Riba Or Halal? Islamic Finance in Today's World

"Almost(?) Halal Finance"? - Or..

Without "Riba" (usury) ..Best Solutions for West's Woes

Amazing as this may sound, it is true. While we just featued an article on Western finance experts looking to Islamic banking as a solution - Muslims are still running to this failed systme to get the things of this world (hiyata dunyah).

Just today, a Muslim told me certain well-known scholars are recommending a "nearly halal" bank to get financing!
Fantastic! I am thinking, WOW - "Nearly Halal"! Amazing.
Just what we need today - almost legal way to get loans for homes, cars, college, start a business or maybe even finance your hajj (pilgrimage) to Makkah .

All this going on for the Muslims, yet the western finance world is looking to Islam for solutions to their sinking ship - [when man's way doesn't work - now they come back to Allah?]

Amazing as it may seem, the western capitalist world is now being forced to do a double take - looking to the very entity it once demonized as "enemy to free world economics". But now they are forced to admit their system and the people running it, has serious flaws - and could spell the end of their pervious goals for world economic take over.

Will they now admit, Islamic finance is the obvious cure to the ailments of a fallen economic tragedy? Is Wall Street ready to turn to look honestly at Muslim financial structuring as a means to turning the world's monetary chaos into financial order?

Only time will tell, but even before the events of September 11, 2001, the president of the Chicago Stock Exchange was discussing the successes noted in some of the test cases by certain Wall Street investors. He spoke directly to Sheik Yusuf Estes Friday, before Labor Day weekend, while the sheik was attending the Islamic Society of North America's Conference for Business held in Chicago that week, When asked about the meeting, Sheik Yusuf said their conversation was very positive and they had made plans for another meeting within the month. However, after the attack on the World Trade Center, communication between the financial district and Muslim scholars came to an almost complete standstill and it was not until recent days there are signs of returning back to these discussions.

It is no secret today, our entire world economy is in a sate of flux, shifting the blame from lenders to owners to developers and back to lenders and then defaulting on notes and the properties go back to the lenders, etc.It is obvious the mismanagement and poor business practices havecontributed greatly to this down turn in our financial world today. Borrowing, lending and collection on notes is all a part of thecredit business. However, the huge rise in foreclosures and bankruptcies make it clear – something is definitely wrong with thesystem.

Whose fault is it? Who can we make the scape-goat? While manywould divert attention away from their own area of involvement, wecan easily understand that, just as it takes two to Tango, it takesmore than one individual to lend or borrow money. So, all are guilty.

This definitely co-insides with what Islam teaches us aboutdealing in the practice of lending and borrowing. While it isperfectly permissible and in some cases, highly encouraged, lendingcannot be used as a commodity for making money on itself. There aresome very practical reasons for this, as well as being against theteachings of the monotheistic faiths of Judaism, Christianity andIslam. The Bible and the Quran make it clear, usury (interest onloans) is not permitted under any circumstances. This will cause fora depletion of the medium of exchange (the bills and coins) and because for the influx of new currency as well as the eventual loss ofvalue of currency, as we have witnessed over the last 90 years.

Putting it in simple terms, the financial system of the west todayis like a patient with a blood transfusion from one arm to the otherarm –with a slow leak in the middle. Eventually, there willbe so little left it will have no value anymore.

Compare the situation of the west with that of the nationaleconomies of the Middle East today – relatively stable and theyappear to be in the best position to endure the inevitable crisissoon to effect the entire globe. However, the world economic crisisis affecting every corner of the planet, especially where jobs arebeing cut and work is coming to a standstill. Layoffs, firings andreduction in forces are noted everywhere.

Now the good news. Islamic finance has proven in today's market tobe the real salvation for those who invested together as the shar'iahcompliant mortgages require. Homes financed with Islamic loans areunder the protected bubble in the housing market. The shared riskfactor and ban on interest-based transactions has proven successfulbeyond anyone's imagination in the finacial world. Experts are at aloss to explain away what has obviously become the only realsuccessful return on venture capital in today's marketplace. Thegrowth and health of Islamic financial institutions has gained theattention of investors, speculators and experts in all areas ofeconomics, but especially regarding housing. Experts have determinedIslamic finance is responsible for close to three quarters of atrillion dollars in assets and is on the upward move between 10 to 30percent each year.

What is the secret? These kinds of mortugages and protectionoffered to both the borrower and the lender – are protected by thevery One who created the universe in the first place. He Knowswithout doubt what will work and what won't work. He has allowed the humans to run their course, disobeying him in their worldly transactions, dealing in a form of high stacks gambling and takingadvantage of the working class while extorting those with poorercredit ratings and forcing them into higher interest rates, until thewhole of the economic structure of the world is about to collapse.

As He says in the Quran,
"By time, all the humans are in loss, except for those who come to the faith (in God) and work righteousness and encourage each other to all that is truth and encourage each other to be steadfastly patient." (Quran, chapter 108 - Al Asr)

All humans will be in a state of "khusr" (bankruptcy) but those who have follow the golden rule - “Do unto others, asyou would have them do unto you” - and never take a gain on themedium of exchange itself.

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