Another oxymoron.
I attended a seminar on Islamic finance about 8 years ago. It was designed to be different. Other than their abhorrence of interest their really wasn’t any principle about it. I remember thinking it was a scam. The whole purpose of it is to pay some Islamic holy man some money and then he will bless it.
The entire religion is a scam. And this is from someone with a degree in their history and who’s done business in their countries for over 30 years. Arabs are the Semites (unlike most Jews) who ignore basic rules of close co-sanguinity and reap the usual effects. Iranians (Mullahs excepted), on the other hand, possess probably a 30-40 point IQ advantage and should be approached with respect and caution. Shouldn’t equate the two.
Ann Barnhardt explained this well:
“Let’s say a person buys a $150,000 home on a 15 year mortgage at 5%. Purely for the sake of simplicity, let’s just say zero down. The amortization table shows that over those 15 years, or 180 months, at 5% interest, the monthly payment would be $1186.19 and that the total interest expense paid over the life of the mortgage would be $63,514.28. So, principal plus interest would be $213,514.28 for the $150,000 property.
Now here is an “interest-free” Sharia loan scenario. And bear in mind that I am dead serious here. I’m not making this up.
A musloid walks in to a “Sharia-compliant” lender and tells them that they want to buy a $150,000 property on a 15 year term. The Sharia-compliant lender then looks up what the going INTEREST RATE is. (Uh, Houston, we have a problem.)
In our example, it is 5% on a 15 year mortgage. The musloid banker then calculates the amortization table on a 15 year loan on $150,000 at 5%. (Uh, Houston, we’ve had some sort of major malfunction here.)
He sees that the total interest expense would be $63,514.28. So, the “Sharia-compliant” lender then offers to buy the property at $150,000 and immediately sell it to the customer for . . . $213,514.28. The customer then sets up a note to repay the $213,514.28 in 180 equal monthly payments of $1186.19 at “zero percent”, because $213,514.28 divided by 180 is $1186.19. Voila! Zero interest!
That’s it. I’m not kidding. I’m not making this up. If I was going to make something up, I would make something up that wasn’t totally, completely, laughably stupid.
Um, soooooo, tell me Mister Musloid, what EXACTLY is the $63,514.28 markup? Uh, isn’t that … interest? How was that amount calculated? Uh, didn’t you ping the interest rate market and calculate an amortization table to come up with that number? Yes.
Isn’t the borrower paying the lender for the use of his money over the 15 year term? Yes.”
Good post. Riba/education BUMP!
It’s a legal fiction. Interest is charged but it is not called interest. Fake phony fraud.
Any religion that allows murder is a false religion.
See actor Nick Cage saying “You don’t say?!!”
They denounce usury, so they devise a worse scheme and scam.