The Gold Currency! - LARIBA · 2016. 3. 24. · 2 The Gold Currency SELECTED NATIONS Exchange Rates...
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The Gold Currency! The Gold Currency! Towards Building A Stable Future and Towards Building A Stable Future and A RIBA A RIBA- Free Faith Free Faith- Based Finance & Banking System Based Finance & Banking System Dr. Yahia Abdul Dr. Yahia Abdul- Rahman Rahman Founder, American Finance House Founder, American Finance House – LARIBA LARIBA www.LARIBA.com www.LARIBA.com Pasadena, California, USA Pasadena, California, USA – 1- 626 626- 449 449-4401 4401 [email protected] [email protected] - +1 +1- 626 626-255 255-2181 2181 LARIBA 2003 Symposium LARIBA 2003 Symposium March 22, 2003 March 22, 2003 The Gold Currency The Gold Currency MONETARY ISSUES IN THE DEVELOPING AND WORLD: MONETARY ISSUES IN THE DEVELOPING AND WORLD: 1.1. CURRENCY DEVALUATION: ASIAN NATIONS: Decline of Exchange Rates Relative to the US$ on February 16 th , 1998 Compared to June 30 th , 1998: Indonesia 75% Malaysia 36% Thailand 48% Philippines 36% Singapore 15% Korea (S) 47% Taiwan 15%
Transcript of The Gold Currency! - LARIBA · 2016. 3. 24. · 2 The Gold Currency SELECTED NATIONS Exchange Rates...
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The Gold Currency!The Gold Currency!Towards Building A Stable Future and Towards Building A Stable Future and A RIBAA RIBA--Free FaithFree Faith--Based Finance & Banking SystemBased Finance & Banking System
Dr. Yahia AbdulDr. Yahia Abdul--RahmanRahmanFounder, American Finance House Founder, American Finance House –– LARIBALARIBA
www.LARIBA.comwww.LARIBA.comPasadena, California, USA Pasadena, California, USA –– [email protected]@MSN.com -- +1+1--626626--255255--21812181
LARIBA 2003 SymposiumLARIBA 2003 SymposiumMarch 22, 2003March 22, 2003
The Gold CurrencyThe Gold CurrencyMONETARY ISSUES IN THE DEVELOPING AND WORLD:MONETARY ISSUES IN THE DEVELOPING AND WORLD:
1.1. CURRENCY DEVALUATION:
ASIAN NATIONS:
Decline of Exchange Rates Relative to the US$ on February 16th, 1998 Compared to June 30th, 1998:
Indonesia 75%Malaysia 36%
Thailand 48%Philippines 36%Singapore 15%Korea (S) 47%Taiwan 15%
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The Gold CurrencyThe Gold CurrencySELECTED NATIONSSELECTED NATIONSExchange Rates of Various Selected NationsExchange Rates of Various Selected Nations’’ Currencies Relative to US $Currencies Relative to US $
Jan 97 Jan 02 Devaluation
Turkey, Lira 108,340.00 1,474,525.00 93%Indonesia 2,347.90 10,410.00 77%Libya, Dinar 0.36 0.66 46%Sudan, Pound 148.00 256.00 42%Malaysia, Ringet 2.53 3.81 34%Pakistan, Rupee 40.21 60.80 24%Egypt, Pound 3.39 4.60 26%Morocco, Dinar 8.83 11.56 24%
The Gold CurrencyThe Gold CurrencyTHE RESULT:THE RESULT:
1. Reduced the Values of Salaries, Savings, Pensions and the Price of Goods and Services
2. Raised the Value of Short-Term Debt, usually Denominated in US$ or European Hard Currencies and Increased Debt Service.
3. Reduced the Credit Rating and Increased the Cost of Borrowing Internationally.
4. Reduced Economic Activity.
5. Increased Unemployment and Poverty.
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The Gold CurrencyThe Gold Currency
FREEZING OF ASSETS:FREEZING OF ASSETS:
Major Powers Resort to Freezing Assets Entrusted with Its Banks By Developing Countries for Indefinite Periods without Ability or Legal Forums for Recourse. Examples:
♦ Egypt (After Nationalization of the Suez Canal), ♦ Iran (After the Islamic Revolution) and ♦ Non-Profit Organization and Wealthy Individuals
(After September 11th, 2001 Horrific Events in US.)
The Gold CurrencyThe Gold Currency
Money Printing:Money Printing:
Developing Countries Induce Its Politically Independent Central Banks to Print More Money for Short-Term Political Gains and Resulting Inflation and Currency Devaluation.
Debt Accumulation Without Democratic Due Debt Accumulation Without Democratic Due ProcessProcess
Developing Countries Resorting to International Borrowing with A Legal Democratic Mandate from the Citizens of the Country Leading to Deepening the Mortgaging of Countries Production, Assets and Resources.
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The Gold CurrencyThe Gold Currency
Leakage Outside The EconomyLeakage Outside The Economy
Lack of Controls on Funds Transfers Outside the Country Back to The Major Countries Leaving Country Coffers Essentially Empty Instead of Using the Borrowed Money for Economic “Development” as was Intended.
Interruption of Trade with Trading PartnersInterruption of Trade with Trading Partners
Trade Agreements and Hence, Flows are Interrupted Because Most of Trade Agreements are Done NOT in Local Currencies but in Major (Hard) Currencies.
The Gold CurrencyThe Gold Currency
FIAT (FIAT (““By Government SanctionBy Government Sanction””) MONEY) MONEY
According to Webster’s New World Dictionary Fiat Money is: “Currency Made Legal by Fiat (sanction) and Neither Backed by, or Necessarily Convertible into, Gold or Silver.”
Paper Money was First Used by the Chinese Beginning in the Tang Dynasty (618-907.) During the Ming Dynasty in 1300 AD the Chinese Placed the Emperor’s Seal and Signatures of the Treasury on a Crude Paper Made from Mulberry Bark.
In the First US Depression (1819-1821) Fiat Money was used in states of Tennessee, Kentucky, Illinois and Missouri but was Quickly Abandoned
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The Gold CurrencyThe Gold Currency
FIAT (FIAT (““By Government SanctionBy Government Sanction””) MONEY) MONEY
In Times of Government Weakness and Instability like in times ofwars, no one will accept Paper Currency because the Promise of the Government has No Value.
Mr. Greenspan, Chairman of the US Federal Reserve Said (May 20th, 1999) to the House Banking Committee soon after the UK Announced its Decision to Sell Part of Its Gold Reserves:
“ Gold Still Represents the Ultimate Form of Payment in the World.”
The Gold CurrencyThe Gold CurrencyFIAT MONEY FIAT MONEY –– GOLD CURRENCYGOLD CURRENCY
The Final Leg To Remove Riba From Our LivesThe Final Leg To Remove Riba From Our LivesLARIBA Monetary Laws Are Based Entirely on the Bimetallic Reference Point. The LaRiba Laws stipulate that Measurements, Zakah, Marriage Dowry, Hudud, Compensation Payments and other Forms of Trade All were Revealed Using Gold and Silver as the Standard. It is an Islamic Obligation to Use the Gold/Silver Bimetallic System.
The Gold Dinar (Roman Empire) and the Silver The Gold Dinar (Roman Empire) and the Silver Dirham Dirham (Persian Empire) (Persian Empire) -- Gold and Silver As Money:Gold and Silver As Money:Gold was used as Money Well into the 20th Century and for at least Two Centuries Before. Most Bonds, Including Government Bonds Were Gold Bonds. But After WWI Convertibility of Paper Money Into Gold Was Suspended for the Most Part and Was Finally Terminated By President Nixon in 1971.
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The Gold CurrencyThe Gold Currency
The Dirham and DinarThe Dirham and Dinar were used as the Official Islamic Currency Beginning with the Second Khalifah Omar Ibn Al-Khattab (634-644 CE.) The Dinar is the Weight of 22 Karat Gold Equivalent to 4.3 grams and the Dirham is the Weight of Silver Equivalent to 3.0 grams. He Established the Well Known Standard Relationship As: “7 Dinars Must Be Equivalent to 10 Dirhams.”These were coins used by the Romans (The Dinar) and the Persians (The Dirham) and the Muslim Authorities Stamped “In the Name of Allah” onto the.
The First Muslim CoinsThe First Muslim Coins were struck during the Khalifah Uthman IbnAffan (644-656CE.)
The First Original Minting of The First Original Minting of DirhamDirham was done in 695 CE (75 AH) during the Khalifah Abdul-Malik Ibn Marwan Rule.
The Gold CurrencyThe Gold CurrencyGOLD MARKETS and PRICES:GOLD MARKETS and PRICES:
Attempts are continually being made, since the end of WWI to completely eradicate the significance of gold in monetary terms and creating false supply that exceeds demand using gold borrowing from central banks, sale of gold from central bank reserves, options, futures and forward sale. .
On August 15th, 1971 the official convertibility of gold into dollars as per the 1944 IMF Agreement was suspended for official holders. This was done in response to France’s Charles de Gaulle objections about the excess dollar supplies and the expanding monetary policy in the US during Vietnam War and the Johnson Great Society programs. (see http://zolatimes.com/V2.16/Gold.html)
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The Gold CurrencyThe Gold Currency1.1. PRICE FIXING:PRICE FIXING:
The center of Gold Trading is in London and the center of Londongold and silver trading is the London Bullion Market, operated by the London Bullion Market Association, LBMA.
The practice of fixing gold prices began in 1919. It continued until 1939, when London gold market was closed as a result of WWI. The market was reopened in 1954. When the central bank gold pool began officially in 1961, the Bank of England (as agent of the pool) maintained an open phone line with N. M. Rothschild during the morning fixing (there was as yet no afternoon fixing.) The objective was to fix the price around the $35/ounce price within a 1% band.
The Gold CurrencyThe Gold Currency2. 2. THE PLAYERSTHE PLAYERS
In its current form, the London gold price fixing takes place twice each business day, at 10:30 am and 3:00 pm in the “Fixing Room”of the Building of the merchant banking firm of N. M. Rothschild. Five individuals, one each, representing:
a. Standard Charter Bankb. Deutsche Bankc. N. M. Rothschild & Sonsd. Republic Banke. HSBC
Price fixing is based on balancing supply and demand. Usually the fixing takes less than 15 minutes. In 1979, during the Islamic Revolution of Iran, the afternoon fixing lasted an hour and 39 minutes due to price volatility.
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Price of Gold per Ounce
0 . 0 0
1 0 0 . 0 0
2 0 0 . 0 0
3 0 0 . 0 0
4 0 0 . 0 0
5 0 0 . 0 0
6 0 0 . 0 0
7 0 0 . 0 0
8 0 0 . 0 0
J a n-6 7
J a n-6 9
J a n-7 1
J a n-7 3
J a n-7 5
J a n-7 7
J a n-7 9
J a n-8 1
J a n-8 3
J a n-8 5
J a n-8 7
J a n-8 9
J a n-9 1
J a n-9 3
J a n-9 5
J a n-9 7
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J a n-0 1
J a n-0 3
J a n-0 5
J a n-0 7
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Date
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Gold Price HistoryGold Price HistoryThe Politicization of GoldThe Politicization of Gold
Gold vs. US Median Housing Prices
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1,000
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Date
oz. O
f Gol
d pe
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ouse
oz. Of Gold per 1 House Various oz. Of Gold per 1 House $35 Constant
How Much Gold Needed To Buy How Much Gold Needed To Buy A House in America?A House in America?
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Gold vs. Rough Rice
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d fo
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wt.
of R
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Per 1 oz. Of Gold Various Per 1 oz. Of Gold $35 Constant
How Much Gold Needed To Buy How Much Gold Needed To Buy Rough Rice (CWT Rough Rice (CWT –– Hundred Wts.)?Hundred Wts.)?
Gold vs. Live Cattle
0.00
0.01
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Jan-69
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Date
oz. O
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d fo
r 1
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Per 1oz. Of Gold Various Per 1oz. Of Gold $35 Constant
How Much GoldHow Much Gold Needed to BuyNeeded to BuyOne Pound of Live CattleOne Pound of Live Cattle
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Gold vs. Crude Oil
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0.20
0.40
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0.80
1.00
1.20
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Date
oz. O
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d fo
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il
Per 1 oz. Of Gold Various Per 1 oz. Of Gold $35 Constant
How Much Gold Needed To Buy How Much Gold Needed To Buy A Barrel of Oil ?A Barrel of Oil ?
Gold vs. Natural Gas
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Per 1 oz. Of Gold Various Per 1 oz. Of Gold $35 Constant
How Much Gold Needed To Buy How Much Gold Needed To Buy Natural Gas (1 Mill BTU)?Natural Gas (1 Mill BTU)?
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The Gold CurrencyThe Gold CurrencyRESEARCH: STUDY HISTORY!RESEARCH: STUDY HISTORY!Who Does Not Learn from Lessons of History is Condemned to RepeaWho Does Not Learn from Lessons of History is Condemned to Repeat Themt Them
1.1. Understand The History of:MonoUnderstand The History of:Mono--Metallic, Metallic, Bimetallic, Symmetalic and Commodity Reserve Bimetallic, Symmetalic and Commodity Reserve Currency Systems & Reasons Used to Change Over. Currency Systems & Reasons Used to Change Over. Study the Bimetallic Movement and How It Died Study the Bimetallic Movement and How It Died Down in 1890Down in 1890’’s in Europe and the Adoption of s in Europe and the Adoption of Monometallic Gold as the Standard.Monometallic Gold as the Standard.
2.2. The Effect of Vast Gold Discovery in Canada & The Effect of Vast Gold Discovery in Canada & South Africa and Advances in Production South Africa and Advances in Production Technology on The Gold Reserve System (400 Mill Technology on The Gold Reserve System (400 Mill Marks in 1883 to 1,600 Mil. Marks in 1906.)Marks in 1883 to 1,600 Mil. Marks in 1906.)
3.3. The Problem of Inadequate International Reserve The Problem of Inadequate International Reserve System in 1920System in 1920’’s and the Effect of Lower Gold Prices s and the Effect of Lower Gold Prices on Reduction of Gold Production and the Great on Reduction of Gold Production and the Great Depression in 1930Depression in 1930’’s.s.
The Gold CurrencyThe Gold Currency
RESEARCH: STUDY HISTORY!RESEARCH: STUDY HISTORY!Who Does Not Learn from Lessons of History is Condemned to RepeaWho Does Not Learn from Lessons of History is Condemned to Repeat Themt Them
6.6. The Effect of Small Interest Differentials, under the Gold The Effect of Small Interest Differentials, under the Gold Standard (When People had Complete Confidence in the Standard (When People had Complete Confidence in the Maintenance of the Fixed Rate) on ShortMaintenance of the Fixed Rate) on Short--Term Capital Flows. Term Capital Flows. This was Precisely What Enabled Britain to Get Along with a This was Precisely What Enabled Britain to Get Along with a Small Gold Reserve in the 19Small Gold Reserve in the 19thth Century.Century.
7.7. The Advantages of Going Gold Over Floating or Adjustable Peg The Advantages of Going Gold Over Floating or Adjustable Peg & Currency Boards MOST IMPORTANT is the Much Smaller & Currency Boards MOST IMPORTANT is the Much Smaller International Reserve Requirement Needed.International Reserve Requirement Needed.
8.8. What Happens If: Gold is Effectively Monetized and Any New What Happens If: Gold is Effectively Monetized and Any New Speculative Bubble in Gold Market would Increase Value of Speculative Bubble in Gold Market would Increase Value of Gold Reserves.Gold Reserves.
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The Gold CurrencyThe Gold Currency
RESEARCH:RESEARCH:9.9. Simulate Past InterSimulate Past Inter--Country (s) Trading Experience Country (s) Trading Experience
Especially During Times of Gold Price Instability. Especially During Times of Gold Price Instability. How Can The Bank Help in Hedging.How Can The Bank Help in Hedging.
10.10. Develop A Computer Develop A Computer ““WarWar--GameGame”” To Simulate The To Simulate The Intelligence of the Currency Traders Against That of Intelligence of the Currency Traders Against That of The Gold Currency Supporters. Stretching the The Gold Currency Supporters. Stretching the Model Under Severe Conditions.Model Under Severe Conditions.
11.11. Develop Scenarios That Can Be Used To Discredit Develop Scenarios That Can Be Used To Discredit the New System and Recommend Solutions.the New System and Recommend Solutions.
12.12. Develop Ways & Strategies To Disengage Thinking Develop Ways & Strategies To Disengage Thinking in Hard Currencies and Reinforce Thinking in Gold in Hard Currencies and Reinforce Thinking in Gold Currency Approach.Currency Approach.
We Ask All People of All Faiths and We Ask All People of All Faiths and Backgrounds to Join The Movement!Backgrounds to Join The Movement!
AMERICAN FINANCE HOUSEAMERICAN FINANCE HOUSEL . A . R . I . B . AL . A . R . I . B . A
[email protected]@LARIBA.com
By GodBy God’’s Grace It will Be Done!!s Grace It will Be Done!!Thank YouThank You
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