In “The Fiat Standard”, Saifedean Ammous discusses how the current fiat currency system creates problems, especially with interest rate arbitrage. This is the practice where big companies borrow money at low interest rates and then charge their customers higher interest rates, often through things like credit cards. At first, this seems strange—why would a clothing store like Macy’s issue credit cards? But it makes sense in the context of the riba fiat system we all live under. Large companies borrow money cheaply and pass that debt onto their customers, making more profit from lending than from actually selling products. This is why companies like Amazon, Walmart, and even clothing stores issue credit cards—they make money by lending, not just by selling goods.

The downside of this system is that it encourages short-term thinking. Companies are more focused on making quick profits from loans and financial instruments rather than investing in producing high-quality, long-lasting products. So, instead of creating durable, well-made goods, businesses churn out products quickly to maximize profits. This, in turn, leads to a market where prices are inflated, and the overall quality of goods suffers.

Looking at this from a broader perspective, it becomes easier to understand why some people view practices like interest on loans as harmful to civilization. It encourages unhealthy financial behaviour that hurts the economy in the long run. This is one reason why alternatives like Bitcoin, which don’t rely on debt or inflationary policies, might be seen as a better solution for a more sustainable and ethical future economy.

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