Download INTRODUCTION TO GOLD DINAR

INTRODUCTION
TO GOLD DINAR
- Business From Islamic Perspective-
introduction
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Claimed by a Muslim scholar, Ibn Khaldun that God created the two
precious metals, silver and gold to serve as a measure of all
commodities
Gold had played an important role for many centuries in a way or
another until the end of Bretton Wood’s system
After the collapse of Bretton Wood’s system, fiat money and a floating
rate exchange system have taken place in the monetary system
Fiat money is created out of nothing by the power of an issuing
authority
With the spread of Islam, the dinar was minted in large quantities and
gradually displaced the bezant gold coin as the major international
currency, circulating throughout the Muslim world and the Christian
Europe as well
differences between current monetary
system & dinar system
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CURRENT MONETARY SYSTEM
“Money creation would cause a gradual shift of power into the
hands of those who control the financial system. With foreign
financial institutions like banks operating, gradual loss of
sovereignty is likely to be seen in the land.” (Ahmad Kameel
Mydin Meera, The Islamic Gold Dinar, 2002)
Paper money quantity can be increased at will any time since there
will always be demands from the public to increase the quantity of
money which would cause inflation = manipulation of paper money
Floating rate exchange is the currency rate that is unstable which
can be easily fluctuating
Differences between current monetary
system & dinar system
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DINAR SYSTEM
fixed exchange rates resulted the absence of exchange rate instability
and thus exchange rate risk where this may encouraged world trade
by eliminating the uncertainty when exchange rate fluctuate
Islamic countries will not need reserve of foreign currencies to
finish commercial trading
The principle of the Islamic economy in the light of the Qur’an and
the sayings of the Prophet Muhammad S.A.W. is to improve the
quality of the economy by encouraging good and forbidding the
harmful
how dinar can help in economic crisis?
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The gold prices are indeed relatively stable compared to other
commodity prices, exchange rate movement and the stock market
index
Manipulation of currencies and the impact toward one economy could
be reduced because of the fact that gold does not inflate in value as it is
a commodity and, thus, has an intrinsic value
If gold coin were used, then counterfeiting would also be checked
With dinar and elimination of interest, we would have a stable currency
and monetary system, money supply growth (from new discoveries of
gold) can be expected not to overshoot growth in the real sector, thus
eliminating the inflationary pressure in the economy
If all these exchange rates are eliminated by means of a single currency
like the dinar, then speculation, arbitrage and manipulation will be very
much removed if not eliminated
can dinar solve the trade problem among the
Islamic countries?
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Organization of Islamic Conference (OIC)
international organization grouping to pool their resource
together, combine their effort and speak with one voice to
safeguards progress and well being of their people and all Muslims in
the world
implementing part-by-part of the Gold Dinar reflects on how our
Prophet Muhammad S.A.W. started to introduce Islam
the successful implementation of the Islamic Gold Dinar is the level of
acceptance among OIC members
“The Gold Dinar could be an important facilitating mechanism to help
the smaller countries of the world move away from an inherently
unstable and ultimately unjust global monetary system,” (Minews,
2002).
can dinar solve the trade problem among the
Islamic countries?
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Though there is yet empirical evidence to conclude on the overall
acceptance by the OIC members, several salient factors might need to
be considered
The factors can be further segregated into economic, political as well as
infrastructure facilities development
gold standard
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a monetary system in which the standard economic unit of account is a
fixed weight of gold
gold standard may also be viewed as a monetary system in which
changes in the supply and demand of gold determine the value of
goods and services in relation to their supply and demand
often been viewed as ensuring long run, though not necessarily shortrun, price stability via the operation of the classical commodity theory
of money
its rarity and durability, gold has long been used as a means of payment
implementing the gold dinar
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Implementing the Gold Dinar in Domestic Transactions
The other way of implementing gold dinar
Collection and Distribution of Zakat
Minting, Buying and Selling Coins/Kiosks
Opening an e-Dinar Account
http://www.e-dinar.com
Trading with Dinars and Dirhams
Establishing an Open Market
Donating in Dinars
Supporting Da’wa
the dinar future
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The future of Gold is a very young gold market with a long
way to go (Sinclair, 2002)
promotion of direct trade between Islamic countries,
preferably through the mechanism of the gold dinar, could
be the initial first step in the proverbial journey of a
thousand miles
the dinar future
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5 reasons that dinar will be excellent in the future:
Many people are aware of the shortcomings of the present system
and advancements in IT technology that providing a way out for
these people. The emergence of e-dinar, e-gold, and GoldMoney.
From the IT, political is not necessary and a gradual introduction of
the dinar is possible without adversely affecting the current system.
Does not require substantial new regulations. The system is easy as
where people invest in gold.
With the advent and staggering growth in e-commerce, e-money is
unavoidable.
Gold has high prospect as a single global currency. Just consider the
obsession humanity has for this metal since historical times.
The simultaneous economic distress in the US, Europe and Japan
are warranting to ponder over the underling causes.
conclusion
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We have spent a good part of the last two decades in
establishing Islamic financial systems in our respective
countries
The time is now right to complete or complement the
domestic systems with an international system - a system
that will allow each Muslim country to reach out to one
another and strengthen the level of trade - a system that
will also allow the ummah to use its collective surpluses to
fund each other, and help each other grow
The Q & A session
By:
FARAH FARINI BOLHI
HANNAN HANARBEK
NORAZIRA AHMAD
NURUL AINI MOHD SHARIFF
YANG QAMMARINA MOHD TOHA