A Practical Guide to Real Trade

A Practical Guide to Real Trade The Foundations of a Just Society

Compiled by Adnan Ashfaq

A Practical Guide to Real Trade F.R.E.E

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About F.R.E.E

REE (The Foundation for the Return of Equitable Economy) is a non profit voluntary organisation, a group of individuals who are concerned about the future of Britain. With unemployment figures reaching unprecedented figures, the government continues to promise to ―Inject‖ more capital into lending as though it is feeding some psychotic Frankenstein numerous doses of heroine. How long will it sustain itself? Usury banking has destroyed trading. Usury (Lending at interest) is condemned by Judaism, Christianity and Islam, while trading is permitted and encouraged. Modern economics has reversed this ideology where trading is forbidden and usury is permitted. To be free is a question that many of us do not think about. It is this anesthesia that the banks are exploiting. It is usury that created unemployment, or rather it destroyed self-employment. Introductory Note

It must be noted here at the outset that the information within this handbook must be taken holistically and understood. There is much material in the bookshops which is over complicated and too academic. The material here is merely a brief introduction to each of the chapters and is aimed to serve as a tool for action.

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Objectives

The objective of this booklet is to act as a guide to people who wish to partake in the FREE network. The FREE networks objectives are:

1. To facilitate the implementation of gold and silver as a parallel currency to £ sterling in the UK, this will be done by:

a) Propagating the philosophy of free currency, free markets and self autonomy through educational seminars, lectures and conventions and setting up training sessions.

b) Preparing Educational materials and literature

c) Setting up of Gold and Silver agents

d) Minting Gold and Silver coins

e) Setting up markets

f) Networking traders both physically and electronically via an e-network

2. To raise the pillar of Islam – Zakat


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Contents

1. PART ONE: The Quranic Injunctions and the Seriousness of Riba (with Hadith explanation) - The Seriousness of Riba…………………………………………………………………… 6 - Understanding Riba……………………………………………………………………….. 7 - Riba – According to Modern scholars……………………………………………………..... 8 - Traditional understanding of Riba of the Ulema……………………………………………. 9

- How to deal justly in our transactions? …………………………………………………….. 11 - How do modern transactions relate to these injunctions? ………………………………….... 12

2. PART TWO: The History of Banking and the Myth of Islamic Banking - A History of Money………………………………………………………………………. 13 - The History of Banking…………………………………………………………………..... 18 - Usury…………………………………………………………………………………….. 20 - Wars and Finance………………………………………………………………………… 21 - The Federal Reserve System……………………………………………………………….. 22 - Islamic Banking a Myth…………………………………………………………………… 25 - Definitions of Money……………………………………………………………………... 26 - Famous Quotes …………………………………………………………………………... 26

3. PART THREE: The Restoration of a New Economy means the Restoration of Zakat - A Practical Step-by-Step approach to restoring Zakat……………………………………….. 31 - Amirate as opposed to Islamic Charities. …………………………………………………... 32 - Method of Payment………………………………………………………………………. 34 - Awqaf……………………………………………………………………………………. 34 - Fatwa of Shaykh Illish……………………………………………………………………... 36 - Case Studies……………………………………………………………………………… 37

4. PART FOUR: The Islamic Economical Architecture of Madinah - Introduction……………………………………………………………………………… 38 - About Gold………………………………………………………………………………. 39 - Gold and the law………………………………………………………………………….. 45 - Minting coins…………………………………………………………………………….. 46 - Setting prices for Dinar and Dirham‘s……………………………………………………… 47 - Other currencies…………………………………………………………………………... 48 - The Souk…………………………………………………………………………………. 48 - Qirad……………………………………………………………………………………... 49 - The Guilds………………………………………………………………………………... 51 - Markets in Europe………………………………………………………………………… 51


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- The Trade Bloc…………………………………………………………………………… 53 - The Wakala – The Coin Agent…………………………………………………………….. 54 - A Clear roadmap…………………………………………………………………………... 56 Model 1(Existing Economy).............…………………………………………………………. 57 Model 2 (FREE Blueprint)…………………………………………………………………. 58


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PART ONE

The Quranic Injunctions and the Seriousness of Riba

(with Hadith)

Terminology

Riba – To Increase, growth Riba al Fadl – Excess, in weight, count or measure. Riba al Nasa – Delay in transactions, prohibited in the Qur‘an as Riba al Nasiah Usury - In most dictionaries the following meaning will be found – ‗the lending or practice of lending money at an exorbitant interest‘, however over centuries the meaning has changed from the original reference which is ‗charging interest at profit of any amount‘. The change of definition of this term is what allowed usury to enter banking finance. Interest – From Interesse, meaning it is between in Latin Simple Interest – This is interest charged on principal of a loan only. Compund Interest - This is interest charged on the remainder which is compounded, so that unpaid interest is added to the balance due.


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The Seriousness of Riba

There are many ayahs in the Qur‘an warning mankind about the seriousness of Riba, these two ayahs from Surah Baqarah are perhaps the most admonishing of all the ayahs relating to Riba. There is no explanation of what Riba is in the Qur‘an, and for this we turn to the prophetic teachings.

Abu Hurayrah (radiyala anhu) narrated that the Prophet (may allah‘s blessing and peace be upon him), said: ―riba has seventy segments, the least serious is equivalent to a man committing incest with his own mother.‖

There are several hadith similar to the one above. Where Allah has said he will forgive all actions except shirk, but second to this in its severity is Riba, worse than Zina, Alcohol consumption, Gambling, Lying, Cheating etc. This is not to reduce the severity of the other sins, but to show how serious Riba is in comparison. From Jabir, may Allah be pleased with him, said ―The Messenger of Allah (may Allah‘s blessing and peace be upon him) has cursed the one who charges Riba, he who gives it, one who records it, and the two witnesses, and he said, ‗They are all equal‘. It is related by Muslim. In al Bukhari there is a similar hadith related by Abu Juhayfah.

Allah explains in the Qur‘an :

―O You who believe, Fear Allah and give up what remains of your demand for usury, if you are indeed believers‖ Surah Baqarah Ayah 278. And further –

―If you do it not take notice of war from Allah and his messenger. But if you turn back you shall have your capital sums; deal not unjustly and you shall not be dealt with unjustly.‖ Surah Baqarah Ayah 279.


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We don‘t need to look too far for examples of this today; banking finance involves giving Riba, taking it, recording and witnessing it. This has been cursed by the Prophet (may Allah‘s blessing and peace be upon him). Riba translated to usury, means excess. The fuqaha have translated the meaning of Riba to be excess stipulated in a transaction of exchange or in a loan, i.e Riba al Qarud – the usury of loans, Riba al Buyu – the usury of trade. However the above ayahs of Qur‘an are a strong warning and a severe admonishment and must be understood to avoid transgressing into the haram, and the punishment of Allah. This requires us to have certain knowledge and awareness of the rulings and leads us to the following questions:

1. What transactions lead to Riba? 2. How do we deal justly in our transactions? 3. How do modern transactions relate to these injunctions? 4. Are there any loans that are non usurious?

Understanding Riba

In order to answer this question we need to understand what Riba is first, and know its forms and faces. There are several types of Riba, one must be careful as to not idealise Riba as simply excess. In its most basic form Riba is excess, this type of Riba is known better as Riba al Fadl, It is essential to have a

―O You who believe! Fear Allah, and give up what remains of your demand for usury, if you are indeed believers‖ Surah Baqarah, Verse 278


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background understanding of these types of Riba as this knowledge will be later applied in how Modern Banking and Islamic Banking takes these forms. It is also important to know about the legal positions of both the Modern Scholars and the Traditional fuqaha to see where the arguments arise of tradition versus modernity. The other type of common riba is Riba al Nasa which occurs with delay. Therefore explaining Riba Fadl, ―I will loan you £100 today if you give me back £110‖, adding on 10% Interest. This is the most basic and common type of example of Riba, known in modern terms as Simple Interest. Explaining Riba al Nasa ―I will loan you £100 today if you give me 10% for each day over the period stipulated‖, i.e if the borrower is 3 days over the stipulated period he will pay back 10% on top of the original £100 loaned on day one = £110, on day two £110 x 10% = £121, on day three £121 x 10% = £133.10 and so on. This is known as Compound Interest and is the way modern banking operates. In his book ‗The Concepts of Riba and Islamic Banking‘ Imran Nyazee explains through the following diagrams how modern methodology differs from the traditional fuqaha in its understanding of Riba:


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Riba – According to Modern scholars

Rashid Rida

It is important to discuss a key player in the emergence of Islamic Banking, we will see how this modern methodology adopted in Islamic Banking, makes Islamic Banking the opposite of Islamic. Rashid Rida, a student of Imam Abduh Afghani, had forged a new interpretation of the understanding of Riba from the previous traditional scholars. Rashid Ridas model however was slightly different from above and outlined that the Qur‘an only prohibits Compound Interest i.e doubling and multiplying. The modern scholars take the view in the previous page and see that the only type of riba prohibited by the sunnah is Riba al Fadl i.e excess. The Qur‘an prohibits Riba al Jahiliyah or Nasiah which involved delay as explained earlier.

The problem with Rashid Rida and the Modern scholars is that there are no details in the Qur‘an about any transactions to explain how and when a

Riba

Prohibited by the Qur‘an Prohibited by the Sunnah

Primary Prohibition Secondary Prohibition

Compound Interest

Simple Interest

Riba al Fadl


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transaction becomes Riba. It seems more correct therefore that the Quranic Injunctions require the Sunnah to elaborate these prohibitions. Just like the fiqh of Salat, Sawm, Zakah, Hajj all require elaboration via the Sunnah texts, so too does Riba. Traditional understanding of Riba of the Ulema

The Traditional ulema have understood the fiqh of economy in the same way as understanding the ahkam of the five pillars of Islam, how one must pray, fast, pay zakah, and observe the Hajj i.e complimenting the ayahs of Qur‘an by sunnah explanation. The Hanafis have outlined a three level structure to understanding these issues. Firstly, identifying the governing

Riba

Prohibited Generally by the Qur‘an

Prohibition elaborated by the Sunnah

Detailed rules for Riba expounded

Resulting Prohibition

Compound Interest Simple Interest Other types of Riba


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texts in the Qur‘an as the general principle, secondly, once the general principle is identified the faqih must look for sub principles if required. After identifying sub principles the faqih must deal with the impact of these sub principles. The sub principle for example could be a rukhsa (concession in fiqh). For the reader we will provide here some sources of governing texts from the Qur‘an and Sunnah:

Qur‘an

There are 12 verses directly related to Riba in the Qur‘an, 7 of these are in Surah Baqarah here are two:

―Those who devour usury will not stand except as stands one whom the evil one by his touch has driven to madness. That is because the say ‖Trade is like usury‖, but Allah has permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (the offence) are companions of the fire; they will abide therein(forever)‖ Surah Baqarah, Verse 275 ―O You who believe! Fear Allah, and give up what remains of your demand for usury, if you are indeed believers‖ Surah Baqarah, Verse 278


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Sunnah

Commentators often explain that Dinars and Dirhams would be exchanged, like for like however as the coins wore through extreme use, the weight of the coins would not remain the same therefore cheating in the market place was occurring in the exchange of coins.

And

Malik ibn Aws from Ibn Umar (may Allah be pleased with him) that the prophet (may Allah‘s blessing and peace be upon him) said ‗Wheat for Wheat is riba , except for ‗here you are‘ and ‗here you are‘ (from hand to hand), barley to barley is riba, except ‗here you are‘ and ‗here you are‘ (from hand to hand), and dates for dates is riba, except ‗here you are‘ and ‗here you are‘(from hand to hand).

This explains the concept of Riba al Nasiah (delay), that a spot transaction ‗here you are ‗ and ‗here you are; is free from Riba and other than that involves delay. It is important to comment here that if there was a mutual agreement otherwise. i.e ‗here you are‘ and return me the exchange tomorrow, then there is no riba. If there is exploitation of any sort in the transaction this is the cause of Riba which is commanded on the prohibition and is severely punishable.

From Abu Sa‘id al- Khudri, who said ―The Messenger of Allah

(may Allah‘s blessing and peace be upon him) said ‗Do not sell

gold for gold, except when it is like for like, and do not

misappropriate one through the other; and do not sell silver

for silver, except like for like, and do not misappropriate one

through the other; and do not sell things absent for those

that are present (agreed by Bukhari and Muslim).


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How to deal justly in our transactions?

We are involved in a usurious finance system from the money we use, to the contracts we extend are haram. It therefore becomes imperative for us to operate as justly as possible on any sales transactions we may be involved in. Allah has commanded severe punishment for the one who is unjust with weights. Therefore it also becomes incumbent on us to know the Saa and the Mudd. These are volumes that were used prior to the secularisation of the Islamic Units. In the market place it was the Saa and the Mudd that was used to weigh commodities for exchange and sale. Lending any money must not involve any excess, delay or exploitation. An understanding of the commands of prohibition is the first step.

The prophet (may Allah‘s blessing and peace be upon him) used to make wudu with one mudd of water, equivalent to one cupped handful, and ghusl with one saa which is equivalent to three cupped handfuls.

How do modern transactions relate to these injunctions? All modern transactions are based on the principle of Fractional Reserve Banking (FSB), FSB is based on a fraction of the money as a reserve of what is being loaned. As we will see in Part Two – The History of Banking, that FSB is what modern banking rests upon. This principle requires a percentage as small as 2% of the money loaned to actually be sitting in the bank at any one time. Over carefully chartered studies the banks have known that at any single time only 2% of the money actually loaned is ever withdrawn at once. If however the withdrawal ratio was to increase slightly the banks have agreements with one another to loan each other in these times as the probability of all banks being used at the same time for high amounts is low. We have seen in recent time‘s countries like Argentina and Indonesia were in


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complete financial chaos when the countries currency was manipulated to complete depreciation. This was caused by the vast population to withdraw money all at once, going well over the expected financiers reserve ratio. When this happens the majority of the countries population loses their entire savings as they have in actual fact been used by the Banks to lend governments huge amounts of loans to finance wars, and finance the industrial sector. Are there any loans that are non usurious?

Qard Hasan – literally meaning a beautiful loan, is an agreement between two parties and the lender not stipulating any fixed time for repaying the loan. i.e it is given on the basis that the borrower can pay back the loan when it is easy for him/her, without paying anything extra.

Qirad – This is a loan given to a trader in return for an agreed profit, i.e profit and loss sharing. On the condition that if the trader loses, so too does the lender. Modern banks work on a principle which guarantees them no loss. This is explained further in the Islamic Trade Bloc discussion later.


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PART TWO

The History of Banking and the Myth of Islamic Banking

Now that we have explained a little about Riba and its seriousness it is important to understand the history of money, banking and how Riba relates to the two. Firstly we shall take a look at a chronological history of money to understand the dates and implications. This can also be useful for quick reference. A HISTORY OF MONEY Early Days : Barter: as Old as the Hills

This direct exchange of services and resources for mutual advantage is as old as man himself. As the number of commodities increase the number of combinations increase and exchange rates become unmanageable.


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3000 - 600BC Pre-Metallic Money

Whales teeth, Maize, Wheat, Dates, Barley, Cattle, Sheep and so on. The invention of coinage in Lydia and Ionian Greece Panning in rivers resulted in discovery of Gold and Silver for the Lydians and Ionians, the first Gold Coins were fashioned. The Lydians were great traders (Lydia is now modern day Turkey). 600 BC - 400 AD The widening circulation of coins Coins were in wider circulation around the world—Italy, Macedonia, Egypt, Persia, India, China. ISLAMIC ERA 684 –705AD (Ummayad Period)* Caliph Abdul Malik Bin Marwan orders the first Islamic Silver Dirham to be minted with his initials and the testimony of faith stamped. Three years later the first Islamc Gold Dinar is ordered for minting. *The periods here refer to traces of coinage. The islamic coinage begins in the 7th century, when the old sasanians were overthrown. Islamic coins consistently had inscriptions of the caliph in rule. The Ummayads and the Abbasids, Fatimids, Mamluks struck Gold Dinars and Silver Dirhams as a basis for their monetary system. 410 - 1485 AD Crusades The crusades financed their luxuries of the East in Gold and Silver. The wars cost the crusades vast amount of wealth.


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1485 - 1640 AD Printing : a new alternative to minting Founded in Europe as a means of debasing coinage, and causing inflations. China lost faith in paper money and were assured of the virtues of Silver as coinage. The rise and fall of the world‘s first paper money As old issues of notes became worthless, new issues replaced them until total outstanding issues became excessive. The coinage supporting paper money became difficult to manage and inflation was caused by too many local notes. Usury: a just price for money? The old and new testament is modified by the Jews for Political and Economical advantage of manipulation and exploitation of non-Jews and even fellow Jews themselves. Banking still foreign to Britain? Although Banking was still largely foreign to Britain in the beginning of the 17th century, it had become much less in 1640, the financial apprentice was about to set up his own brand of unmistakable brand of banking business. 1640—1789 The Birth of Banking Sir William Petty (1623—87) a musician stated ‗We must erect a Bank, which well computed, doth almost double the effect of our coined money‘, and so came the banks.


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1633 - 1672 The rise of the goldsmith banker Safe keeping of Gold, lending out depository money, transferring money from town to town. The Goldsmiths took advantage of unused, saved Gold by lending to others on interest. Promissory notes came into being. The money supply and the constitution Took centuries to establish rates of metallic money. The rules of the optimum amount of paper money required was decided over long period of experimentation. 1789 - 1914 Gold versus Paper No paper system could control the flooding of paper money, although the Gold standard was not fully established. Loss in Gold did not result in loss in paper. There was something going wrong. 1850 - 1914 The final triumph of the full gold standard This was the period of triumph for the British Empire. Britain was in power. Competing central banks caused swings in the monetary pendulum. 1914 - 1918 Financing the First World War The war caused heavy financial debt and a loss in the Gold Standard. 1951—1990 Inflation and the integration of an expanding monetary system


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The central bank has both the will and the means to control the supply of the money spending is not limited by the amount of money in circulation. Lending to Third World becomes common and mortgages are everyday language. 1775 - 1861 The official dollar and the growth Recognised as the world currency the dollar was supported by agriculture, mining, forestry, manufacturing et.c. When war broke out, the dollar became the standard currency. The national debt and the Bank wars Thomas Paine, 1776 states ‗No nation ought to be without a debt, for a debt is a national bond‘ 1900- 1913 From Gold standard to central banks The minimum amount of Gold a bank had to hold became a problem for banks against a ‗Greenback‘. 1914—1944 banks through boom and slump The outbreak of the First World War caused an emergency withdrawal of Gold. President Roosevelt confiscates Gold under Executive order making it illegal to buy/sell gold under any national crisis with penalties of violation. The public were asked to deliver gold at $20.57 an ounce, after gathering all the gold, it was later sold at $35 an ounce.


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1985 ‗Black Monday‘ Great Crash The dollar devalued by 800% and lost its purchasing power. 1992 First new Islamic Gold Dinar

At the Islamic Trade Fair in Birmingham with coins from the Communities of Granada and Brixton. 2002 Return to the Islamic Gold Dinar The Islamic Gold Dinar is minted once again in its original form and proposed to the Malaysian government to adopt as a trade mechanism to settle international transactions. Since this time the Malaysians have set up over 13 agents selling Gold Dinars as investment options throughout the states of Malaysia. The Gold Dinar is now minted in Dubai, Malaysia, Indonesia, Spain and other countries are showing interest. 2008 The Global Credit Crunch At the time of writing this booklet the global financial system is experiencing a new depression. Unemployment is rising. The purchasing power of the sterling has dropped. Commodities have resulted in price increase; the average family is tightening expenditure. £77 billion wiped off global stock market over night in January 2008, staples increase by as much as 181%.


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THE HISTORY OF BANKING

The previous chronology of dates provides a succinct summary of the history of money. It is important here to discuss a little more about the history of money, it is highly recommended to listen to the audio presentation of Tarek el Diwany :―How the Bankers Won the World‖.- available from Emerald Media Productions, on the Productions section of the Dallas Academy website – www.dallasacademy.org.uk. (or contact F.R.E.E directly). Long ago, the goldsmiths kept in their vaults precious metals, such as Gold and Silver coins, jewellery and other forms. The goldsmiths were completely entrusted with valuables. A receipt would be issued to the individual who deposited their gold to say how much had been deposited. An agreement had been made that the receipts could be exchanged for goods at the market place in other words passing on the ownership of the gold and silver in the vaults to the next recipient. At some point the goldsmith realised that people were rarely coming back for their gold and silver, and he was then able to issue out receipts of loans to people without actually having the equivalent ratio in the bank. In a very short time there were far more receipts in circulation than actual metal in the vaults. This was the first ever case of Fractional Reserve

President Woodrow Wilson

―A great Industrial nation is controlled by its system of credit. Our system of credit is concentrated in the hands of a few men. We have

come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world – no longer a

government of free opinion, no longer a government by conviction and vote of majority, but a government by the opinion and duress of small

groups of dominant men.

―I am a most unhappy man. I have unwittingly ruined my country.‖

(President regretted signing into law the Federal Reserve Act)


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Banking. In 1998 in the United Kingdom the required Reserve ratio was 3.1% this is currently 0%, i.e the banks have nothing in the bank against the money that we hold. The money we use today still bears a promise, this is a promise by the Bank of England and the Bank of Scotland that: ―I Promise to pay the bearer on demand the sum of…..‖, This promise still exists on modern bank notes like the previous receipts from the goldsmith. Where the promise is of £5, £10, £20 etc, it must be noted that of course the currency of the United Kingdom – Sterling was historically Silver, the Roman empire was built on Silver as was the British Empire. The £ sign is the sign for the Latin Libra, meaning pound, which is in actual fact the weight standard. So to put this in context the £5 sterling note that we hold is in fact a certificate from the bank to issue to us 5 pounds in weight of sterling silver. This promise is written on several currencies on the US dollar it was written: ―This note is legal tender for debts public and private and is redeemable in lawful money in any Federal Reserve bank‖ In the 1950s a Cleveland businessman decided to take this to the test in the US. He asked for redemption of a $20 bill, and was sent two $10 bills. He persisted and was sent a further two $5 bills for the $10, this continued and he was not satisfied with the definition of lawful money. It was later decided to remove this declaration and replace it with ―In God We Trust‖. On the Pakistani Rupee also this can be found to say ―Hamil Haza Ko Motalba Par Ida Karega‖, translating as the bearer will be issued this amount in rupees, which historically at the time of the Mughals was also Gold and Silver. Not long ago the Ashrafi was used amongst the Mughals a coin similar to the Gold Dinar. Throughout the world, Fractional Reserve Banking exists with varying reserve ratios. In his fascinating diaries In the 1300s the famous traveller Ibn Battuta set on his travels from Tangiers in Morocco, across the world. It is important to note here some of his observations. Throughout his travels he notes the use of


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Gold and Silver as coinage across the world, until he arrives in China and he comments on the strange use of a paper receipt being used in exchange of goods, with the emperors stamp. This was being used in the market commonly where the Gold dinar and Silver Dirham was unable to be used. In similar accounts of Marco Polo‘s travels comments were also made and notes made that this was the first introduction of paper receipts as a medium of exchange in Europe. Up until the 11th Century the English pound was 240 pennies, in 1666 this was debased to over 700 pennies to the pound. King Henry VIII after consulting his scholars had issued the 240 pennies to be further mixed with base metal ensuring less valuable silver and more devalued metals to be mixed. Thus the 720 pennies to the pound was established. The pound was debased, in value so the issuing of promissory notes was introduced by the Goldsmiths as a bearing of convenience, and a door to usury.

Usury

In the 16th Century John Calvin changed the definition of usury. Up until this time usury of any type was abolished. His reforming ideas allowed the Kings

―Thou shalt not lend upon usury to thy brother, usury of money, usury of victuals or usury of anything that is lent upon usury‖. Old Testament, Deuteronomy


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to tax people on interest, and make illegitimate profits on lending. When the definition of interest was reformed, together with the debasing of coinage and introduction of paper money, this was the recipe of a magic spell. Fractional Reserve Banking became the industry that would change the destiny of many to come. With a free will of an elect few, the oligarchs would have complete control over the interest rate, issuing of paper money and thus creating wealth from nothing. Gold was abandoned, shunned and kept in vaults, traded across the world for its worth in return of paper money. The highly controversial Fort Knox site where reserves of gold are said to be, was last audited in 1971, and since then Fort Knox has never been audited. Many believe there is no gold there anymore. In 1694 the Bank of England was found and the issue of paper money bearing the promise was introduced. Sir Isaac Newton in 1707 fought with the unions to re-align the Scots pound to the English pound which before this was 13-1 ratio, devaluing the Scots Pound. However Newton only managed to reduce the ratio to 12-1 after the union. Wars and Finance

―Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed‖. Dwight D. Eisenhower


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At Waterloo it was the House of the Rothschild‘s that helped finance the war against the seventh coalition. Amschel Meyer Rothschild in 1815 assisted Napoleon in what was a decisive defeat. This defeat had cost Napoleon £600,000 which was created out of nothing, and a great profit to the Rothschild‘s. After the Napoleonic wars the House of the Rothschild‘s grew rapidly as it was soon realised that war was a huge business at a guaranteed profit. At this time there were more names to become a banking cartel, which would form the banking hegemony which we know today. The wars were a definite banking success lending at enormous interest in what would become something that every government would need. So, at this we must realise that the Banks are independent from the government, an industry in itself which enables the government credit, just like the public is allowed credit to buy a house or a car etc.

If we time travel from 1815 to present day, we can see that what was loaned to napoleon at the time of waterloo in 1815, was a figure of £600,000, and the war in modern Iraq has cost the US $600 Billion. That is 1 million times more the cost to fight one nation during Napoleons times. We can also take a look at the present national debt of the United States of America at $10 Trillion. In comparison the national debt of the UK is over £600 Billion. A total of 1.7 trillion has been estimated for both Iraq and Afghanistan. That is

Napoleon Bonaparte

―When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.‖


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17% of the national debt of the US. This cost is used for the equipment, troop salaries, fuel costs, camp, base, food, clothing, protection and any other costs. Therefore we now know that wars are a great way to cause debt and secondly make money at lending. We can also see from this that the rate of inflation has depreciated the value of paper money to such an extent that the units of figures are continuously revised – million, billion, trillion…and so on. For every political move, we can see there is an economic motive and for every economic move there is a political motive.

The Federal Reserve System It was in 1910 that a meeting was held off the coast of Georgia, U.S. On an Island known as Jekyll Island it was at this meeting that the Federal Reserve was created. This island was privately owned by a few millionaires and was a resort club. This island was later bought by the state of Georgia. People were invited in secret and to come alone. Only after the establishment of the Federal Reserve was it known about the records of what happened on Jekyll Island. 7 men were present at this meeting, all of very high importance to provide banking experience and expertise. There are several evidences to support the matter of the formation of the Federal Reserve System. One such evidence is an article written by Frank Vanderlip, he was also one of the 7 invited to the meeting. He writes about the formation of the Federal Reserve

―I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue

of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The

issuing power should be taken from the banks and restored to the people, to whom it properly belongs‖.

Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802) 3rd president of US (1743 - 1826)


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System. All names were disguised, we must ask why? Vanderlip states if it were to be exposed publicly the bill about to be formed on Jekyll Island would not be passed by congress, as the purpose was to break the money trust. It was known that the public would never accept this deception. The Morgan‘s, Rockefellers, Rothschild‘s, are some of the names present. At the time they were fierce competitors in industrialism. However, at Jekyll island something was about to change. The agreement in this meeting must not be overlooked. The avoidance of competition would be the way forward and buying people out – A Banking Cartel was formed. They came into the idea of Joint Ventures, so anyone threatening their businesses would be bought out. This worked, and the meeting at Jekyll Island was successful, the Federal Reserve System was never to be led by government, this was a cartel legalised by law. This cartel went into partnership with the government for the benefit of both the cartel and the government. During the times of Henry VIII banking was practised in its basic usurious form, but it was this meeting at Jekyll Island in 1910 that formed banking in its elitist format as it is known today. The mechanism of money creation must be analysed to understand why this meeting and the formation of the Federal Reserve System was so important and such a lucrative proposition to any body to succeed in. The method of banking however simple it sounds, that‘s how it is – simple. For example, congress needs money, taxes are not enough, congress needs $1 billion and asks the treasury, treasury then ask the Federal Reserve building and the officer signs a cheque for $1 Billion to the Congress official. This allows the government to ask for money at any time from the Federal Reserve System. Let‘s take a look at how the bank works: Money Created out of nothing is spent by the government, but the Federal Reserve System earns interest on the loan, as it is legalised, interest on nothing is very attractive. As new money is created the strength or the purchasing power reduces, I,e Inflation, the appearance of rising prices, it is important to


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note that the price of things do not rise but the power of money weakens. With Gold this does not happen. So who wins if we, the average man on the street loses purchasing power?, at the time of full value before the ―inflation‖, as this was created by government and the Federal Reserve System they have both gained by the value of the purchasing power. The loans and interest is where the gain is found. As economy contracts, more problems are found. Expansion does not last; people lose their assets and investments. The banks will never accept a loss as this is the way it was planned on Jekyll Island. Several terms can be found on the high street bank to legitimise all deceptive forms of risk based prevention schemes. The banks will always scale the customer on collateral. You provide security, they provide the loan. If you cannot pay back the loan – You have already signed the dotted line to hand over your security – your business, your house, and your savings. The name of the Federal Reserve System - Federal to make it sound government operational, Reserve makes it sound like there are reserves somewhere, system allowed the people to think that there is a system of banks. The banks work on deposits, every time a loan is created a deposit is created. When a worker puts in his salary the bank receives an asset. Commercial banks hold this money as notes and coins and must have liquid assets that are available for immediate and easy access this is important for transfers into cash. By lending 20 times more than the banks actually have they make 200% profit, based on an interest rate of 10% and on £100 they loan £2000 at 10% interest they make £200, i.e 200% profit. This is a calculation on simple interest, if we compound interest as the following example shows:


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On 8% nominal interest: It implies an effective quarterly interest rate of 8%/4 = 2%. Start with £100. At the end of one year it will have accumulated to: £100 (1+ .02) (1+ .02) (1+ .02) (1+ .02) = £108.24

―Money is something which is not permissible to hire‖ Imam Sahnun, Al Mudawana al Kubra It was this very banking spell that broke the Islamic Khalifate. This mathematical formula has equated into Trillions of diluted dollars and pounds into the financial system that has caused present day purchasing power to weaken immensely. It has given us a standard of life that embraces freedom but deceives us into a slavery that is a trickery of hand. The trickery has caused a shift in society where the Rich have never been richer and the poor never been poorer. Historically there has never been such a distance between the rich and poor on a global level. This is about to change with the coming of time. Islamic Banking a Myth Step by Step you shall follow them……. Abu Sa'id al-Khudri reported Allah's Messenger (may peace be upon him) as saying: You would tread the same path as was trodden by those before you inch by inch and step by step so much so that if they had entered into the hole of the lizard, you would follow them in this also. We said: Allah's Messenger, do you mean Jews and Christians (by your words) "those before

A time is certainly coming over mankind in which there will be nothing (left) which will be of use save a dinar and a dirham‖ The Musnad of Imam Ahmad ibn Hanbal


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you"? He said: Who else (than those two religious groups)? -Sahih Muslim, Hadith 6448 The fine tuned mechanism of Banking destroyed the Khalifate and introduced the concept of Islamic Banking within the Muslim world. The reader must take into context to begin with, that any present monetary system is founded upon Riba, and unless the foundation is replaced and found upon a just riba free system anything within this will be tainted with riba. We cannot accept a system that is 50% Halal and perhaps 50% Haram or 80% Halal and 20% Haram. The shariah allows only a 100% Halal system that is to say if we even allow the concept of percentage in the equation, as it is either Halal or Haram. Let‘s examine the technicalities that make Islamic Banking even worse than conventional banking, since conventional banking has already been indicated as Haram, then the so called myth of Islamic Banking if proven guilty becomes hypocrisy, like a wolf in sheep‘s clothing but only twice. There are several worldly scholars of great reputation who have allowed their name to be put to Islamic Banks. Does this mean they are wrong? Or had they never thought about laying the foundations again, as it was prior to the destruction of the Islamic Khalifate. The Islamic Bank is institutionalised as a legitimate entity. HSBC, Citibank, and the World Bank amongst others are heavily supporting Islamic Banks, perhaps another reason to question the formation of the myth. Murabaha,- a sale. Two sales in one is a disguised method of profiting from usury. One bank defines this as a‖Mark-Up. The bank purchases in its own name the goods the buyer wants. It then sells the goods to the buyer for a profit. The buyer then settles the payment to the bank with instalments. To an outsider this profit is simply a loan with an interest rate, but it has been disguised to be profit. Imam Malik (Radiyala Anhu) prohibits two sales in one in the Muwatta, under the heading Prohibition against two sales in one:


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―Yahya related to me from Malik that he heard that the Messenger of Allah, may Allah bless him and grant him peace, forbade two sales in one. Yahya related to me from Malik that he heard that a man said to another, ―Buy this camel for me immediately so that I can buy it from you on credit‖, Abdullah ibn Umar was asked about that and he disapproved of it and forbade it. Islamic Banks buy houses on this principle and sell it to the buyer in instalments. The critical matter here is that there is no deception in the price. When a cost is included then the seller becomes entitled to make a mark up on it. Murabaha can also be a finance contract i.e a loan in this case it would be treated differently. Divisions of responsibilities and profits would be clearly outlaid. (Further information on this can be found in the masterpiece by the eloquent scholar Professor Umar Ibrahim Vadillo‘s ―Esoteric Deviation in Islam‖). Definitions of Money Banco – A Latin word meaning table, where money was traditionally exchanged over Money – The name of the Greek goddess Juno is Moneta, the possessor of wealth and fortune. Store Value - something such as money that keeps its value and can be accepted as payment for a current purchase or for a purchase at a future date Intrinsic Value – From a philosophers definition intrinsic value has traditionally been thought to lie at the heart of ethics. Philosophers use a number of terms to refer to such value. The intrinsic value of something is said to be the value that, that thing has ―in itself,‖ or ―for its own sake,‖ or ―as such,‖ or ―in its own right.‖ Extrinsic value is value that is not intrinsic.


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Some Famous Quotes Albert Einstein ―The crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career." Sir Winston Leonard Spenser Churchill "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." John Kenneth Galbraith "Under capitalism, man exploits man. Under communism, it's just the opposite." Bertrand Russell British logician and philosopher Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate.. Karl Marx and Frederick Engels ―Capitalism reeks blood from every pore‖


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Niccolo Machiavelli

―For the great majority of mankind are satisfied with appearances as though they were realities, and are often more influenced by the things that seem than by those that are.‖

President James Madison

―History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control of governments by controlling money and its issuance.‖

President Abraham Lincoln

―The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy.‖

President James A Garfield

―Whoever controls the volume of money in any country is absolute master of all industry and commerce.‖

The Rt. Hon. Reginald McKenna – Chancellor of the Exchequer

―I am afraid that the ordinary citizen will not like to be told that the banks can, and do, create money. The amount of money in existence varies only with the action of the banks in increasing and decreasing deposits and bank purchases. Every loan, overdraft, or bank purchase creates a deposit and every repayment of a loan, overdraft or bank sale destroys a deposit. And they who control the credit of a nation direct the policy of governments, and hold in the hollow of their hands the destiny of the people.

Sir Josiah Stamp – Bank of England

―Banking was conceived in inequity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create deposits,


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and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the costs of your own salary, let them continue to create deposits.‖

Supreme Court Justice Felix Frankfurter

―The real rulers in Washington are invisible and exercise power from behind the scenes.‖

Louis T. McFadden, Chairman of Banking & Currency Committee

In 1932:

―The truth is the Federal Reserve Board has usurped the Government of the United States. It controls everything here and it controls all our foreign relations. It makes and breaks government at will …‖

In 1933:

―Roosevelt has brought with him from Wall Street James P. Warburg, son of Paul M. Warburg, Organizer and first Chairman of the Board of the Federal Reserve System…‖

In 1950:

―This same Warburg had the audacity and arrogance to proclaim before the U.S. Senate: ‗We shall have World Government whether or not we like it. The only question is whether World Government will be achieved by Conquest or Consent‘.‖

Senator Barry Goldwater

―Most Americans have no real understanding of the operation of the international money-lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States.‖


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Henry Ford

―It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.‖

Benjamin H. Friedman

Letter to Dr. David Goldstein dated October 10, 1954

―The history of the world for the past several centuries and current events at home and abroad confirm the existence of such a conspiracy (to destroy Christianity and obtain global power). The world-wide net-work of diabolical conspirators implements this plot against the Christian faith while Christians appear to be sound asleep. The Christian clergy appear to be more ignorant or more indifferent about this conspiracy than other Christians … It seems so sad.‖


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PART THREE The Restoration of a New Economy means the

Restoration of Zakat

The Men and Women believers are friends of one another. They command the right and forbid the wrong

and establish the prayer and pay Zakat and obey Allah and His Messenger.

They are the people Allah will have mercy on. Allah is Almighty, All Wise

Qur‘an 9:72

When the Messenger of Allah (Allah‘s blessing and peace be upon him) was deceased and Sayiddina Abu Bakr appointed Khalif, some Arab tribes became apostates. Sayiddina Ùmar said to Abu Bakr (Radiyala Anhu), "Why would you fight these people while Allah's Messenger (Allah‘s blessing and peace be upon him) said: I have been directed to fight against people until they testify that there is no god but Allah. Whoever professes it is granted full protection of his property and life except for a right cause and his (other) affairs rest with Allah?" Upon this Abu Bakr (Radiyala Anhu) said, 'By Allah, I would definitely fight against those who make a difference between Prayer and Zakat, for it is the obligation upon the rich. By Allah, I would fight against them even if they withheld a cord (used for hobbling the feet of a camel) which they used to give to Allah's Messenger (peace be upon him) (as Zakat).' Ùmar said, 'Then I became convinced that Abu Bakr was right.'" Sayiddina Abu Bakr has compared Zakat to the prayer giving it its due right, where has this eminence come from? In the Qur‘an the word Zakat is mentioned over 30 times, and most of these instances are twinned with Salat,


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almost as if they are two sides of the same coin. But how is it that people do not give Zakat and its fiqh its due diligence? What we need to become familiar with is terms and understanding of: 1. The Zakat Payer 2. The Zakat Collector and its administrative judicial 3. The Zakat Recipients in all eight categories as stipulated in the Qur‘an 4. The means of payment and its importance, how it is linked in entirely with the course of this paper. (It is highly recommended to the reader to read the only complete and entirely applicable work of Shaykh Abdalhaqq Bewley – Zakat : Raising a Fallen Pillar, much of this chapter is based on his work as there are very few scholarly works as complete as this. We shall also examine some practical steps to implementation and case studies to illuminate this). A Practical Step-by-Step approach to restoring Zakat There are several presentations that have been given; seminars and workshops run on the fiqh of zakat. Much of this is done as a run up to the month of Ramadhan as people prepare annually to give their Zakat to charities who collect and distribute Zakat (much of the time outside the country it has been collected in). However, the basis of these presentations is founded upon working within the present monetary system. In some cases like Islamic Banking this also becomes problematic, where the foundations are to be replaced with something halal. There are 5 things that make Zakat valid:

1. Intention 2. Collection 3. Local distribution 4. Correct time 5. Correct Elements


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Zakat is to be collected by a community leader that is an Amir who has been elected. Zakat is to be distributed locally in the community to the ones in need (to be examined further) Zakat is to be given in the correct elements meaning, the correct age and health of the livestock, good crops, and the right weight of gold and silver as in monetary wealth. You may be thinking now that three out of the five mentioned above are not being fulfilled in our present time therefore our Zakat is invalid. Well the truth of the matter is that the monetary system ended the Khalifate, but to elaborate on this it is Amirate, local leadership that was destroyed before the Khalif was finally removed. To restore Zakat as we may say is to restore leadership and to restore leadership then is to restore Zakat. It then becomes incumbent upon us to ensure we have an Amir. The Amir is a leader who has vision and if possible a clear understanding of the Qur‘an and Sunnah, or in cases where the Amir is not an alim, he must at least have someone at his disposal who can guide him in matters pertaining to Shariah.

Imam Qurtubi further explains in his tafsir about the following verse:

"O you who believe! Obey Allah and obey the Messenger and those in command among you. ..."Qur'an, 4, 59, That the ayat is an order to "obey the Sultan with respect to seven things: the minting of the dinar and the dirham, fixing weights and measures, legal judgments‘, Hajj, Jumu'ah, the two Eids and Jihad."


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Now, according to this injunction the Sultan/Amir once he has been elected should mint the dinar and dirham. As mentioned already this has been done by individuals, and these coins can be purchased with paper money from Thomas Cook Rostamani in Dubai, at the airport and other outlets within the emirates. Similarly there are several agents selling minted Dinars to similar specification throughout Malaysia, Indonesia, Granada (Spain), and soon other private entities throughout other countries will also emerge making the coins readily available throughout Muslim lands and wherever Muslims may be in the West. This now allows the purification of Zakat to be fulfilled just like Wudu purifies one for the prayer; the coinage has a similar parallel. Amirate as opposed to Islamic Charities. Allah says ―Collected sadaqa‖, therefore Zakat is collected. Collected by who? It is a well documented fact that Sultans and Amirs existed throughout Muslim lands and collected Zakat, Islamic Charities are an innovation. Institutionalising Islam has become the only way today‘s Muslims understand operating in. Returning to the Book of Allah and Amal of Ahl‘al Madinah is the only way to restore Zakat and all its requirements. What is wrong with Islamic Charities? a) they are an innovation b) they are not an elected governance c) they are not collecting Zakat since they are not elected d) they are being given Zakat in paper money which is not halal e) they are not distributing Zakat locally, but internationally. f) The Zakat they are given is not distributed entirely and partially funds their activities, admin etc. For Zakat to be restored, we have the coinage, we can elect an Amir, and we can distribute the Zakat locally. However, there is an argument that Zakat should be given to the needy and there are no needy in Britain or the West. This is not the case, several deprived areas in each city and town can be found in Britain, where people live in slums, and severe conditions occasionally


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where Muslim families are living on a thin line. Overseas Students are burdened with high fees and are often in difficulty. Much of Britain is swamped in debt, with people struggling to fulfill payments. The Rich and poor divide is not as clear, therefore those eligible to pay Zakat have been negligent to know about the impoverished Muslims living nearby. If we were to look at the eight recipients now: Allah says: ―Collected sadaqa is for : the poor, the destitute, those who collect it, reconciling peoples hearts, freeing slaves, those in debt, spending in the way of Allah, and travellers. Qur‘an 9:60. The Poor - as we have mentioned in a city like Edinburgh alone there are at least 5 council slums where Muslims are resident living on benefit from the government. The Destitute - some of those living in these slums, students or people in Asylum. There are several other categories of people who can fall under this banner. Those who collect it – the Zakat Collectors and distributors are also eligible for Zakat. They must be well versed in shariah. Reconciling peoples hearts – This can apply to new Muslims to strengthen them in their faith. On occasions zakat can be given to non-muslims in times of war where they may benefit the Muslims. Freeing Slaves – Some slaves can buy their freedom from their masters with Zakat money. However this does not apply to our current situation as we have no slaves to free.


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Spending in the Way of Allah – Zakat money here is generally understood to be used in times of warfare for equipping the Muslims with adequate fighting equipment. Travellers – Zakat money here can be used for those travelling in need. Today people travel to give talks and seminars about lecturing on Islamic topics, or generally to help someone else. We have now defined the eight recipients briefly, and can justify that Zakat can be paid locally and to an Amir, and with Gold. This fulfils two of the points that are currently being ignored by Zakat payers. Let‘s now examine the element - that is the method of payment. Method of Payment Zakat is either paid in livestock, crops or monetary wealth. Unless we are farmers the method of payment is monetary wealth. For our discussion lets assume that monetary wealth is the default payment for the majority of readers are non-farmers. This monetary wealth that we are discussing is paper money – pounds, dollars, rupees, Euros - paper currency. We have already established the nature of paper money and riba, therefore it is clear that the halal currency for Muslims must be something other than paper money. This is discussed in detail in the final chapter of this paper. But before we close this chapter we must discuss a final institution – awqaf and close with a case study demonstrating the practical implementation of Zakat. Awqaf The importance of restoring zakat, means restoring a halal currency for Muslims that is riba free. If this is implemented then leadership is restored in


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communities, which allows for a biological action that will change communities not only in Britain but around the world. For the Muslims restoring this incumbent responsibility is a priority. In doing so, we will be restoring a halal currency, which means trading in a currency that has real worth and no riba. This will do the following:

- Normalise society and reduce the divide between rich and poor through a non inflatable currency.

- Reduce burden of debt in society as debt is created by interest – riba.

- Restore employment through alternative means of non monopolistic entities which are effects of a riba currency.

- Restore trade over riba which as Allah says :

"Allah has permitted trade and forbidden interest." [Al-Baqarah 2: 275].

When a human being dies, his work comes to an end, except for three things: ongoing charity, knowledge benefited from, or a pious son who prays for

him‖(Hadith) From this the scholars understand ongoing charity as meaning an endowment—waqf or the plural Awqaf. Waqfs were vital to the religious parts of the society before the establishment of modern states in the Muslim world. But even in the modern society Waqfs are important ways of financing the administration of mosques and markets. Awqaf is an institute that replaces the government role of education, health and social welfare. It is based upon privately founded buildings that can receive a rental income and assist in paying for the education, health and


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social welfare. Even up to the 20th century awqaf has played a major role in society. The general purpose of a waqf is to be generous and benefit the common good. Awqaf paid for salaries of teachers, madrassas, universities, clinics, gardens, libraries. As greatly researched by professor Mehmet Maksudoglu, he states in his contribution on waqf in Sultanniya, by Shaykh Dr. Abdalqadir as-Sufi that the awqaf under the Ottoman Khalifate provided for :

1. Jami‘ mosques and musallas 2. Madrassas, schools, libraries, zawiyyas 3. Fountains, ponds, smoothing of roads 4. Caravanserais (for markets), hospitals, cemeteries, meadows for cattle 5. Waqfs for the Haramayn ash- sharif 6. Waqfs dedicated for teaching hadith, tafsir, fiqh etc 7. Waqfs for reciting the Mawlid 8. Waqfs for food to break fast during ramadhan

This is just a short list of some of the dedicated waqfs that existed in Turkey under Ottoman rule. Fatwa of Shaykh Illish Before the demolition of the Khalifate all Zakat was collected in Gold an Silver. When Paper Money was first introduced a leading Shaykh was questioned about the payment of Zakat with paper. The following fatwa was issued and the original manuscript can still be found in Arabic, here is a translation:


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Shaykh Illish wrote: "If the Zakat was obligatory by considering its substance as a merchandise, then the nisab would not be stipulated according to its value but according to its substance and its quantity, as is the case with silver, gold, grain or fruits. Since its substance [paper] is irrelevant [in value] in respect to the Zakat, then it should be treated as the copper, iron or other similar substances.' For those not familiar with the Fiqh on Zakat, Here is a quote from the Se'adet-i Ebediyye or "Endless Bliss" written by Husain Hilmi Effendi (the founder of Ihlas Foundation) in 1956. It is a book supported by the people who use the name "Ahl al-Sunnah"and it can enlighten the understanding of our "de facto" 'alims. Se'adet-i Ebediyye is a book prepared according to the Hanafi madhhab. Here are the relevant quotes: "the zakat of paper money is to be given in gold. It cannot be given in paper

money" "It is haram to accept any money which is not gold or silver as zakat or kharaj

[from Harun Rashid]"

The return to the payment of zakat in gold and silver is an essential part of the re-establishment of Islam. We must be particularly aware of those who say 'it is not practical to pay zakat in gold and silver'. This is a false argument, not the issue. The issue is the fulfilment of Allah's Law. We must work towards the establishment of the Law.


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Case Studies For Zakat to work in gold and silver the following are required:

A) Dinar Agent B) Zakat Payers C) Zakat Collectors/Distributors and of course an Amir D) Zakat Recipients

During Ramadhan of 2004, there have been several cases of individuals who have learned about the restoration of Zakat, the Dinar and the Dirham in the city of Edinburgh, Scotland. A Dinar agent has been present. With the price of gold at that time an agreed price was decided, for those who would pay their Zakat by conventional means had exchanged their paper money for Gold and Silver coins with the agent. Now that the Zakat payer had Gold and Silver to pay for Zakat it has been handed over to an Amir who was collecting the Zakat. The transaction which is to be purified by the handing over the Zakat in its legal form had been fulfilled. The Zakat collector can now either hand over the Gold or Silver coin to the eligible recipient, or in cases in Edinburgh the collector had made it easy for the recipient and exchanged the gold back into paper for the purpose of practical usage of the Zakat. As you will see this is a part restoration of Zakat, meaning the recipient had not received the gold or silver. You may ask why? If a trade bloc had been established allowing a full circle to be made between supplier – purchaser – consumer, then of course Zakat and Trade would be completely restored with the Dinar and Dirham, but this is not the case as Gold and Silver are not legal tender, and the purpose of this paper is to act as the yeast in the making of the bread, meaning the implementation of a trade system.


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PART FOUR The Islamic Economical Architecture of Madinah

Introduction We are now led on to our final chapter. The reader must realise now that the Muslim position on Islamic finance is based on a currency, which is Just, stable and Halal by shariah. Historically, Muslims across the world have used – date stones, whales teeth, barley, sugar, Gold and Silver and many other forms of exchange. The Prophet (May Allah‘s blessings and peace be upon him) used the coins of the Byzantines, which were the Drachmus and the Denarius, Gold and Silver coins. During the latter part of the Prophet‘s (May Allah‘s blessings and peace be upon him) lifetime, it was these coins that were adopted as the sunnah practise. Just like the Qur‘an never being bound in a mushaf during the Prophet‘s (May Allah‘s blessings and peace be upon him) time, and many other actions it was necessary to adopt a way that would become more accepted for the growing Muslim communities around the world as Islam spread rapidly during these times from East to West. It is important to stress here, that the following chapter is based then on an accepted sunnah that was never questioned, gold and silver as a currency. The reality is that we must represent freedom, and it is in choosing this symbol of freedom that we must strive for. However, in a time where stability and choice is but a mere fallacy we shall attempt to demonstrate how Gold has had unprecedented stability of purchasing power.


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About Gold

There are several evidences against using ―representative‖ mediums such as paper rather than the medium itself, these were outlawed and prohibited. Let‘s look at what some scholars have to say about Gold and Silver: Imam Ghazali (RA) in a translation of Ihya Ulum Uddin says the following: In the Book of Constructive Virtues, under the heading ―Gods Plan in creation of Gold and Silver‖ Gold and Silver are two gifts of God and by their help all worldly acts are smoothly done. These are nothing but stones and have got no value of their own. People want to have them, by their exchange; commodities of the world can be purchased. There are several things which he (man) cannot gather and several things for which he has no necessity. For example, a man has food, but no riding camel. He who has a camel has necessity of food. So between them there is the necessity of exchange of these two things and fixation of their value. But value of these things is not equal. Therefore Gold and Silver work as judges through their medium. Ibn Battuta In the 1300s the traveller Ibn Battuta mentions the common use of the Dinar and the Dirham.


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The Gold Ashrafi During the time of the Moghuls the Gold Ashrafi was used for trade much like the one above. This is an image of a coin used in Babars times and was minted for a special occasion as a gift.

Saudi Riyal On the Saudi Riyal King Fahad can be seen with an image of the Gold Dinar minted by the Mamluks.

One only has to open the books of Islamic History and Hadith and the mention of the Dinar and Dirham can be found in all these sources. Allah Almighty himself in the Qur‘an also mentions the Dinar in word:


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―And among the followers of the Book there are some such that if you entrust (of them) with a heap of wealth, he shall pay it back to you; and among them there are some such that if you entrust one (of them) with a Dinar he shall not oay it back to you except so long as you remain firm in demanding it; this is because they say: There is not upon us in the matter of the unlearned people any way (to reproach); and they shall tell a lie against Allah while they know‖ Surah Al Imran (75). Amongst the Hadith of Bukhari, in the Sahih Volumes, under the heading of Miracles the following hadith can be found: "Narrated Ùrwa: That the Prophet gave him one Dinar so as to buy a sheep for him. Ùrwa bought two sheep for him with the money. Then he sold one of the sheep for one Dinar, and brought one Dinar and a sheep to the Prophet. On that, the Prophet invoked Allah to bless him in his deals. So Ùrwa used to gain (from any deal) even if he bought dust Bukhari 4.836 What this tells us is that 1400 years ago during the time of the Prophet Muhammad (may Allah‘s blessings and peace be upon him) there was an expectation that one Gold Dinar (which we know from various sources weighs around 4.25 grams of Gold) would buy you one sheep. In 2002 when I first came across this Hadith, a close friend and teacher of mine Dr.Yasin Dutton examined the price of a sheep in various parts of the world – Algeria, Wales, Pakistan, Mali, Nigeria. When translated into pounds sterling the value equated between £35 and £40. This is the first incredible point in this examination that the value of a sheep was consistent throughout the world, but what was more important was that at that time, 4.25g of Gold (that of a Gold Dinar) was worth £35 Sterling!!. That has demonstrated that against a weight of gold 4.25g the purchasing power after 1400 years has remained relatively the same. Where One Dinar could buy you a sheep at the time of


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Prophet Muhammad (may Allah‘s blessings and peace be upon him) and the purchasing power of the same amount of gold can buy you the same. Furthermore, in present day (January 2009) the price of one Gold Dinar is around £70 - £80, demonstrating that over 7 years from 2002, the price of Gold has NOT become more expensive, but inversely to the surprise of many this means that £ Sterling has devalued in purchasing power by over 100%! To confirm the stability of gold over time even further, after these 7 years a sheep was valued at between £70 - £80 : The Value of a Gold Dinar!!, so this demonstrates the purchasing power of Gold over time to be stable and strong. This is a very good condition for a practical currency. Roy Jastram a professor at Birkeley California, U.S in 1976 periodically observed the purchasing power of Gold against a basket of commodities at intervals from 1560 to 1976. He demonstrated how stable the metals purchasing power is. A similar comparison was then made with the US Dollar over a period of 200 years. What can be noticed here is that from 1500 to 1800 the purchasing power of gold demonstrates great stability until the introduction of paper money, inflation and the great crash of 1929 was experienced. The chart over page illustrates something similar to this.


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The Gold Dinar is but a piece of metal, a material something only because we feel its worth. This worth has been justified by mankind in his most primitive habitat. The Lydians 3000 – 600 BC were using gold and silver for trade. The Amazonian Indians have bathed in gold in worship recognising its high worth. It is a metal that has been fought over for centuries, worshipped, and in modern times kept in a vault to prevent its real use in order to control and manipulate the destiny of people by the magical spell of banking finance. Gold has also been used in modern times in the electronic industry for its properties as a highly conductive metal that is free from corrosion. However, it is now in our hands to put this back into its correct use as Allah has planned.


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The Gold Dinar and Silver Dirham were standardised in weight and size as follows during the time of Caliph Abdul Malik Bin Marwan during the 7th Century. Although Umar Ibn al-Khattab established the known standard relationship between them based on their weights: "7 dinars must be equivalent to 10 dirhams." Gold Dinar – 4.25 grammes in weight Silver Dirham – 3 grammes in weight

Gold Variations

Three main formats are commonly available, each having their own value.

1) Buillion

Raw form, ingots or cast. Available from Gold specialists. There is minimal labour overhead, hence the cheapest to buy and sell.

2) Jewellery

Can vary in purity as this is a process form of the metal, shaped and worked on, often with additional gems, stones or decorative. Generally the most expensive form of buying the gold for labour costs added. Available at Jewellers and pawn shops.

3) Coinage

The most common form for investment, as it represents memorabilia, history and its value as shaped gold. Coinage is generally the second in price after buillion, and slightly cheaper than jewellery. Although overheads and labour charges are carried over to the customer when purchasing coins. Often, the most convenient form and easy to carry.

Purities

Most Common: 24K, 22K, 18K. The Karats represent parts in 1000.


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24K is next 1000 parts in 1000, i.e 100% Gold and can be very soft, sometimes used in Jewellery, although can be delicate. The most expensive since its the purest grade. Often found in Indian Jewellers.

22K represents 917 parts in 1000 or 91.7% pure Gold, although can also be 916 or 915 parts in 1000. The remaining 83 parts can constitute Copper or Silver, sometimes both. The quantity of either Silver or Copper can affect the colour of the Gold. Where more copper results in a more reddish coin, and the Silver a more Whitish coin. 917 of course containing more parts of Gold has a deeper yellow colour.

18K represents 750 parts in 1000, i.e 75% pure Gold and the remaining Silver/ Copper. This is often the most common form found in western retail outlets in jewellery.

Most Coins are 22K Gold, allowing only the additive to maintain the form of the coin. This makes the coin durable and for centuries this has proven the case.

Chart from Ashanti Gold by Professor Edward S Ayensu

% Cu

Au

80

60

40

20

20

40

60

80

Ag

20 40 60 80

Cu

% Ag % Au

18ct

14ct

9ct


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The chart above represents the variation in colour based on percentage of Gold and other metals which it is alloyed with. When Gold is mined it comes clustered with large amounts of Copper and Silver. For example 9ct Gold has 35% Gold and 65% other metals such as Copper and Silver in varying amounts. This chart can be used as a guideline for practical use. So the overall colour of 9ct gold coins will be much paler than that of 18 or 22 ct gold coins.

Testing for Authenticity

There are several methods adopted from civilisation to civilisation. The Mongolians blow on the coin and hold the coin to the ear listening and recognising its vibration. Others toss the coins with their nail and listen to the twang from the flick. The people of the Indian subcontinent are known to bite the metal to check for its softness. Jewellers use a practical touchstone which when the metal is rubbed on should leave behind a trace. The shade of the trace can also tell the trained eye the purity of the gold. Some modern means are also in discussion such as holograms to authenticate the mint hallmark. However this could be expensive until quantities reach sustainability.

Gold and the Law

Before embarking upon making our own coins, let‘s take a look at what the law of the land has to say. Legal Tender is a term used that has a very narrow technical meaning in relation to settling a debt. (It is usually defined as Government money) As long as the debtor pays in legal tender the exact amount he owes under terms of the contract which of course can be gold. It may be a surprising fact, but Scottish and Northern Irish notes are actually


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not legal tender in England and Wales the acceptability is down to the parties involved.

Therefore if two parties wish to exchange gold for furniture or clothes, then as long as both parties agree, this can be seen as a form of legal tender. However, it becomes illegal only when Gold is imposed as a currency and the only means of acceptance in a business. Gold sovereigns are still legal tender, and if you wish to accept Gold Sovereigns this is perfectly within the law of the United Kingdom. Readers may want to explore the law of the land they are in, to re-use the gold coins that were previously in circulation prior to bank money.

In the United Kingdom the HM Customs and Excise issue a booklet, which can also be downloaded from their website VAT – Investment Gold Coins. Investment gold coins are exempt from VAT. The book defines an Investment Gold Coin as the following:

1. The purity of the coin must be more than 900 thousandths. 2. The coin must be or have been legal tender in its country of origin.

3. The sale value of the coin must not exceed 180% of the open market value.

If we apply the above to the Gold Dinar, then: 1. The purity of the coin is 917 thousandths.

2. The coin has not been legal tender in its country of origin. 3. The sale value is not more than 180% of the open market value.

The Gold Dinar is minted in Indonesia, Malaysia, and Dubai. It is not considered legal tender in any of these countries. According to this definition the Gold Dinar will be subject to VAT if imported into the UK.


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Minting Coins

Since Gold Dinars are not VAT exempt we are now faced with two choices, either we use existing VAT free coins or we mint our own coins. Both these options are viable. Now, minting coins can be as simple as acquiring a fly press, here is a fly press:

The two weights at point 11, are used when swung with a handle point 10 to drive a shaft down at speed, towards point 6, where the target is placed. The fly press can be used as a blanking machine to cut, stamp and emboss and deep drawing. For the purpose of a coin, this requires a die to stamp an image i.e embossing, and then cutting. This method although fairly crude will not achieve the finishing i.e knurl on the edge of the coin which adds to the cosmetic of the coin. Also this method produces scrap that needs to be recycled. Another method is to have the coins blanked and finished elsewhere with only an embossing operation. It would be an interesting experiment to strike existing silver coins and beaten to a blank face, and then struck with a new image, say ―The Edinburgh Pound‖ or ―The Glasgow Pound‖. There are of course options of sub contracting minting jobs to specialist minters; two in Britain are the Tower Mint in London and the Royal Mint in Birmingham. However the cost of minting a few hundred will


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not prove economical as the outlay of the design and dies to manufacture are at least £1000. Hence the cost of the Silver will be more than the actual worth of the coin due to excessive overheads, which drive the coin to being more of a souvenir than a useable currency. The fly press method although crude is the best starting point, fly presses can be picked up in auction for as little as £100 - £200 as they have been abandoned since high tech, state of the art machinery have overtaken them for the production of blanked and embossed components.

Setting prices for Dinar and Dirham‘s

As we have reviewed the value of a Dinar to be at a constant of a sheep, we can then use this as a gauge to measure items per gramme of gold, i.e 4.25g is worth a sheep of an average weight of 20kg, if we were to compare like for like then 1 gramme of 22K Gold is worth 4.7kg of sheep. For the sake of terms in paper money this actually means 1 gramme of gold to be around £21 based on a sheep that costs £90.

Similarly for silver we have a comparison of the earlier times that a chicken would cost 1 Silver Dirham of 3 grammes. An average chicken weighs around 1.5kg therefore 1 gramme of silver is worth a third of the price of a chicken. So, what is the price of a chicken? Well of course using this method although not true, as paper money as we have demonstrated is not a true measurement due to its instable nature, we shall use this only since it is a method familiar to the reader. The price of a chicken at the time of writing is around £4, using the first example of Gold then, 1 gramme of Silver could be said to be worth £1.33. So you see this is how one can sit down and analyse a method of seriously re-defining the economy in matters of the Silver and Gold. To put this into some perspective an average house of £200,000 in today‘s paper money this would be equivalent to 2,222 gold coins. At this stage, it is now paper important to mention that re-defining


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the economy means exactly this, in other words although we have translated the value of house from paper to gold. This is an inflated value, a house should never cost 2,222 gold coins, a car should never need to cost 222 gold coins, a mobile cellular phone should never need to cost 3 gold dinars. Gold and Silver are finite resources in the world.

We can reveal many comparisons, a story from the Old Testament where it is referenced that King Nebuchadnezzar of Babylon was able to buy three hundred and fifty loaves of bread with an ounce of gold. If a loaf now costs one pound fifty, three hundred and fifty loaves would cost about £525. An ounce of gold costs about £650.

Other Currencies Since the 1980s it has been documented that over 300 currencies are in operation under schemes similar to the LETS (Local Exchange Trade Schemes). These are alternatives to state currency. Some of these have been in documented hours where someone works for someone a number of hours and is then in debt to repay that person back by a similar number of hours of an agreed trade or service. Barter, exchanging goods has been used in earlier days and will probably continue to be a means of operation that is acceptable within limits but problems occur when one out of two parties of exchange no longer requires the items that are being exchanged or in the case of the other systems the buyer cannot repay the other person back as the services, trade is of no use to the seller. This is where a medium of exchange is required to settle a transaction. Over time Gold has become that defacto choice that represents – FREEDOM. To Implement this freedom we are now about to illustrate the architectural road map to that freedom. This roadmap is not a highly intellectual or technological reformation of the monetary system. We are returning to the


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sources of Sunnah. This requires an analysis of the Sunnah of Amal Ahl‘al Madinah. The Gold Dinar requires the Market place to succeed. Without the market place the Gold Dinar is only a coin, which becomes like stagnant water. The market place will allow the free circulation of the coins in which taxes are abolished and the muamalat are relived.

The Souk

Upon arriving in Madinah, the Prophet (may Allah‘s blessings and peace be upon him) established the place of the prayer, The Mosque of Madinah. Soon after the establishment of the Mosque, the Market place was established. The wisdom behind this was to strengthen the economical situation of the Muslims. The laws of shariah and the muamalat were all laid down for the full functioning of the souk. This ensured Madinah to become an independently governed city, both politically and economically.

Caravanserais can be found throughout the world to this day, however very few still function with the advent of globalisation. The Caravanserai was a place where the trader could rest with his camel and horse with a place to water and feed them. He could rest, pray and eat there. This would be a stop for the traders much like the service stations linking the cities transport infrastructure such as the M1 or M6 today in the UK. This infrastructure can be used to restore the markets in the same way.

Qirad

Qirad is an investment contract between two parties: The Investor and the trader (or agent). The agent is the owner of the business. The correct Islamic


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position from the Al Muwatta of Imam Malik (this is earliest source of legal and social parameters of the first Muslim community of Madinah) is:

―It is not permitted for the investor to stipulate to the agent to only buy from so-and-so, referring to a specific man. That is not permitted because by doing so he would become his hireling for a wage.‖ (Al Muwatta – 32,5,6)

This evidence indicates that the trader has autonomy and is in control of his business. For the Market place to survive, the traders will require investment loans and Qirad is the contract that will allow this to happen. The contract has to include the following:

1. The investor and the agent.

2. The quantity of the investment.

3. The nature of the business.

4. Duration of the business.

5. Percentage of the share of the profit.

The conditions of the contract are as follows:

1. If there is a loss this is deducted from the investment, and whatever remains is given back to the investors and the agent loses all his work.

2. The agent cannot change what has been agreed upon in the contract.

3. If the loss exceeds the investment this is the agent‘s responsibility.

4. The investor has the right that the business does not exceed the amount of the money initially invested.

5. The investor cannot dictate to the agent what he sells.


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Qirad (also known as Mudharabah) is an Investment opportunity for traders and investment seekers. A business contract is made between the parties and profit and loss—both are shared. The trader requires a business loan and the investor is looking for an investment, upon contractual agreement the trader multiplies his profit. The investor then takes his agreed percentage from the profit. Qirad is a business transaction widely practised by the companions of the prophet (saw) during his lifetime and after. In the Muwatta of Imam Malik we find: ―Malik spoke about a man who gave a man one hundred dinars as a Qirad. He bought goods with it and then went to pay the one hundred dinars to the owner of the goods and found that they had been stolen. The investor says, ―Sell the goods. If there is anything over, it is mine. If there is a loss, it is against you because you lost it.‖ The agent says, ―Rather you must fulfill what the seller owed. I bought them with your capital which you gave me.‖ Malik said, ―The agent is obliged to pay the price to the seller and the investor is told, ―If you wish, pay the hundred dinars to the agent and the goods are between you. The Qirad is according to what the first hundred were based on. If you wish, you are free of the goods. If the hundred dinars are paid to the agent, it is a qirad according to the conditions of a qirad. If he refuses, the goods belong to the agent and he must pay the price.‖ The following are the main conditions of Qiraad: 1. Payment (investment) in dinar or e-dinar (www.e-dinar.com) NOT in merchandise 2. No collateral, no equity, no timing 3. Loss is 100% taken by investor 4. Profit is split according to contract share 5. Management is independent for agent

http://www.e-dinar.com/


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Advantages of Qirad

For the Investor:

a) Knowledge of what the business is for which the investor is investing.

b) The complete sharing of the ―real‖ results of the business between the parts.

c) The knowledge of who the owners are.

For the Agent (Trader):

a) The agent has importance, since the business reflects the profit.

b) The agent is not forced to guarantee – The investor and agent are engaging in a contract that does not guarantee a return to the investor.

c) The ownership of the agent is protected – no matter if profit or loss the agents business will not undergo receivership.

The Qirad is an essential element to the natural market.


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The Guilds

The guilds were a natural system that was based on honesty, trust and brotherhood. It was a natural way for the community that flourished where apprentices were respected to become the future of the local economy. Throughout Europe prior to the pressure in the 19th century examples of guilds were normal and the only way of economical progress. In Andalusia the ceramic work, mosaic work, crystal glazes, metalwork, the glorious lamps, jewellery, tapestry, leather work were only some examples that were integrated into the Sufi tariqas of Islam. The guilds incorporated four main categories – masters, officials, apprentices and chiefs. The chief would often resolve disputes amongst members.

Ibn Khaldun (the famous North African historian) said that a period of prosperity is followed by a period of decadence. The market, for example, flourished in an environment of openness and accessibility to all, and collapsed when it became a privilege to the elite.


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Markets in Europe

Markets have been the life and soul of European trade since the time of the renaissance in Florence. There are still many markets remaining in Britain, and in times of the economic downturn, they are busier than ever in many towns. The economic downturn is an opportunity for the rise of markets and the decline of supermarkets. As banks run in crisis, an opportunity for a free currency and the free market has risen. Towns like Totnes in Devon, and Brixton in London have developed their own currency. This is the opportunity for Gold and Silver and other intrinsic real value currencies to be tested. The Foundation for the Return of Equitable Economy has launched a project to revive the markets in the city of Edinburgh ―The Alternative Market‖ branded by F.R.E.E and backed by the local chamber of commerce, a trial was run with intellectual discourses balanced by performances and entertainers, musicians and dancers. The market running aside this, allowed punters to be entertained, mentally challenged, and then finally enjoy a coffee with a cake (made locally) and of course whet their appetites by shopping for locally made bread, cheeses and browse lots of stalls. This themed market is what we need to return to the streets of Britain, with the call of the adhan in the market and Muslims turning toward Qibla the onlookers will decide for themselves to either put their head to the ground in submission of one god, or submit to a financial system that has and will continue to strip them of wealth, property, status and finally their soul. Here outlined is a basic template of what to do:

1. Do your homework with location, get the prime spot, ideally do it in the street to guarantee footfall. If you don‘t have a busy market then no one will be happy.


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2. Once location is sought, go to the council and put in your application for a market operator‘s license, this can take up to 6 weeks so plan this with your launch.

3. Hire stalls, table, chairs, marquees, tents, a PA system for music. Do your business plan, work out the maths and figure out how much you need to charge each stallholder to breakeven. Remember, although we can‘t achieve a free market due to these costs the key thing is to keep the rent low, if the stall hire is more than the average then re-look at the location and your outlay costs. The Muslim market has to have the key ingredient of generosity and low or no costs to attract stall holders.

4. Once you are comfortable with low stall hire, Publicise. You will get stall holders, don‘t worry every trader is looking for a chance to sell and there simply is just not enough markets out there.

5. Now you have your license, stallholders and have hired all facilities cover all angles of health and safety, food hygiene. The council will come on site to check on the day of your market, make sure you have weights to hold down the stalls from wind.

6. On the day, make sure you have hands to help set up and dismantle afterwards. Managing the performers, entertainers, speakers and traders is not a one man job. A group of 5 -10 is ideal.

The Prophet (may Allah‘s blessing and peace be upon him), said ―Markets should follow the same sunnah as the mosques: whoever gets his place first has a right to it until he gets up and goes back to his house or finishes his selling. (Al-Hindi, Kanz al-‘Ummal, 488, no. 2688) The Souq is an ―Open market‖ or a ―free market‖ in which traders are given the freedom, No taxes are levied, no rents.


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The market will be a great place for da‘wah as trade opportunities will be open for Muslims and Non-Muslims. We only need to look at the great trade routes of the early Islamic World that captivated the leaders of lands to embrace Islam, China, Malaysia, Indonesia and many other nations accepted Islam under the name of trade. The modern market will excel any modern day shopping centre in terms of accessibility, practicality and choice. Indoor and Outdoor areas will exist, as geographically conditions may vary therefore both options must be possible, the market will consist of: Parking facilities Warehousing and storage Workshops Various selling areas Office facilities Areas for cultural and artistic displays and performances Public transportation access Courthouse Toilet and ablution facilities A mosque nearby

The Trade Bloc

The supermarkets as we know today monopolise trading. They hold producers such as farmers and crop producers in enslavement just as the IMF cripples economies of third world nations. A farmer or producer has little choice today but to sell to these monopolies as they have taken over trading. Supermarkets dictate the quality, pricing and quantity of produce they want, leaving little choice for the producer since they become trapped with a supplier-customer chain, which seems impossible to break. It is these very


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chains that have enslaved the producer, and the only solution to freedom is an ―Open Market‖. The banks and supermarkets deceive the community to think they are there to serve them, while both institutions are tools of monopoly, oppression and greed. Even staff in supermarkets is enslaved without giving them an opportunity to choose how they work. We are all part of an enslaved system, and we have become the cattle, grazing on pastures in which there is no freedom. We first had markets, then shops and now supermarkets. We must return back to markets. The open markets and the open distribution are not for any exclusive group or person. They are for everyone and their competitors. They are open to all. With them trade will return. Open trade will encourage production that is the creation of wealth. In a model of open production processes, increasing trade will benefit all working people. It is therefore proved that the wealth of a nation is the result of justice and openness, not the result of injustice and monopolies

The Wakala – The Coin Agent

Becoming a Wakala (Dinar agent)

There is no hard and fast rule in how to become a Wakala. Through measured experience there are some indications and guidelines that are recommended.

1. Minimum 150 Dinar Coins and 2000 Dirhams Coins At this quantity you will be selling to the individuals who are interested to have a few pieces mainly for gifts, souvenirs. You will have the odd one who may buy 20 or 30 coins, and seldom have some one who will want over 100


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coins. When you get to the stage of people buying 20/ 30 coins frequently and in number then the pace has picked, you should increase your threshold. Regarding the Dirham coins, again they may attract investors, but for the best part they will be individuals interested in a few souvenirs, because they are cheaper people will buy more. 500 coins also suffice a Dowry in some traditions. Some people use Gold.

2.E-Dinar

The E-Dinar system is also a very important part to become a Wakala. Depending on how serious you are. Open an account on www.e-dinar.com and you can purchase E-Dinar. To explain a little, this system is designed as Electronic Gold, there are other websites doing this the biggest one is www.e-gold.com, the sites are completely trustworthy and secure. The setback at the moment is you must wire the money which can take around 3 days and you will have Electronic Dinar in your account, of course the dinar is not actually electronic, but a repository (Transguard) in the UAE is signalled to assign your identity account no, to that amount of physical gold coinage. However at any point of you wish to have your Edinar into physical coinage delivered to you then a courier is arranged. So credit this account with a minimum of 100 Dinar. What you will do here is once your account is credited, encourage people to open E-dinar accounts, this takes 5 minutes, and then they can purchase E-dinars from your account, a simple transfer from your account to the customers account takes seconds.

3.Paper Fiat Money

The third element is to have access to paper or conventional currency at any point. The equivalent in physical coins you have would make sense - so if one dinar costs around $100 (for argument sake) and you have 150 of them, then you should have $15000 in paper available. The reason for the paper is


http://www.e-gold.com/


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so that you have a buy and sell back option. People will only really be interested in your service if they know they can sell back at hard times. As you know most people will not take gold as a currency or exchange. So your customers will mainly be for investment. People will have more confidence in your service when they know they can change back to paper when required to buy things and use the investment. Therefore if the full amount comes back to you in Gold you must be ready to redeem. Now there is a margin, and 15% is recommended generally for buy back i.e 85% of the value of the gold market is acceptable, so if the coin is worth $100, the customer will only get $85, this is to allow for any change in market price, which otherwise will leave you in a situation with worthless, devalued paper and other people with more valuable gold, you will be facilitating this, but there has to be an acceptable profit to sustain this. So generally the mark up for the coins is also at 10% of market value, i.e you buy at $100, and sell at $110.

Finally Marketing is an important element, and the sales will of course be affected by how you market the product. I have sold small quantities in the past and people know me, so come back to me i.e a trust and reliability is built. It is important to note that this model is only to allow the investment of coins and not the functioning of the coins as a currency, this can only happen when the volume of currency reaches the tipping point, and this is when it can function as a currency and the business model must change to adapt.

A Clear Roadmap

The diagrams over the next two pages illustrate two models. Model 1. Illustrates how corporate banks lend money to high street banks who in turn lend money to businesses at interest. These loans when used in supermarkets increase the buying power. With such exploitive buying power, this enables the supermarkets to tie down the producers, namely farmers to a contract


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which guarantees them sales but at a high cost. For this reason, much of the produce in this country is imported and cost is kept low. The effect of this has been the abolishment of the local town markets and the replacement of the supermarkets. With no where else to turn the local producers are forced to submit to the supermarkets that have created a monopoly over trade.

This exploitive monopoly must now be broken with the FREE Blueprint illustrated in Model 2 on the next page. This requires the discussed currency being minted, the return of the free market, and the surrounding institutions, contracts and above all governance. It is with this that we shall see the return of Zakat and the end of usurious banking. With this description we feel we have given the reader an urge or at least the understanding to do something that is within our grasp, and with real exciting prospects that can change the society we are living in.

Model 1.


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Model 2.

For information on :

Dinar

www.e-dinar.com www.islamicmint.com

www.dinarkel.com

Gold

www.kitco.com www.gold.org

Zakat

www.zakatpages.com

Markets www.ukopenmarkets.com

www.thealternativemarket.com


http://www.islamicmint.com/

http://www.dinarkel.com/

http://www.kitco.com/

http://www.gold.org/

http://www.zakatpages.com/

http://www.ukopenmarkets.com/

http://www.thealternativemarket.com/

Printed and distributed by F.R.E.E

The Foundation for the Return of Equitable Economy (anti-copyright)

Documents

A Practical Guide to Real Trade