"Islamic Banking" is DOUBLE Haraam - Sheikh Umer Vadillo

[AsifAmeer]

Check this out..

There's a bank run in Greece! hehehe

This is from yesterday.

Before I answer your question on why money is withdrawn, we have to understand what exactly "money" is. This is called the Exter's Monetary Pyramid

About a century ago, Gold created the inverted base of the Money

• Gold is Risk-free. Holding Gold earns no interest
• Cash - Almost risk-free. Holding Cash earns almost on interest
• T-Bills (Govt Bonds): Higher risk than Cash. Earns interest
• Commercial paper (CDs, savings accounts, money market accounts
• Exchange traded Commodities & Stocks & derivatives
• OTC (Over the Counter) stocks, futures & derivatives
• Real-Estate
• Small Business

Notice how risk & liquidity is increased from Gold to cash to t-bill to stocks... During crisis "money flows towards "risk-aversion" (the bottom part of the pyramid). During boom-time, money flows to the upper part of the pyramid(all things rational)

If you understand this pyramid, you understand leverage. You understand banking, you understand fractional reserve lending.

Remember i explained you that banks create this overlapping ownership to capital causing market forces to go haywire.. When your house value increases, its not the same as having liquid cash. When you have $100k in stocks, its not the same as CASH. When you have $100k in your bank account, even that is not the same as CASH. And when you have CASH, its not as good as Gold.

All this stuff, I can bet you, no school, college or university would discuss in detail on Campus.

Run on the Bank occurs when people fear the bank is about to go belly up. The act of withdrawal becomes a self-fulfilling prophecy. Central Banks try to provide liquidity but without the adding more Gold at the base, the new liquidity increases the risk of inflation. Huge amount of liquidity risks loss of faith in the currency itself.


Will tag a few more folks here
[MENTION=13871]Unicorn[/MENTION] @imran1976 @ConcernedPaki @cefspan @hans @itsnotme90 @Keepinformed @mrk123

@AsifAmeer:

Dude, I have a question for you regarding Fractional Reserve lending. I have been reading up a bit about it and it seems its the prevalent style of banking around the world! With what I have read, it seems that this 'money multiplier' system was pretty occult in the sense that its inherent problem could only be exposed if people started withdrawing their money in banks in large numbers. Although even then these banks are covered by central banks of countries who lend out more to banks that might face problems with its reserve ratio due to large withdrawals (wow, I kind of sound like you :P)

My question is: If such large withdrawals is a precursor to the unearthing of this fraudulent prevalent system of lending, then where and when exactly did the withdrawal start happening? Or did withdrawals never happen and it was exposed some other way? How does the mortgage crises relate to this as well?

Looking forward to your response!

 

[Aleph]

Thanks, bro, this makes a lot of sense. Although, I would still want to learn more about each step of the 'money pyramid'. For example, what exactly is a T-bill or Commercial paper? I guess I will google all this and bug you if I have to (you 'ungal'ed me into reading up about all this!).

One thing remains unanswered though: Has the self-fulfilling prophecy (mass cash withdrawals from banks) taken place as of yet? If so, where and when? If not, then when do you anticipate this to happen?

Thanks!

Check this out..

There's a bank run in Greece! hehehe

This is from yesterday.

Before I answer your question on why money is withdrawn, we have to understand what exactly "money" is. This is called the Exter's Monetary Pyramid

About a century ago, Gold created the inverted base of the Money

• Gold is Risk-free. Holding Gold earns no interest
• Cash - Almost risk-free. Holding Cash earns almost on interest
• T-Bills (Govt Bonds): Higher risk than Cash. Earns interest
• Commercial paper (CDs, savings accounts, money market accounts
• Exchange traded Commodities & Stocks & derivatives
• OTC (Over the Counter) stocks, futures & derivatives
• Real-Estate
• Small Business

Notice how risk & liquidity is increased from Gold to cash to t-bill to stocks... During crisis "money flows towards "risk-aversion" (the bottom part of the pyramid). During boom-time, money flows to the upper part of the pyramid(all things rational)

If you understand this pyramid, you understand leverage. You understand banking, you understand fractional reserve lending.

Remember i explained you that banks create this overlapping ownership to capital causing market forces to go haywire.. When your house value increases, its not the same as having liquid cash. When you have $100k in stocks, its not the same as CASH. When you have $100k in your bank account, even that is not the same as CASH. And when you have CASH, its not as good as Gold.

All this stuff, I can bet you, no school, college or university would discuss in detail on Campus.

Run on the Bank occurs when people fear the bank is about to go belly up. The act of withdrawal becomes a self-fulfilling prophecy. Central Banks try to provide liquidity but without the adding more Gold at the base, the new liquidity increases the risk of inflation. Huge amount of liquidity risks loss of faith in the currency itself.


Will tag a few more folks here
@Unicorn @imran1976 @ConcernedPaki @cefspan @hans @itsnotme90 @Keepinformed @mrk123

 

[AsifAmeer]

T-Bill is Treasury Bonds. Treasury Bonds are....

When Govt needs money (CASH), it "borrows" cash from the Central Bank. The Cash is borrowed into existence. Thats why cash is also called a "bill" or a "note". In exchange for cash, Govt prints interest bearing bonds (T-Bills) to the Central Bank which the central bank auctions in the REPO market. These T-bills are bought by banks and put on the bank balance sheets as Tier 1 capital (stock holder equity)

I am sorry for not being able to simplify this. These processes are not the business of a common man...

Thanks, bro, this makes a lot of sense. Although, I would still want to learn more about each step of the 'money pyramid'. For example, what exactly is a T-bill or Commercial paper? I guess I will google all this and bug you if I have to (you 'ungal'ed me into reading up about all this!).

One thing remains unanswered though: Has the self-fulfilling prophecy (mass cash withdrawals from banks) taken place as of yet? If so, where and when? If not, then when do you anticipate this to happen?

Thanks!

 

[AsifAmeer]

The bankrun as already started on the greek banks. 4 Banks are technically broke and running on negative equity. Once the loans are called from those banks, its over. Why arent the loans being called by German banks? because they dont want to see these banks go bust. Its like you call your credit card company and tell them that it they want their $5000 back, they need to issue you a new $10000 line of credit.

Thanks, bro, this makes a lot of sense. Although, I would still want to learn more about each step of the 'money pyramid'. For example, what exactly is a T-bill or Commercial paper? I guess I will google all this and bug you if I have to (you 'ungal'ed me into reading up about all this!).

One thing remains unanswered though: Has the self-fulfilling prophecy (mass cash withdrawals from banks) taken place as of yet? If so, where and when? If not, then when do you anticipate this to happen?

Thanks!

 

[Aleph]

I see (said the blind man)! Is that why you are asking people to exchange their PKR for other currencies? Would that be similar to running to our banks and withdrawing all our monies from the banks and then watching the system collapse?

Sorry for bothering you with my never-ending questions, but you are doing a great job of explaining it all!

The bankrun as already started on the greek banks. 4 Banks are technically broke and running on negative equity. Once the loans are called from those banks, its over. Why arent the loans being called by German banks? because they dont want to see these banks go bust. Its like you call your credit card company and tell them that it they want their $5000 back, they need to issue you a new $10000 line of credit.

 

[AsifAmeer]

Its not my intention to collapse the system. My intention is to inform the people that they have an option to protest the Govt in a civil MEANINGFUL and productive way. As soon as the news of this protest hits the Govt, they will be forced to balance their budget, reduce inflation, and start functioning. Because the other route is the collapse of a currency and if the people are already out of the currency, collapse of the currency will hurt the Govt the most!

I see (said the blind man)! Is that why you are asking people to exchange their PKR for other currencies? Would that be similar to running to our banks and withdrawing all our monies from the banks and then watching the system collapse?

Sorry for bothering you with my never-ending questions, but you are doing a great job of explaining it all!

 

[Unicorn]

Check this out..

There's a bank run in Greece! hehehe

This is from yesterday.

Before I answer your question on why money is withdrawn, we have to understand what exactly "money" is. This is called the Exter's Monetary Pyramid

About a century ago, Gold created the inverted base of the Money

• Gold is Risk-free. Holding Gold earns no interest
• Cash - Almost risk-free. Holding Cash earns almost on interest
• T-Bills (Govt Bonds): Higher risk than Cash. Earns interest
• Commercial paper (CDs, savings accounts, money market accounts
• Exchange traded Commodities & Stocks & derivatives
• OTC (Over the Counter) stocks, futures & derivatives
• Real-Estate
• Small Business

Notice how risk & liquidity is increased from Gold to cash to t-bill to stocks... During crisis "money flows towards "risk-aversion" (the bottom part of the pyramid). During boom-time, money flows to the upper part of the pyramid(all things rational)

If you understand this pyramid, you understand leverage. You understand banking, you understand fractional reserve lending.

Remember i explained you that banks create this overlapping ownership to capital causing market forces to go haywire.. When your house value increases, its not the same as having liquid cash. When you have $100k in stocks, its not the same as CASH. When you have $100k in your bank account, even that is not the same as CASH. And when you have CASH, its not as good as Gold.

All this stuff, I can bet you, no school, college or university would discuss in detail on Campus.

Run on the Bank occurs when people fear the bank is about to go belly up. The act of withdrawal becomes a self-fulfilling prophecy. Central Banks try to provide liquidity but without the adding more Gold at the base, the new liquidity increases the risk of inflation. Huge amount of liquidity risks loss of faith in the currency itself.


Will tag a few more folks here
@Unicorn @imran1976 @ConcernedPaki @cefspan @hans @itsnotme90 @Keepinformed @mrk123

Ouch ouch, it looks like "Latoo" turning slowly and almost ready to topple:(

 

[AsifAmeer]

Ouch ouch, it looks like "Latoo" turning slowly and almost ready to topple:(

Very well said..

[MENTION=28031]Aleph[/MENTION] if the base gets too small, the pricing of the asset classes above get imbalanced in the economy.

 

[atensari]

Exactly like I had expected. Because you wouldn't have time to actually get a copy of the documents containing what perestroyka meant and how had it been implemented.

If you still don't know how corporate interests run governments and their lobbies in the world, then you don't research but blindly believe (no offence intended).

If you still don't know how CIA started all this drama of jihad, I would urge you to take those goggles out and see things how they are.

If you still believe that Russia military might was only worth this much, please spend some time watching how massive it still is.

And about the article, it was published in jang in the 90s so its not fiction but a reality. Anyway, no use discussing as my mate, (no offence intended again) when you only want to deny what is open out there, what can a person do.

Will not even care watching your reply now as its of no use. I too held the same attitude back when I was 8 and at that time, when I was handed material to read, I too started skeptically but then started to understand issues. Anyway, leave it. ta ta.

But you please keep trying marketing your your fictions, hopefully some day ...............

 

[imran1976]

Fractional reserve banking is without any doubt the most successful Scam in the entire history of mankind - This system creates magical money or unseen money , just look at the money supply of any country and you will find out that only 3-8% of total money supply is printed by government , the rest 92-97% is the unseen magical money which exists only in computers as digits.

with a reserve of 10%, the banks can create 10 times of the original deposit - Say the deposit is 5000, the bank can create 5000x10= 50000 , they create debt; our system is running on debt. Now assume the interest rate 8%, so 50000x8% = 4000 ; now imagine what a profitable venture this is ; with 5000 deposit the bank sucks out 4000 from the people.

this is just a simple example, imagine the macro level , imagine the interest government pay on it's debts; from whose pocket it's paid - yes the tax payers.

 

[imran1976]

from the text written by Mufti Taqi Usmani on the Judgement on RIba' in 1991


(d) Expansion of Artificial Money and Inflation


170. Since interest-bearing loans have no specific relation with actual production, and the financier, after securing a strong collateral, normally has no concern how the funds are used by the borrower, the money supply effected through banks and financial institutions has no nexus with the goods and services actually produced on the ground. It creates a serious mismatch between the supply of money and the production of goods and services. This is obviously one of the basic factors that create or fuel inflation.


171. This phenomenon is aggravated to a horrible extent by the well-known characteristic of the modern banks normally termed as "money creation." Even the introductory books of economics usually explain, often with complacence, how the banks create money. This apparently miraculous function of the banks is sometimes taken to be one of the factors that boost production and bring prosperity. But the illusion underlying this concept, is seldom unveiled by the champions of modern banking.


172. The history of "money creation" refers back to the famous story of the goldsmiths of medieval England. The people used to deposit their gold coins with them in trust, and they used to issue a receipt to the depositors. In order to simplify the process, the goldsmiths started issuing "bearer" receipts which gradually took the place of gold coins and the people started using them in settlement of their liabilities. When these receipts gained wide acceptability in the market, only a small fraction of the depositors or bearers ever came to the goldsmiths to demand actual gold. At this point the goldsmiths began lending out some of the deposited gold secretly and thus started earning interest on these loans. After some time they discovered that they could print more money (i.e. paper gold deposit certificates) than actually deposited with them and that they could loan out this extra money on interest. They acted accordingly and this was the birth of "money creation" or "fractional reserve lending" which means to loan out more money than one has as a reserve for deposits. In this way these goldsmiths, after becoming more confident, started decreasing the reserve requirement and increasing the percentage of their self-created credit, and used to loan out four, five, even ten times more gold certificates than they had in their safe rooms.


173. Initially, it was abuse of trust and a sheer fraud on the part of the goldsmiths not warranted by any norm of equity, justice and honesty. It was a form of forgery and usurpation of the power of the sovereign authority to issue money. But overtime, this fraudulent practice turned into the fashionable standard practice of the modern banks under the "fractional reserve" system. How the money changers and bankers have succeeded in legalizing the creation of money by the private banks, in spite of the strong opposition from several rulers in England and USA, and how the Rothchilds acquired financial mastery over the whole of Europe and the Rockfeller over the whole of America is a long story, now lost in the mist of numerous theories developed to support the concept of money-creation by the private banks. But the net result is that the modern banks are creating money out of nothing. They are allowed to advance loans in the amounts ten times more than their deposits. The coins and notes issued by the government as a genuine and debt-free money have now a very insignificant proportion in the total money in circulation, most of which is artificial money created by advances made by the banks. The proportion of real money issued by the governments has been constantly declining in most of the countries, while the proportion of the artificial money created by the banks out of nothing is ever-increasing. The spiral of loans built upon loans is now the major part of the money supply. Taking the example of UK according to the statistics of 1997 the total money stock in the country was 680 billion pounds, out of which only 25 billion pounds were issued by the government in the form of coins and notes. All the rest i.e. 655 billion pounds were created by the banks. It means that the original debt-free money remained only 3.6% of the whole money supply while 96.4% is nothing but a bubble created by the banks. The way this bubble is growing annually can be seen from the following table that details the quantum of money supply in UK during twenty years:


175. This phenomenon unveils two realities. Firstly, it shows that 96.4% of the total money supply is debt-ridden money and only 3.6% is debt-free. One can imagine how the whole economy is drowned under debt. Secondly, it means that 96.4% of the aggregate money circulated in the country is nothing but numbers created by computers, having no real thing behind them.


176. The situation in USA is almost the same as that in U.K. Patrick S.J. Carmack and Bill Still observe about it as follows:

"Why are we over our head in debt? Because we are laboring under a debt-money system, in which all our money is created in parallel with an equivalent quantity of debt, that is designed and controlled by private bankers for their benefit. They create and loan money at interest, we get the debt


So, although the banks do not create currency, they do create checkbook money, or deposits, by making new loans. They even invest some of this created money. In fact, over one trillion dollars of this privately-created money has been used to purchase U.S. bonds on the open market, which provides the banks with roughly 50 billion dollars in interest, less the interest they pay some depositors. In this way, through fractional reserve lending, banks create far in excess of 90% of the money, and therefore cause over 90% of our inflation."