The first article looked at the reasons behind the economic woes the world is now experiencing, and identified that the move away from the gold standard, which led to the unrestrained ‘creation’ of paper money, fueling inflation, leading to the loss of value in the fiat currency.
We now go on to give you TEN reasons why NOW is the time is right to ditch paper money for some of the shiny stuff….
REASON ONE: Islamic Currency
Precious metals have been used as a means of exchange and a store of wealth for thousands of years. The use of gold and silver as a means of exchange in an Islamic society is explicitly recommended through Quran, hadith and the example of the Companions, may Allah(swt) be pleased with them all. The hadith of the Messenger of Allah(saw) indicates that the dinar is a 22 carat gold coin with weight of 4.25 grams; the dirham is specific weight of pure silver with a weight of 3 grams. Umar ibn Al-Khattab(ra) made sure that 7 gold dinars must be equivalent in weight to 10 silver dirhams.
So possessing gold and silver, and pursuing the means to trade in gold and silver through the dinar and dirham is in accordance with the Sunnah of the Messenger(saw) and worship of Allah (swt).
REASON TWO: End of USD as the World’s Reserve Currency
No less than the IMF (International Monetary Fund) called for the replacement of the dollar as the world’s reserve currency (strange how the head of the establishment has been caught up in a scandal recently too, after questioning why there was no gold at Fort Knox) earlier this year. This means that worlds’ commodities would be priced in a currency other than the dollar. This could be based on a weighted basket of international currencies and commodities. The staggering debt level of the US (£14 trillion) is giving genuine concern about the future stability of the dollar, and confidence is now waning.
REASON THREE: Bad Money drives out Good Money
A simple economic principle states that bad money drives out good money. So, if the dollar is perceived as bad, people will begin to sell... this process could happen very quickly, as people and governments look to drop what is worthless to avoid being left with it. We may remember the example of Zimbabwe in the late 1990’s, when hyperinflation rendered paper money worthless... images of people with wheelbarrows full of money were common... the value of the Zimbabwe dollar was over $2 trillion to $1 USD. So as countries divest their foreign reserves away from dollars, the collapse could be sudden and rapid.
This was described by the Islamic scholar Ibn Taimiyyah(rh):
‘If the ruler cancels the use of a certain coin and mints another kind of money for the people, he will spoil the riches which they possess, by decreasing their value as the old coins will now become merely a commodity. He will do injustice to them by depriving them of the higher values originally owned by them. Moreover, if the intrinsic value of coins are different it will become a source of profit for the wicked to collect the small (bad) coins and exchange them (for good money) and then they will take them to another country and shift the small (bad) money of that country (to this country). So (the value of) people's goods will be damaged.’
REASON FOUR: Gaining Status as Legal Tender
For the first time since abandoning the gold standard in 1971, gold and silver are once again considered legal tender in at least one part of the United States. The state of Utah passed the “Utah Legal Tender Act,” which recognizes gold and silver coins that are issued by the federal government as legal tender in the state.
Malaysia last year also introduced coinage of precious metals in the state of Kelantan, in the form of the gold dinar and the silver dirham. To kick-start the initiative, the state will pay a quarter of its public servants' salaries using the dinar. Second, all state companies will accept dinar payments. Lastly, some 600 commercial enterprises will also embrace this currency.
REASON FIVE: Banks and Financial Institutions beginning to hoard Gold
The European Parliament Committee on Economic and Monetary Affairs made an agreement that gold would be accepted as collateral for member debts. This could see the ‘confiscation’ of the gold reserves of Greece (115 tonnes) to help pay off its debt, but would also consign it to a doomed existence within the failing EU by robbing her of her liquid asset wealth. Portugal (380 tonnes), Spain (280 tonnes) and Italy (2500 tonnes) could be next to follow, consigning them to continuing dependency on paper currency, and reducing the chances of a ‘gold standard’ taking hold within Europe. Let us not forget the UK, under the stewardship of Gordon Brown, sold half of its reserves when the gold price was at an all time low during the 1990’s, costing taxpayers billions of pounds. This could cost the UK dearly, even though it has retained its independence by retaining its currency.
Earlier this year, global investment bankers J.P. Morgan was the first bank to announce it would accept gold as a collateral as a security for lending. What is apparent is that the financial institutions, whilst upholding the continued lending of paper money, are busily accumulating real wealth in anticipation of the pending collapse of fiat currency.
REASON SIX: Gold Essential to Stop the Continuous Waging of Wars
The sooner the dollar collapses, the sooner the US will retreat from the ‘war on terrorism’ it has waged globally. The US has already been struck by revelations that the Federal Reserve holds little or no gold in Fort Knox... so 8400 tonnes of gold is where??? As the financial crisis deepens, America’s ability to wage war will steadily erode as capital and resources dry up. It is only a matter of time before the war machine sputters to a halt and the troops return home. When the killing stops, a truly new world order will begin. So invest in gold, rather than bogus stocks and shares to contribute to the inevitable end of the greenback...
REASON SEVEN: Countries Amassing Gold Reserves
Major countries are buying up vast quantities of gold... in the process, ditching their paper assets and contributing to their decline in value. China has $1 trillion currency reserves, and is looking to purchase more than $1 trillion in bullion. This is following on the heels of Mexico, who bought 93 tonnes in Q1, and Russia also bought 19 tonnes, increasing its holding to over 800 tonnes, and planning to buy 100 tonnes every year. Other countries accumulating reserves include Thailand, Saudi Arabia, and India.
Clearly, these nations are beginning to back up their currencies with gold, hoping to maintain value to their own paper currencies above the dollar or euro.
‘Keeping gold and silver out of circulation is part of working corruption in the land.’ [Al-Muwatta of Imam Malik : 31.16.37]
REASON EIGHT: Gold & Silver – Inflation Proof
Gold and silver are both finite resources. As such, they have a ‘market value’ and, due to the requirement for the metal to be mined, the value is not prone to a sudden devaluation due to a glut in supply, which is synonymous with paper money which is printed on demand. Hence the return to gold and silver in the economy will halt inflationary pressures, as well as remove the need for interest, being the creation of wealth from lending rather than through promoting trade.
REASON NINE: Wealthiest Individuals Amassing Gold
The worlds’ richest folk own their fair share of the shiny stuff. Eight of the ten wealthiest individuals in Russia own gold mines. They are rich for a reason. The worlds’ central banks, after selling gold for the last twenty years, have been net buyers of gold for the last two years... that’s when gold prices have been at an all time high, and logic would be to sell (which George Soros has, in fact).
REASON TEN: Paper is Exactly That – Just Paper
Paper money really is intrinsically worthless. What use will our pounds or dollars be as reckless governments continue to print more and more notes which essentially devalue the ‘wealth’ people possess.
It is noteworthy (no pun intended) that, although he regards a pure commodity standard as ultimately undesirable because of its high resource cost, Milton Friedman recognizes its unique potential as a guarantee of monetary stability.
Writes Friedman: “If money consisted wholly of a physical commodity...in principle there would be no need for control by the government at all...”
Bayyina Foundation
Research Team
"O Muslims, do not be deceived by this hypocrisy. Unite yourselves as one man. Let us no longer be separated. The rendevous of Islam is under the shadow of the Khalifate. The Khebla of the True-Believer who desires happiness for himself and prosperity to Islam is the holy seat of the Khalifate." [Abdullah Quilliam - Shaykh ul-Islam of the British Isles from 1893 - 1924]
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