Dinar Dirham: KGT sasar 20 ribu kedai

KOTA BHARU, 28 Mei: Kelantan Golden Trade (KGT) mensasarkan 20,000 peniaga yang berminat menerima urusniaga Dinar dan Dirham bagi menyemarakkan penggunaan mata wang syariah.

Pengarah Eksekutif KGT Nik Mahani Mohamad berkata, tindakan proaktif itu bagi mempopularkan semula penggunaan mata wang syariah di kalangan umat Islam.

“Untuk 2011 kami target pendaftaran 20,000 kedai termasuk kedai kepunyaan non-muslim yang sedia menerima Dinar dan Dirham sebagai mata wang syariah.

“Dan diharap ia menjadi pencetus kepada pembayaran gaji kakitangan kerajaan, pembayaran zakat dan aktiviti jual beli rakyat menggunakan Dinar dan Dirham” katanya pada persidangan media sempena Kempen Dinar Emas Kelantan 2011 di sebuah hotel di sini semalam.

Turut hadir Ketua Pegawai Operasi KGT, Umar Ibrahim Vadillo. Sekarang lebih 2,000 pekedai berdaftar dengan KGT di seluruh Malaysia.

Nik Mahani juga berkata, KGT kini berusaha menyemarakkan lagi penggunaan mata wang syariah, di mana telah dimulakan kempen sejak dua bulan lalu di Kuala Lumpur.

“Di samping mendekati rakyat, program itu juga dilaksanakan sempena pelancaran Projek Printis Pasar Terbuka Pasar Besar Siti Khadijah di Kelantan,” ujarnya.

KGT juga melancarkan Khidmat Sistem Pesanan Ringkas (SMS) bagi memudahkan pengguna mengetahui harga harian Dinar dan Dirham pada sepanjang tahun.

Selain itu KGT turut menyertai Karnival Halal Kelantan 2011 yang akan dirasmikan Tengku Mahkota Kelantan pada 29 Mei di Balai Islam.

sumber :http://bm.harakahdaily.net/index.php/separator-berita-utama/world/83-negeri-kelantan/3520-dinar-dirham-kgt-sasar-20-ribu-kedai-

Perak perkenal dinar emas, dirham akhir bulan depan

January 25, 2011

IPOH, 25 Jan — Kerajaan Perak akan memperkenalkan mata wang dinar emas dan dirham pada akhir bulan depan bertujuan mempelbagaikan bentuk simpanan kewangan rakyat.

Pengerusi Jawatankuasa Pelajaran, Pengajian Tinggi, ICT, Sumber Manusia, Sains dan Teknologi negeri Datuk Mohamad Zahir Khalid berkata Perak sedang bekerjasama dengan Kuwait Finance House (KFH) untuk memperkenalkan dinar emas dan dirham kerana institusi kewangan itu berpengalaman luas dalam aspek pengendalian mata wang berkenaan.

“Apa yang pasti mata wang (dinar emas dan dirham) diperkenalkan Perak amat jauh berbeza dengan mata wang yang diperkenalkan Kelantan sebelum ini. Perbezaan itu akan dijelaskan oleh Menteri Besar (Datuk Seri Dr Zambry Abdul Kadir) nanti,” katanya kepada pemberita selepas mempengerusikan mesyuarat bersama pihak pengurusan tertinggi KFH di sini hari ini.

Segala perincian, mekanisme serta bentuk mata wang berkenaan akan diumumkan pada pelancaran itu nanti, kata Mohamad Zahir.

Dinar emas dan dirham itu akan dikeluarkan Goldnet International Sdn Bhd, anak syarikat Perbadanan Kemajuan Negeri Perak (PKNP) dengan kerjasama KFH (Malaysia) Sdn Bhd.

Pengerusi KFH Shaheen al Ghanem berharap hubungan yang terjalin termasuk dalam aspek nasihat kewangan serta sokongan dalam pengeluaran bantuan modal dengan kerajaan negeri dapat diteruskan pada masa depan.

“Kami juga sebenarnya dalam proses untuk melebarkan sayap perniagaan ke seluruh Malaysia dan sedang melihat kemungkinan mewujudkan cawangan di Ipoh pada masa terdekat kerana berpuas hati dengan inisiatif pembangunan yang ditunjukkan kerajaan negeri,” katanya. — Bernama

Sumber : http://www.themalaysianinsider.com/bahasa/article/perak-perkenal-dinar-emas-dirham-akhir-bulan-depan/

Don: Use paper currency, not gold dinar

Sources : http://biz.thestar.com.my/news/story.asp?file=/2011/1/18/business/7817150&sec=business"
Tuesday January 18, 2011


Don: Use paper currency, not gold dinar


KUALA LUMPUR: Islamic countries should continue to use paper currency instead of gold dinar, said professor of comparative economic history at International Centre for Education in Islamic Finance Dr Murat Cizakca.


History had shown that the return to coinage system could increase interest rates and inflation would be difficult to control, he said.


Speaking at a public lecture on Islamic Gold Dinar: Myths and Reality organised by Association of Chartered Islamic Finance Professionals and Inceif yesterday, he said money should serve as a medium of exchange, not as a commodity.


“We need to continue with paper currency, and the central banks controlling paper currency should have full autonomy,” he said.


He added that gold supply was dominated by non-Islamic countries.


“The gold dinar will be exposed to speculation as the gold price also has its ups and downs. Islamic countries should continue to use paper currency and increase trade among each other,” he said. - Bernama


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My opinion, well, is there is a hidden agenda.. we should give full support if this what Islam has taught us.. Even Prophet has said something about dinar and dirham, when someday there will be nothing that valuable except dinar and dirham.. I had put the Hadis in my blog.. look for it.. that is our Prophet says.. you don't want to believe what he says.. better recite your syahadah.. enough said.. up to you guys.. I still believe to what had Prophet Muhammad PBUH said.. because I am believer.. till then.. salam..

What is Dinar?

What is Dinar?
Basically, Dinar is a gold coin.
The World Islamic Trading Organisation following the standard of caliph Umar Ibn al-Khattab, established the following standard:
DINAR Weight: 4.25 grams
Alloy: 22 carats (0.916) Gold

According to Islamic Law...

The Islamic gold dinar (sometimes referred as Islamic dinar or Gold dinar) is a bullion gold coin made from 4.25 grams of 22-carat gold with historical Islamic significance.

Gold dinar may also refer to various historic gold coins denominated in dinars.

The Islamic Dirham is a specific weight of pure silver equivalent to 3.0 grams.

Umar Ibn al-Khattab established the known standard relationship between them based on their weights: "7 dinars must be equivalent to 10 dirhams."

"The Revelation undertook to mention them and attached many judgements to them, for example zakat, marriage, and hudud, etc., therefore within the Revelation they have to have a reality and specific measure for assessment [of zakat, etc.] upon which its judgements may be based rather than on the non-shari'i [other coins].

Know that there is consensus [ijma] since the beginning of Islam and the age of the Companions and the Followers that the dirham of the shari'ah is that of which ten weigh seven mithqals [weight of the dinar] of gold. . . The weight of a mithqal of gold is seventy-two grains of barley, so that the dirham which is seven-tenths of it is fifty and two-fifths grains. All these measurements are firmly established by consensus." Ibn Khaldun, Al-Muqaddimah


Sources : "http://www.publicdinar.com/content/view/48/53/lang,english/"

Kelantan, Malaysia: Embracing Shariah currency

Kelantan, Malaysia: Embracing Shariah currency
By The Halal Journal published Yesterday

Original Article Source: The Halal Journal Jan/Feb 2011


By Abdalghany Aoueskhanov

The historic launch of the Gold Dinar and Silver Dirham, also known as “Shariah Currency”, on 12 August 2010 (2 Ramadhan 1431H) by the Kelantan Sultanate in Malaysia was indeed historic. On that day, the people of Kelantan embraced Sunna Money by free choice. The introduction of bi-metallic currency in this north-eastern Malaysian state was a resounding success as it proved once again that when people are given freedom to choose their money, they choose gold and silver.

The dinars and dirhams of Kelantan were sold out quickly: the first batch worth RM2 million was sold out before the end of Ramadhan prompting Kelantan Golden Trade, the state company in charge of minting and distributing the coins, to restrict the selling of silver dirhams to only those who wanted to pay Zakat with it. Payment of Zakat with gold and silver coins, not promissory notes, is the restoration of the third pillar of the Deen and fulfilment of the most important obligation after Solat (prayers).

After Ramadhan, the Kelantan government increased the budget for the second batch to RM4 million and it too was sold out completely. The third batch worth RM6 million is now in the process of being minted and will arrive in Kuala Lumpur, Malaysia, in a matter of days.

The Islamic coins of the Kelantan Sultanate were minted according to the latest international standard of the World Islamic Mint (WIM) [read more on WIM on page xx].

The news of the launch of Shariah Currency in Kelantan on 12 August broke out all over the world, and almost all major international media and news agencies highlighted the event. Most significantly, Kelantan’s brave call for freedom resonated among all those who wanted to throw off the evil chains of Usury. Muamalah Council Malaysia’s news centre received emails from numerous individuals, Muslims and otherwise, from around the globe congratulating the government and people of Kelantan and expressing their excitement and solidarity. These are just a few of those letters:

“I am a Christian, but I share your enthusiasm for your people ridding themselves of the control of corrupt, interest-stealing, money-debasing bankers.

Good luck in your endeavours.

God bless,

David Rogers (Canada)”

“I am not a Muslim but I am very proud of your decision to accept "honest" money. The best of luck to you and remember that each minted precious metal coin is one step further away from the tyranny of the modern banking system. I applaud your decision to promote the protection of "the little person", gold and silver are freedom and you are promoting pure freedom from the chains that bind the world. Thank you for starting the revolution towards true economic freedom.

Thank you from Greece,

Christofer Chalukidi”

Wakala Induk Nusantara (WIN), the only accredited minter and distributor of dinars and dirhams by the World Islamic Mint (WIM) in Indonesia, has started to phase out the existing coins in circulation, which were minted according to the old standard of WIM, and replaced them with the new standard coins. “Within the first half of next year, we’ll complete the transition to the new standard that will give our customers added value coins not only due to improved quality and enhanced counterfeit level, but most importantly, 1:1 ratio exchange with other coins in the region,” said Zaim Saidi, Director of WIN and the leader of the biggest dinar movement in the world. WIN is already using WIM stickers stating “We Accept Dinar and Dirham” within its network of shops and traders, called “Jawara”.

Muslim communities in Europe, Australia and the United States are starting to distribute WIM coins within their communities. This year saw the launch of the much-awaited project, Dinar People – a new online marketplace and directory where Dinar users and supporters can meet like-minded people from around the world. This network serves as a real-time virtual open marketplace where anybody can communicate, interact and initiate commerce with other members.

The government of Pakistan plans to hold its first international forum on Gold Dinar next year. And in June 2011, there will be the 2nd World Conference on Riba, to be hosted by Nigeria, the country where the Gold Dinar movement promises to explode next (The 1st World Conference on Riba was held in Kuala Lumpur, Malaysia, on 1-2 November, 2010. Read about it on page xx).

Going back to the Malaysian state of Kelantan, more than 1,500 shops and business outlets are already accepting Shariah Currency, and, according to the CEO of Kelantan Golden Trade (KGT), Umar Ibrahim Vadillo, next year, it is expected that 20,000 shops in the state of Kelantan alone will be accepting the Islamic medium of exchange. Customers can identify these shops by the sticker “We Accept Dinar and Dirham” issued universally by the WIM, World Islamic Mint. The list of shops and Wakalas (agencies appointed by Kelantan Government to sell the coins) can be viewed on KGT’s website: www.dinarkel.com.

In 2011, the government of Kelantan will introduce Wadiah institutions that will provide safe-keeping service and also act as Wakala to facilitate payment operations upon instruction of its clients. The Kelantan Wadiahs are fully developed and endorsed by WIM. Along with Wadiahs, Malaysians will be introduced to an SMS service that will allow them to know the real-time price of dinar and dirham daily by automatic SMS update; subscription to this service must be renewed annually.

These will be the first localised Wadiahs in modern history that are 100 per cent Shariah-compliant (e-Dinar being the first international Wadiah) and Kelantan’s model will be replicated throughout Malaysia and the world, creating a multitude of local repositories plugged in the single data base, e-Dinar.

Early 2011, the Gold Dinar Cooperative will be set up with headquarters in Kuala Lumpur. The cooperative will register Halal money users nationwide and mobilise them into a social movement for economic freedom. Under the cooperative, there will be conducted activities such as training programmes, seminars, publications, and information bureau. The registration has already started, and enquiries can be made to zahimi@al-qafilahinternational.com.This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Since 12 August 2010, the silver dirham appreciated vis-à-vis the Ringgit by 45 per cent and the gold dinar by 10 per cent in November 2010. Anybody interested to obtain Kelantan dinars and dirhams can do so at Nubex Sdn Bhd (www.nubex.com.my), the official distributor for Kelantan Golden Trade in Kuala Lumpur.

The price of dinar and dirham can be viewed 24 hours live at the official websites of the World Islamic Mint: www.islamicmint.com (in USD and EUR) or www.islamicmint.com.my (in MYR).



*About the Author: An economist by training, Abdalghany is a free-lance researcher and writer for various Malaysian NGOs and media publications with the scope of interests ranging from consumerism and health care to economics and geopolitics, writing articles in both, Russian and English. Vast work experience and extensive research led Abdalghany to the conclusion: paper money is the biggest injustice of modern times. In the past seven years, he was actively involved in a number of projects related to the restoration of Islamic currency – Gold Dinar and Silver Dirham. He was instrumental in the organisation of the launch of the Islamic currency in the state of Kelantan on 12 August 2010. He is currently the editor of the website and newsletter of Muamalah Council Malaysia – a non-profit organisation dedicated to disseminating the knowledge on sound money to Malaysian public.


sources : "http://www.halaljournal.com/article/5385/kelantan,-malaysia:-embracing-shariah-currency"

The Origins of Paper Money – Part Two: Monetary System in the Islamic World

The Origins of Paper Money – Part Two: Monetary System in the Islamic World
By The Halal Journal published 7 months ago

Original Article Source: The Halal Journal Mar/Apr 2008



How did money as a medium of exchange for foods and services evolve into its current form we know and use today? Hazel Hassan Hisham transports us back into time and traces its origins in this second of a two-part article that chronicles the evolution of paper money.

The first Muslim coins were struck during the Caliphate of Uthman (ra), 644-656 CE. The first original minting of Islamic dirham was done in 695 CE (75 AH) during the reign of Khalifah 'Abd al-Malik. It followed the standard set by Umar Ibn al-Khattab (ra).

These coins included the phrase: "Allah is Unique, Allah is Eternal". Beginning with these coins the use of human figures and animals was discontinued. Both the dinar and dirham coins were round in shape. Typically, one side of the coin was stamped with the words "La ilaha illallah" and "Alhamdulillah" and the obverse side with the name of the caliph or ruler and the date of minting.

The earliest Arab coins imitated those of the Persians (the Sassanians) and the Byzantines. The Arab-Sassanian series goes back as far as 31 AH (Hijriah) just 21 years after the death of Prophet Muhammad S.A.W. The Sassanian coins resumed a century later by the Arab governors of the Tabaristan province (on the southern border of the Caspian Sea). The Arab-Byzantine coins imitated the copper 40-nummia pieces of the 7th century Byzantine Emperors.

The Arab coinage was reformed in 77-79 AH (696-98 AD), creating the main Umayyad series. Its copper denomination, the Fals, exhibited a wide variety of types, but the silver coin, the dirham, used a single calligraphic type at all of the mints of the Caliphate. This coin, with its religious inscriptions and its consistent use of a date and a mint name, set a pattern that was followed for the next few centuries throughout the Islamic world.

The Abbasid series is similar to the Umayyad, but the script takes on a distinctive form that exaggerates the horizontal letters and makes the others microscopic. The Caliph's name is absent on the early issues (as on the Umayyad Dirhams), but it appears on some coins of al-Mahdi (775-85 AD) and becomes a standard feature on all later issues.

During the early 900s AD, the Abbasid Caliphs came under the power of the Buwayhid rulers and lost their temporal authority. Their coins came to an end, but their names were often placed on the coinage of other rulers, citing them as Islam's spiritual head. In a later age, the Abbasid Caliphs regained control of a temporal state, but those coins are of a much different style. Some non-Abbasid coins can be deceptive when they include the Caliph's name but happen to omit the name of the temporal ruler.

In the medieval Islamic world, a vigorous monetary economy was created during the 7th-12th centuries based on the expanding levels of circulation of a stable high-value currency – the Dinar. The Islamic gold dinar (sometimes referred as Islamic dinar or Gold dinar) is a bullion gold coin made from 4.25 grams of 22-carat (k) gold with historical Islamic significance.

The Dirham and Dinar were both used as the official Islamic currency beginning with the second Caliphate, 634-644 CE. The Islamic Dinar is the weight of gold equivalent to 4.25 grams, whereas the Islamic Dirham is the weight of silver equivalent to 3.0 grams. Umar Ibn al-Khattab established the known standard relationship between the two based on their weights: 7 dinars must be equivalent to 10 dirhams.

Gold has always had value to humans, even before it was money. This is demonstrated by the extraordinary efforts made to obtain it. Prospecting for gold was a worldwide effort going back thousands of years, even before the first money in the form of gold coins appeared. In the quest for gold by the Phoenicians, Egyptians, Indians, Hittites, Chinese, and others, prisoners of war were sent to work the mines, as were slaves and criminals. This happened during a time when gold had no value as 'money,' but was just considered a desirable commodity on itself.

The first use of gold as money occurred around 700 BC, when Lydian (Turkey) merchants produced the first coins. These were simply stamped lumps of a 63 per cent gold and 27 per cent silver mixture known as 'electrum.' This standardised unit of value, had no doubt helped Lydian traders in their wide-ranging successes, for by the time of Croesus of Mermnadae – the last King of Lydia (570-546 BC) – Lydia had amassed a huge hoard of gold. Today, we still speak of the ultra-wealthy as being 'rich as Croesus.'

Gold, measured out, became money. Gold was money in ancient Greece. The Greeks mined for gold throughout the Mediterranean and Middle East regions by 550 BC, and both Plato and Aristotle wrote about gold and had theories about its origins – one of them is that Gold was associated with water and it was said that gold was a particularly dense combination of water and sunlight.

The Islamic gold dinar came back to life as a consequence of a currency crisis in Asia in 1997. The then Prime Minister of Malaysia, Tun Dr. Mahathir Mohamad, proposed the Islamic gold dinar as currency for international trade in the Muslim world. It was supposed to suppress the overly traded American dollar and ensure that dollar's instability does not affect international trade because Islamic gold dinar was to be tied to the price of gold, and thus provide a stable value of the currency.

Tun Dr. Mahathir once emphasised that the Gold Dinar policy is being driven by the crushing reality of the economic and strategic crisis. The Gold Dinar can be a trading currency for all countries, not necessarily Muslim countries alone. He strongly feels that the Muslim countries are in the best position to demonstrate the viability of the system and in the process, show the world that they are capable of growing with stability and peace.

However, the idea has since been halted. Perhaps one day, it will become a reality and the gold dinar will reign within the Muslim world one day.

Sources : "http://www.halaljournal.com/article/4869/the-origins-of-paper-money-�ae�-part-two:--monetary-system-in-the-islamic-world"

Gold Dinar makes a comeback on high gold price

Gold Dinar makes a comeback on high gold price
By Bernama published 5 years ago


By Che Halit Morad

KUALA LUMPUR, March 2 (Bernama) -- Gabungan Koperasi Universiti Bhd (Gakub) is currently working with Swarnabhumi International Holdings Sdn Bhd towards making a reality of the government's intention to use the gold dinar as an instrument in the international Islamic financial system.

Zahimi Chik, a director of Swarnabhumi, the company that produces the gold dinar, said efforts were being taken to bring back the glorious past of the currency by introducing it for saving purposes, as a wedding gift, for zakat payment and trading.

As a first step, it is hoped that the recently launched gold dinar is accepted and used by Gakub members and eventually by more than the five million cooperative members nationwide, he said.

"The gold dinar is suitable for savings due to its lasting, intrinsic values, and it can be used anywhere and cannot be easily created or made a counterfeit.

"For zakat payment, using the gold dinar would mean payment by cash, while payments through paper money, cheques or promisary notes are still techincally considered as being debt instruments," he said.

In a larger context, Zahimi said the usage of gold dinar in the commercial sector would make a reality of the vision to make the gold dinar the choice mode of payment in international trade.

"It can unite the Muslim community through the usage of a common currency among the member countries of OIC or Organisation of Islamic Conference and see the return of fair trade for everyone," he said.

The gold dinar and silver dirham had been the syariah currency unit for the Muslim nations for 1400 years.

They were used for savings, as payment and measuring units before the advent of the paper money in the early 1900s which then replaced the use of the gold and silver currencies.

In Malaysia, former Prime Minister Tun Dr Mahathir Mohamad become a leading voice in advocating the use of gold dinar in international trade.

During his tenure as prime minister, he had often stressed on making the dinar a trading currency for all countries and not just the Islamic countries.

The Islamic countries, however, are in the best position to prove the effectiveness of the system, he said.

During the OIC summit in Putrajaya, he said the grouping had agreed to Malaysia's proposal to use the gold dinar in trade transactions between member countries.

Zahimi said his company made the 1.0 gold dinar which was equivalent to 4.25 grammes of gold of 22 carats as well as the half dinar (2.125 gms) and 8.0 dinar (34gms)

Pure gold is 24 carats, but pure gold without the addition of other elements would not be suitable for making a currency unit as it is too soft, he said.

He said that although the value of gold dinar fluctuated, its value remained high, for example, for the 1.0 gold dinar the value was at RM302 on February 21, compared with RM300 as at January 12.

Over the last 5 years, gold prices have doubled, making gold an excellent long term savings investment.

Response for the gold dinar from cooperatives and individuals meanwhile has been good and the company is now in the process of appointing its main agent to help market the gold dinars nationwide, he said.

An agreement would be also soon signed to appoint the company to mint the gold dinar, he said.

Swarnabhumi is expected to produce 10 kg or 3,000 pieces of the gold dinar per month during its initial stage of production, Zahimi said.

Chairman of Gakub, Mohd Said Mohd Kadis meanwhile said that for now the gold dinar could be bought at any cooperative that has a kiosk for dinar exchange (Kodex).

"It is a proactive measure from the cooperative to encourage the use of dinar. Imagine if the gold dinar is kept as a form of savings for workers in the Employees Provident Future," he further said.

"The question now is whether other parties such as banks and financial institutions are prepared to buy the gold dinar as marketed by Gakub?" he asked.


Sources : "http://www.halaljournal.com/article/167/gold-dinar-makes-a-comeback-on-high-gold-price"

Gold Dinar as Halal Money

Gold Dinar as Halal Money
By Vivy Yusof published 2 years ago

Filed Under: Islamic Finance >> Currency


Many are aware of the concept of Halal money, but to them, Halal money is money obtained in an honest way, which means not by gambling. There is a bigger issue to be addressed regarding Halal money, and the secret lies within the currency note itself.

If I told you that your RM50 note is worth nothing, would you believe me? This all comes down to history. Let’s recap: in the 1800s, colonies robbed us by monopolising our land, taking our resources. In return, they issued a paper IOU, which is a promise to pay, signed by their companies involved. While waiting and wishing for our tangible returns, the IOUs were circulated and used by us, as a medium to trade. The paper IOUs gradually decreased in size and were beautified by pictures of the rulers. Soon, they were accepted as a medium of exchange, and known to all of us as Money, something we all chase for to survive.

This shows that while God has given Muslim countries so much richness such as oil, precious metals and fertile land, we generously hand them over to others and succumb to their manipulations. Paper money as a dishonest tool is a highly sensitive topic to touch upon, and determining the Halal aspect of it would be best left to the Ulamas to decide. However, we can all use our common sense with this simple example. The third pillar of Islam urges Muslims to pay Zakat, which is the act of giving a proportion of our income to the poor. Zakat is only to be paid with tangible goods, such as gold, goats, and camels. Many Muslims just shake off their Zakat responsibility by paying using paper money. Considering the origins and history of paper money, being just a promise to pay, is our Zakat accepted in Islam? Ultimately, paper money symbolises a debt, and in Islamic law, a debt cannot be used as a medium of exchange.

Zakat has to be paid with honest and Halal money, and what springs to mind is the obvious; Dinar. This 100 per cent gold coin fits the requirement of Halal as it has value and is tangible merchandise. One of the persons most passionate about Gold Dinar is Umar Ibrahim Vadillo, who wrote The Return of the Islamic Gold Dinar. He is one of those who believe strongly that any true Muslim carries the responsibility to reject paper money. To him, paper money is a form of “fraud” despised by Allah and therefore, the absolute worst thing a Muslim can do is to use it. He believes the only means of exchange allowed by Syariah law are gold Dinar and silver Dirham.

He quotes the words of Imam-ad-Dean Ahmad which says, “Muslims cannot escape the fact that gold is our money. Instead of fighting the will of Allah, I propose that we embrace it. If the 1 billion Muslims of the world would use gold as their unit of account, the volatility would stabilise.”

There is another person closer to our hearts fighting for the good of gold Dinar; Malaysia’s former Prime Minister, Tun Dr. Mahathir Mohamed. In 2003, he, along with his economic adviser, Tan Sri Nor Mohamed Yakcop, proposed the introduction of Islamic gold Dinar as currency to be used for international trade among the Muslim countries. Reason for this is to suppress the overly-traded US dollars and to ensure that the US dollar’s instability does not affect our international trade. Islamic gold Dinar is more stable in the sense that it is tied to the price of gold. The idea of using gold instead of the paper money is understandably a bizarre one to many. We might not be able to imagine people going about their everyday lives carrying bags of gold instead of thin currency notes. However, shouldn’t we be patient and open-minded so as to see the other side of the story, perhaps the better side?

So, why gold? As elaborated by Umar Ibrahim in his book, gold is an asset that is no one else’s liability. According to him, paper assets (bonds, shares, and so on) are promises to repay money borrowed, and its value is dependent upon the investor’s belief that the promise will be fulfilled. Gold by itself is a precious metal. No one can deny that gold is valuable and always treasured. Gold cannot be created or destroyed, whereas paper money can be easily torn, burned or created numerously. Only a fool would turn down the idea of receiving gold. Also, gold would not contribute to inflation problems. For example, during Prophet Muhammad’s (peace be upon him) time, a chicken costs 1 Dirham (silver). Today, a chicken still costs approximately 1 Dirham. Therefore, within over a thousand of years, the effect silver had on inflation is virtually zero. On the other hand, the existence of paper money has caused prices to increase ten-folds! The value of gold is independent of the financial system, whereas the value of currencies depends on the strength of their countries. If we wanted stability, the obvious answer would be to choose gold.

Gold Dinar is already used in some Islamic countries, but still very small-scaled. The World Islamic Trading Organisation, following the standards of Umar ibn Al-Khattab, established that one Dinar is equivalent to 4.25g of 22K gold and 23mm in its diameter size. In recent years, China is also showing affinity to gold, as their people are encouraged to buy and trade gold. The Chinese government is committed to increase their gold reserves to reduce reliance on the US dollar. India is another example of a country that has a high demand of gold. The Indians find gold as a commodity of immense value in their religious beliefs, and feel that gold is the only form of protection for Indian rupees against the US dollar. Currently there are 1.3 billion Chinese, 1.1 billion Indians and 1.8 billion Muslims, together representing more than 60 per cent of the world population. If we unite to use gold as currency, there would be a definite shift of power to the East.

Imam Malik defined money as “any merchandise commonly accepted as a medium of exchange.” In the past, when people were free to choose, they chose gold and silver as their money, as their medium of exchange. Now, we are legally forced to succumb and agree to the use of paper currency. Perhaps, if we are given the freedom to choose again, it would be a completely different scenario, and gold and silver would enter the picture again. Increasing awareness of the importance of gold Dinar is a success for the Muslims.

More people are accepting that it is more Islamic to use gold as currency. More people are believing that monetary crisis we face these days are caused by paper money, which can be printed over and over again. More people are realising that this repetitive problem will never stop unless something is changed. More people are opening their eyes, but sadly, only a handful of them are opening their mouths to make a difference. When asked about if the introduction of an Islamic Gold Dinar could be realised, Tun Dr Mahathir replied, “This is not a dream, it can be realised.” To many, it is still a dream. Granted, the replacement of paper currency is a difficult thing to do, but with comprehensive research and meticulous planning, it can be done. All we need to do is to be able to understand, accept and adapt to a new era, a Halal-certified one.


article from "http://www.halaljournal.com/article/3362/gold-dinar-as-halal-money"

Dinar and Dirham

Abu Bakr ibn Abi Maryam reported that he heard the Messenger of Allah, may Allah bless him and grant him peace, say: "A time is certainly coming over mankind in which there will be nothing [left] which will be of use save a dinar and a dirham." (The Musnad of Imam Ahmad ibn Hanbal)

Gold and silver are the most stable currency the world has ever seen.Protect your wealth by buying gold and silver.

Zero inflation in 1,400 years

A chicken at the time of the Prophet, salla'llahu alaihi wa sallam, cost one dirham; today, 1,400 years later, a chicken costs approximately one dirham.

GUEST EDITORIAL
James E. Sinclair
Chairman & CEO of Tan Range Exploration Corp
The 5 Elements for a Long-Term Bull Market in Gold
Now Have a Nuclear Wild Card by James Sinclair
October 28, 2002


The planned introduction of the Gold Dinar is not an act revenge by Malaysia. It is true that there was a huge and devastating currency raid a few years ago by a famous US trader, who leveled Asian monetary units and caused the major Asian economies to falter. It is true that some of those economies have not fully recovered. However, it is also true that history may point to this currency raid and raider as the germination of the seed for the uniting factor of Islamic economic power that changed the economic and monetary world. That currency raid, which I believe never considered the ramifications to human life, is a watershed example of the devastating negative potential of personal enterprise versus the positive attributes of free enterprise.


I am however starting to think that the plan for the Gold Dinar and support from other Islamic nations is a planned offensive against the use of the dollar as a settlement currency for oil. It is perceived, and correctly so, that the Islamic world is controlled via the use of the US dollar as the main settlement currency. When I say "controlled" I mean whatever happens economically in the USA is exported there via the dollar. Dollars exchanged for the Gold Dinar currency as a measure for gold settlements quarterly or gold convertible to pay for certain oil imports would end all the debate of whether or not gold has a place in the monetary system.


What we are hearing now is that the Gold Dinar will be used as a "measure" settled quarterly in gold on an Islamic intra-nation basis, but that could change quickly. A review of the trade balances of Malaysia and its intra-Islamic trade partners indicates that if the Gold Dinar is employed as now suggested, it would tie up approximately 200 tonnes of gold production equal to 10% of new mine supply. If Malaysia went all the way and went to convertibility with a 15% gold cover, they would utilize more than 300 tonnes of new production. Either way, this is the Wildest of Wild Cards for Gold.


The advent of the Gold Dinar, as now envisioned, would remove any discussion of whether or not we are embarking on a very long-term bull market in gold. I have already told you that I believe this is not just a gold recovery, not just a gold bull phase, not just a gold bull market, but the advent of the return of gold to a monetary application in which gold will be in a bullish posture on balance for the rest of my life. I expect to live until at least 2030. Gold Producer Hedger Take Note.


Few Islamic nations have affinity with Hussein, but fewer like the idea of the US attacking Iraq, an Islamic country. For what it is worth, I am told there is a significant possibility that when the US attacks Iraq, the united Islamic salvo back will be at the US dollar via the Gold Dinar -- not as a measure, but rather as a convertible currency. Confidence that the Saudis will come to the rescue of the dollar stands on thin ice. The Saudi Royal Family is under significant pressure from the fundamentalist influence there. They are less likely than most observers think to rescue the dollar this time. The Gold Dinar is the major wild card in the entire history of gold. It must be monitored very closely.


Translated from the "Al-Fath Al-'Ali Al-Maliki" pp. 164-165


"This Fatwa considers paper-money to be fulus, because it only represents money and does not have value as merchandise. It follows that since Zakat cannot be paid in fulus, which has no value as merchandise, it cannot be paid in paper-money, which value as weight of paper is null. On this basis, it becomes clear the urgent need to restore the use of the Dinar and the Dirham as payment of Zakat. If the millions of Muslims who now make their payment of Zakat in paper money would do it in newly minted Dinars and Dirham's, they will put in circulation millions of gold and silver coins into the mainstream of daily commercial activities of our communities. That single act will became the most important political act of the century, opening the path towards the establishment our own halal free currency breaking away from the usurious financial system.


The return to the payment of zakat in gold and silver is an essential part of the reestablishment of Islam."
Those are serious words and should not be taken lightly. You see, the establishment of a gold-based currency is rebellion against the IMF as it is distinctly forbidden under IMF rules. The advent of the Gold Dinar would be the "Nadir" of the IMF & World Bank.


These are uncharted times. I believe that the Islamic Nations are quite serious about this and that in some form, it will happen on schedule or sooner. Now we can add a "Nuclear Wild Card," an independent gold-based Islamic currency to the 5 elements for a long-term bull market in gold.
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The Seriousness of the Gold Dinar
A presentation made in Kuala Lumpur Malaysia
By
The Honorable Dr. Mahathir Bin Mohammed
Minister of Finance for Malaysia
"The Gold Dinar in Multilateral Trade"
Presented to the Community
by
James Sinclair

I have chosen to delete the first 17 points as they refer to subjects that might cause the western precious metals researcher to prejudice the rest of this extremely important document. There is no coverage in the West of this watershed event in monetary history which is clearly, really and powerfully in the making. Those that wish the first 17 points need only ask for them and I will provide them. They speak to the perspective of an Arab in today's Islamic world. This opening 17 points requires a perspective of high pan-determinish to deal with objectively. That is a quality that the West has always lacked and after September 11th probably will not acquire soon in matters dealing with the Islamic world. I have made the decision to make to present t to you in this manner as it must be read with an open mind.


There is an Islamic currency coming. That is a fact. There is a high chance that this is it. The Dinar is a tactic nuclear monetary weapon of self-protection in the Islamic perspective. It is a statement by them of Islamic Self Consciousness and Islamic Self Esteem. It is an Islamic rally point for all 1.2 billion of that persuasion. It is coming soon and it is real. It may not be viewed objectively by the West, in the environment of a weak dollar now existing. That weak dollar situation looks to me as if it will get significantly worse before it gets significantly better. This is not low amplitude noise. This is a NOISE that may scream soon the unthinkable word, Remonetization. Here are the words of its architect. Pay close attention to the final point in the words of this Minister of finances own words. They need to be understood completely in order to understand what is coming. Oleh/By : DATO SERI DR MAHATHIR BIN MOHAMAD Tempat/Venue: IKIM HALL KUALA LUMPUR Tarikh/Date: 23/10/2002 Tajuk/Title : THE GOLD DINAR IN MULTI-LATERAL TRADE SEMINAR


20. If the Muslims are going to protect themselves they must have sufficient wealth. Allah has endowed Muslim countries with inexhaustible wealth. These need to be administered for the good of the ummah.

21. But wealth can also be acquired through commercial activities, through the production and distribution of goods and services and through trade.

22. Today trade between Muslim countries is small. It is not suggested that we reduce our trade with the non- Muslims. But we should endeavour to increase the trade between Muslim countries.

23. We can trade through the exchange of goods, through barter. But today we use money. Since we don't have a currency which is strong enough and stable enough in exchange rate terms, we have to use the American dollar. But the dollar is also not stable. Today the dollar has depreciated against many other currencies. This means that despite the increase in the price of oil for example, we are actually earning less due to the devaluation of the dollar. It is the same with the other currencies. It is the same with our own currencies. They all fluctuate in value. And they are all subject to speculation and manipulation as happened in Malaysia and other East Asian countries, in Russia and in Latin America.

24. The reason for this is that paper currency has no intrinsic value. You can print any figure you like on currency notes but in exchange rate terms the figure means nothing. The Malaysian Ringgit is 3.8 to one U.S. Dollar. The Turkish Lira is 1.5 million to one U.S. Dollar. The Indonesian Rupiah is 9000 to one U.S. Dollar. The purchasing power within the country is different from the purchasing power outside the country. Sometimes countries have as many as four exchange rates -- one official, one for domestic economy, one for export and one for import.

25. Clearly this situation in terms of international finance is chaotic and anarchic. But since the system benefits the powerful countries they are unwilling to correct it.

26. If we want to avoid being short-changed we must have a currency that has intrinsic value. Gold does fluctuate in price but the fluctuation is minimal. It is not possible to devalue gold by one hundred percent or one thousand percent. Nor is it possible to revalue gold by the same percentage. The fluctuation in the value of gold can only be by a few percentages, up or down.

27. When the Allied nations met in Bretton Woods to determine the principle for the rate of exchange of international currencies in order to facilitate trade, they decided to use gold as a standard. The value of the U.S. Dollar was fixed at one dollar for 1/35 ounce of gold or 35 U.S. Dollars per ounce. All other currencies were valued in gold through the rates of exchange with the U.S. Dollar.

28. This worked quite well until some countries wanted to devalue their currencies in order to become competitive in the international market. Then other countries also decided to devalue in order to remain competitive. Finally the U.S. Dollar was devalued against the Gold.

29. At this stage the gold standard could not be sustained. The market claimed that it could determine the exchange rate through the demand and supply of currencies freely traded in the market. But profiteers moved in and they manipulated the value of the currencies so that there was chaos in terms of exchange rates of currencies. Business became very difficult. Indeed many good businesses went bankrupt when the domestic currency gets devalued. The hedge Funds which claim to insure the value of the currencies made huge sums of money speculating and manipulating the values of the currencies.

30. This anarchy in the international financial regime will remain because it benefits the rich and the powerful. If we want to protect ourselves we must evolve our own payment system, our own trading currency.

31. The Gold dinar can provide the currency for trade between nations. If we value all trade items against gold, then we will have no problem with the exchange rate. We know that in the last resort we can melt the gold and sell it in the market. You obviously cannot do that with paper currency, worst still with figures on a computer. They have no intrinsic market value as gold has.

32. But gold is bulky. We cannot be carrying gold all over the world in order to pay for goods we want to import. But we need not do that.

33. It is not intended to use the gold dinar as currency for everyday transactions in the domestic market. For this we can use national currencies. If there is inflation then the currency can buy less gold and other goods. And vice versa. So there is no necessity to carry bags of gold coins for transaction within the countries.

34. But even for international trade the transport of gold bullions or gold coins would be very minimal. Through bilateral payments arrangements the imports can be balanced by the exports and the differences settled in gold dinars. The Central Bank can provide a guarantee for the gold required for the payments of the balance. In the following weeks or months the deficits may be reduced or a surplus achieved. In that case the payments of the balance can be made through accounting arrangements between the Central Banks. It is only occasionally that a necessity might arise for the actual gold dinar to be used to pay for the purchase of imports.

35. We cannot really verify the amount of money a country has. A country's own currency cannot be regarded as its reserve. But gold dinars or gold bullion or gold ingots can serve as a country's reserve. Still in the end we have to trust each other. If we are good Muslims then the cases of fraud by Central Banks would be minimal.

36. Assuming that Malaysia exports to a Dinar Area country a hundred million Dinars worth of motor vehicles and then imports 110 million dinars worth of oil, then the payment required by Malaysia would be just 10 million dinars. The ten million dinars is credited to Malaysia's trading partner. If in the following month the trading partner buys 110 million dinars worth of Malaysian cars and Malaysia buys 100 million dinars worth of oil, then no payment need to be made by either party. The 10 million dinars that has to be paid by Malaysia's trading partner for the motor vehicle can be offset by the credit of 10 million dinars from the previous month's transactions.

37. Today with computers we can close account and pay more frequently. Through this method it is not necessary to purchase or earn hard currency.

38. Of course there may be some countries which are so poor that they cannot have gold dinars. We can buy some raw materials to be paid in gold dinars. They can be helped to build up the reserves of gold dinars.

39. There will be problems. But if we begin with just a pair of countries we would be able to minimise problems and demonstrate whether it works or not. We will be able to identify the weaknesses and the faults and correct them.

40. Gold is a precious metal. There has never been a time when there was no demand for gold. It is also not so plentiful that its price will fall the way paper currency or even other precious metals can fall. Yet it is not so limited in quantity that anyone or any trader can corner it and manipulate the price.

41. In different countries the price of gold will differ in terms of the currency of that country. That is a function of the currency of the country. The value of one gold dinar is one gold dinar no matter what the exchange rate of a currency is against the gold dinar. If the value of goods or services is expressed in gold dinar, the value remains the same no matter which country is involved in the trade.

42. Thus an exporter can declare the agreed price in dinar to the importer in another country and to the Central Bank in his country. Depending on the agreement reached the Central Bank will pay the exporter the current local currency equivalent to the gold dinar price. At the importer's end, he would pay to his country's Central Bank the local currency equivalent of the agreed price in dinar. At the end of the week or month the Central Banks will total up the value in dinar of the exports and imports between the two trading countries. If they are not balanced then the country with a surplus will have a credit account against the country with a deficit. The difference can be paid in dinar or in goods or the country with the surplus can hold the dinar for future purchase from the country in deficit.

43. In multi-lateral trade, the process may be a little more complicated but it is entirely, manageable. A clearing house can be set up for a group of trading countries and the deficit and surpluses balanced. The process is not unlike the clearing of the cheques of numerous banks at a central clearing house.

44. Provided there are goods or services to be supplied by all participating countries, the amount of gold dinars that needs to be kept as reserve backing and for payment in the last resort is very small. Ideally there would be no need to transport and pay in dinars. The imports and exports in most instances would cancel themselves. The profits come from disposing of the goods or services domestically when the local currency would be used.

45. There will be problems of course. But there are problems now. Countries with no "hard currency" i.e. U.S. dollars cannot pay for their imports anyway. In addition the U.S. currency is not as stable as gold. Not only can it appreciate or depreciate widely but a country's currency can be made to depreciate so much against the U.S. Dollar that its imports cannot be paid for, priced as they are in U.S. Dollar. The gold dinar cannot depreciate much against the U.S. Dollar.

46. Gold price can also be manipulated but not as easily as U.S. Dollar or other currency. No one can sell gold at below market price because he just will not be able to deliver when called upon to do so. Short-selling will be very difficult if not impossible.

47. However local currency prices of gold can still fluctuate if left to the market. It is up to the country concerned whether to control exchange rates or not. But speculation and manipulation will not be as easy as when local currency is valued against the U.S. Dollar.

48. It must again be stressed that the Gold Dinar is exclusively for international trade. It is not to be used as local currency. In a sense it is like the U.S. Dollar now. Some countries of course use the U.S. Dollar locally for paying hotel bills by foreigners. But the dinar is heavy and cumbersome to carry. So it cannot be used as freely as the U.S. Dollar locally. This again lends credibility to the dinar and the local currency, which has to be used for local payment.


49. We should not be too ambitious as to launch the Gold Dinar for multi-lateral trade at one go. We should begin by pairing off the countries willing to use the Gold Dinar. A pair of good trading countries with a fairly well balanced trade should initiate the use of the Gold Dinar. Problems that arise can be resolved and the system improved. After the bugs have been got rid off then the trade using the dinar can be expanded gradually to involve more countries.


50. Traders in particular will be happy because their prices in Gold Dinar would not be affected by changes in the exchange rates of the importing countries or the exporting countries. In dinar, the prices will always remain the same.


51. It is not the intention to make the dinar a common currency for all countries. It is not really the Gold Standard with a fixed value against local currency. If countries print more local currency there would still be inflation within the country. But trade would be stable and enhanced. Speculators and manipulators will not be able to undermine international trade.


52. Of course the Gold Dinar can be a trading currency, for all countries, not necessarily Muslim countries. But Muslim countries are in the best position to demonstrate the viability of the system. They are in a position to manage their economies rationally and in the process show the world that they are capable of growing with stability and in peace. And this will do more towards countering oppressions by their enemies than the futile violent retaliations.


Sinclair conclusion:Dear Friends of the Gold Community new and old, this is a very young gold market with a long way to go. It is only in the crawling stage and has done magnificently so far. Soon it will stand up, become strong and be recognized. This time Atlas will not Shrug but rather Gold as an economic Atlas will be used to bolster and restore confidence in the US dollar through a revitalized Gold cover Clause. When the next bull market in equities begins it will be gold that will stand as the foundation to that event and not more paper foolishness from any central bank or international derivative traders. The really millennium begins when gold revitalizes world economies not through convertibility but rather through the gold's real role in the monetary system. Gold is a control item that disciplines the creation of monetary aggregates. That is what the Gold cover clause does and that is why Nixon sterilized it. Mark my words. It is coming and it brings good times, not the four horsemen now looked for as the specters coming over the hill. The ascendancy of gold will be hard fought but will be finally embraced as now popular central bank tools of interest rate manipulation and monetary aggregate expansion are destined by their own definition to fall flat on their political faces. It is amazing that out of Islam comes what will save the Western World's economic system. I am certain that Divinity, whatever He, She or It is or is not, has a unique SENSE OF HUMOR and loves Infinite Variety.


4 of the 5 elements for a long-term bull market in gold are in. The 5th element may well be here as well. Now the Wild Card has raised it's head. Where is the greatest risk in gold now?


In my opinion, the short side of gold has infinite risk. The long side of gold has significant fundamental support.

© 2002 James E. Sinclair

This article appears in the Nov. 15, 2002 issue of Executive Intelligence Review (www.larouchepub.com).
Gold Dinar: An Economic and Strategic
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Response to Chaos
by Michael O. Billington


Mounting concern around the world that the Bush Administration is madly threatening to drive the world into perpetual warfare, while doing nothing to address the global financial-economic collapse, has led to the introduction of a number of defensive measures by nations and groups of nations acting in concert. One such measure is the proposal for creation of a Gold Dinar, intended as a replacement for the dollar as the currency of trade among nations. With a war against Iraq looming on the horizon, and U.S. threats against Saudi Arabia escalating in the establishment's institutions and publications, it is increasingly probable that the Gold Dinar policy will be implemented in the near term, among certain Islamic nations at first, and potentially expanding to include non-Islamic nations.


Malaysian Prime Minister Dr. Mahathir bin Mohamad hosted a two-day seminar in Kuala Lumpur on Oct. 22-23, called "The Gold Dinar in Multilateral Trade." This was the second major conference in Malaysia on this subject involving representatives of members of the Organization of Islamic Conference (OIC). The first conference, "Stable and Just Global Monetary Systems," held in August, announced that the Gold Dinar would be implemented as a bilateral arrangement between Malaysia and certain unspecified partners by the middle of 2003, and extended to multilateral agreements over time. At the more recent seminar, Bijan Latif, the head of Iran's Central Bank, offered to support the establishment of a secretariat in Malaysia to coordinate the development of the Gold Dinar policy. Dr.Mahathir supported the idea.


Not a Gold Standard


In his speech to the October seminar, Dr. Mahathir made clear that the proposal was not intended to establish a gold standard (as put forth by fixated "gold bugs" around the world), but to return to the Bretton Woods policy of a gold-reserve system, which was destroyed when President Richard Nixon removed the dollar from a fixed peg to gold on Aug. 15, 1971, allowing currencies to float at the whim of speculators. Dr. Mahathir reminded the participants, that after World War II, "when the Allied nations met in Bretton Woods to determine the principle for the rate of exchange of international currencies in order to facilitate trade, they decided to use gold as a standard." This worked until 1971, when "the market claimed that it could determine the exchange rate through the demand and supply of currencies freely traded in the market. But the profiteers moved in and manipulated the value of the currencies so that there was chaos in terms of exchange rates of currencies."


The Gold Dinar policy intends to return to the former, superior policy. Tan Sri Nor Mohamed Yakcop, an economic adviser to Dr. Mahathir, explained the system at the August conference as follows, using trade between Malaysia and Saudi Arabia as an example: "Malaysian exporters will be paid in ringgit [the Malaysian currency] by Bank Negara [the Malaysian National Bank] on the due date of exports.... Similarly, the importers will pay Bank Negara the ringgit equivalent of their imports. The Saudi Central Bank will do the same for its exports and imports. Say, at the end of a three-month cycle, the total exports from Malaysia to Saudi Arabia is 2 million Gold Dinar, and the total exports of Saudi Arabia to Malaysia is 1.8 million Gold Dinar. Therefore, for that particular three-month cycle, the Saudi Central Bank will pay Bank Negara 0.2 million Gold Dinar. The actual payment can be by way of the Saudis transferring 0.2 million ounces of gold in its custodian's account in the Bank of England in London, to Bank Negara's account with the same custodian. The important point to note here, is that the relatively small amount of 0.2 million Gold Dinar is able to support a total trade value of 3.8 million Gold Dinar."


The weakness of the system as it is now proposed is that gold, too, is subject to speculation, especially if it is pegged to a currency such as the dollar, which is heading for a plunge due to the collapse of the U.S. banking system. Dr. Mahathir is aware of the problem: "Gold prices can also be manipulated," he said, "but not as easily as the U.S. dollar or other currencies.... Speculation and manipulation will not be as easy as when local currency is valued against the U.S. dollar."


EIR Founding Editor Lyndon LaRouche has proposed that the necessary return to a Bretton Woods system of fixed exchange rates must also peg currencies to a "basket of commodities" rather than to gold, as a means of basing currency valuations to the real economy, rather than tying the real economy to a speculative entity (see Documentation). Although the Gold Dinar proposal assigns a value to gold in terms of dollars, Dr. Mahathir suggested in his speech that he is thinking along the lines of a "basket of commodities": "The value of one Gold Dinar is one Gold Dinar, no matter what the exchange rate of a currency is against the Gold Dinar. If the value of goods and services is expressed in Gold Dinar, the value remains the same, no matter which country is involved in the trade."


Whatever the case in this regard, the discussion and implementation of the bilateral or restricted multilateral Gold Dinar policy can provide a much-needed defense against the collapse of the dollar-centered financial system, and could contribute to a more durable global solution in the near future.
Strategic Necessity


Dr. Mahathir emphasized that the Gold Dinar policy is being driven by the crushing reality of the economic and strategic crisis. The disastrous situation in the Holy Land, the terrorist attacks of Sept. 11, 2001, and the threatened war on Iraq, have resulted in "the whole world's economy being unable to grow," he said. "The West, and in particular the Americans, are very angry. So are the Muslims. Angry people cannot act rationally." He concluded his speech: "Of course, the Gold Dinar can be a trading currency for all countries, not necessarily Muslim countries. But Muslim countries are in the best position to demonstrate the viability of the system, ... and in the process, show the world that they are capable of growing with stability and peace. And this will do more towards countering oppressions by their enemies, than the futile violent retaliations."


Other voices are also warning that the current folly in Washington will only hasten this break from the bankrupt IMF system. James Sinclair, the head of the mining company Tan Range Exploration, said in an Oct. 28 editorial in Financial Sense Online: "It is perceived, and correctly so, that the Islamic world is controlled via the use of the U.S. dollar as the main settlement currency.... I am told there is a significant possibility that when the U.S. attacks Iraq, the united Islamic salvo back will be at the U.S. dollar via the Gold Dinar." The Saudis, he says, "are less likely than most observers think to rescue the dollar this time."


In fact, the Saudis are already repatriating deposits from the United States, as reflected in the increase by $30 billion in deposits in Saudi banks in September.


Sinclair also notes, as did Bijan Latif of the Iranian Central Bank, that "the establishment of a gold-based currency is rebellion against the IMF, as it is distinctly forbidden under IMF rules." Sinclair adds: "The advent of the Gold Dinar would be the 'nadir' of the IMF and World Bank."


Other commentators have noted the concern in Saudi Arabia that the United States may freeze Saudi assets in U.S. banks, forcing them to consider the Gold Dinar as a replacement for the dollar, and dumping dollar holdings altogether if necessary. As amazing as this sounds, given the long history of U.S.-Saudi friendship, there has been a drumbeat of anti-Saudi hysteria in the United States recently, escalating since the infamous presentation before the Defense Department's Defense Policy Board on July 10 by the RAND corporation's Laurent Murawiec, which declared Saudi Arabia the mother of all terror, and calling for the overthrow of that country's government and other Arab "dictatorships" (see EIR, Aug. 16, 2002). Although Murawiec was fired by RAND for this mindless diatribe, Richard Perle, who runs the Defense Policy Board, was never publicly reprimanded, let alone fired, and the Saudis took note.


Even more blatant was the report issued by the leading think-tank of the American establishment, the Council on Foreign Relations, in October, "Terrorist Financing." The report is the work of a task force, headed by Maurice "Hank" Greenberg of the AIG insurance cartel, himself a notorious money-launderer. The report castigates Islamic charities in general, but hits Saudi Arabia in particular: "For years, individuals and charities based in Saudi Arabia have been the most important source of funds for al-Qaeda; and for years, Saudi officials have turned a blind eye to this problem," says the report. Making their intentions clear, the CFR adds: "It may well be the case that if Saudi Arabia and other nations in the region were to move quickly to share sensitive financial information with the U.S., regulate or close down Islamic banks, incarcerate prominent Saudi citizens or render them to international authorities, audit Islamic charities, and investigate the hawala system-just a few of the steps that nation would have to take-it would be putting its current system of governance at significant political risk." Nonetheless, they argue, the Bush Administration must proceed, and stop pretending that "Saudi Arabia is being cooperative, when they know very well all the ways in which it is not."


With this madness as establishment policy, the Saudis, and others, may well see no choice but to pull out of the dollar-based system. This is one reason for the great interest in LaRouche and his proposals in the Mideast today. It may well lead to the timely adoption of the Gold Dinar policy among Islamic nations, and progress toward a New Bretton Woods monetary system.



11/3 J. DOUGLAS BOWEY and ANTAL E. FEKETE - M E M O R A N D U M

M E M O R A N D U M TO:

The Right Honorable Dr. Mahathir Mohamad, Prime Minister, Malaysia
FROM: J. Douglas Bowey and Antal E. Fekete
SUBJECT: Islamic Gold Dinar and Silver Dirham Initiative
DATE: 1 November, 2002


Authors of the Islamic Gold Dinar and Silver Dirham initiative are to be congratulated for their ingenuity, courage, and timing on designing and instituting an international monetary system based on hard money. The following points may be useful to further improve the efficiency of this bold initiative inaugurated by Malaysia.


1. No Monetary Role for Gold and Silver without Free Coinage. The Gold Dinar and the Silver Dirham will not be money and can’t have any monetary role until and unless at least one government officially opens the Mint to gold (silver). This means "free coinage of gold (silver)," that is to say, the Mint must stand ready to convert gold into Gold Dinars (and silver into Silver Dirhams) in unlimited quantities free of charge, on the account of anyone tendering the right amount and fineness of gold (silver). In the absence of this commitment, the Dinar and the Dirham, just like the U.S. Gold and Silver Eagles, will remain souvenirs and keepsakes, having no monetary role to play whatsoever. They will not enter into monetary circulation, and will not be used for accounting purposes. This is one of the critical points missed by virtually all hard-money advocates today. It goes without saying that all taxes, duties, imposts, restrictions on the import and export of gold and silver must be abolished and declared unconstitutional.


2. First Step: Open the Mint to Silver. As the IMF has imposed a ban on monetizing gold (but not silver), for tactical reasons it might be advisable to test first by declaring the Mint open to silver only. This would have the effect of attracting capital in the form of silver to countries with a Mint open to silver. A bill market would spring to life more or less spontaneously. It would then finance the production and distribution of crude oil and other important commodities in terms of the Dirham. There is no need unnecessarily to affront and offend the U.S. by declaring the dollar ineligible for billing crude oil deliveries. However, opening the Mint to silver would be just as effective in puncturing the balloon of dollar-hegemony. The dollar would start fading away as the trading currency of the world.


3. Second Step: Open the Mint to Gold. Once the principle of billing in Silver Dirhams is accepted, as a second step, the Mints can be declared open to gold as well. IMF fulminations notwithstanding, Islamic and other countries can go safely ahead with their gold and silver circulation and bill markets trading bills payable in gold and silver, because the denial of IMF dollar-credits can no longer hurt them. They will be able to attract all the capital they want in terms of gold and silver.


4. Third Step: Finance the Trade in Crude Oil with Gold Bills. A gold bill is just an invoice evidencing the sale of goods in urgent demand (such as crude oil, grain and other agricultural commodities, copper, etc.) by the producer to the distributor. It has to be "accepted" by the latter, must mature in 91 days or less without the possibility of extension, and it must be payable in Dinars at maturity. The bill is a "self-liquidating" instrument. This means that, at maturity, the bill is paid out of the proceeds of the disposal of the underlying merchandise by the distributor. A spontaneous trading in gold bills will spring up. In the bill market, outstanding gold bills are bought and sold at a discount, which depends on the number of days left to maturity and the discount rate. The discount rate varies inversely with the "propensity to spend." The greater the demand for the underlying merchandise, the lower is the discount rate. Sellers of bills are those who have salable merchandise to ship; buyers of bills are those who have short-term liquid funds to invest. The discount rate may move up or down in such a way as to facilitate the clearing of outstanding bills in the market. The discount rate should not be mistaken for a rate of interest, as explained in (9) below.


5. Making the Banks Irrelevant. The beauty of the plan is that it can bypass any and all banks that may be suspected of affiliation with or allegiance to the big multinational dollar banks. Banks are irrelevant to the bill market trading gold bills. There is no need to establish new dinar banks and train personnel either; that would take years. The spontaneous bill market trading of dinar bills would be a more than adequate replacement for financing domestic and world trade.


6. Attracting Capital from Abroad. Here is the mechanism whereby a country that has opened its Mint to gold can attract capital. The Central Bank stands ready to rediscount gold dinar bills at the posted rediscount rate. A higher rediscount rate will attract gold to the Mint resulting in a capital inflow. A lower rediscount rate will expel gold from the country, allowing capital to seek higher returns abroad. Foreigners will send in gold in response to a higher rediscount rate as they want to hold the most liquid short-term instrument: the gold bill of exchange.


7. Wages Must Be Payable in Gold Dinar and/or in Silver Dirham. In order to facilitate dinar and dirham circulation, employers must be requested to pay wages in Dinar or Dirham. Employers get Dinars and Dirhams by selling their gold bills in the bill market, or by rediscounting them at the Central Bank. The workers will spend their dinars and dirhams on consumer goods. The circle is now complete: the consumer’s coin is paying the bill at maturity, by which time the underlying consumer good is sold in exchange for the dinar or dirham.


8. Bimetallism Would Be a Mistake. Do not fix the bimetallic ratio between the Gold Dinar and the Silver Dirham. Let the market find and adjust the proper ratio, whenever necessary, without government intervention.


9. Islamic Law Banning Usury and Interest. It must be clear that there is no lending or borrowing, nor interest paying and taking, involved in bill trading. The function of the bill market is not lending; it is clearing. The producer bills the distributor for merchandise shipped, with "terms: 91 days net." The important point to grasp is that the producer is not a lender; and the distributor is not a borrower. The term 91 days net is part of the contract. Hardly any distributor pays cash to the producer for merchandise shipped for resale. Bills circulate spontaneously before maturity; the producer may use them to pay his suppliers, who will be glad to take the bills in payment for the supplies shipped. Alternatively, the producer may discount his bills in the bill market for cash. The transaction has nothing to do with lending and borrowing at interest. Discounting bills is part of the process of clearing. In more detail, discounting is an essential part of the trade in consumer goods. The amount of discount is of the same character as the markup on merchandise representing overhead and profit of the merchant, allowable charges under Islamic Law. The amount of discount depends (1) on the number of days the bill has to run before maturity; and (2) on the discount rate. The discount rate is not an interest rate. The former reflects the propensity to consume; the latter the propensity to save, the relation in either case being inverse. That is, the higher the propensity the lower is the rate and vice versa.


Note that gold distribution and the bill market are just the two sides of the same coin: neither could stand without the support of the other. In order to make the gold dinar an instrument of world trade, there must be a complementary bill market.


We would be pleased to answer any questions derived from this MEMORANDUM, or to act as consultants and/or advisors to Governments that are courageous enough to implement a plan to open the mint to silver and/or gold.

J. DOUGLAS BOWEY is a Private Merchant Banker living in Los Angeles, California. He has traveled extensively and lived in the Islamic world. Bowey’s specialty is strategic alliance finance.

ANTAL E. FEKETE is Professor Emeritus (Mathematics), Memorial University of Newfoundland, St. John’s, Newfoundland, Canada. He is a world-class economist specializing in monetary science and history. He lives between St. John’s, Newfoundland, Canada, and Budapest, Hungary. He has written extensively. A portion of his writings may be seen on the website www.goldisfreedom.com.

J. DOUGLAS BOWEY and ANTAL E. FEKETE have recently joined forces to create an opportunity. Together they will now begin to offer this opportunity (methodology) to "select" Central Banks/Governments. This methodology allows Central Banks/Governments to continually increase their gold and silver reserve holdings, with minimal risk, without the use of "financial engineering," and while retaining full physical control of those reserves.BOWEY and/or FEKETE may be contacted through:


J. Douglas Bowey and Associates
Beverly Hills, CA
Email: jdbanda@aol.com
Telephone: 310/820-0444

Article from "http://www.silverbearcafe.com/dinar.html#chaos"

Gold Dinar: An Economic and Strategic Response to Chaos

This article appears in the November 15, 2002 issue of Executive Intelligence Review.
Gold Dinar:An Economic and Strategic Response to Chaos
by Michael O. Billington

Mounting concern around the world that the Bush Administration is madly threatening to drive the world into perpetual warfare, while doing nothing to address the global financial-economic collapse, has led to the introduction of a number of defensive measures by nations and groups of nations acting in concert. One such measure is the proposal for creation of a Gold Dinar, intended as a replacement for the dollar as the currency of trade among nations. With a war against Iraq looming on the horizon, and U.S. threats against Saudi Arabia escalating in the establishment's institutions and publications, it is increasingly probable that the Gold Dinar policy will be implemented in the near term, among certain Islamic nations at first, and potentially expanding to include non-Islamic nations.

Malaysian Prime Minister Dr. Mahathir bin Mohamad hosted a two-day seminar in Kuala Lumpur on Oct. 22-23, called "The Gold Dinar in Multilateral Trade." This was the second major conference in Malaysia on this subject involving representatives of members of the Organization of Islamic Conference (OIC). The first conference, "Stable and Just Global Monetary Systems," held in August, announced that the Gold Dinar would be implemented as a bilateral arrangement between Malaysia and certain unspecified partners by the middle of 2003, and extended to multilateral agreements over time. At the more recent seminar, Bijan Latif, the head of Iran's Central Bank, offered to support the establishment of a secretariat in Malaysia to coordinate the development of the Gold Dinar policy. Dr. Mahathir supported the idea.

Not a Gold Standard
In his speech to the October seminar, Dr. Mahathir made clear that the proposal was not intended to establish a gold standard (as put forth by fixated "gold bugs" around the world), but to return to the Bretton Woods policy of a gold-reserve system, which was destroyed when President Richard Nixon removed the dollar from a fixed peg to gold on Aug. 15, 1971, allowing currencies to float at the whim of speculators. Dr. Mahathir reminded the participants, that after World War II, "when the Allied nations met in Bretton Woods to determine the principle for the rate of exchange of international currencies in order to facilitate trade, they decided to use gold as a standard." This worked until 1971, when "the market claimed that it could determine the exchange rate through the demand and supply of currencies freely traded in the market. But the profiteers moved in and manipulated the value of the currencies so that there was chaos in terms of exchange rates of currencies."

The Gold Dinar policy intends to return to the former, superior policy. Tan Sri Nor Mohamed Yakcop, an economic adviser to Dr. Mahathir, explained the system at the August conference as follows, using trade between Malaysia and Saudi Arabia as an example: "Malaysian exporters will be paid in ringgit [the Malaysian currency] by Bank Negara [the Malaysian National Bank] on the due date of exports.... Similarly, the importers will pay Bank Negara the ringgit equivalent of their imports. The Saudi Central Bank will do the same for its exports and imports. Say, at the end of a three-month cycle, the total exports from Malaysia to Saudi Arabia is 2 million Gold Dinar, and the total exports of Saudi Arabia to Malaysia is 1.8 million Gold Dinar. Therefore, for that particular three-month cycle, the Saudi Central Bank will pay Bank Negara 0.2 million Gold Dinar. The actual payment can be by way of the Saudis transferring 0.2 million ounces of gold in its custodian's account in the Bank of England in London, to Bank Negara's account with the same custodian. The important point to note here, is that the relatively small amount of 0.2 million Gold Dinar is able to support a total trade value of 3.8 million Gold Dinar."

The weakness of the system as it is now proposed is that gold, too, is subject to speculation, especially if it is pegged to a currency such as the dollar, which is heading for a plunge due to the collapse of the U.S. banking system. Dr. Mahathir is aware of the problem: "Gold prices can also be manipulated," he said, "but not as easily as the U.S. dollar or other currencies.... Speculation and manipulation will not be as easy as when local currency is valued against the U.S. dollar."

EIR Founding Editor Lyndon LaRouche has proposed that the necessary return to a Bretton Woods system of fixed exchange rates must also peg currencies to a "basket of commodities" rather than to gold, as a means of basing currency valuations to the real economy, rather than tying the real economy to a speculative entity (see Documentation). Although the Gold Dinar proposal assigns a value to gold in terms of dollars, Dr. Mahathir suggested in his speech that he is thinking along the lines of a "basket of commodities": "The value of one Gold Dinar is one Gold Dinar, no matter what the exchange rate of a currency is against the Gold Dinar. If the value of goods and services is expressed in Gold Dinar, the value remains the same, no matter which country is involved in the trade."

Whatever the case in this regard, the discussion and implementation of the bilateral or restricted multilateral Gold Dinar policy can provide a much-needed defense against the collapse of the dollar-centered financial system, and could contribute to a more durable global solution in the near future.

Strategic Necessity
Dr. Mahathir emphasized that the Gold Dinar policy is being driven by the crushing reality of the economic and strategic crisis. The disastrous situation in the Holy Land, the terrorist attacks of Sept. 11, 2001, and the threatened war on Iraq, have resulted in "the whole world's economy being unable to grow," he said. "The West, and in particular the Americans, are very angry. So are the Muslims. Angry people cannot act rationally." He concluded his speech: "Of course, the Gold Dinar can be a trading currency for all countries, not necessarily Muslim countries. But Muslim countries are in the best position to demonstrate the viability of the system, ... and in the process, show the world that they are capable of growing with stability and peace. And this will do more towards countering oppressions by their enemies, than the futile violent retaliations."

Other voices are also warning that the current folly in Washington will only hasten this break from the bankrupt IMF system. James Sinclair, the head of the mining company Tan Range Exploration, said in an Oct. 28 editorial in Financial Sense Online: "It is perceived, and correctly so, that the Islamic world is controlled via the use of the U.S. dollar as the main settlement currency.... I am told there is a significant possibility that when the U.S. attacks Iraq, the united Islamic salvo back will be at the U.S. dollar via the Gold Dinar." The Saudis, he says, "are less likely than most observers think to rescue the dollar this time."

In fact, the Saudis are already repatriating deposits from the United States, as reflected in the increase by $30 billion in deposits in Saudi banks in September.

Sinclair also notes, as did Bijan Latif of the Iranian Central Bank, that "the establishment of a gold-based currency is rebellion against the IMF, as it is distinctly forbidden under IMF rules." Sinclair adds: "The advent of the Gold Dinar would be the 'nadir' of the IMF and World Bank."

Other commentators have noted the concern in Saudi Arabia that the United States may freeze Saudi assets in U.S. banks, forcing them to consider the Gold Dinar as a replacement for the dollar, and dumping dollar holdings altogether if necessary. As amazing as this sounds, given the long history of U.S.-Saudi friendship, there has been a drumbeat of anti-Saudi hysteria in the United States recently, escalating since the infamous presentation before the Defense Department's Defense Policy Board on July 10 by the RAND corporation's Laurent Murawiec, which declared Saudi Arabia the mother of all terror, and calling for the overthrow of that country's government and other Arab "dictatorships" (see EIR, Aug. 16, 2002). Although Murawiec was fired by RAND for this mindless diatribe, Richard Perle, who runs the Defense Policy Board, was never publicly reprimanded, let alone fired, and the Saudis took note.

Even more blatant was the report issued by the leading think-tank of the American establishment, the Council on Foreign Relations, in October, "Terrorist Financing." The report is the work of a task force, headed by Maurice "Hank" Greenberg of the AIG insurance cartel, himself a notorious money-launderer. The report castigates Islamic charities in general, but hits Saudi Arabia in particular: "For years, individuals and charities based in Saudi Arabia have been the most important source of funds for al-Qaeda; and for years, Saudi officials have turned a blind eye to this problem," says the report. Making their intentions clear, the CFR adds: "It may well be the case that if Saudi Arabia and other nations in the region were to move quickly to share sensitive financial information with the U.S., regulate or close down Islamic banks, incarcerate prominent Saudi citizens or render them to international authorities, audit Islamic charities, and investigate the hawala system—just a few of the steps that nation would have to take—it would be putting its current system of governance at significant political risk." Nonetheless, they argue, the Bush Administration must proceed, and stop pretending that "Saudi Arabia is being cooperative, when they know very well all the ways in which it is not."

With this madness as establishment policy, the Saudis, and others, may well see no choice but to pull out of the dollar-based system. This is one reason for the great interest in LaRouche and his proposals in the Mideast today. It may well lead to the timely adoption of the Gold Dinar policy among Islamic nations, and progress toward a New Bretton Woods monetary system.

Article is taken from "http://www.larouchepub.com/other/2002/2944gold_dinar.html"

Seminar to discuss introduction of Islamic gold dinar as world currency

Seminar to discuss introduction of Islamic gold dinar as world currency



INTRINSIC value ... Syaikh Abdulqadir as-Sufi displays the Islamic gold dinar coin at a news conference in Putrajaya, July 31.

--------------------------------------------------------------------------------


PUTRAJAYA July 31 - Prime Minister Datuk Seri Dr Mahathir Mohamad intends to hold a seminar to discuss the introduction of the Islamic gold dinar as a world currency and determine all the parameters of its usage and the dimension of its applications, it was announced today.

An expert on the Islamic gold dinar, Rais Umar Ibrahim Vadillo, said this was expressed to him by Dr Mahathir during their one-hour meeting at the Prime Minister's office here.

Speaking to reporters after accompanying a world reknowned Muslim scholar, Shaykh Abdalqadir as-Sufi, in paying a courtesy call on the Prime Minister, Rais Umar said Dr Mahathir expressed his desire to establish Islamic gold dinar as a world currency.

The seminar would determine the parameters of the gold dinar's usage and the dimension of its applications, said Vadillo.

"The moment Malaysia established the gold currency as legal tender, like the South African kruggerand, then you are (potentially) creating a currency for one billion Muslims," he added.

Besides being a mean of payment for one of the biggest and most homogenous communities in the world, the Islamic dinar is also seen by many people as the only real challenge to the "hegemony of the US dollar", he said.

"Gold itself is not a promise of payment but gold is a merchandise, a commodity. It holds value by itself and it has no inflation."

Rais Umar said studies on the behaviour of gold over several centuries demonstrated that the price of gold had been constant.

"Unlike paper currencies, a piece of gold is of value from day one."

He said the expanded use of the Islamic dinar would be to increase its functionality and this need not go through the political process.

"It should be through the spontaneous use of the coin. Let the people use the coin. There are thousands of people using the Islamic dinar in the Muslim world."

Rais Umar said it did not depend how many people were trading with it.

"We can create a trading bloc using gold coins even if only 20 people are trading in it. Gold does not depend on the credibility of political authorities, gold depends on itself. That is why it is possible to succeed," he said in reference to the possibility of the Islamic gold dinar being a world currency.

Rais Umar, leader of Murabitun Worldwide Movement, arrived here yesterday for a two-week visit together with Shaykh Abdalqadir, a renowned Islamic speaker and writer who was born in Scotland.

However, Rais Umar did not say when the seminar would be held except saying that Malaysia could play the lead role in establishing the gold currency as legal tender since it would potentially benefit one billion users in the world.

Meanwhile, Shaykh Abdalqadir said Malaysians were fortunate to have a leader in Dr Mahathir who knew the impact of the paper currency manipulation and those behind it.

He said Dr Mahathir had revealed the tactics of certain capitalist forces who had impoverished several Asian economies when they destroyed their currencies.

He praised Dr Mahathir for being a great Muslim leader who had spoken against these manipulators.

He was also confident that Dr Mahathir would lead in the greater use of the real money through the Islamic gold dinar.

Shaykh Abdalqadir last visited Malaysia in 1990 and has been invited to deliver a lecture entitled "The Collaborative Couple" at Universiti Malaya.

Article from "http://www.utusan.com.my/utusan/info.asp?y=2001&dt=0801&pub=Utusan_Express&sec=Front_Page&pg=fp_01.htm&arc=hive%20%20utusan"

The Islamic Gold Dinar

Wednesday, June 16, 2004
The Islamic Gold Dinar
Source: YemenTimes

Raidan Al-Saqqaf

In order to minimize dependency on US Dollar; Malaysia will be using the golden Dinar in its international trade transactions with other Muslim nations before the end of this year, as a step to push the new currency (Islamic Dinar) to be the currency adopted by the Islamic countries in their inter-transactions in order to increase the number of trade transactions between Islamic countries and enhance their economic development.

The idea came from Professor Omar Ibrahim Fadillo, founder of the Morabeteen International Organization. According to him; Islamic unity can only be established after the economic unity, coordination and cooperation between the Islamic nations. In addition to that, the important thing behind this concept is that it denotes a symbol from the Islamic history, and adjusting it with today’s international trade operations, symbolizes the real power of Islamic concepts especially while encouraging boycotting of American products, and to limit the influence of the American dollar.

The success of the gold Dinar as a unified Islamic currency is dependent on three factors: (a) the level of demand for the golden Dinar as a currency, (b) the number of trade transactions between countries dealing in this currency, and (c) the intensity of economic cooperation and coordination between Islamic countries.

Islamic countries will benefit in many ways from implementing this new currency project, most important of which is that these countries need not have enormous foreign currencies reserves. On the other hand, it is sad to point out that the insignificant amount of trade and economic cooperation between Arab and Muslim nations, knowing that the overall total production of all the Arab countries is less than that of Spain.

Indeed, this is a very hard time for the Arab world, especially after the war on Iraq; each country now has its own foreign policy and follows its own road, not towards Arab unity but towards its own individual interests. This demonstrates the weaknesses of our nations. We have no shared strategies for the region or future plans with our neighboring Arab and Muslim countries, we are in a sad position lacking in the teamwork required for both short and long term survival.

However, Malaysian Prime Minister Mahathir Mohammad understands the magnitude of the situation; his attempt to create a united Islamic market using one currency, which is the gold Islamic Dinar, is praiseworthy. The system is built on the idea that the Islamic governments keep the gold in a central bank and use it in settling their commercial dealings between each other. Mr. Mahathir has also conducted in 2002 bilateral talks with several Islamic countries, including Bahrain, Libya, Morocco and Iran, in order to convince them to use the Islamic Dinar as a way of payment in their commercial dealings with Malaysia. Now the ball is in our court; whether Mahathir’s attempt is to succeed or fail, that depends on our governments.

Endnote: The Islamic golden Dinar can increase the amount of trade between Muslim countries; in fact, it can create a strong fund unity that helps our economic position.

Article is quote from "http://www.islamicawakening.com/viewnews.php?newsID=1973"

"Statement On the Shariah Currency and Legal Tender"

Credit to World Islamic Mint http://www.islamicmint.com/news_articles/articles/papermoneyexperiment.html

Statement from Hajj Abdalhasib Castineira, Shariah Counselor of World Islamic Mint and Former Director of the Great Mosque of Granada. Issued in Kuala Lumpur on Tuesday 17th, August, 2010.


Bismillah irrahman irrahim
Regarding the matter of the Gold Dinar and Silver Dirham and Legal Tender in Malaysia

The Gold Dinar and Silver Dirham known as Shariah currency or Shariah coins in the Fiqh are not legal tender. The Shariah currency has no relation to present fiat currencies on many accounts and should not be legally or practically be compared or treated as the same. The Gold Dinar and Silver Dirham relates to religious matters, most important of which is the matter of payment of Zakat, rather than constitutional matters. Its introduction can only occurred on voluntary basis since freedom is a command from Allah in all commercial transactions including the acceptance of money. Its usage has been throughout history open to Muslim and non-Muslims alike.

All Praise is due to Allah, the most Compassionate, the most Merciful, the Lord of all the worlds, the King of the Day of Judgment, Who has gathered all knowledge in His Essence and Who is the Creator of all knowledge for eternity. All peace and blessings be upon His beloved Prophet, Muhammad, who was not taught by man but by Him, He was the last and most honored Prophet, the last in the chain of prophethood that was brought to this world and has guided us to the right path. May abundant peace and blessing be upon his Family and his Companions, who were chosen among the good and benevolent.

In relation to the present concern of the people regarding the Launching of the Shariah currency in the State of Kelantan on the last 2nd of Ramadhan 1431, as a witness of the momentous ceremony of the Launching in the city of Kota Bharu and as Shariah Counselor of World Islamic Mint, I would like to state in a manner of clarification and support to this initiative the following:

1.- The Gold Dinar and Silver Dirham are not legal tender. Legal tender or forced tender is an offered payment that, by law, cannot be refused in settlement of a debt, and have the debt remain in force. Personal cheques, credit cards, debit cards and similar non-cash methods of payment are not legal tender only the notes and coins of Malaysia are Legal Tender. The issuing of Legal Tender is the exclusive prerogative of the Federal Government and the Government of Kelantan never had nor has the intention to issue Legal Tender as that is legally impossible.

2.- The Dinar and the Dirham are known in the fiqh (see [a] Muqaddimah of ibn Khaldun) as the “Shariah currency”or “Shariah coins”. The term “Shariah coins” is specific to the Dinar and Dirham and is not applicable to any other coin made in gold, silver or any other material. Any other coin is known as “non-shari’i” (ibn Khaldun).

3.-Properly speaking the term “alternative currency” is not applicable to the Shariah coins or currency because the term “Shariah coins” is specific to the Dinar and Dirham and therefore is not alternative to any other coins or currency (non shari’i). It stands on its own without alternative. The use of the expression “alternative currency” can only be used if proper explanation is given in regards to the fundamental differences that exist in relation to the legal tender currencies such as the Malaysian Ringgit. The Malaysian Ringgit is an entirely different legal concept and has different functions. The Malaysian Ringgit is not based on a commodity (in Arabic ‘ayn, meaning tangible merchandise) like the Dinar and Dirham, the Malaysian Ringgit a promissory note (in Arabic dayn, meaning debt or liability) with no intrinsic value (its value as ‘ayn/tangible merchandise is the value of the paper close to zero) but with a fiat value which established by the compulsion law of the Federal Government through the Law of Legal Tender and it can change from time to time. On the other hand, the value of the Dinar and Dirham depends entirely on the market value of the commodity (gold and silver) on which it is manufactured, just like a kilo of rice depends on the value of rice. This difference in important in religious terms, for example, zakat which is a legal obligation of the Shariah has to be paid in ‘ayn but cannot be paid in dayn. (see [b] Al-Kasani). Muslims should, if having the choice(if no choice is given or no ‘ayn is available then darurah, that is exceptionality, is temporarily applicable), pay with ‘ayn rather than dayn.

5.- In linguistic sense, the Dinar and Dirham are not face values, but names that indicate specific weights. The Dinar is a specific weight of 4.25 grams and it is also known as mithqal in Arabic. The Dirham is a specific weight of 2.975 grams or 7/10 of the mithqal. In a way they are legally the same as saying “1kg of rice”. Therefore they are specific weights of commodity (gold and silver) which are mentioned in Qur’an and in many aspects of the Shariah regarding zakat and legal judgments; and thus they cannot be altered in their weight.

6.- In history, the Shariah coins has never been legal tender. In the practice of the early Muslim community the Shariah coins were not only currency used as means of payment. Barley, dates or salt were also used as means of payment and therefore no exclusive right was given to the Shariah coins. The reason for this “freedom to choose the medium of exchange” is that money is considered a part of trading it is regulated under the same Qur’anic injunction that regulates trade: “tijaratun ‘aan taradim minkum”, the meaning of which is “trade according to mutual consent”. “Mutual consent” excludes the idea of compulsion or monopoly in regards to trading. (see [c] Tafsir al-Jalalayn). This is another reason why the Dinar and Dirham are not legal tender and have never been legal tender. Freedom to choose the medium of exchange is a fundamental right granted by Allah to Muslims and non-Muslims alike. The use of the Shariah currency is therefore inclusive of non-Muslims.

7.-The term “currency” is commonly understood as legal tender or as fiat money that carries a face value. Since the “Shariah coins” are not legal tender and do not have a face value the” Shariah coins” should be better understood as a commodity rather than as “currency” in the common use of the term. Regarding current common practices, the use of the “Shariah coins” belongs to the category of barter, that is, the mutual exchange of products and services. It is arguable that in the past, before the introduction of legal tender laws, transactions made with gold and silver were consider normal transactions and the term barter was applicable to all other transactions. Therefore the use of the term “Shariah currency” should be understood with the limitations explained above and in consideration to the historical practice of the Muslims as it is relevant in the Islamic Jurisprudence.

8.- Until very recently in history “paper currencies” were defined as promissory notes in terms of gold and silver. In that sense they represented an ‘amanah’ (trusting wealth to someone who will keep it for you until you demand it) that is an obligation to pay on demand a certain amount of gold and silver. We know from history that this obligation was often not fulfilled and eventually the governments of the world decided gradually to eliminate the obligation to pay in specie altogether. The closest case of the default is the US dollar and its unilateral decision to break their “Bretton Woods Agreement”. This concept of ‘broken amanah’ is known in the Qur’an and carries legal implications as to the prohibition to accept amanah from non-Muslims unless they live under Muslim rule so that they can be obliged to pay their contractual obligations (see [d] Qadi Abu Bakr ibn al-Arabi).

This legal injunction, which in theory implies the prohibition to accept British pounds, US dollars, etc. ( or any other currency backed by them), has been abrogated long ago since the colonial days by new laws that consider that this legal injunction is no longer applicable. Under the inspiration of the colonial legal systems, the constitutional Law of all Muslim countries including Malaysia grants the right to accept foreign promissory notes from non-Muslim countries (such as USD) to their own Central Bank (Bank Negara) as a reserve value for their own fiat currency. Because of this many Muslims (and non-Muslims) still mistakenly belief that their own fiat currency is backed by gold and silver when in fact no legal tender in the world is fully backed by specie anymore. The gold dinar and silver dirham are commodities and therefore they are not an ‘amanah: they are a tangible commodity (‘ayn), that is, when you pay with them, you hand over a certain amount of gold and silver and therefore they do not require to be backed by any other asset or authority other than itself. This is another reason why the Shariah currency cannot be compared or considered an alternative to “paper currencies”.

9.- Legal Tender is often a misunderstood concept. Coins and banknotes do not need to be ‘legal tender’ in order to be used as money to buy and perform other transactions for which money is intended. Legal tender must be accepted to settle a money debt. For example, US federal law does not restrict private businesses, persons or organisations in what methods of payment they choose to accept or refuse. Businesses are therefore free to insist on payment by credit card, for example, or to refuse larger denomination banknotes. In Canada for example, only Canadian dollar banknotes issued by the Bank of Canada are legal tender; however, commercial transactions may legally be settled in any manner agreed by the parties involved. A significant amount of business in Canada is transacted in United States dollars, despite United States currency not being legal tender. Legal tender can be refused unless or until a person is in debt, therefore vending machines and transport staff do not have to accept the largest denomination of banknote for a single bus fare or bar of chocolate, and even shopkeepers can reject large banknotes. However, restaurants that do not collect money until after a meal is served (a debt has been created) would have to accept any legal tender. The right of a trader to refuse to do business with any person means a purchaser cannot demand to make a purchase, and so declaring a legal tender other than for debts would be redundant.

10.- The minting of the Dinar and Dirham is a known practice of the Muslims from the early days of Islam. The first dated coins that can be assigned to the Muslims are copies of silver dirhams of the Sasanian Yezdigird III, struck during the Khalifate of Uthman, radiallahu anhu. These coins differ from the original ones in that an Arabic inscription is found in the obverse margins, normally reading “in the name of Allah”. Since then the writing in Arabic of the name of Allah and parts of Qur’an on the coins became a custom in all minting made by Muslims. In the year 75 (695) the Khalif Abdalmalik ordered Al-Haddjadj to mint the first dirhams, officially establishing the standard of Umar ibn al-Khattab, radiallahu anhu: 7/10 of the mithqal. The next year he ordered the dirhams to be minted in all the regions of the Dar al-Islam. He ordered the coins to be stamped with the sentence: “Allahu Ahad, Allahu Samad”. The minting of the coins is considered an obligation of the Sultan that needs to be followed (see [e] al-Qurtubi).

And Victory belongs to Allah. In Him we trust and praise belong to the Lord of the worlds and peace and blessings on His Messenger.

The slave of Allah, Hajj Abdalhasib Castineira, in Kuala Lumpur, on the 5th of Ramadhan, 1431.
 
NOTES
A] Imam Abu Zayd Ibn Khaldun (d. 1406)
“The Revelation undertook to mention them and attached many judgments to them, for example zakat, marriage, and hudud. Therefore within the Revelation they have to have a reality and specific measure for assessment (of zakat, etc.) upon which its judgments may be based rather than on the non-shari’i (other coins).

Know that there is a consensus (ijma) since the beginning of Islam and the age of the Companions and the Followers that the dirham of the shari’ah is that of which ten weigh seven mithqals (weight of the dinar) of gold… The weight of a mithqal is seventy-two grains of barley, so that the dirham which is seven tenths of it is fifty and two fifths grains. All these measurements are firmly established by consensus.”
“Al-Muqaddimah”

B] Imam Abu Bakr al-Kasani ( d.1191)
“If the property on which zakat fell due is dayn, as distinguished from ‘ayn, its zakat may be settled in terms of ‘ayn wealth. Thus a person having a claim of two hundred dirhams on which zakat is due, may give, in settlement of the same, five dirhams in cash, because dayn as compared with ‘ayn is defective (naqis) and the ‘ayn is complete (kamil), and a settlement of the defective in terms of the complete is valid. On the contrary, the settlement of the complete ‘ayn in terms of the defective (dayn) is not valid, and therefore, the zakat debt is not discharged if a person wants to pay the zakat of two hundred dirhams which he possesses (i.e. ‘ayn) in terms of the five dirhams which a poor person owes him (i.e. dayn); namely, by absolving him from the debt intending it for his own zakat debt on the two hundred dirhams.”
“Bada’i` al-Sana’i”

C] Shaykh Jalaluddin al-Mahalli & Shaykh Jalaluddin al-Suyuti
Allah says in the Qur’an (4, 29):

{ يَٰأَيُّهَا ٱلَّذِينَ آمَنُواْ لاَ تَأْكُلُوۤاْ أَمْوَٰلَكُمْ بَيْنَكُمْ بِٱلْبَٰطِلِ إِلاَّ أَن تَكُونَ تِجَٰرَةً عَن تَرَاضٍ مِّنْكُمْ وَلاَ تَقْتُلُوۤاْ أَنْفُسَكُمْ إِنَّ ٱللَّهَ كَانَ بِكُمْ رَحِيماً }

Tafsir:
“O you who believe, consume not your goods between you wrongly, unlawfully according to the Law, through usury or usurpation, except it be trading (tijāratan, also read tijāratun), so that the goods be from trade effected, through mutual agreement, through mutual good-will: such [goods] you may consume. And kill not yourselves, by committing what leads towards destruction on account of some affiliation, be it in this world or the Hereafter. Surely God is ever Merciful to you, when He forbids you such things.”
“Tafsir al-Jalalayn”
 
D] Qadi Abu Bakr Ibn al Arabi (d. 1148)
Allah says in the Qur’an (3:75):
“And amongst the People of the Book there are those who, if you were to entrust them with a treasure (qintar), he would return it to you. And amongst them is he who, if you were to entrust him with a dinar would not return it to you, unless you kept standing over him. “

Tafsir:
“the benefit that can be taken from this is the prohibition of entrusting (amanah) the People of the Book with goods. The question concerning entrusting property is legislated by the text of Qur’an.”
“Ahkam al-Qur’an”

E] Imam Abu Abdallah Al-Qurtubi (d. 1273)
Allah says in the Qur’an (4:59):
“O you who believe! Obey Allah and obey the Messenger and those in command among you..”

Tafsir:
“The ayat is an order to obey the Sultan in respect to seven obligations: the minting of the dinar and the dirham, fixing weights and measure, legal judgments, Hajj, Jumu’ah, the two Eids and Jihad.”
“Al-Jami’ li-Ahkam al-Qur’an”