The EFFECT of the Dinar and the Dirham on Business

Paper-money, which does not render any service except in
exchange for something productive, is made artificially
productive by interest.

On the other hand, every genuine enterprise, like the use of a
house or a manufacturing process, can only be productive by
the services rendered to society.

Interest competes and wins over genuine enterprises profitable to
society. The genuine business has to pay the interest out of the
profit from a genuine service to society, but the bank makes
profit out of the interest through the artificial expansion of the
money lent.

The final result is that the higher the interest rates the greater the
destruction of 'less competitive" businesses

The EFFECT of the return of the dinar and the dirham will be

The shift of capital investment from the most "speculative areas"
to the more productive areas.As a result a new landscape
associated with the dinars and the dirhams will re-emerge, that
is, the world of Islamic Trading

A new re-start for trading will come about through the
restoration of two of its most representative but losts
institutions:
the market-place which will replace supermarkets
and
the caravans which will replace monopolistic distribution

And the return of the guilds, that is, associated independent
intelligent workteams, in which the relationship
master/apprentice will replace employer/employee

The EFFECT of the Dinar and the Dirham on the Real Estate

Today you want to buy a house and a bank will offer you a
mortgage. This is how the ring distorts the operationthe house

The annual rent of this house is 10% of its value
but,...
the same money is offered by the bank at 5%, which considering
inflation is a bargain!

Why would the bank be so generous, when it could rent the
house and obtain the house plus a higher 10% return?
This is the paradox of the ring.
Out of that 5% interest the bank will make a 100% profit with the
mathematics of the ring.

The borrower thinks that the interest is better than paying the
rent, the bank makes a higher profit out of expanding money
who loses? All the holders of the newly inflated currency by its loss of
value (inflation).

THE HIRE-ABILITY OF MERCHANDISE

A house can be rented, it is a hireable merchandise
Money cannot be rented, it is a non hireable merchandise

Profit and rent come only from real services to society -this is the
end of speculative economy and the beginning of real
prosperity to society.

This is because investment will have to be directed towards real
services, instead of being drawn by the artificial profit of the
ring which like a parasite lives off real services.Without the
mortgage, housing prices will simply find a new stability
established by the equilibrium between the offer and a new
demand based on what people can really pay.

Imam Sahnun wrote in the great Madinan text, "Mudawwana al-
Kubra", 12:46
"Money is something which it is not permissible to hire."

The Practical Use of the Dinar and the Dirham

In the beginning, networks of shops and individuals which will
accept the gold and silver coins as a medium of exchange will be
distinguished by a sign or window sticker.

Just like Visa or American Express cards started to be introduced
in society. Each shop will have the sticker indicating that they
accept the dinar and the dirham.

The transportation of gold and silver will be facilitated by a
network of agencies that will allow money to be sent to any
corner of the world. It will operate by a simple method of
book-keeping. Just like the company Inter-flora makes available
flowers all over world without needing to send the flowers
physically.

Equally the gold and silver could be made available in different
parts of the world although only the balance between the
different agencies needs to be physically transported

A future use of cash cards would allow you to retrieve gold and
silver from your own account in any shop of the network.

Under the strong supervision of the WITO, World Islamic
Trading Organisation, companies will be able to issue cards
which let you retrieve money just like modern cashiers allow
you to collect paper money

The TRANSFERRAL of gold and silver to a third party by
means of special debit cards. This is the most delicate of all
questions, since many forms of transferral of money are not
allowed in Islamic Law and open the door to fraudulent abuse of
trust.

That is why any step in this direction will need to be strongly
monitored by WITO or some civil authority, to prevent the
account keeper from turning into a bank by lending money and
/or creating money out of nothing by expanding the credit.