History of Riba

THE PROHIBITION OF RIBA IN THE QUR’AN AND SUNNAH

Allah the Most High, provided us with an opportunity in 1973-74, to realize the fraudulent nature of paper money. Up to August 1971 the US dollar was convertible into gold, at the request of foreign governments (in accordance with the Britton Woods Agreement), at the rate of $35 for one ounce of gold. If Saudi Arabia had sold oil up to 1970 and had accumulated 35 billion US dollars from the sales. Saudi Arabia would know that it was worth 1 billion ounces of gold. Saudi Arabia may have chosen not to demand that the dollars be redeemed for gold because of trust in the Bretton Woods Agreement.

In August 1971 the US government reneged on the Bratton Woods Agreement and abandoned its obligation to redeem dollars for gold. Suddenly the 1 billion ounces of Saudi gold began to decrease. In Late 1973 the Egyptian army attacked Israel and won some significant initial victories. The US government then established an air bridge to supply Israeli with sufficient advanced weapons to reverse the tide of the war. The Muslim world responded to that with an oil boycott of USA. It created a tremendous shock to the capitalist stock markets and the value of the US dollar fell dramatically! Instead of an ounce of gold having a worth of $35, it was now worth more than $160.

What was the price which the Saudis, who led the boycott, had to pay? This was the price: Their one billion ounces of gold had suddenly evaporated with the collapse of the dollar. All that was left was a paltry 220 million ounces of gold (based on the new value of the dollar, i.e. $160 per ounce of gold). Almost 800 million ounces of gold had evaporated into thin air. The Saudis and the world of Islam had to pay an even bigger price when King Faisal (may Allah have mercy on him) was assassinated in a Mossadic operation bearing the same fingerprints as the World Trade Center bombing, the sting operation launched to attempt to silence the innocent blind Egyptian Shaikh Omar Abd al-Rahman.

In January 1989, at the time of the Islamic revolution in Iran, the price of gold rose to $850 an ounce. This meant that the US dollar had fallen to US$850 as the value of one ounce of gold. If Saudi Arabia had sold thirty-five billion dollars worth of oil in 1970 and assumed that their money was worth one billion ounces of gold, they awoke in January' 1989 to find that 96% of the gold had vanished, and that their thirty five billion dollars could now buy only 4 % of one billion ounces of gold! It is truly amazing that there are so-called Islamic scholars, experts in the subject of riba, who cannot recognize riba in paper (i.e. fiat) money.

The US dollar is presently trading at approximately $380 per ounce of gold. Our view is that if the Muslim world were to recover control of its oil resources. and even before it demands that oil be paid for in gold, the value of the US dollar will tumble catastrophically, as it did in 1974 and again in 1989. Muslims should not wait on that day to wake up to the reality of the gigantic fraud called inflation made possible through the use of paper money. Muslims at least, should return to the use of real money.

Eventually, Insha Allah, we will succeed in restoring Dar al-Islam when Imam al-Mahdi arises (or perhaps, before that) and then, in that territory, we will have to restore real money to the market. Some American political scientists and economist have the same goal. They wish to restore Integrity to money through another international agreement similar to the Bretton Woods Agreement. Personally I believe that the standard of public morality required for a return to monetary integrity no longer exists in western society. In fact the world has witnessed a return to the fraudulent economy of Madyan which confronted the Prophet Shuaib (s ). He preached to them:

Oh my people! Worship Allah! You have no other God besides Him! There has now come to you a clear sign from your Lord! Give just measure and weight, and do not diminish the value of the property of the people. And do not commit fasad on the earth after it has been set in order. . .

(Qur’an: al-'Araf: 7-85)

Allah the Most High destroyed Madyan with tumble earthquakes which left them dead inside their named homes. And Allah the Most High, warns in Surah al-Kahf that He will do the same to today’s world created by fraudulent riba-based capitalism:

Verily We shall reduce whatever is on (the earth) to barren dust.

(Qur’an: al-Kahf l8:8)

The argument that inflation justifies interest is thus false. It is also very dangerous! Scholars who adopt this argument are leading all their innocent sheep straight into the jaws of the wolves. Both the sheep and their shepherds should fear the fire of Hell! Indeed the Qur’an speaks of a people who were misled by their leaders and who when they ended up in hell asked Allah, the Most High, to give double punishment to those leaders who misguided them:

These Lord, are the men who led us astray. Let their punishment be doubled in the Fire.

(Qur’an: al-’Araf:-7;38)

The strategy of restoring integrity to money by restoring gold is a strategy which can be truly pursued only when Muslims take control of the State, i.e. Dar al-Islam. One of the reasons for this is because the freedom to own and keep gold bullion can be taken away, and has been taken away from the people by the State. In USA, for example, this freedom was taken away by the Roosevelt administration in 1933. Lincoln also took it away in the Civil War, and it was taken away twice before the signing of the US Constitution.

The Laws of gold confiscation are very clear. During any time of national crisis, it becomes illegal to buy, sell, or 'hoard’ gold bullion in any form. It is delineated under in Executive Order and can be administered as quickly as the assets in your checking account can be frozen. The penalties under US law, for violation are 10 years in prison, $10,000 fine, or both!

A national crisis can be as simple as astute in which a government is broke. It needs money to balance its books, to continue foreign trade etc. How does it solve the problem? Well, one way is by appropriating all available valuable assets, and having them re-appraised upward. Here as an example.

In 1933 the FDR Administration in USA confiscated all private gold. Government paid for the gold at $20.57 an ounce. Here is what the announcement looked like -

********************************************************************************************

Post Master Please Post in a Conspicuous Place

James A. Farley

Post Master General

UNDER EXECUTIVE ORDER OF THE PRESIDENT

issued April 5, 1933

all persons are required to deliver

ON OR BEFORE MAY 1. 1933

all Gold Coins, Gold Bullion and Gold Certificates

now owned by them to a Federal Reserve Bank,

branch or agency, or so any member bank of the

Federal Reserve System.

Criminal Penalties for Violation of Executive Order

$10,000 fine or 10 year imprisonment or both, as

provided in Section 9 of the order.

Secretary of the Treasury

********************************************************************************************

Once the gold was gathered, the US Government announced that the new price of gold was $35 per ounce, an increase of approximately 70%. The US government solved its problem by cheating and robbing people of their wealth. It’s called riba? No Islamic government functioning in accordance with the laws of Islam, has ever cheated the people.

Today’s world of riba, in the form of artificial money, has witnessed the return of that age of evil which has been described in surah al-Kahf. There were young men who believed in Islam and who were being persecuted and tyrannized by a world which had no faith in Allah the Most High, and which committed shirk by worshipping others besides AIIah the Most High. Today’s world has created the State, Constitution, Parliament, Supreme Court and the U.N. Security Council etc., as the supreme authority instead of Allah, the Most High. Thus, like that age in Surah al-Kahf, this age also is an age of shirk! In order to preserve their faith in Islam the young men in Surah al Kahf fled to a cave where Allah the Most High, put them to sleep for three hundred (solar) years or more. When He roused them they felt hungry, and hunger drove them to send one of them to buy some (halal) food from the market. But when the Qur’an made mention of the money which the youth would take to buy the food it used the word wariqfkum. While this word is universally understood to mean silver coins, it is possible that this was hint of waraq (paper-money), indicating that the emergence of artificial paper money (fiat money) would be a sign of the return of the evil age described in Surah al Kahf. And Allah the Most High, knows best!

To conclude, artificial paper money is riba, and it functions as an important means through which mankind is ripped off of the wealth which is the fruit of their labor, and rizq from Allah, the Most High.

Source: IMRAN N. HOSEIN

to be continued . . . . 

The Prohibition of Riba (Interest) by Imran Hosein

The Prohibition of Riba (Interest) (Q&A) by Imran Hosein

Inflation and riba

THE PROHIBITION OF RIBA IN THE QUR’AN AND SUNNAH

What misguided Muslims who use the inflation argument to justify riba should do, is to calculate the value, in gold, of the sum borrowed from a bank, then calculate the equivalent value, in gold of the sum which is to be repaid to the bank. If there is any difference between the two such that the sum to be repaid is greater than the sum borrowed, that would be evidence of the riba which Islam prohibits.

We may also note that when the Prophet (s) ordered gold for gold and equal for equal the implication is that the lender who lends 100 gold dinars in 1984 is entitled to the return, in 1994, of no more than the same 100 gold dinars (i.e. an equal amount of gold) from the borrower. But the value of one hundred gold dinars lent in 1989 may change by 1994 so relation to the quantity of wheat, for example, which can be bought with it. The price of wheat may increase by 1994 because of a shortage of wheat in the market. The same 100 gold dinars can no longer purchase in 1994 the amount of wheat which could have been bought in 1989. Despite that, the law would still remain unchanged; ‘gold for gold - equal for equal’! Finally it is time for us to understand that inflation is itself a form of riba. It is, in fact a creeping riba which robs us of our wealth without our being even aware of the fact that we are being robbed. The "smart-men’ in the economy, who know how to use the system for their advantage make windfall profits, through inflation. at the expense of the dumb innocent ‘suckers’ who keep on working harder and yet harder for less and less as artificial paper money continuously loses its value.

It is a matter of absolutely critical importance that Muslims should carefully study the prophecy of the Prophet (s) in which he has prophesied the collapse of artificial secular currency (i.e. paper. plastic and electronic money, etc.):

Abu Bakr bin Abu Maryam reported that he heard the Messenger of Allah say: A time is certainty coming over mankind in which there will be nothing (left) which will be of use (or benefit) save a dinar and a dirham (gold and silver coins).

(Ahmad)

That prophecy of Prophet Muhammad (s) is about to be fulfilled. Today’s monetary system uses paper to make gold. That is fraudulent! Paper-money is riba. Let us explain.

Suppose your grand-father died in 1971 and left an estate of 100 gold coins which you inherited. And suppose further, that since you wore a baby the money was kept securely stored away for you. Twenty-five years later, in 1996, you asked for your money. The box in which it was stored was opened and you were given the 100 gold coins. Your money had neither increased nor decreased. It remained the same. Gold had functioned successfully as money! It had succeeded in performing one of the most important functions of money, i.e. to be a store of value! It has faithfully performed this function for all of recorded human history.

And now, let us suppose that in 1971 those who were entrusted with the 100 gold coins decided to convert them from real money into artificial money. They fell that paper was a more appropriate and reliable form of money than gold. They were highly impressed by the strength of the American dollar. And they trusted because the American dollar itself proclaimed: In God We Trust. And so they converted the 100 gold coins (i.e. 100 ounces of gold) into American dollars and obtained US$3,500. That was 1971. They put the money away very securely. It could not have been invested because your grandfather had left specific instructions prohibiting such.

In 1996 you asked for your money and they then brought you the American dollars. You declared that you wanted the money which your grand-father had left for you. They then went to the market to reconvert the dollars, to gold and, of course, they continued to believe in the dollars since it declared: In God We Trust. But, to their great surprise, the market gave them only 8 gold coins for the US $3,500. A great tragedy had occurred during those 25 years. 92% of your wealth had been lost. Paper had failed miserably as money. It did not function as a reliable store of value. In fact your low was someone else’s gain. Predators had struck. They had tipped you off by deception. That is riba.

Artificial money is quite different from real money. Real money has intrinsic value, paper money has none. Its only value is that conferred upon it by market forces. The market value of paper-money will last only for as long and to the extent that there is demand for it in the market. Demand is based on confidence. The currency market is now controlled by the most vicious of all speculative forces, forces fueled by compelling greed with no loyalties and no patriotism. Anything which seriously disturbs market confidence will cause the speculative stampede which will fulfill the prophecy of the Prophet (s).

Here is an example: If Muslims gain control over their oil resources and demand that they be paid for their oil sports with gold rather than dollars made of non-redeemable artificial paper money, there will be significant loss of confidence in paper currency. Why should this be so? Non-redeemable paper, plastic or electronic money has value only to the extent that people are prepared to recognize it as possessing value. When public confidence in a currency is shaken, its value will collapse. A demand for gold, as payment for oil, will have the effect of shaking confidence in paper money. Speculative forces in the currency market will greedily seize that opportunity to make the killing of a lifetime. That in turn can cause the collapse of today’s fraudulent international monetary system based on non-redeemable paper money. Money is the very foundation of capital. The collapse of money in what may best be described as a money melt-down, will witness the collapse of riba-based capitalism. Those who have real money will survive while those speculators who successfully exploit the collapse will make the greatest profits ever. The masses will lose their wealth. They will be caught with worthless paper parading as money. That is a financial holocaust which is just waiting to occur. And it has been predicted by others as well, besides the Prophet (s). 

Judy Shelton, for example, uses the term: ‘Money Meltdown’ as the very title of an excellent book which she has written in international monetary economics..

We should not forget, nor allow the world to forget, the dramatic ominous and unprecedented collapse of the US dollar in January 21, 1980, when the value of the dollar relative to gold fell to $850 an ounce! In 1970 it was $35 an ounce. Its present value is about $380 an ounce. This collapse of the dollar look place in the immediate wake of the successful anti-western Islamic revolution in Iran which gave control of the vast oil resources of Iran to an anti-systemic Islamic government. Iran’s government is anti-systemic since It is based on non-secular foundations and it challenges the secular model of society and the political and economic world order produced by modem Godless European secular civilization. The stabilization of the price of gold at its present level is the result of the success of policies were designed to contain the Islamic revolution to Iran.

Why should an Islamic revolution in Iran threaten a collapse of the international monetary' system? The experts in international monetary economics are silent! The predatory speculative forces which precipitated that collapse are even more silent. This is because they are aware of the prophesy of the Prophet (s). They feared that the prophesy was about to be fulfilled. In fact, it was not the moment. It was only the first whiff of smoke from the fire which is coming!

There is perhaps, no other medium through which more of mankind are touched by riba today than through paper currency issued by corrupt unscrupulous governments. Today's paper currency no longer functions as receipts redeemable for gold and silver, i.e., precious metals which were created by Allah, the Most high, to serve as currency (among other things). Paper currency is entirely artificial wealth and as such, is most certainly fraudulent. And fraudulent transactions which damage the entire structure of the free and fair market are a form of riba! It is through the universal prevalence of fraudulent paper currency today (i.e. paper currency which cannot be redeemed for real value) as well as through the fact that tending and borrowing, on interest constitute the very foundation of the capitalist economy which now dominates mankind, that the prophesy of the Prophet (s) regarding riba has now been fulfilled. In fact it has been fulfilled within the lifetime of some who are still alive today:

Abu Hurairah reported that the Messenger of Allah said: A time will come over mankind when not a single person will remain who does not consume riba, and if one does not consume it, its vapor (or alternatively its dust) will reach him.

(Ahmad, Abu Daud, Nasai, Ibn Majah)

The world of Islam was still largely free of riba and of fraudulent artificial paper currency up to the moment when the Ottoman Caliphate was abolished. The abolition of the Caliphate in 1924, and its replacement with secular nation States all over the Muslim world, opened the floodgates for the wholesale incorporation into the body of the Ummah of all the evils of secular western capitalist economy including the total corruption of the free market. The Islamic Movement will have to take the initiative, wherever it is possible to do so, to try to restore the free market, and this requires the reintroduction of gold and silver coins as the medium of exchange. We should not only recall but also deliberate seriously over the prophecy of the Prophet (s) quoted above:

Miqdam bin Ma’adikarib said that he heard Allah's Messenger say: A time is certainly coming to mankind when only the dinar and the dirham will be of use.

(Ahmad)

This indicates a prophecy of Prophet Muhammad (s) of truly momentous importance to the effect that the entire monetary system of artificial money in the form of paper, plastic and electronic money will collapse one day. On that day and henceforth all paper currency will be worthless paper.

Source: IMRAN N. HOSEIN

to be continued . . . . 

The Prohibition of Riba (Interest) by Imran Hosein

The Prohibition of Riba (Interest) (Q&A) by Imran Hosein