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Author Topic: Gold, oil, fiat money and the islamic law  (Read 8393 times)
Joise
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July 13, 2011, 12:06:58 AM
 #1

There's an interesting article which dwells on the interactions between
gold price and the price of oil, as well as on the consequences
that the oil resources are finite and production is likely to peak in these
days - if they didn't peak already.

As it turns out, oil price and gold price are linked in several
ways: For example a high oil price could trigger inflation,
which will lead to a preference for gold. A very high oil
price would also weaken the US economy, which could lead
to a process that oil-producing countries could prefer
some other payment than the dollar.

Then, there is a very interesting remark that astonished
me. To cite:

"The answer to that question begins with the historical desire of Arab producers to receive gold in exchange for their oil. This dates back to 1933 when King Ibn Saud demanded payment in gold for the original oil concession in Saudi Arabia. In addition, Islamic law forbids the use of a promise of payment, such as the US dollar, as a medium of exchange. There is growing dissention among religious fundamentalists in Saudi Arabia regarding the exchange of oil for US dollars."

The full text is here:

http://www.gold-eagle.com/editorials_05/barisheff042205.html



[To be true, I believe but I am not completely sure that this
is the original source - there are numerous references and
unattributed copies of this text on the web.]


What is stunning for me is that fiat money in general and the dollar
in particular is seen as a payment _promise_. I bet that Bitcoin is
probably more seen as an asset that may have value or not; but
it does not depend on the goodwill or ability or trustworthiness
of the person paying with it, only on a diligent check on the
side of the receiver.

Its quite fascinating - and I don't say that ironically at all -
that bitcoin seems to be able to gain support from wildly
different partys. I am not a religious person but I think that
at least in THIS aspect islamic law might have very good
reasons which people from completely different political ends
might share.

I am writing this at the late evening of a day where a
collapse of the european currency became thinkable.
If this becomes reality, then it could be attributed to
a large part to the way how power is able to shift
perception of realities into outright denial, how a suffucient
amount of money turns a dedicated medium of exchange
into a literal Ponzi scheme.

I remind also that seemingly _each_ of the last important wars
has led governments to tinker with the value of
money. In Germany, it was the abolishment of
the Goldmark for war bounds during, and the payment of
reparations with money printing presses after
world war I. World war II was financed by a technique
which was called "silent war financing" (geräuschlose
Kriegsfinanzierung) - basically, banks were forced
to sign war bounds because people had no interest in them.
In the US, the end of the dollar's gold backing was not
by mere coincidence during the vietnam war. I think
about the economical consequences of the Iraq/Afghanistan
wars everyone has his own picture.

It's certainly a truly naive and innocent wish but
it would be too beautiful if bitcoin could contribute
to a world with fewer wars....

But what do you think about this? Many people
have pointed out that bitcoin seems to have
compatibility with the Hawala System (http://en.wikipedia.org/wiki/Hawala).
Might it be compatible to some important aspects of arabic culture?
My personal feeling is yes.


- Joise

P.S.

Another text on the topic of dollar-oil-gold and the expected
peak of oil production:

http://www.monacorarecoins.com/rare-coin-news/article/the-us-dollar-oil-gold-relationship/

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October 26, 2011, 12:34:28 PM
 #2

This is definately worth a bump.

The fact that a culture has the foresight to disallow the promise of payment is very interesting.

Bitcoin is not a promise to pay because it involves cryptographic work. Therefore it is of interest to the muslim who wishes to follow Sharia to use Bitcoin! Seeing as the Muslim world is global then there's surely got to be a massive market for bitcoin there! If you have a friend who is muslim ask them about this aspect of Sharia law.

This has got to be why the Islamic world is being bombed all over the place.
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October 26, 2011, 04:00:02 PM
 #3

Most Muslims today have no idea that fiat currency is not compatible with Islamic law. The "Islamic" banking industry itself is largely a sham and uses tricks to hide the fact that they charge interest. Also, many Arab regimes rely on currency manipulation to finance the security apparatus that keeps them in power.

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October 26, 2011, 08:36:30 PM
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Most Muslims today have no idea that fiat currency is not compatible with Islamic law. The "Islamic" banking industry itself is largely a sham and uses tricks to hide the fact that they charge interest. Also, many Arab regimes rely on currency manipulation to finance the security apparatus that keeps them in power.

Yes, interest by any other name is still a return.

You might find Onion Tears a worthwhile read.
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October 27, 2011, 08:50:55 PM
 #5

All that "islamic" things that think they are different... meh...  Roll Eyes otherwise you go to hell? Again, meh
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October 27, 2011, 10:18:51 PM
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There are plenty of variations of Islamic law. It's all about interpretation Smiley

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October 28, 2011, 05:30:00 AM
 #7

Basically everyone do as he wish  Cheesy
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October 28, 2011, 05:33:01 PM
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just a note, the differences between the islamic law and the normal one are mainly about the way the recognition and how the liabilities are handled.
Gabi
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October 28, 2011, 08:31:34 PM
 #9

And i suppose that there is god somewhere and the fact that if you do not obey you go to hell
And thus, not modifiable law that can't adapt to the evolution of societies


Of course that apply for every religion! Christians managed to have crusades and killing thousands of people and burning witches everywhere...
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December 11, 2011, 09:53:37 AM
 #10

The fact that a culture has the foresight to disallow the promise of payment is very interesting.

Usury used to be a crime/sin in the entire Christian world as well, and I think it still is for Jews (at least when dealing with Jews).

To the OP or anyone else who is surprised that dollars are promises to pay; this might interest you:
http://www.youtube.com/watch?v=Dc3sKwwAaCU

I use the above video to help convince people of the need for monetary reform. Its surprising how few people have any clue what money really is.

fellowtraveler
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December 16, 2011, 11:59:59 AM
 #11

"You shall not lend upon usury to thy brother;
usury of money, usury of victuals,
usury of any thing that is lent upon usury:
Unto a stranger you may lend upon usury;
but unto your brother you shall not lend upon usury:
that the LORD your God may bless you in all that you set your hand to
in the land whither you go to possess it."
Deut 23:19-20

"You shall not have different weights in your bag, a great and a small.
You shall not have different measures in your house, a great and a small.
But you shall have a perfect and just weight, a perfect and just measure
you shall have: That your days may be lengthened in the land which the
LORD your God gives you."
Deuteronomy 25:13

"You shall not steal."
Exodus 20:15

"Different weights, and different measures, both of them are alike
abomination to the LORD."

Proverbs 20:10

He overturned the tables of the money-lenders,
and the benches of those selling doves.
"It is written," he said to them,
"'My house will be called a house of prayer,' (1)
but you are making it a 'den of thieves' (2)."
Matthew 21:12b-13, 1. Isaiah 56:7, 2. Jeremiah 7:11

"The rich rule over the poor, and the borrower is servant to the lender."
Proverbs 22:7

"Hate evil, and love good,
and establish justice in the courts."
Amos 5:15

"Justice, and only justice, you shall follow, that you may live and
inherit the land that the Lord your God is giving you."
Deuteronomy 16:20

"Do not pervert justice;
do not show partiality to the poor
or favoritism to the strong,

but judge your neighbor fairly."
Leviticus 19:15

"You shall not go after the majority to do evil.
Neither shall you testify in a matter of strife
to incline after the majority to pervert justice."
Exodus 23:2

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Flip Tulipcoin
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December 16, 2011, 02:22:11 PM
 #12

Materialism is the oldest human religion, and the fall back position. It is so fundamental that it is incorporated in nearly all the major world beliefs even when explicit disclaimers about wealth are made.

It's good that people recognize that the Islamic world plays finance with the rest of us, there's always a way to make it happen. For example, in the 15th century Florence Italy had a Jewish ghetto that was protected so that the Jews could lend money, as gentiles were proscribed from doing so. A few kickbacks to Pope Martin V and the Jewish bankers had carte blanche, at least during the daytime, as they were confined to the ghetto at night by law  Smiley

And of course, let's not forget the hole in the sheet, these freaks love to control people in every way, superstition is a good way to accomplish that goal. Obviously if God had not intended for them to be shorn, he would not have made them sheep, so it's all good, now isn't it?



It's time for the U.S. to throw Israel under the bus. The pure avarice of a colonial land grab by European colonists after WWII has nothing to do with religious tolerance or freedom, to the contrary, it mocks both by hiding behind them.
Mashuri
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December 16, 2011, 09:02:53 PM
 #13

Any force used to ban or limit usury will distort the market.  Time has value to people, which is essentially what an interest rate is a price on.  In a free market, I can't see a usury-free bank getting more investors than its interest-earning competition.

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December 20, 2011, 06:08:56 PM
 #14

You may find this thread of interest:
https://bitcointalk.org/index.php?topic=21732.0

Bears.  Beets.  Battlestar Galactica.  Bitcoin.
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December 20, 2011, 09:28:20 PM
 #15

Usury used to be a crime/sin in the entire Christian world as well, and I think it still is for Jews (at least when dealing with Jews).

Jewish banking came about because their religion doesn't have such prohibitions, and they were able to offer banking services to European aristocracy during the early part of the second millennium. Banking and loans enabled hiring armies, industry, and expanding power. Our modern civilization relies on banking and the ability to raise capital; if Intel couldn't sell stock to build a $2.5 billion dollar chip fab, you might still be using an abacus.

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December 21, 2011, 08:28:00 AM
 #16

Usury used to be a crime/sin in the entire Christian world as well, and I think it still is for Jews (at least when dealing with Jews).

Jewish banking came about because their religion doesn't have such prohibitions, and they were able to offer banking services to European aristocracy

As I said, but I could be wrong, I thought Jews were allowed to collect interest but only from non Jews. The bible quote from fellowtrader could explain why:
You shall not lend upon usury to thy brother;
usury of money, usury of victuals,
usury of any thing that is lent upon usury:
Unto a stranger you may lend upon usury;


Im only guessing Christians interpreted brother differently than Jews? Anyway, my point was that forbidding usury is not exactly a new idea. Its a very old one that almost everyone abolished, except in Islam.

Mashuri
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December 21, 2011, 08:47:14 PM
 #17

You may find this thread of interest:
https://bitcointalk.org/index.php?topic=21732.0

I've seen it since inception.

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January 05, 2012, 04:42:06 AM
 #18

I just signed up for a mortgage (no, not in the USA  Cheesy).  Does that mean my bank manager is going to hell, based on the Koran?  That's one heck of an occupational safety hazard.

Do not send bitcoins to me: 16b8s7pBJ9rUmsExNW25qD5VUqVqRPZuXu
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January 05, 2012, 04:55:12 AM
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I just signed up for a mortgage (no, not in the USA  Cheesy).  Does that mean my bank manager is going to hell, based on the Koran?  That's one heck of an occupational safety hazard.

I'm not sure committing a sin automatically dooms you to hell in any religion.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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December 27, 2013, 11:11:28 PM
 #20

About the last two comments: You speak merely out of your desire and ignorance  Roll Eyes - never say I think, but say God says. It is God alone who sets out His rulings to humanity and we have to follow. The fist and most important teaching is the worship God God alone without associating any partners to Him and follow/apply His rulings and listen to the prophet that has been send to you, in this case it is the prophet Mohamed (peace be upon him) who has been send to all humanity and genies.

You have already noticed the economic collapse collapse a few years back, but this is just the beginning cos debt keeps building up until the bankers decide to up the interest rate, which means that the whole Western world and USA will collapse - and this is due to the use of interest/usury by governments and individuals. People get robbed from their money, people loose their homes (e.g. Greece). . Is this what you like, fiat currency build on nothing except interest?

The Sharia financial system is fair and stable.
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