Yesterday I wrote a post "Both gold and silver have intrinsic values which their fluctuation are different, and it makes gold and silver cannot be attached to each other in single currency system".
The statement above actually is answer for some Muslims who want to use gold dinar and silver dirham as daily currency and eliminate paper money that they think are valueless. Also to follow sunnah which dinar and dirham were used in the period of Salaf.
Their idea is using gold dinar and silver dirham for daily transaction together. Both currency attached to each other in fixed exchange rate. One dinar must always same as dirham in specific amount. Their reason to use gold and silver is because these metals have intrinsic values, the physical value if these metals being sold in the market.
But actually the intrinsic value itself that would become a problem. Both metals are fluctuate in price with different fluctuation. It make the intrinsic values of gold dinar and silver dirham will not always same as in the fixed exchange rate.
And don't forget about superiority of gold. People prefer gold than silver. It would make people prefer to be paid by gold, and pay by silver. The worse is, people might hoard the gold dinar and make the number of gold dinar that circulated in society becoming less. It would increase the real value of dinar and decrease the real value of dirham.
The sign toward this already can be seen now. Muslims majority countries have issued gold dinar and silver dirham although only for investment. But in fact people prefer to invest in gold dinar, not in silver dirham.
How if we use single kind of metal?. The question is which metal. Gold?. How to make gold coin that small enough to pay a cup of coffee in roadside stall?. Use silver or cheaper metal like copper?. It would become a problem if you must carry big amount of money in your wallet. Also how to provide one kind of metal in number that meet the demand of people who need this metal as currency.
This is why Muslim economists nowadays do not think to eliminate paper money then use gold dinar and silver dirham. But they try to develop economic system that suitable with modern days but still in accordance of Islamic rules.
And you think your paper money are valueless?. You can make a test by yourself. Try to use paper money to buy something. If your paper money still can be used to buy something, it's means your paper money still valuable.
I understand if any of you disagree with me. So I invite you to tell your view, and discuss. But I request, your view should be based on economic disciplines, because we are talking about economic issue.
Economy is not part of ibadah, but part of muamalah. And in muamalah we are not always must follow sunnah. We can develop and make innovations, as long as not against Islamic rules.
Re: Can we eliminate paper money then use gold and silver as currency?
I'm not sure, the West is almost done with paper or real money.
A lot of transactions are carried out electronically. The money does not exist except with the bank.
Which is not a bad thing if the bank is reputable.
But as you question the integrity of those that may hoard gold rather than silver, the subject is more about morality and ethics than material posession.
A national banking system may be the answer but it requires a competent and objective government.
...wait wat?
I'd have said wars are waged with money but I'd be a few years late..
And anybody that should have listened has probably already blown themselves up for something else already.
...ocean's 11 it ain't.
And maybe flippin tables has been done before.
Last edited by M.I.A.; 03-05-2016 at 06:02 PM.
Reason: Creepy yes, terrorist.. No
Re: Can we eliminate paper money then use gold and silver as currency?
Fluctuations betwwen gold and silver can be internationally standardized by a body responsible for minting.
Paper is not backed by anything other than a faithless promise to repay - usually in silver (rupees of rupa, pounds weight of sterling silver) and are debased on a daily basis by those behind the corrupt usury based banking system and their pet politicians.
The usury based system is not a stable system and was never expected to be such by those in the know, it is inevitable that it totally collapses when inflation can no longer be reconciled with reduced standard of living, and the corrupt usury based house of cards is about to come crashing down.
it is unlikely to happen naturally since that is a very long deawn out and gruesome process so expect a controlled demolition before this generation passes.
The best that can be done with paper is the creating of documents in a clear and honest transaction with real goods in exchanges involving future obligations between any two or more parties, and which could be produced as a proof in the event of a dispute with the debtor dictating and signing the pledge. Gold and silver bullion/coin were usually legal tender of last resort in case of differences or problems in fulfilment of pledge.
An individual's gold and silver is usually safe even if their property burns while absent, or if they accidentally put it in the wash.
The scope for manipulation of people's wealth with digital currency, and the amount of manipulation that takes place on a minute by minute bases on the currency international exchanges for paper (currency speculation) demonstrate easily the weak arguing points of those who seek to prevent people from having control of their rights and the fruits of their own labour.
Re: Can we eliminate paper money then use gold and silver as currency?
Government may determine the price of gold and silver. But market cannot be dictated. It would cause two markets, official market and black market with different prices. So, using two kind of intrinsic valued metals that attached to each other in fixed rate cannot be implemented properly. Also the market in this modern days is too big to be supported by available gold. That's why paper money that circulated nowadays no longer supported by gold. But paper money still supported by government and especially by people's trust.
about usury. Usury is not caused by paper money because it has been exist long time before paper money are used by people. Even the history of usury started when people borrowed commodities like food ingredients which they must pay back with same commodity but in bigger amount.
Re: Can we eliminate paper money then use gold and silver as currency?
It is unlawful to determine or manipulate the price of gold and silver and copper as in what amount of goods they can buy, it is however possible and allowed to determine the difference in value between gold and silver (ie: x dirhams = y dinars) as currency since both are lawful currency, copper can also be included in the equation and any excess mined can easily be released as jewellery and base metal use in goods. If there is a sharp spike in the availability in one currency item over another, extraction and refining would be limited by market difference and cost efficiency, this happens with oil on a regular basis and saudi arabia demonstrated the ability to do this just recently (although that had a lot to do with petty regional squabbles and sabotage in the course of america's divide and conquer strategy in the region and also due to the hammering that the dollar was taking as a result of the output competition). In extreme circumstances a correction could possibly be made.
Caliph 'Umar ibn al khattab demonstrated the will to hold hoarders and market manipulaters to account (read sahih Muslim book of trading for more info, that is a legal issue and not one limited to the circulation of rare base metal currency.
so we can see that there are many lawful and reasonable ways of resolving such minor issues in comparison to the usurer anarchy and corruption brought about by paper and digital currency where prices of goods are manipulated increasingly and even output destruction is practised on occasion sue to the havoc such false currencies wreak on the markets.
The blackmarket excuse doesn't hold water since the government fixing of prices of goods is usually ignored anyway based on supply and demand, this phenomenon is starkly demonstrated during the run-up to and through ramadan.
Also the blackmarket for paper currency is also vast, and for those in control of digital currency it is run like heavily controlled organized crime and a systematic siphoning of wealth from the global community.
The claim that there are more goods than gold and siver indicates a basic lack of understanding of the law of supply and demand - or a willful ignorance of such due to the desire to manipulate the masses and usurp their wealth unlawfully, it just means that less gold, silver and copper would be required to make a purchase of goods, and that the capitalist manufacturing process would reflect supply and demand better in place of consumerist hype and trend setting in order to push useless goods churned out in an unbridled manner.
The Prophet pbuh himself refused to control natural fluctuations whilst they took place in his presence, and has also indicated huge scarcity and high prices of goods in future,
Usury is inherent in paper currency since it is inflated constantly and the prices of goods are raised constantly (when considering annual/decade/century /millenial graphs), until there is a crash - which the usurers themselves call "market correction". And maybe compare the price in goods with gold with the steady decrease in the price of debased metal (starting with the romans i believe) and illusory paper currency over the last one thousand years (you can find historic charts on goldprice.org and on other web resources).
Also the hadith regarding the bull's head and one hundred dinars doesn't indicate a problem with the dinar but the unjust sanctions, sieges and sabotage by people that create scarcity in goods.
To attempt to push the illusion that paper and digital currency is somehow less prone to manipulation than gold and silver is deceptive since both paper and digital concepts fail when standing an honest scientific test in terms of overall stability.
Bear in mind that i am referring to a global order subject to the laws of God and not to the current chaotic hotchpotch of current feifdoms which are on their way out.
the middle eastern leaders will soon realise that they are bickering to weaken themselves in preparation for such an outcome.
To musailamah (the o frog half in water and half in mud, half the fiefdom geezer):
inna al arda li Allah, yoorithuhaa man ya shaa a min 'ibaadih, wal 'aaqibatu li al muttaqeen.
026:183*Khan:"And defraud not people by reducing their things, nor do evil, making corruption and mischief in the land.
026:183*Maulana:And wrong not men of their dues, and act not corruptly in the earth, making mischief.
026:183*Pickthal:Wrong not mankind in their goods, and do not evil, making mischief, in the earth.
026:183*Rashad:"Do not cheat the people out of their rights, and do not roam the earth corruptingly.
026:183*Sarwar:and do not defraud people in their property or spread evil in the land.
026:183*Shakir:And do not wrong men of their things, and do not act corruptly in the earth, making mischief.
026:183*Sherali:'And diminish not unto people their things, nor go about the earth, creating disorder;
026:183*Yusufali:"And withhold not things justly due to men, nor do evil in the land, working mischief.
Quran ch 26:183
The word used is "laa tabkhasoo" seeming to indicate debasing, diminishing, sabotaging, ruining unlawfully, defrauding etc.
Notice the huge spikes taking place and increasing with every fiat monetary collapse.
Federal reserve comes in during a crisis and synthetically stabilizes currency after world war 1with all the economic woes blamed on "the great war",1930's when the dollar was being ditched and roosevelt confiscated the gold ammassed after tributes from world war 1, and then had all the woes blamed on world war 2 which was also manufactured, the early eighties huge crash (that's when i come on the scene ), the "bubble burst" of 2000-2001 and the birth of the "war on terror" where bush slows the dollar collapse with an arms race and a huge media distraction during a reign of terror and censorship precedent, and the 2008 crash which was blown beyond recovery levels with unprecedented qe (inflation injection).
notice also that the fiat currency problem is amplifying with every incident and that each incident is being plugged with huge amounts of inflation and only exacerbating the situation while huge global distractions appear as coincidence.
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), the "bubble burst" of 2000-2001 and the birth of the "war on terror" where bush slows the dollar collapse with an arms race and a huge media distraction during a reign of terror and censorship precedent, and the 2008 crash which was blown beyond recovery levels with unprecedented qe (inflation injection).
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