Thread by @Adil_IFI

In his podcast with @muslimmoneyexp, Mufti Menk @muftimenk outlines a powerful alternative to Riba (interest).

Linking loans to gold to ensure that the lender doesn't lose out due to inflation. Here's why that's a great idea. 🧵 👇 1/8

The current major problem with interest-free loans is that the original money loaned out loses value over time. Especially in high inflation environments such as Zimbabwe or Turkey. 📈 2/8

Mufti described an example scenario where someone makes a loan of 5m with an equivalent value of $500 usd. Within a week under high-inflation that 5m could be worth $250.

This destroys the incentive to give interest-free loans which is disastrous for society. 3/8

So instead people commonly peg these loans to the US dollar.

I.e "I'm lending you the equivalent of $100 today, so pay me back $100 in the future." 💱 4/8

However even the US dollar is susceptible to inflation. Which is no surprise given how much money they print! (But that's a topic for another time ) 💸 5/8

So the best solution is to peg it to Gold, which is the most inflation proof asset.

As Mufti says with gold everyone wins. Gold has stood the test of time and over the long-term goes up. 🪙 6/8

The host Umer @umersuleman also makes a great point in the podcast. He describes the feeling of ease he got when he transacted in gold.

This is natural as when you transact on fair terms, wanting good for all, you open the door for barakah. 🌱 7/8

Barakah can bring unquantifiable benefits for the same quantity. 🪴

Going back to a gold standard can bring back barakah in our economy and society. 🤲 8/8 #IslamicFinance #SoundMoney

You can check out the full podcast here: mme.wahed.com/mufti-menk-ear…