Extract from my blog:
“I’ll begin by asking Allah to continue to bless & preserve Shaykh Amin Kholwadia & Darul Qasim Institute. I concur with him that the contracts offered by Islamic Finance Companies, which claim to provide riba-free mortgages, indeed conceal riba through a combination of contracts (Contractum trinius). If anyone is interested in understanding precisely how this is accomplished, I recommend listening to Tarek El Diwany here:
Tarek El Diwany also has a great documentary detailing the history of how and why usury/riba became normalised by humanity. It is called “Why Are We All In Debt?” :
Shaykh Haitham Al Haddad also explains how Islamic finance contracts are linked to usury/riba :
Although this is true, the supposed solution provided by Shaykh Amin Kholwadia & other Ulama who subscribe to the Dar al-Harb narrative, to justify Muslims in non-Muslim lands getting conventional mortgages (which admittedly are cheaper than ‘‘Islamic’’ finance ones), is also harmful to the Muslim community on various levels. One reason why the Dar al-Harb narrative is inconsistent and harms Muslims is due to the lack of acknowledgement of the negative externalities with global corporate financial structures. Whether a person is Muslim or not, when they take out a loan from a bank to purchase a house, the bank does not provide them with money that is already in circulation, whether from its own funds or its depositors’ money. Instead, the bank creates a fresh sum of $300,000 or £500,000, or whatever amount the borrower needs to buy their home. As they leave the bank, the money supply in the economy increases because of their loan request to finance the home. The reason why that’s problematic is that increasing the money supply reduces the purchasing power of the money already in circulation in the economy, leading to higher prices for goods and services like fuel, food, and rent. In other words, life becomes more expensive for everyone. Therefore, a person who borrows money from banks, whether conventional or from so-called “Islamic” finance/banks, is contributing to inflation. This is how fiat paper money, which we are forced to use due to legal tender laws, operates. The national currencies we use today, such as US dollars, Great British Pounds, Euros, Chinese Yen, Pakistani Rupees, Turkish Lira, and others, are essentially created through government credit/debt and the credit of banks backed by the Central Bank. These fiat currencies are inherently linked to riba/interest. The only people who benefit from this horrible monetary system are the privileged few, at the expense of the majority of humanity. These privileged few are the institutions granted the authority to issue fiat through loans backed by Central Banks. Corporations also benefit due to the “Cantillon Effect,” which refers to the uneven distribution of benefits resulting from changes in the money supply. It suggests that those closest to the source of new money (colloquially referred to as “those closest to the money printer”) tend to benefit the most, as they have early access to the increased money supply before more inflation hits. They use the new money created out of nothing to buy assets that appreciate over time. The sick ironic part is that these ‘‘assets’’ (like homes, for example) appreciating over time are a result of the very credit bubbles created in the market by riba-based loans (mortgages). In other words, rising house prices each year indicate that money is losing its purchasing power further. Professor Saifedean Ammous, the author of the book “The Fiat Standard: The Debt Slavery Alternative to Human Civilization,” which examines the various ways the central bank’s riba system harms humanity, expresses the following viewpoint regarding the present monetary system: “Borrowing money imposes a tax on society, while offering a subsidy to the borrower. In the current fiat-based monetary system, a Muslim who chooses not to engage in borrowing money due to religious convictions against usury/interest effectively subsidizes everyone else who does borrow money. Essentially, they are paying to support others through this subsidy.”
See:
It’s evident from this reality that if Muslims continue to borrow money to purchase homes, whether they do so through “Islamic Finance” contracts claiming to be riba/interest-free or by subscribing to the Dar al-Harb argument proposed by Shaykh Amin Kholwadia & others (which justifies obtaining mortgages from conventional banks), they are contributing to inflation via riba credit creation. The consequences of this disproportionately affect the Muslim community, a lot of whom choose not to borrow money from banks due to religious reasons. This inflation, resulting from an increased money supply, not only erodes the savings of individuals compelled to hold fiat currencies by nation-states but also steals their time and energy, as people find themselves needing to work harder and longer to make ends meet due to the cost of living. Offering justification for engaging in decades long debt contracts with these malevolent institutions, which have inflicted harm upon humanity, only serves to further empower the riba demon. Should we genuinely support this monetary system? Asserting that it is Islamically permissible to obtain conventional mortgages due to our residence in Darul Harb hinders the drive to explore authentic alternatives. What’s the alternative if obtaining conventional mortgages or mortgages via “Islamic Finance” both contribute to the riba demon?”
Read more:
Moro Blanco 
Leave a comment