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..
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.
to be continued . . . .
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