buyer, the loan in this case would be interest-free).

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