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**floadaVonfoli** · 10-17-2011, 03:09 PM

I don't know the answers to those questions (I think I read somewhere that, in principle, fiat money is ok. Not sure though).

However, the thing to keep in mind is that in the real world there is no such thing as fiat money that is issued by the government. All (most?) currencies are actually bank notes (for example, if you look at US currency, it does not say, "US Treasury note" or "US Govt Note". Instead, it says, "Federal Reserve Note" (the Fed is an amalgamation of private banks).

That is, (very basically speaking) they are loans by the banks to the government, and interest is owed on those notes. Also consider the fact that banks and governments collude to such an extent that they are essentially one and the same...I don't know what that means for the shariah status of such currencies.

I hate banks with a passion. May Allah destroy them all.

for your reply.

it seems that the present system of fiat money survives on interest and would not work without interest.
so in the strict sense, as soon as a person starts using money he is dealing in interest?

also, why does the government need the banks to issue this money? why do they not issue this money themselves?

10-17-2011, 03:09 PM	#3
floadaVonfoli Join Date Oct 2005 Posts 417 Senior Member	I don't know the answers to those questions (I think I read somewhere that, in principle, fiat money is ok. Not sure though). However, the thing to keep in mind is that in the real world there is no such thing as fiat money that is issued by the government. All (most?) currencies are actually bank notes (for example, if you look at US currency, it does not say, "US Treasury note" or "US Govt Note". Instead, it says, "Federal Reserve Note" (the Fed is an amalgamation of private banks). That is, (very basically speaking) they are loans by the banks to the government, and interest is owed on those notes. Also consider the fact that banks and governments collude to such an extent that they are essentially one and the same...I don't know what that means for the shariah status of such currencies. I hate banks with a passion. May Allah destroy them all. for your reply. it seems that the present system of fiat money survives on interest and would not work without interest. so in the strict sense, as soon as a person starts using money he is dealing in interest? also, why does the government need the banks to issue this money? why do they not issue this money themselves?
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