Novocastrian

No offense intended. I was just pointing out that others have been assuming you are from the west. It seemed likely that you may have just done your studies there (the US?) but have origins elsewhere.

BTW I don't disagree about bankers.

DXBtoDOH

Economics isn't your forte, then? With no money lenders on interest and money creators, we'd have no market....

As with all good things in life, moderation is key. I won't disagree a global situation emerged that allowed aspects of finance to seemingly get too powerful and out of control, but at the same time there's a strong risk in the baying for the pound of blood. Are you sure you can get exactly that pound and not one drop more?

Anyway, some might describe the GCC as close to pure capitalism you can find on this planet. Not in every sense, but more than in the West. You have been warned.

scot47

In the Gulf they have even learned to live with usury !

ReesanDemha

Respect

DXBtoDOH

Show me how removing money lenders (banks) from the market would improve things, please.

This is a serious question.

Brains1983

Not serious enough for a question mark though.

DXBtoDOH

Piss off

ReesanDemha

The problem is not money lenders per se, but it's the system of interest rates - and how they are used to enslave people and whole countries that is the problem.

And what is the current system of paper / electronic money actually based on?

Or is it just numbers on a computer screen ??

DXBtoDOH

How are interest rates used to enslave people?

Look, if we didn't have interest rates (a ban on interest, for example) then why would I want to loan money to you? There'd be a massive shortage of money available for everything from mortgages to buy a house to large loans to for infrastructure development. You can see now that would cripple economic expansion and badly affect our standards of living.

You are correct that money isn't based on something intrinsic beyond some attempts at basing the value of a currency on gold, but it's based on faith backed up by the country in question. The USD is worth what it is because the US economy is very strong and the US doesn't default on its debt obligations. Same with the pound. And that's why African countries have shit currencies for the opposite reasons. If you want to talk about electronic money on paper then it's still fiat, it's legally backed up by the government issuing the currency. It may just be a sum on a balance sheet rather than physical cash but it's still legitimate money.

This is a very simple explanation and of course it gets much more complicated as you delve into the topic, especially when we start analysing why goods and services are valued the way they are.

ExpatAl

You could argue that civilisation has flourished thanks to the world of credit and money lending. To help in financing new innovations, ideas...

kostik3000

I liked the old Middle Age times when you lend money for the exchange of the right for "first night" with borrower's daughters

Sarcasm, of course.

DXBtoDOH

Absolutely. Without the market there would be no civilisation. Of course there's more to civilisation than the market but the market makes civilisation possible. The market is what started civilisation and the market is what drives civilisation.

It has been argued that why the Islamic world went into a sharp economic decline was because of their difficulties with the interest issue, and when the European world evolved out of the medieval mindset and embraced interest wholeheartedly, the European economies really took off and the economic well-being of the east/west rapidly diverged.

Anyway, I would reaffirm that people looking for a less materialistic, less "greedy" and more socially responsible place to live, the GCC is the absolutely last place on earth you'd want to move to. It's all about money here, strictly about money, and absolutely no consideration or support for people who are not citizens (and expats have no chance in hell of becoming citizens). You want social responsibility? Stay in the West, which has a much better developed system of social and communal obligations towards others and is far, far, FAR more inclusive and tolerant and progressive than any country outside the West.

ReesanDemha

Where does the paper/electronic money come from in the first place and who is the interest ultimately payable to ? Who is making a profit from printing/creating money out of thin air ?

Miss Ann Thrope

Why do I somehow get the impression that the answer you are seeking to hear starts with J and rhymes with the news?

DXBtoDOH

Well you are, if you have a savings account or invest in the markets.

Let's say you have 100,000 QAR and deposit it into a savings account at a bank. Is that money really in the account? No. It's electronic figures, not physical stacks of money. You can go into the bank and withdraw the whole sum in cash but while it's "in" the bank it's electronic figures. Just like the electronic money you can't understand.

Interest is the privilege for lending the money. In fact, when you deposit money into a savings account, you are actually lending money to the bank. The bank rewards you by paying interest on your savings account. The bank wants your money because they can in turn loan out the money to other people, whether for a mortgage or for a new apartment tower, and make money off the interest on those loans, which they in turn use to pay the interest on your savings account. This is, as expected, a simplified explanation, but it does demonstrate in part how money can literally be created out of thin air. You have "made money" even if you did nothing but park 100k in the bank. You have made a profit. There is no shame in profit. Why should there be?

If people are "enslaved" to interest it's usually through bad lifestyle choices and decisions. Money itself is not the enemy.