Saturday, 5 April 2014

The seriousness of Gold Dinar- Part 2

This post continues from Part 1

32. But gold is bulky. We cannot be carrying gold all over the world in order to pay for goods we want to import. But we need not do that.

33. It is not intended to use the gold dinar as currency for everyday transactions in the domestic market. For this we can use national currencies. If there is inflation then the currency can buy less gold and other goods. And vice versa. So there is no necessity to carry bags of gold coins for transaction within the countries.

34. But even for international trade the transport of gold bullions or gold coins would be very minimal. Through bilateral payments arrangements the imports can be balanced by the exports and the differences settled in gold dinars. The Central Bank can provide a guarantee for the gold required for the payments of the balance. In the following weeks or months the deficits may be reduced or a surplus achieved. In that case the payments of the balance can be made through accounting arrangements between the Central Banks. It is only occasionally that a necessity might arise for the actual gold dinar to be used to pay for the purchase of imports.

35. We cannot really verify the amount of money a country has. A country's own currency cannot be regarded as its reserve. But gold dinars or gold bullion or gold ingots can serve as a country's reserve. Still in the end we have to trust each other. If we are good Muslims then the cases of fraud by Central Banks would be minimal.

36. Assuming that Malaysia exports to a Dinar Area country a hundred million Dinars worth of motor vehicles and then imports 110 million dinars worth of oil, then the payment required by Malaysia would be just 10 million dinars. The ten million dinars is credited to Malaysia's trading partner. If in the following month the trading partner buys 110 million dinars worth of Malaysian cars and Malaysia buys 100 million dinars worth of oil, then no payment need to be made by either party. The 10 million dinars that has to be paid by Malaysia's trading partner for the motor vehicle can be offset by the credit of 10 million dinars from the previous month's transactions.

37. Today with computers we can close account and pay more frequently. Through this method it is not necessary to purchase or earn hard currency.

38. Of course there may be some countries which are so poor that they cannot have gold dinars. We can buy some raw materials to be paid in gold dinars. They can be helped to build up the reserves of gold dinars.

39. There will be problems. But if we begin with just a pair of countries we would be able to minimize problems and demonstrate whether it works or not. We will be able to identify the weaknesses and the faults and correct them.

40. Gold is a precious metal. There has never been a time when there was no demand for gold. It is also not so plentiful that its price will fall the way paper currency or even other precious metals can fall. Yet it is not so limited in quantity that anyone or any trader can corner it and manipulate the price.

These points resonate well with Public Gold taglines i.e.
To save your family, buy gold.
To help our nation, keep gold.
To follow your religion, use gold.

If we buy gold (convert cash into gold), then we save our money from being spent unnecessarily. Our wealth is protected from inflation thus helping our family and future generation with the inevitable rising cost of everything.
When we as individuals buy and demand for gold, there has to be supply of gold from within or outside the country. When our gold reserve is increased, the impact of economics instabilities will be less compared to the impact towards currency.
As we know, gold dinar has been used since the time of Rasulullah SAW and economics activities were prosperous back then even with the non-Muslim regions. That has enabled Islam to spread its power in the Europe and Asia. It is not impossible that with Islamic economies and dinar, the world financial system will be much better than it is now.

The next post will be the final part of the speech. Stay tuned.

Norazharina Mat Amin

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