Financial Failures

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Financial Failures

Issue to be discussedFinancial Failure a realityExploring reasonsInterestTaxationEthicsEstablished norms & practicesThe future

Financial failuresThe great depress & stock market crashThe recent financial meltdown in Europe & USA


Possible reasons givenCyclicalMarket correction & Arbitrage TheoryThe ugly beauty of Free market

Are these acceptable ?Or are there other important factors that are missing!

A deeper analysisExploited by greedy capitalistGeared to the advantage of the capitalist powersThe bigger fish eats the smaller fishIn practice the stock market works quite differently that theorizedEthics are over-stretchedCreates a hollow market the bubble!The underlying fundamentals need evaluation!

The choice ?To succeed or fail?To play with the lives of million on the basis of trail and error?Is the current system the outcome of the wisest men, or should the system of the Wisest be acceptable ?

To succeed or fail ?

Analysing the building block of corporate financeInterest is the basis of financeIs it justifiable ?Are there problems associate with it ?What is the fundamental problem ?Global warning for interest !

What the Quran DECLARES (2:275): Those who eat Rib (usury) will not stand (on the Day of Resurrection)

except like the standing of a person beaten by Shaitn (Satan) leading him to insanity.

That is because they say: "Trading is only like Rib (usury),"

whereas Allh has permitted trading and forbidden Rib.

So whosoever receives an admonition from his Lord & stops eating Rib (usury) shall not be punished for the past; his case is for Allh (to judge); but whoever returns (to Rib), such are the dwellers of the Fire they will abide therein forever.

Soorah Al-Baqarah Ayah # 276:Allh will destroy Rib (usury)

and will give increase for Sadaqt (deeds of charity, alms, etc.)

And Allh likes not the disbelievers, sinners.

RIBA will be DESTROYED !!!!!!

Soorah Al-Baqarah Ayah # 277:Truly those who believe, and do deeds of righteousness, and perform As-Salt, and give Zakt,

they will have their reward with their Lord. On them shall be no fear, nor shall they grieve.

Soorah Al-Baqarah Ayah # 278:O you who believe!

Be afraid of Allh and give up what remains (due to you) from Rib (from now onward),

if you are (really) believers.

MUST give up riba!

Soorah Al-Baqarah Ayah # 279:And if you do not do it,

then take a notice of war from Allh and His Messenger;

but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums).

Soorah Al-Baqarah Ayah # 280:And if the debtor is in straitened circumstances,

then (let there be) postponement to (the time of) ease;

and that ye remit the debt as almsgiving would be better for you if ye did but know.

Soorah Al-Baqarah Ayah # 281:And be afraid of the Day when you shall be brought back to Allh.

Then every person shall be paid what he earned, and they shall not be dealt with unjustly.

Ahadeeth on RIBA:Jabir (r) narrates that the prophet (s) cursed the receiver and the payer of riba, the one who records it and the 2 witnesses to the transaction and said: They are all alike (Tirmidhi)

Abu Hurairah (r) narrates that the prophet (s) said: On the night of Ascension I came upon people whose stomachs were like houses with snakes visible from the outside. I asked Gibril who they were. He replied that they were people who had received riba. (Musnad Ahmed)

Abu Hurairah (r) narrates that the prophet (s) said: There will certainly come a time for humanity when everyone will take riba and if he does not do so, its dust will reach him (Abu Dawoud)

Is RIBA Haram in IslamIt is a serious kabair; if not left in hell-fire forever

It is clearly haram in Quran & hadith

There is absolutely no difference amongst the Fuqahah on Riba

It is a sin in Judaism & Christianity

It is not considered a good practice in Hinduism, Buddhism, or Maoism

Views on RIBA/INTERESTPlato disliked it Anti-human

Aristotle condemned it

Early Roman Empire prohibited it !

Lex Genucia of Rome Illegal (340BC)

Federal Shariat Court Anti Islamic

Federal Shariat Court-Contrary to IslamGovernment Savings Banks Act 1873The Interest Act 1839The Code of Civil Procedure, 1908The Co-operative Societies Rules, 1927The Negotiable Instruments Act, 1881The Land Acquisition Act, 1894The State Bank of Pakistan Act, 1956The Insurance Act, 1938The West Pakistan Money Lenders Rules, 1960The Co-Operative Societies Act, 1925(Banking & Finance (For BCom, Part 1), Prof M Amin Khalid, Karachi 2002)

Federal Shariat Court-Contrary to IslamThe West Pakistan Money Lenders Ordinance, 1960The NWFP Money Lenders Ordinance, 1960The Punjab Money Lenders Ordinance, 1960The Sindh Money Lenders Ordinance, 1960The Banking Companies Ordinance, 1962The Baluhistan Money Lenders Ordinance, 1960The Banking Companies (Recovery of Loans) Ordinance, 1979The Agriculture Development Bank Rules, 1961The Banking Companies Rules, 1962The Banks (Nationalization) Payment of Compensation Rules, 1974

Consequence of RIBA in the HereafterBarzakh: drowning in a pool of blood; being fed thrown rock until Qimiyah;

Stomaches filled with snakes;

In hell-fire forever;

The Wrath of Allah & His Prophet forever

Cannot stand, beaten by worst enemy Shaitan; in a state of maddness

Definition of RIBAIs a Arabic word with means extra.

Any amount over and above the principle amount is RIBA.

Late/penalty fees is also RIBA.

What is the fundamental problem with RIBA ?

RIBA in a controlled environmentIndependent in 1948

Very simple life; no complications

Following a barter system

In the case study, all other economic variable have been removed

5 simple people use barter systemSajidFishAbidWoodNasirFruitsFurqanSaltSalmanEntertainer

Not always happy, but cooperate together in barter system.

Each feels he is cheated, would like to change the system ?

Loaned money : solution to problem!One blessed day, Uncle Yahoodi, arrives with the answer to their problem.

Loaned money, as aid, minimum interest; for the development of the society

Uncle Yahoodi ready of help out these people;

Loan taken is this fair (halal) ?NamePrincipleInterestSajid 1000+100Abid 1000+100Nasir 1000+100Furqan 1000+100Salman 1000+100=========================Total amount given 5,000Thus total money supply 5000 ONLY

Is there any problem in the above transaction?

RIBA Exposed impossible to return does not exist!Loan taken = 5,000

Thus, total money supply 5,000

How will they return 5,500!

The Riba amount 500 EXTRA does NOT exist

RIBA impossible to return ->ZULM=HARAM

Returning RIBATrying to do the impossible

Every Haram has its price !

In order to achieve the impossible, the whole society will be affected negatively!

Negative consequence of InterestInflation (in the long term hyper-inflation/sprilling)Short money supplyCurrency devaluedUnemployment (stagflation),stressful working conditionsCheating and fraudDeteriorating quality of good & servicesOrganized crime, supported by influential peopleForeigners dictating policyPolitically dividedForeigners acquiring national assetsForeigner instructing to disable national securityLawlessness, helplessnessRampant corruptionEffectively a failed stateWAR!Interest + inflation = sprilling inflation =>Hyper inflation=ACHEIVED

Our progress after 60 years of Riba!

5 simple people sit to thinkUncle Yahoodi came to help us ? AID should be forgiven !

To help us, Uncle Yahoodi gave us 5000. So we should return 5000!

Uncle Yahoodi gave us worthless paper, in exchange he took over our country!

Why did we accept his money on his terms?

Why didnt we buy gold ?

Extremely Profitable Business Transaction

Recent history of bankingJews, were jewelers & goldsmiths

People would keep their valuable, in their vault, in return for service charge and a promissory note.

It was noticed that only 1 in 20 people returned for their valuable. 95% did not return!

Their promissory note was been circulated in the whole town, because of the ease of use.

They began to print NOTES!If they had gold worth 100, they could easily print and distribute 2000 worth!

They gave loans

They bought real assets: property, building, farms, horses, gold mines!

They began to keep mini armies!

In the town they became Lords!

At the national levelThey gave their allegiance to the king of the area.

Promised to finance the war

In return only they would be allowed to legally print money in the country.

Whenever the king needed money, they would freely give, in return for assets of the kingdom. New kings became slaves in their hands!

Proof of Jewish instigated warsNapolean Bonaparte:The Jews provide troops for my campaign in Poland, but they ought to reimburse meThey are a state within the state. The Jews are master robbers of the modern age; they are the carrion birds of humanity (Speeches before the Council of State May 7th, 1806, Book: Antizion by William Grimstard)

Proof of Jewish instigated warsWinston Churchill, UK Prime Minister:This movement among the Jews in not new. This worldwide conspiracy for the ove