# Does bank lending help society prosper?

*From gold to digital money: does bank lending let societies prosper?*

- URL: https://muftiabulayth.org/r/wce73zqci_i/s/28/
- Date: 2020-07-10 · Kind: discussion · Transcript tier: machine · Recording: Shaykh Omar Baloch | Cynicism, Consumerism & the Catch 22 of Riba | Mindtrap with Mufti #30 (1:46:53–1:50:43)
- Status: general teaching
- Watch from the start of the segment: https://www.youtube.com/watch?v=wCe73zqCi_I&t=6413s
- Recording page: https://muftiabulayth.org/r/wce73zqci_i/

**Topics:** Riba, mortgages and loans; Money and finance

**Summary (not a quotation; machine-made, unchecked):** Mufti Abu Layth argues that bank lending, by recycling the same money, is what has allowed modern societies to prosper; the guest warns of endless debt.

## Longer summary

Mufti Abu Layth says that as societies progressed money moved from minerals to paper, then to digital money and now cryptocurrency, and banks can lend several times what they hold. The guest says the stimulus cheques added to government debt, which passes into higher rents and prices, and that a society cannot keep adding debt. Mufti compares the US response to the pandemic with the UK's furlough scheme, then says he is speaking at a greater level than schemes: money deposited in a bank is lent out, spent and deposited again, allowing a single sum to regenerate an entire industry. Mufti says it is things like this that have allowed modern societies to prosper.

## Sources and names cited

- Shaykh Omar Baloch
- the COVID-19 pandemic

## Transcript (machine tier, 1:46:53–1:50:43)

[1:46:14] poor person I borrow from you now 1000 pounds or 1000 dinars now you see I I don't have no other no other money he's gonna enter my world so how am I supposed to pay back so I'm hoping for something to happen and I'm struggling and now this debt is is this compound interest you're adding and it's ridiculous and then what you're gonna do is you're gonna end up kind of like saying well I know I'll enslave your kids or you become my slave or we'll do this and people would wish that you know what I wish that like the imminence that the earth will swallow me and I just died rather than having to face this

[1:46:53] person and this is why Aladdin says he declared war on him because it was worse than murder now what I've said is that look in as societies progressed as the Industrial Age will emerge first of all money was demineralized and it became it went onto paper and then it was later so that was like money 2.0 and then it was digitized and so that's 3.0 and now we're going into like crypto currency which is 4.0 money is now we make it literally out of thin air like societies like banks can loan up to depending on

[1:47:32] the laws and statutes maybe ten times or whatever the amount that they have and we know it's sure sure sure but which has an effect in terms of inflation sure but what it does is what it does is it allows prosperity because you see like as an example everybody got a stimulus check but what is the result of that I just want this to be very clear sure okay government takes a trillion to twenty trillion dollar debt further and because it gave

[1:48:09] everybody two thousand dollars get everybody got $1,200 in the whole country okay so that has increased now what happens because the debt is increased companies have a higher mortgage now at the end because it has to go has somebody has to pay it right now because my company has to pay a higher rent for the what was previously my business store now the person who's selling the apples let's say have a grocery store and the person who is selling the orange he has the same issue he has to increase his price I have to increase my price for the customer sure so there is this and I agree with you but oblem is

[1:48:46] that you cannot have a society that thinks that we will just keep on adding debt nope it look like Sharon like look I know I was watching a comparison of how it was on YouTube of how the US should have learned from the UK in the covin scenario and the UK had a different scheme with the furlough scheme now it - I'm sure because it was giving out money was giving out grants it was doing things but it handled it quite differently than America did now you see I'm not talking about schemes I'm not interested in schemes per se I'm trying to speak at a much you know greater level than that and I'm saying human societies as they kind of

[1:49:26] prospered you see like if I'm a bank now I have a let's say you come to me and you say look I need a million dollars or okay that's we're thinking really huge but let's say even you need a million why because you wanna build a huge supermarket now I give you now somebody comes to me here comes up to LA he gives me a million dollars to save now I give you a million dollars you go pay this person Omar who now runs a company and sets up your thing you know he does that he brings that million and puts it back in my bank and invests it now in that

[1:50:04] same way you see a bank is even though a bank is technically especially with it being digitized with they're giving out literally I mean it's not actual things they're necessarily giving out but it's allowing that money to regenerate an entire society even though that fund may have just mean one amount now let's say you come to me now and say in between actually the expenses have gone up you know I actually need another million now he's put that million with me I've given you that same million back which really you know okay you've got two million you've given him that million it's managed to set up an entire industry almost here this is a very low level

## Cite

Mufti Abu Layth Archive, segment wCe73zqCi_I/s/28. https://muftiabulayth.org/r/wce73zqci_i/s/28/

Not a fatwa: these answers were given to specific people at specific times. Ask a qualified scholar about your own situation.