Inflation-based monetary systems
The crisis in financial systems and the financial difficulties experienced by many arise from the payment of interest from those who have less money to those who have more money than they need. Based on interest and compound interest, a given amount of money doubles in value at regular intervals, following an exponential growth pattern. The continual payment of interest and compound interest is arithmetically, as well as practically, impossible in the longer-term. The concentration of money in the hands of fewer people or enterprises creates a constant pressure for large scale investments. Military production is perhaps the only area through which the saturation point can be postponed indefinitely.
One common misconception is that payment of interest can be avoided by not borrowing money. This is not true because included in every price paid is a certain amount of interest. A second misconception is that since everybody has to pay interest when borrowing money (or buying goods or services), then all benefit or lose equally. This is incorrect. There are great differences between those who profit from the system and those who pay for it. The present monetary system allows the operation of a hidden distribution mechanism which constantly reallocates money from those who have less money than they need to those who have more than they need. The payment of interest is prohibited by the Islamic faith.