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million. This means that (1) $million accumulates in the bank account which does not correspond to actual value in reality. This surplus is the usury which is described in the Qur’an (That, which ye lay out by usury for increase through the property of (other) people, will have no increase with Allah). Note that the biggest borrowers in the world are governments which borrow money to pay for their operations and not for profit production. Consequently, the accumulated pure usury will be much higher than the ratio of (1%) in the above example. That is why usury money can reach during a specific period of time hundreds of billions of dollars and up to twice the amount of real money. It is worthwhile to know that the real economic growth rate in the US was no more than 3.5% during the last (30) years, while the actual interest rate was more than (8%). This means that virtual money over (30) years was (135%) of the actual value of money. So if the actual value of the US economy was 5 trillion dollars, the value of usury excess of the true value will be $6.75 trillion dollars. This makes the virtual money value (11.75) trillion dollars.
The second case that leads to an increase in the virtual money is when investors deposit their money in the banks for investment in usury. If investors deposit in the bank (100) million with (5%) interest after taking into account inflation, and for a period of (10) years. The value of the money invested becomes (150) million. For the bank not to lose money, it in turn invests the (100) million. Let’s say the bank gains (7%) by investing its money ($ 170 million); if (5%) of that investment was part of productive investment by the bank and the rest was pure usury, we will have (20) million usurious money which has no real value in reality. The reality is that most banks do not invest their money in production processes, but rather by investing in other banks and by recycling the loans to other borrowers. This makes the virtual money increase repeatedly and multiple times.
Either way, the resultant quantity of the money accumulated in the banks is much more than the quantity of the initial real money that represents the (real) production. However, what encourages and motivates the continuation of the increase in virtual money is the absence of the urgent need to withdraw large amount of funds from many banks at once. When one of these banks gets exposed to pressure from investors and depositors to withdraw amounts of money (Run On The Bank) that exceed the amount of the real money, the bank soon collapses for the lack of ability to meet customer needs, as happened with the Bank of Boston in the early eighties of the last century. If the Government does not intervene to save the bank and back it up by its funds, a collapse of the bank becomes imminent. When the problem becomes severe and has the potential of affecting several financial institutions, the big countries such as the US begin to print and pump money that could match the amount of the virtual money. This leads to massive inflation, decline in prices and weak production and may lead to a huge financial disaster. Sometimes a disaster may occur by withdrawing large amounts of investors’ money at the same time from the banks (similar to the real estate and credit crisis in the US – this occurred few months after writing this article).
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