Fiat money.
Yesterday a group of us listened to Prof. Dato’ Dr. Ahamed Kameel Mydin Meera break down what may be the biggest issue of our lifetime.
It impacts almost everything:
• Falling birth rates
• The cost of living spiralling
• People working harder but feeling less secure
• Entire societies ageing and shrinking
And yes – Gaza too…
A quick step back.
For most of history, money was real.
• Gold and silver were a measure of value
• Currency was redeemable for something tangible
After World War II, that changed.
• A new global system was created
• The US dollar became the world’s reserve currency
• And by the early 1970s, the gold link was cut
From that point on, money became fiat.
• Not anchored to anything real
• Created largely through debt
• Printed out of nothing
• Lent into existence
• Then charged interest on
• The “greatest business model of all time” where the rich get super rich and leave others suffering.
The consequences have been profound.
When money grows faster than real goods and services:
• Prices rise
• Asset bubbles form
• Wealth concentrates
• Ordinary life becomes too expensive
Over time, debt messes us all up.
• Marriage gets delayed
• Children become “too expensive”
• People are forced to choose between security and family
Here’s the scary part.
For a society to sustain itself:
• Fertility needs to be at least 2.11
• Below 1.3, decline becomes extremely hard to reverse
• Multiple countries today are well below this, like Singapore
Now, Gaza.
Under the Oslo Accords in the 90s, Palestinians were granted limited political authority but denied monetary sovereignty.
This left them unable to issue their own currency and effectively dependent on the Israeli shekel, with no control over money supply, interest rates, or exchange conditions.
So what happens now…the Professor told us this:
• Aid enters Gaza in foreign currency
• It must be converted into shekels
• Around 40% is lost in conversion, fees, and commissions
• Prices inflate artificially
So £200 of aid can translate into the absurdity of providing just a couple of bags of flour and a bag of sugar.
All because the money is distorted.
From an Islamic perspective, this matters deeply.
• Creating money out of nothing is riba, according to Professor Kameel.
• And, he says, is worse than lending money with interest, which is also riba.
The deeper issue isn’t gold. It’s debt.
So what does an Islamic approach emphasise?
• Risk-sharing instead of guaranteed returns
• Education and health as foundations
• Reviving waqf as social infrastructure – where private wealth is permanently set aside to fund public goods, schools, hospitals, even animal food so they can always eat.
With that said, the believer is hopeful. Whatever comes up must come down and it’s the new generation who must change this.
You can watch the talk here: https://lnkd.in/ehPPRAQA Activate to view larger image,
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Categories: Islamic Guidance, World