Foreign Currency and Interest: Difference between revisions

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shek in israel for dollars in america is problem unless  
shek in israel for dollars in america is problem unless  
if you pay acc to price of halva only muter if a you have all of the type that you're going to pay b. speak with lashon mechira not halva, c dont say it is price bc of hakdamat maot. if pay time of piraon muter. torat ribit 19:16 brit yehuda 20 fnt 29. time of piroan is asao damim chazon ish 72:6
if you pay acc to price of halva only muter if a you have all of the type that you're going to pay b. speak with lashon mechira not halva, c dont say it is price bc of hakdamat maot. if pay time of piraon muter. torat ribit 19:16 brit yehuda 20 fnt 29. time of piroan is asao damim chazon ish 72:6
=== Borrowing Shekalim to Repay Dollars or Vice Versa ===
# If someone borrows shekalim in Israel in order to pay back dollars in America, that would be permitted if the borrower has dollars in his possession (before the loan). Some permit this even if the borrower does not have dollars as long as he does not say it is a loan, rather he just says give me shekalim and I'll give you dollars in return.<ref>Torat Ribbit 9:16. See Brit Yehuda ch. 20 fnt. 29. Fundamentally, Brit Yehuda treats this case like pesika. Chidushim Ubiurim (bava metsia 27) treats this case like pesika where there is yatzah hashaar in the place of the payment, even though it isn't yatzah hashaar in the place of the loan. </ref>
# It is permitted to borrow dollars in America in order to repay in dollars in Israel. Similarly, if someone borrows shekalim in Israel in order to pay back shekalim in America that is permitted.<ref>Torat Ribbit 9:14, See Brit Yehuda 18 fnt. 15</ref>
# It is permitted to borrow shekalim in America to repay in Israel or borrow dollars in Israel to repay in America.<ref>Torat Ribbit 9:15</ref>


===Expired or Altered Currency===
===Expired or Altered Currency===
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# Today most money is paper or digital money, which has no intrinsic value and not representative of a commodity value. It is evaluated according to the assigned value according to the government and world markets.  
# Today most money is paper or digital money, which has no intrinsic value and not representative of a commodity value. It is evaluated according to the assigned value according to the government and world markets.  
# Fiat money is considered money in halacha.<ref>[https://www.hebrewbooks.org/pdfpager.aspx?req=1839&st=&pgnum=100 Chatom Sofer YD 134 s.v. aval], Chazon Ish YD 72:2-10, Chelkat Binyamin 162:6, Brit Yehuda (ch. 18 fnt. 10). Chazon Ish's approach is that anything which people of the country accept as currency is considered a halachic currency, מטבע. Chatom Sofer's approach is that a currency that is backed by the government and enforced so that everyone in the country must take it is considered halachic currency. For most currency in the country it is used, it is unanimously agreed is considered currency in halacha. It seems to be irrelevant whether the currency would be representative money or fiat money for this purpose, as long as it is accepted by the country people and government it would considered halachic currency. However, Rav Moshe in Igrot Moshe YD 2:114 seems to treat fiat money, currency that isn't backed by a silver standard, not to be halachic currency. Nonetheless, Rav Moshe agrees that loans must be returned a dollar for a dollar because that is how the government decrees and dina d'malchuta dina. </ref>
# Fiat money is considered money in halacha.<ref>[https://www.hebrewbooks.org/pdfpager.aspx?req=1839&st=&pgnum=100 Chatom Sofer YD 134 s.v. aval], Chazon Ish YD 72:2-10, Chelkat Binyamin 162:6, Brit Yehuda (ch. 18 fnt. 10). Chazon Ish's approach is that anything which people of the country accept as currency is considered a halachic currency, מטבע. Chatom Sofer's approach is that a currency that is backed by the government and enforced so that everyone in the country must take it is considered halachic currency. For most currency in the country it is used, it is unanimously agreed is considered currency in halacha. It seems to be irrelevant whether the currency would be representative money or fiat money for this purpose, as long as it is accepted by the country people and government it would considered halachic currency. However, Rav Moshe in Igrot Moshe YD 2:114 seems to treat fiat money, currency that isn't backed by a silver standard, not to be halachic currency. Nonetheless, Rav Moshe agrees that loans must be returned a dollar for a dollar because that is how the government decrees and dina d'malchuta dina. </ref>
# It is forbidden to lend money and charge for inflation.<ref>Igrot Moshe YD 2:114 explains that since halacha views coins as stable and not changing charging for the inflation of the purchasing power of the coins is interest. The only time coins are reevaluated in Shulchan Aruch Y.D. 165:1 is if the coins changed sizes, however, the Rama there writes that if the purchasing power changed but not the size of the coin then one must return the new coins irrelevant of the inflation. Chazon Ish YD 74:5, Minchat Yitzchak 1:70, 6:161, Brit Yehuda 20:3, and Laws of Ribbis p. 52 agree. Note, that Rav Moshe is discussing fiat money in 1971 and the Chazon Ish representative money as is evident in their words.
# It is forbidden to lend money and charge for inflation.<ref>Igrot Moshe YD 2:114 explains that since halacha views coins as stable and not changing charging for the inflation of the purchasing power of the coins is interest. The only time coins are reevaluated in Shulchan Aruch Y.D. 165:1 is if the coins changed sizes, however, the Rama there writes that if the purchasing power changed but not the size of the coin then one must return the new coins irrelevant of the inflation. Chazon Ish YD 74:5, Minchat Yitzchak 1:70, [https://www.hebrewbooks.org/pdfpager.aspx?req=1599&st=&pgnum=533 6:161], Brit Yehuda 20:3, and Laws of Ribbis p. 52 agree. Note, that Rav Moshe is discussing fiat money in 1971 and the Chazon Ish representative money as is evident in their words.
*Gemara Bava Kama 97a discusses whether a person who borrowed coins and the coins expired under the monarch they were minted under can return those same coins now that they are expired. Shmuel holds that you are supposed to return the old coins since the coins expiring isn't like they broke.</ref>
*Gemara Bava Kama 97a discusses whether a person who borrowed coins and the coins expired under the monarch they were minted under can return those same coins now that they are expired. Shmuel holds that you are supposed to return the old coins since the coins expiring isn't like they broke.</ref>
# If a coin is invalidated and replaced with a new coin in a fiat money system the new coins need to be repaid since the size and weight of the old or new coins are irrelevant to the value of the coin. If the new coins has a different purchasing power compared to the old coins, if someone lent money in an old coin one must return the new coins according to the value the new coins have in relation to the old coins.<ref>Chazon Ish YD 74:5</ref>
# If a coin is invalidated and replaced with a new coin in a fiat money system the new coins need to be repaid since the size and weight of the old or new coins are irrelevant to the value of the coin. If the new coins has a different purchasing power compared to the old coins, if someone lent money in an old coin one must return the new coins according to the value the new coins have in relation to the old coins.<ref>Chazon Ish YD 74:5</ref>

Latest revision as of 19:07, 17 November 2024

Foreign Currency

  1. Rashba respona 4:287 forbids lending money of one currency for another currency since the coins change fixed with respect one to another.

---Just Notes--- Ribbit Halacha Lmaaseh Brit Pinchas case1 matbeya to matbeya. halvah. borrow shek for shek muter, case2 matbeya to pierot. pesika. in israel borrow shek return dollar, if you are koveh price acc to time of halvah then you need the entire amount that you're mitchayev to give. if you are koveh price acc to time of piraon that's muter. case3 peirot to pierot. seah bseah. in israel borrow dollar for dollar he needs yesh lo case4 peirot to matbeya. sale/tarsha. borrow dollars for shek koveh acc to time of halvah muter. acc to time of piraon asur unless he has some dollars and could return it then he can even return with shek with yesh lo. case5 pierot to another pierot. sale/asur. seah chtim seah dochen. koveh acc to time of halvah muter if has all of the second coins from beginning. acc to time of piraon asur unless could return what borrowed

Borrowing and returning done in Israel. borrow shek for shek muter, borrow dollar for dollar he needs yesh lo. borrow shek return dollar, if you are koveh price acc to time of halvah then you need the entire amount that you're mitchayev to give. if you are koveh price acc to time of piraon that's muter. borrow dollars for shek koveh acc to time of halvah muter. acc to time of piraon asur unless he has some dollars and could return it then he can even return with shek with yesh lo. borrow dolalrs for another foreign currency koveh acc to time of halvah muter if has all of the second coins from beginning. acc to time of piraon asur unless could return what borrowed halvah in israel return in america or vice versa. shek for shek or dol for dol muter. borrow shek and return dollars acc to time of halvah he needs to have all coins. acc to time of piraon if borrow shek in israel and returned dolalrs in america muter

igm yd 3:37, shvet halevi 3:119 say dollars in israel are matbeya but ribit yehuda 18:5 argues

Torat Ribbit 19:14 muter if borrow shek in israel for shek in america. brit yehuda 13:12 argues that you need matbeya of piroan place. torat ribit thinks enough to be matbeya of either place

sa harav seif 30 if you have possiblity to pay bmatzbeya borrow foreign to return with local matebya either 1. pay acc to time of halva or 2 specify a day or 3 sa harav 30 option to pay with local currency acc to time of halva or ype of foriegn one he borrowed

shek in israel for dollars in america is problem unless if you pay acc to price of halva only muter if a you have all of the type that you're going to pay b. speak with lashon mechira not halva, c dont say it is price bc of hakdamat maot. if pay time of piraon muter. torat ribit 19:16 brit yehuda 20 fnt 29. time of piroan is asao damim chazon ish 72:6

Borrowing Shekalim to Repay Dollars or Vice Versa

  1. If someone borrows shekalim in Israel in order to pay back dollars in America, that would be permitted if the borrower has dollars in his possession (before the loan). Some permit this even if the borrower does not have dollars as long as he does not say it is a loan, rather he just says give me shekalim and I'll give you dollars in return.[1]
  2. It is permitted to borrow dollars in America in order to repay in dollars in Israel. Similarly, if someone borrows shekalim in Israel in order to pay back shekalim in America that is permitted.[2]
  3. It is permitted to borrow shekalim in America to repay in Israel or borrow dollars in Israel to repay in America.[3]

Expired or Altered Currency

The system of coins used in the days of the Gemara and Shulchan Aruch were intrinsically valuable commodities, such as silver or gold. In that system the size and weight of the money and the value of that metal determined the value of the coins.[4] This is known as commodity money and is associated with the theory of economics metallism. Another system used is representative money which could be used to redeem a commodity; this is also known as the gold standard. In 1971, America replaced this system with fiat money, theoretically understood by chartalism, which has no intrinsic value and no representative value but has a value based on the government.

Fiat Money (Chartalism)

  1. Today most money is paper or digital money, which has no intrinsic value and not representative of a commodity value. It is evaluated according to the assigned value according to the government and world markets.
  2. Fiat money is considered money in halacha.[5]
  3. It is forbidden to lend money and charge for inflation.[6]
  4. If a coin is invalidated and replaced with a new coin in a fiat money system the new coins need to be repaid since the size and weight of the old or new coins are irrelevant to the value of the coin. If the new coins has a different purchasing power compared to the old coins, if someone lent money in an old coin one must return the new coins according to the value the new coins have in relation to the old coins.[7]

Commodity Money (Metallism)

  1. If the new currency is the same size and weight as the old currency but its purchasing power is different one can simply repay the loan with the new currency.[8]
  2. If a person lent someone money in a currency and then that currency become invalidated and was replaced with a new coin, if the new coin is thicker or weightier than the old one, whether or not one can simply repay the loan with the new currency depends on the following factors:
    1. If the prices of the marketplace reflects the new coin's thickness or weight then one can't repay the loan with the new currency, rather one should pay the amount of the new coins so that the sum total equates to the amount of silver of the old coins borrowed.[9]
    2. If the prices of the marketplace do not reflect the new coin's thickness or weight and simply changed prices because of changes in supply and demand, one can repay with the new currency unless the new coin is more than 25% larger, in which case one needs to repay the amount of silver borrowed with the old coins.[10]
  3. If one should have paid the new coins up to the quantity of silver that was borrowed and instead one repaid the loan with the new currency some say that it was a violation of biblical interest and some say rabbinic.[11]
  4. We rely on non-Jewish experts to tell us that the coins are more or less than 25% larger than the old coins. If you are asking a hired professional economist they are trusted and if you're asking someone else you should ask two non-Jews one not in front of the other.[12]
  5. If the government establishes how the old loans should be repaid then one can follow that standard based on dina dmalchuta dina.[13]

Sources

  1. ↑ Torat Ribbit 9:16. See Brit Yehuda ch. 20 fnt. 29. Fundamentally, Brit Yehuda treats this case like pesika. Chidushim Ubiurim (bava metsia 27) treats this case like pesika where there is yatzah hashaar in the place of the payment, even though it isn't yatzah hashaar in the place of the loan.
  2. ↑ Torat Ribbit 9:14, See Brit Yehuda 18 fnt. 15
  3. ↑ Torat Ribbit 9:15
  4. ↑ Gemara Bava Metsia 44a-b
  5. ↑ Chatom Sofer YD 134 s.v. aval, Chazon Ish YD 72:2-10, Chelkat Binyamin 162:6, Brit Yehuda (ch. 18 fnt. 10). Chazon Ish's approach is that anything which people of the country accept as currency is considered a halachic currency, מטבע. Chatom Sofer's approach is that a currency that is backed by the government and enforced so that everyone in the country must take it is considered halachic currency. For most currency in the country it is used, it is unanimously agreed is considered currency in halacha. It seems to be irrelevant whether the currency would be representative money or fiat money for this purpose, as long as it is accepted by the country people and government it would considered halachic currency. However, Rav Moshe in Igrot Moshe YD 2:114 seems to treat fiat money, currency that isn't backed by a silver standard, not to be halachic currency. Nonetheless, Rav Moshe agrees that loans must be returned a dollar for a dollar because that is how the government decrees and dina d'malchuta dina.
  6. ↑ Igrot Moshe YD 2:114 explains that since halacha views coins as stable and not changing charging for the inflation of the purchasing power of the coins is interest. The only time coins are reevaluated in Shulchan Aruch Y.D. 165:1 is if the coins changed sizes, however, the Rama there writes that if the purchasing power changed but not the size of the coin then one must return the new coins irrelevant of the inflation. Chazon Ish YD 74:5, Minchat Yitzchak 1:70, 6:161, Brit Yehuda 20:3, and Laws of Ribbis p. 52 agree. Note, that Rav Moshe is discussing fiat money in 1971 and the Chazon Ish representative money as is evident in their words.
    • Gemara Bava Kama 97a discusses whether a person who borrowed coins and the coins expired under the monarch they were minted under can return those same coins now that they are expired. Shmuel holds that you are supposed to return the old coins since the coins expiring isn't like they broke.
  7. ↑ Chazon Ish YD 74:5
  8. ↑ Rama 165:1
  9. ↑ Shulchan Aruch 165:1
  10. ↑ Shulchan Aruch 165:1
  11. ↑ Shach 165:2
  12. ↑ Rama 165:1, Shach 165:7
  13. ↑ Rama 165:1, Shach 165:8
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