INTRODUCTION TO GOLD DINAR

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INTRODUCTION TO GOLD DINAR

• - Business From Islamic Perspective-

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introduction

• 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 Woods system
• After the collapse of Bretton Woods 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

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differences between current monetary system
dinar system

• 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

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Differences between current monetary system
dinar system

• 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 Quran 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

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how dinar can help in economic crisis?

• 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

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can dinar solve the trade problem among the
Islamic countries?

• 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).

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can dinar solve the trade problem among the
Islamic countries?

• 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

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gold standard

• 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 short-run, 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

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implementing the gold dinar

• 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 Dawa

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the dinar future

• 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

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the dinar future

• 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.

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conclusion

• 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

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The Q A session

• By
• FARAH FARINI BOLHI
• HANNAN HANARBEK
• NORAZIRA AHMAD
• NURUL AINI MOHD SHARIFF
• YANG QAMMARINA MOHD TOHA