Extract from my blog:
What is the remedy? How can individuals, including Muslims or anyone opposed to endorsing the existing central bank’s fiat monetary system, break free from the interest based network? How can they discontinue the use of ribawi fiat currencies? In the long run, how can humanity transition to an economic system founded on a currency, whether it be gold or something similar or even with better attributes than gold that cannot be created arbitrarily? This transition aims to diminish the influence of central banks and governments globally that align with the Zionist movement.
Some Muslims suggest that the ultimate solution is to return to the gold standard. They acknowledge that there is no explicit command in the Qur’an and Hadiths that mandates the use of gold, but they reason that gold was used at the time of the Prophet Muhammad PBUH. Additionally, they point out that the nisab (threshold or minimum amount of wealth or assets that a Muslim must possess before they are obligated to pay a specific form of almsgiving known as zakat) is calculated in gold and silver, making it a part of Islamic muamalat (Islamic financial transactions that adhere to Sharia law, prohibiting interest & emphasizing ethical conduct).
Furthermore, they argue that gold cannot be created out of interest-bearing loans, as paper fiat national currencies are made, making gold a form of “sound money.” In other words, it is challenging to create or inflate.
To help people understand what constitutes good money, both Muslims and non-Muslims who advocate for a return to the gold standard encourage individuals to ask themselves the following questions:
What is money?
Why was gold chosen by the free market as money?
Why has gold endured for over 5000 years?
What qualities of gold led to its selection?
They argue that by pondering and researching these questions, one would likely conclude that the majority of humanity chose gold as money because of the following inherent characteristics:
• Divisibility: Ability to break down a sum of money into smaller units or denominations. Money should be divisible so that it can be easily exchanged, making transactions more convenient.
• Durability: Money must be durable to ensure it remains in circulation and retains its value; it should not be easily damaged.
• Recognisability: Refers to the ease with which a form of money can be identified and distinguished from counterfeits. It encompasses design elements, security features, and overall appearance that make it easy for people, including both the general public and experts, to recognize genuine currency and distinguish it from fake or altered versions.
• Portability: The ease with which a form of money can be carried and used for transactions is known as portability. Portable money is typically lightweight, convenient to carry, and widely accepted, making it suitable for everyday transactions and purchases. Portability ensures that money can be easily transported and used for various financial transactions, regardless of location or circumstances.
• Scarcity: Its rarity compared to global demand makes it a sought-after asset, and its limited supply ensures its enduring worth. Some advocates of gold, who champion it as a solution, often appeal to the concept of ‘‘intrinsic value.’‘ In other words, when you ask such individuals why gold is valuable, they will respond with ‘‘because gold has intrinsic value.’‘ When further pressed to explain what intrinsic value actually means, they will point out that gold is not only used as money but also serves other purposes, such as in shiny jewelry and electronic parts.
This statement represents a partial truth. Gold does derive some of its value from its utility in non-monetary applications, but that constitutes only a small percentage. The majority of gold’s value primarily arises from its esteemed monetary characteristics:
Divisibility
Durability
Recognisability
Portability
Scarcity
“Gold does have non-monetary industrial use, but only about 10% of its demand is industrial. The other 90% is based on bullion and jewelry demand, for which buyers view gold as a store of wealth, or a display of beauty and wealth, because it happens to have very good properties for it in the sense that it looks nice, doesn’t rust, is very rare, holds a lot of value in a small space, is divisible, lasts forever, and so forth. If gold’s demand for jewelry, coinage, and bars were to ever decrease substantially and structurally, leaving its practical industrial usage as its primary demand, the existing supply/demand balance would be thrown out and this would likely result in a much lower price. In the West, interest in gold bullion has gradually declined somewhat over decades, while demand from the East for storing wealth has been strong. I suspect the 2020’s decade, due to monetary and fiscal policy, could renew western interest in gold, but we’ll see. So, the argument that Bitcoin isn’t like gold because it can’t be used for anything other than money, doesn’t really hold up. Or more specifically, it’s about 10% true, referring to gold’s 10% industrial demand. With 90% of gold’s demand coming from jewelry and bullion usage, which are based on perception and sentiment and fashion (all for good reason, based on gold’s unique properties), gold would have similar problems to Bitcoin if there was ever a widespread loss of interest in it as a store of value and display of wealth. Of course, gold’s advantage is that it has thousands of years of international history as money, in addition to its properties that make it suitable for money, so the risk of it losing that perception is low, making it historically an extremely reliable store of value with less upside and less downside risk, but not inherently all that different. The difference is mainly that Bitcoin is newer and with a smaller market capitalization, with more explosive upside and downside potential.”
~ Lyn Alden
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