Credit money is illegitimate in the Islamic economy/realization of a reasonable market without the use of real money is meaningless

Ayatollah Araki emphasized that credit money is illegitimate in the Islamic economy: if we want to have a reasonable market, we must use real money, i.e. gold and silver, instead of credit money.

Ayatollah Araki was speaking today at the “National Conference on Islamic Economy in Facing the Basic Challenges of Iran’s Economy” which was held on the topic of “Ratio of Money and Inflation in Islamic Economy” at the University of Qom and stated: Money is the medium of exchange in goods or services It is defined in the interconnected rings of the economic system.

He also said about the functions of money: one of these functions is the measure of value and the other function is facilitating exchange or providing services.

Pointing to some features of money such as having real value, maintainability, transferability and limited fluctuation in value, he pointed out: All these features are present in gold and silver.

Ayatollah Araki also clarified: If we want to have a reasonable market, gold and silver must be the medium of exchange; In other words, there is no doubt that credit money is illegal in Islamic economy.

He added: “The biggest theft in human history is that they buy goods and services with money without real support such as dollars, and of course with political support or the support of force and power, which is definitely an example of “the exchange of wealth with falsehood.” Because the value of this money is based on political position or power and has no economic value.

He further paid attention to verse 39 of Surah Rum and said: increasing money in riba and usurious transactions is a kind of hidden theft.

He considered the minting of gold coins and its prevalence in the market and its storage in homes as one of the worst crimes of this time and added: These gold and silver can play an important role in market exchanges.

Ayatollah Araki also referred to a narration of Imam Baqir and said: In this narration, the Prophet was asked about the nature of gold and silver, and the Prophet introduced gold and silver as the criterion of value and economic stability of the society.

By stating that on this basis, creating money in the economic system is prohibited and money must be attached to work or something that has real value, he said: Capitalist system considers the bank as a money merchant and by giving small money to the people, money He takes back more of them, which has caused many problems in all countries.

He further called inflation or imaginary price increase or decrease in purchasing power as the definite and inevitable result of the spread of credit money and said: the increase in production causes the price decrease; But it does not necessarily reduce inflation.

He added: the increase in liquidity is not the cause of inflation; Rather, increasing money without real value causes inflation.

At the end of his speech, Ayatollah Araki pointed out: For many years, different societies have been governed by certain economic principles, and today we all see the existing problems; Therefore, today’s experts should not say that the principles of Islamic economics are not scientific and specialized; Because these principles must have logic and reasoning, of course, we hope that these words will be heard and the grounds for a scientific discussion about them will be created by the authorities.

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