Gold Dinar and Fiat Money

Gold Dinar and Fiat Money

Gold dinar is an alternative system to fiat money whereby the value of the currency is Gold value rather than paper note. The implementation and usage of Gold Dinar give more value added as opposed to the fiat money. Furthermore, in the usage of Gold as a currency and financial instrument it leads us to follow the way of Islamic society in the past. The usage of Fiat Money is actually first implemented by the west which is Non-Muslim community. They establish the usage of fiat money e.g. paper money to change the system of Gold Dinar. It is actually after the feel of Khilafah system in 1924. They gradually use the fiat money in everyday life.

The speculative issue in using fiat money is available. This is because the value of fiat money itself a ‘paper’. It leads to much speculative issue (Gharar). It is not correct manner because it makes the efficiency and effectiveness of trading will be drop, for example in the financial crisis in the 1997-1998. The crisis of the value of money happened because people try to speculate of it.

Besides that, there are many disadvantages of using fiat money:
1. It generates inflation
2. It makes countries become more indebted through the current system of borrowing in case of deficit.
3. Printing money easily by the central banks take away purchasing power of the money
4. It brings injustice in monetary transaction by dominant currencies/countries
5. Do not have intrinsic value

As opposed to the usage of the fiat money, I recommended to go back to the reality of usage of financial instruments which is Gold Dinar. Below are the advantages of using Gold Dinar as financial instrument.
1. It has intrinsic value
2. It leads to harmonization in currency system that people cannot make injustice for the usage of it
3. Inflation maybe happened in natural way
4. it can solve the problem of overproduction in printing money. Do not lead to discrimination
5. The value of Gold stable

Some Ulamaa’ are calling for abrogation of fiat money, because of the above mentioned reasons. The question arise here is will it working effectively to change from fiat money to Gold Dinar? Time will make sure it happens. Then, it is true the current fiat system generates more harm than good to the people. But how to change the financial system to make it reality in using Gold as transaction? Actually the role of changing the system by the leader, should not be sudden, as that may create more harm than the benefit, like say changing the currency suddenly. People that have money are bound to loose at least most part of their money if not all.

As for the suggestion before by the former Malaysia Prime Minister, Tun. Dr. Mahathir Mohammad, he suggests to go back in using Gold Dinar as a transaction. Many ways that he has suggest bringing unity in the Muslim leaders in one community.

The implementation that can be use to start direct of usage Gold Dinar is with the Muslim country itself in the issue of trading. For example, if Country A wants to buy or trade the commodity from Country B they can pay it with Gold Dinar and they get what they want from Country B. This also can lead the unity of the Muslim country and bring together into one Muslim world that should not be lead by the foreign country such as Europe.

As for that, America under their presiden George Bush condemned the action. They said that Gold Dinar is Useless. It is totally wrong because the usage of Gold Dinar give many advantages to Muslim World. Maybe the presiden have their own agenda.

To make Islam as a unity Muslim in the world, the secularism in using fiat money need to be change gradually. It is to make sure that the problem in using fiat money will not harmful to Muslim society. With using Gold Dinar it will bring us together (Islamic World) into one wonderful system and make many advantages of it. Recognition of Muslim world needed to be done to make it using Gold Dinar a reality. Basically it is not impossible. Only time will make it happen. A lot of study and implementation need to be done.