Rare Muslim opposes gold…for wrong reason

February 3, 2011

I began reading this article with great excitement, and thought, “Finally, a Muslim economist is talking sense instead of frothing at the mouth about the ‘evils’ of paper currencies.”  It seemed so good at first that I figured a fatwa would be issued against him within the next 24 hours.

Until I read his real reason for opposing a return to the gold standard:  “He said gold supply was dominated by non-Islamic countries.”

There you have it.  It’s not about what’s best for the global economy, for stabilizing prices, or what the best medium of exchange truly is.  It all boils down to what gives Islam the upper hand.  Thanks, Professor.  From the Malaysian National News Agency, Bernama.com on Jan. 17:

KUALA LUMPUR—Islamic countries should continue to use paper currency instead of gold dinar as history has shown that the return to the coinage system could increase interest rates and inflation would be difficult to control.

Professor of Comparative Economic History at International Centre for Education in Islamic Finance (INCEIF), Dr Murat Cizakca, said money should serve as a medium of exchange, not as a commodity.

“We need to continue with paper currency, and the central banks controlling paper currency should have full autonomy,” he said.

Cizakca said this at a public lecture entitled, “Islamic Gold Dinar:  Myths and Reality” organized by the Association of Chartered Islamic Finance Professionals and INCEIF here Monday.

He said gold supply was dominated by non-Islamic countries.

“The gold dinar will be exposed to speculation as the gold price also have its ups and downs.

“Thus, Islamic countries should continue to use paper currency and increase trade between each other, and eventually in the future agree to a common paper currency,” he said…

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