Bismillah Ar-Rahmani Ar-Raheem

The Gold Dinar, the Silver Dirham and a Resurgent Political Islam

Part I
By Younus Abdullah Muhammad. The Prophet Muhammad (Sala Allahu alayhi wa salam) said: There will certainly come a time over mankind when there will be nothing of value except the value of the Dinar (gold currency) and the Dirham (silver currency). [Musnad of Imam Ahmad] This essay is to be released in several parts, all of which are intended to serve as a pedagogical tool meant to enhance the realm of economic awareness, and to promote discussions crucial to the ongoing Islamic Awakening. For more of the methodological approach underlying this analysis please refer to the document On Crafting Islamic Policy available at www.IslamPolicy.com. Comments and criticism are welcomed and can be forwarded to IslamPolicy@gmail.com. Part 1: Preserving Petrodollars and Controlling the Arab Spring The ramifications of recent events in the Arab World will reverberate to effect the geopolitical realities of nations across the planet. This is particularly evident when analyzed through the lens of an international economy still struggling to recover from the global financial crisis of late 2007. The international economy today is marked both by uncertainty and interconnectedness. The Arab world, once classified as the final frontier for neo-liberal globalization, now has the potential to determine not only its own destiny but also the direction of the post-crisis economy generally. That reality became all the more complicated with the recent election of Islamist regimes in the wake of the Arab Spring. Today political Islam seems ascendant throughout the Middle East and the consequences of such an outcome are being contemplated by leading figures all over the world. Massive efforts are underway to insert a New Middle East and North Africa into the fold of Western-dominant globalization. In such an interconnected international arena, with leading powers dependant on energy imports, international capital flows, and exports to foreign markets, the policies adopted by the new Arab regimes will either facilitate a maintenance of the status quo or an initial movement toward a world of greater multipolarity. Already the direction Islamist governments steer their economies has become the focus of citizens internal to the Arab world and without via the concern of international press, policy makers and pundits. The success of the Arab Spring will depend on the economic platform adopted. If the future is to be truly liberating, these new Islamist regimes or the citizens beneath them must insert the Islamic concept of the gold Dinar and silver Dirham alongside a critical analysis of the present dollar-dominated monetary system that facilitates the present(and actually imperialist) form of globalization. Todays circumstances are eerily reminiscent of the preserved prophesies of the Prophet Muhammad (saws) who described a future situation of domination and decline (the nations will gather together around you as they are to feast) of partnership (you will make a pact with the Romans or yellow ones)
1

and eventual conflict (Rome will betray, advancing with 80 banners - underneath each banner, 12,000) between the West and the Arab world. The root of this struggle was also represented in his (saws) discussion of Roman prevention of the dinar and dirham and the forced use of foreign currencies. It seems the Prophet (saws) also predicted the Arab Spring. He said, "There will be a great trial affecting the Arabs. Those who are killed in it are in the hell-fire. The effects during it are greater from the tongue than from the sword [Abu Dawud] The effects of the Arab Spring spread everywhere: to Europe, America, Africa and the rest of the world. However public protest due to discontent is a far cry from dissent alongside proposed alternative solutions. The actuality of protest movements in the Arab world is that they are based on ideological ignorance and contradiction. At the heart of global discontent lie economic factors, yet the moderate Islamic regimes ushered in by the first wave of democracy seem to be dedicated to preserving the same economic relationships that actually sparked the Arab Spring. Because rebellion against authoritarianism can only promote justice alongside calls for Islam and its socio-political order, the Prophet (saws) was correct to classify it as a trial rather than transformative alteration. The protest movements spreading amongst the masses are a by-product of the presently failing and oligarchical international system. It is interesting to note that the order failing people all over the world is the order Muslim-Brotherhood - backed Islamists are racing to participate with in the Arab Springs aftermath. It is recorded that the Prophet (saws) also said, Iraq will be prevented from its dirham and its measurement, Sham will be prevented from the dinar and its measurement, and Egypt will be prevented from its dinar and its measurement, you will return from where you began, you will return from where you began. [Muslim] The classical Islamic scholar Imam Nawawee (R.A) explained that in this statement the Prophet (saws) was referring to a time when the Romans would conquer these countries and prevent Muslims from their wealth. In fact there are several authentic narrations from the Prophet (saws) that predict that after a trial touching every house in the Arab world the Arabs will align with the remnants of the people of Rome (also termed the yellow ones) as a global power to defeat a common enemy from behind their strength. The immediate alliance formulating now between Islamic nations and the West, backed in the economic necessities forcing such collaboration, is indicative of a concrete circumstance potentially resembling this reality. In an important narration recorded by Imam Ahmad Ibn Hanbal in his Musnad, it was reported that the Prophet (saws) said, It is almost time when neither the dinar nor the madyee (lesser currency) will come to the people of Iraq. The people asked, From where will that happen? And he said, From Rome, who will prevent them, and then after pausing for some time, he (saws) said, In the last of my nation there will be a caliph who will throw handfuls of money without counting or keeping accounts. This situation described by Allahs Messenger, considered alongside a competent understanding of recent economic realities, is a near perfect concise description for the underlying causes of the wars between Islamic and Western worlds. With political Islam ascendant, one may suggest an opportunity has arisen to confront this divide and push for a return to the Dinar and Dirham, but a closer look at the political parties being thrust forward in Egypt, Iraq and Sham (Syria and Lebanon) documents that prevention of fundamental economic change will come from the collaboration of the new regimes within these nations.
2

Victory is destined for the members of the Prophets nation that will restore the true economic system, culminating in the political resurrection of the Khilafah, with its economic order based in gold and silver and free of foreign control. These Muslims will avoid deception and push for principled action while others will prefer comprise in the name of pragmatism. Where the Prophet (saws) mentioned Iraq in the hadith from Imam Ahmad, he stated that the Romans would prevent both the gold dinar and a lesser currency (madyee) from coming to Iraq and then after pausing for sometime he referred to the Mahdi who is categorised in many narrations as one who will throw handfuls of money, indicating a little realised distinction between economies that run on the paper currencies of today and the intrinsic gold and silver coins associated with Islams socio- political economic order. This conflict over currencies resembles the actual situation that led to the Wests intervention in Iraq, an intervention that has only helped to further revive Islam and that will ultimately culminate in restoration of the religion as a complete way of life. The Islamic monetary system is based on the gold dinar and silver dirham. It is a bimetallic specie system as opposed to todays international fiat or paper money system dominated by the dollar bill. The Prophet's (saws) reference to Iraq and the madyee may very well be a reference to the largely fraudulent Iraqi war of 2003. During the final span of Bill Clintons presidency and just before they came to power with the election of George W. Bush III, neo-conservative ideologues from the Project for a New American Century (PNAC) sent a letter to the Clinton Administration recommending immediate regime change in Iraq. Saddam had been left in power after the first Gulf War which allowed a sustained American military presence in Saudi Arabia and ultimately led to 9/11. The Clinton administration had implemented draconian sanctions that killed at least 500,000 Iraqi children, but the neo-cons were not content without the complete removal of Saddams regime. The neo-conservatives wanted to liberalise the Middle East and Iraq as a major oil producer was the keystone operation. Sanctions only enforced rebellion and by November of 2000 Saddam defied the international order and began selling oil for Euros instead of dollar bills. This seemingly unimportant decision threatened the entire global financial order for the perpetuation of Western control over the wealth of the Muslim world is largely dependent on controlling the currency of oil. The sale of Iraqi oil for Euros continued until the fraudulent invasion of 2003 and radically altered the exchange rate of the dollar versus the Euro. The invasion ultimately sparked region-wide Anti-American sentiment alongside rising religiosity and it is perhaps for this reason the Prophet (saws) commented on the prevention by the Romans of a sovereign currency in Iraq as the root of a conflict that would lead to revival. All economic systems are based on trust. The confidence of currencies throughout history has been the determinant factor behind the rise and fall of economic orders, whether fiat or specie. There are countless historical examples of monetary systems that collapsed through the sudden demonitization spurred by a particular incident. Saddams move to swap Euros for dollars jeopardized the present dollar-denominated monetary system by threatening to expose the fraud that sustains the dollars role as a global reserve currency. The current age is one of globalization but it is dominated by the U.S and the dollar bill. It is for this reason that U.S debt matters little. The U.S can simply print money through its Central Bank, the U.S
3

Federal Reserve, issue loans to private international banks and buy up global assets. The system is like a cartel and allows the US and the elite banks to produce paper money for free, while the rest of the world produces goods, services and natural resources those dollars can buy. Because of this privilege, every country must acquire dollars. The international debt of the World Bank (WB and International Monetary Fund (IMF)) is denominated in dollars, between 60-70% of global foreign currency reserves are held in dollars and due to the potential for speculative attacks by currency traders countries are forced to hold surplus reserves rather than utilize them to develop the real economy. Additionally, and perhaps most importantly, commodities and especially oil are priced in dollar denominated terms. Keeping oil priced in dollars is important for a number of reasons; however, it would be impossible for the dollar to retain its dominant role without the complicity of oil-rich Arab rulers who grant this enormous privelage through their predominant influence in the OPEC (Organization of Petroleum Exporting Countries) cartel. Because oil can only be purchased for U.S dollars, oil importing countries, like China, Japan or those throughout Europe and the developing world are forced to trade internationally for dollar bills. Countries that do not earn enough dollars to pay for purchases are forced to borrow from the IMF or World Bank at interest. It is this dollar privilege that preserves its role as the servant of international finance and as the medium that facilities the in-servitude of allegedly sovereign nations. For U.S oil imports, the U.S can simply print additional dollars without exporting or selling goods and because oil remains the most important global resource, any move to pose an alternative system would be met with intense opposition. For the few years before the Iraq War in 2003, Saddams move to Euros increased the roles of the alternative currency and made Iraqs Central Bank additional revenue as their Euro reserves appreciated against a falling dollar. It is interesting to note that after false allegations led to Saddams overthrow in 2004, a shipment of billions in U.S dollars disappeared after safe delivery to the door of Iraq's central bank. It is highly probable that the Euro reserves were simply swapped for the dollar notes so to guarantee that there would not be no competition for currency. Of course, the Iraq War turned into an immaculate debacle. Absent a decade of occupation and the exorbitant expenses that accompanied it, the present search for an alternative economic order would be lacking. Today the dollar's role as a reserve currency is one that must be questioned if reform in the Middle East is to be productive. Even before the Iraq War, economists were baffled by the U.Ss twin-deficits; the negative current account balance (Imports minus Exports) and the exponentially increasing national debt (now in 2012, at $16 trillion). The present fiat-money order is to be based on fluctuating exchange rates and borrowing costs that are to punish excessive debt. Yet, the U.S dollars global role makes it a massive exception to all the rules and prevents real international competition. Such is the magic behind todays monetary system and is a key factor in effecting the policies of all nations. After decades of support for the autocratic regimes in the Middle East, President Obama announced well into the conclusion of the Arab Spring that it will now be the policy of the United States to promote reform across the region. However, this reform is only to preserve the present formulation of the dollardominant, U.S led system. The U.S has moved to insert the North African nations of Morocco, Algeria, Tunisia and Libya into the fold of Neoliberalism. Turkey has entered relations with America that Foreign Minister Ahmet Davutoglu recently called, a golden age. These relations are highlighted by their collaborative effort to overthrow
4

the Assad regime in Syria. In Egypt, the U.S retains support for armed forces that preserve the dictatorial networks of the Mubarak-era. And sustained support for dictatorship in the oil-rich Gulf states documents that American diplomacy in the new Middle East has nothing to do with democracy-promotion. It is possible that the Prophet Muhammad (saws) cursed the Arab Spring because awareness and understanding of the Islamic alternative has mostly been missing. As the new Islamist regimes race to enter the international monetary fold, it will become absolutely necessary to identify the beauty of an authentic Islamic order based on the stability of the gold dinar and silver dirham. So few understand that economic orders set the foundation of all societies, and because the same financial oligarchy that supported Hosni Mubarak and Zabidene bin Ali retain global dominance by suppressing the development of alternatives, it will be up to Muslims themselves to turn toward the Islamic sources and identify that within them, lay an order that is truly revolutionary. Islam forbids and attacks a prevalent ignorance in any field necessary to creating a social environment conducive to spiritual well-being. In so far as economic structures set that tone, it will be interesting to see if trust between citizen and state will occur as new regimes face these economic difficulties. Social justice is impossible under the petrodollar scheme. Unfortunately, the Muslim world has indeed returned from where it began: subservient to oppressive rulers, worshipping the false idols of financial temples, and unwilling to turn wholeheartedly to the Islamic model. It is highly probable that the Prophet (saws) was referring to this unfolding debacle when he mentioned that Iraq, Egypt and Sham will be prevented from the dinar and dirham. Indeed, the fiat system now dominating with todays polytheistic cabal, backed from foreign institutions and corporate logos as the intermediaries of a dollar-Godhead, effects every facet of society and has infringed the hearts and minds of Muslim masses to such a degree that any discussion of Islamic economics in Muslim circles is to bear the brunt of an intellectually degenerate population dedicated to rote memorization but void of the critical thought, creative capacity, and insight that serves as the actual foundation of the Islamic tradition. Were the structure of the international monetary system not designed to promote dollar dependencies, there may be room for an age of trust and cooperation between countries. Yet, identifying the root of affliction in international affairs remains impossible unless one can decipher these essential distinctions. As Dr. Carroll Quigley, former advisor to Bill Clinton and historian that published a history of the financial elite in his book, Tragedy and Hope (1964) remarked, The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world, as a whole (p 326) This plan is exemplified by todays dollar system and is at once an outgrowth of empire tracing back to the dawn of civilization. It is also a consequence of the decline and disappearance of the Islamic order. As Professor Quigley revealed, Capitalism is of such an overwhelming significance in the history of the 20th Century and its ramifications and influences have been so subterranean and even occult, that we may be excused if we devote considerable attention to its organization and methods. Essentially, what it did was to take the old disorganized and localized methods of handling money and credit and organize them into an integrated system, on an international basis. The center of that system was London with major offshoots in New York and Paris. (p 53) The petrodollar scheme is an outgrowth of high financial circles and their transition to back American
5

power after World War II. The 21st Century has and will be marked by confrontation between this international cabal, its proxies and organizational manifestations. The Prophet (saws) couldnt have more succinctly expressed the nature of this conflict than in mentioning its origins in Iraq, Egypt and Sham as a struggle for prevention of the dinar and dirham. With the core of western economies in disarray, sustainability of the dollars control will be determined by whether or not the Middle East can be inserted into the fold. Federal Reserve Chairman Ben Bernanke recently announced a low interest rate policy extending through 2014. This policy is to allow the international banking cabal access to free dollar bills so that nations of the Arab Spring, indebted through IMF and World Bank loans signed on condition of economic liberalization, will be open to foreign purchases of real assets and the infiltration of high finance and multinational corporation. The benefits from that can, at once, enslave the Muslim masses and perpetuate dollar dominance by reflating the global order. The plan largely overlooks the reality of potential massive popular resistance. What was to be a simple operation in Iraq transformed the world. People today have lost trust in governments, but unfortunately, people rarely connect the financial order of the day to inaptitude of government capacity as a consequence of the financial order enforced by dollar bills and central banks. Across the globe, from Europe to America to the nations of the Arab Spring, there is increased resistance to this order stemming from Wall Street and the City of London. However transforming that economic order is really only possible in the Muslim world, where petroleum reserves, the possibility of region-wide cooperation and the ability to reissue the dinar and the dirham would immediately destroy dependency and create pathways for the Islamic alternative. Money can be the master or servant of mankind. As long as we blindly follow the dollarbased regimes we have purchased our own slavery. In part 2 of this series, we will inshaAllah analyze the historical origins of todays monetary system, the potential collapse of the dollar scheme and thereby the necessity of returning to the gold dinar and silver dirham. Wa Allahu Alam! Younus Abdullah Muhammad is a Muslim-American and Master of International Affairs. He is presently residing in solitary confinement in Virginia (US). He is the founder of IslamPolicy.com and can be contacted at islampolicy@gmail.com