🚀 go-pugleaf

I was already through graduate school when I first learned that there are
banks which operate under Islamic law that still can act as intermediaries
between borrowers and lenders, but without charging interest or paying
interest on deposits.  (What greater proof of the mercy of  Allah can one
want?)  Instead they constrain themselves to taking a predetermined
percentage of the borrowing firm's profits until the loan is repaid, and
then share those profits with depositors.
Thus they avoid the "interest system," usury being "the sin of the
devourers."

But now I receive this fantastic thing (below) and pass it on
to this thread at once.


(My favorite monetary economist, Sweden's Boudewijn Wegerif
is permitting posting of this English version of his article on Islamic
lending practices -- a timely discovery for the rest of the world to
make, as the secrets of debt slavery under world-wide national
bankruptcies and forced clandestine reorganization in receivership
are now coming to light.  )


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

MONEY MATTERS
Islamic "World Currency for Free People"
Boudewijn Wegerif            -- May 2001
----------------------------------------


Dear list members,

I hope you find the .. following article interesting. A slightly abridged
version has been translated into Swedish for the next issue of PENGAR
(Money), the quarterly journal of monetary reform, of which I am consulting
editor. PENGAR is sponsored by the members' owned, interest-free bank JAK,
which you may be interested to learn more about, through the English section
at www.jak.se.

Please feel free to post the article to others -- note though that I would
appreciate knowing where the article has been placed and the lists to which
it has been posted.

 In friendship,

 Boudewijn Wegerif
Monetary Studies Programme
Folkhogskola Vardingeby
150 21 Molnbo, Sweden.

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

ISLAMIC DINARS AND DIRHAMS
"A World Currency for Free People"

Boudewijn Wegerif   --  May 2001

"A time is certainly coming over mankind in which there will be nothing left
that will be of use save a dinar and a dirham" - Ascribed to the prophet
Mohammed, as reported by Abu Bakr ibn Abi Maryam and quoted at
www.islamicmint.com.

From the beginning of Islam until 1924, with the break-up of the Near
Eastern Ottoman Empire and fall of the Khalifate, the basic currency of the
Muslims was the gold dinar and silver dirham. Islam was then made subject to
western banking practice, with its different paper currencies. However, now
Muslims around the world are being encouraged to convert their paper
currencies into new 100 percent Islamic gold dinars and silver dirhams. They
are also being encouraged to join the 100 percent gold backed e-dinar
service, which is linked to e-gold (see page xx).

The new Islamic dinar and dirham represent the renewal of coins that go back
to the beginning of Islam. The weights of the coins (4.3 and 3 grams) and
their role in the economy was set by the Shari'a - i.e. the Islamic Law.

A small Islamic sect called Murabitun is spearheading the movement to bring
the bimetallic dinar and dirham back into play as the "world currency for
all free people".

At www.murabitun.org one may read how in the 12th century the Murabitun were
the most feared warriors of a flourishing Islamic Civilisation. They swept
North into Southern Spain from West Africa in a devastating wave of conquest
and destruction of the feeble and corrupt petty kingdoms of the day. An
economically just and socially glorious period of Islam is said to have been
engendered in the wake of the fighting.

Now Murabitun is alight again, say the authors of this history.

From his home in Scotland, the Murabitun leader, Shaykh Abdalqadir as-Sufi,
travels the world with the basic Murabitun message that Allah and His
Messenger have declared war on usury. The renewed Islamic order will come
about "not through fighting in the streets against the world's guns" but
through taking effective advantage of "the continuing collapse of the
paper-money-edifice now sinking under mathematical lunacy and inflation."

Perhaps the most telling point in favour of the new gold and silver currency
is that it meets the Islamic zakat requirement by which Muslims must give at
least 2� percent of their income to the poor in tangible merchandise or
"honest money of actual substance", therefore not paper money.

"If the millions of Muslims who now make their payment of zakat in paper
money would do it in newly minted dinars and dirhams, they will put in
circulation millions of gold and silver coins into the mainstream of daily
commercial activities of our communities," is written at
www.islamicmint.com. "That single act will become the most important
political act of the century, opening the path towards the establishment our
own halal (usury) free currency breaking away from the usurious financial
system".

WORLD WITHOUT BANKS

The political leader of Murabitun, Umar Ibrahim Vadillo, has a vision of a
world without banks. In a 3,000-word essay on the Islamic Banking Fallacy
(at http://www.geocities.com/ Athens/Delphi/6588/bfallacy.html) he dismisses
the Islamic banking system as "profoundly contrary to Islam".

Three reasons are given why the Islamic bank is "a totally crypto-usurious
institution", which "must be rejected and fought".

1. The use of credit to artificially expand the monetary resources is
emphatically forbidden in the Shari'a (Islamic Law).

2. The Islamic principle of co-ownership, enshrined in the Shari'a, is
usurped by the nature of the limited liability ownership of the banks and
the enterprises they support.

3. In terms of the Islamic Law forbidding usury, a loan cannot be made of a
commodity whose value is changeable, yet in banking everywhere fluctuation
in value is generated and this effects the individual transactions the bank
makes.

Umar Ibrahim Vadillo concludes: "There is no way of establishing an
equitable market without going outside of the modem monetary and financial
systems."

So long as the money supply is entrusted to a bank-supported government one
must be ready to live with an artificial currency, which can be expanded and
contracted at will, always according to the policies and economical
suitability of the moment.

The Islamic bimetallic currency, on the other hand, is a natural currency
that does not need rules or regulation, laws or official control.

FREEDOM AND STABILITY

According to a Murabitun "White Paper" document at www.murabitun.org/WITO/
white.html, a genuinely Islamic currency "only needs the individual freedom
to possess and use gold and silver coins with an implicit elimination of all
taxes imposed on their use. There is no doubt that the freedom to possess
gold does not only mean the freedom to buy it and sell it for industrial
purposes but also the freedom to use it as a medium of exchange."

Then, as commodities amongst other commodities, the value of gold and silver
will naturally remains stable in relation to basic consumable goods. It
seems that the value attached to gold and silver exchanges in a genuinely
free market have a remarkable consistency over time.

Thus, according to a statement at www.islamicmint.com, "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. In 1,400 years
inflation is zero. Could we say the same about the dollar or any other paper
currency in the last 25 years?"

The portability and anonymity of gold are also cited in the Murabitun
literature as important, but their bottom line argument in favour of gold is
that it is an asset that is no-one else's liability. "All forms of paper
assets - bonds, shares, and even bank deposits - are promises to repay money
borrowed. Their value is dependent upon the investor's belief that the
promise will be fulfilled. A piece of gold is independent of the financial
system, and its worth is underwritten by 5,000 years of human experience."

OPEN TRADE

With the adoption of a bimetallic gold and silver currency, Umar Ibrahim
Vadillo anticipates the re-emergence of the once flourishing world of
Islamic trading, which "does not involve any form of interest-debt, control
of products by speculative future and stock markets, or the mediation of any
bank".

The trading renewal will be founded on the restoration of two of Islam's
most representative but lost institutions, "the marketplace, which will
replace supermarkets, and, the caravans, which will replace monopolistic
distribution." There is also a call for a return to the guilds of
"independent, intelligent work teams, in which the relationship
master/apprentice will replace employer/employee."

By tradition, the Islamic Market was once placed alongside the Mosque as a
"space freely accessible to everybody, with no divisions (such as shops) and
where no taxes, levies or rents could be paid". And, as in a Mosque, whoever
got to a market place first had a right to it until he got up and went back
to his house or finished selling.

The same flexibility/fluidity, for a free flow of trade, is associated with
caravans. "The caravan brought more than merchandise from one market to
another, they brought the whole city that they represented."

NO FIGURES GIVEN

There is no clear record of how effective Murabitun has been in introducing
the gold dinar and linked trading model to Islam. In 1998 the gold market
analyst Jay Taylor wrote (in an article at www.goldeagle.com/editorials_98/
taylor112598.html) that the Islamic dinar was being privately used in more
than 22 countries and being minted in four countries, including South
Africa.

According to the Murabitum's own undated "White Paper", "Dinars and dirhams
have already been minted under the supervision and standards of the World
Islamic Trading Organisation and are in circulation in Spain, Germany and
South Africa, soon to be followed by Switzerland, England and other Muslim
countries".

And at www.geocities.com/Athens/Delphi/6588/mundail, 14 countries are listed
as having Murabitum groups with their own websites, namely South Africa,
North America, Malaysia, Germany, Nigeria, England, Turkey, Spain,
Australia, France, Mexico, Switzerland, Bermuda and Denmark.

Although no figures are given, I suspect that the majority of the 4,000 or
so new account holders at e-gold every week may be Muslims using the e-dinar
service, which operates through e-gold. In 1999 there was a major promotion
for the gold dinar in Dubai and at the e-gold website it is stated that more
than half the gold backing for the e-gold payments service is in 400-ounce
Dubai gold bars.

In the promotion of the e-dinar (at www.zpub.com/aaa/dinar.txt and
www-e-dinar.com/ en/index_4.html) the point is well made that the greatest
obstacle to gold and silver coinage, namely divisibility, is overcome by
this system of payments: "Since ancient Babylonian times, paying for a pizza
with gold coins has been impractical. All physical coins come in fixed
sizes. There is a limit as to how small a coin can be. e-dinar, in contrast,
is computerized; precise to 0.000001 oz (troy)".

There is irony in the thought that a return to traditional Islamic trading
may be dependent on the Internet invention of 'infidels' - unbelievers.
Perhaps too much irony.