2009-12-31

finance regulation lessons from Islam

11.6: pol/finance regulation/lessons from islam:
. another muslim-unique rule is no money from lending .
. this could mean that all customers have to pre-pay,
or that all markets should be in stocks not bonds,
where you use your savings to buy co.ownership in a money-maker .
. a usaa fin.mgt and depression historian
pointed out how deflation works:
demand falls off massively in a fin system that borrows a lot;
it involves doing production in huge batches
or for very expensive items .
. mass production can be very cheap
but if the masses don't buy the product
then the business is scrambling to pay for the loan,
because money is rented, so time is money .
. this forces unfair sales prices just to pay off the loan .