Comments on Caliphate Online: Currency of the Caliphate

Without going into the rigmarole of money, wealth ...

2010-01-01T23:52:08.755Z

Without going into the rigmarole of money, wealth and all its implications, or wether it is practicle to switch to Gold and Silver standards, a million $ question arises:

Whether the Petro rich Sheikhs or the Islamic Dictators From Morroco to Indonesia will be willing to give Khilafat and its incurring benefits to Muslim masses a chance to regulate their lives according to Sharia against their own Onipotent Malik,Amir,and Sheikh and dictatorial egos in order dream of Righflly Guided governance can usher in Millat Islamia.

RE: AbdussamadI think wealth is being confused her...

2008-11-27T05:29:00.000Z

RE: Abdussamad

I think wealth is being confused here with money

money is a means to measure wealth, a unit of account, it is not wealth in itself

Wealth is created by the development of productive hard assets such as land, property, products etc, which are then sold for a profit. Wealth is increased by increasing production i.e. you produce more good and services and sell them for a profit. each time you exchange there needs to be currency (gold) so the transaction can happen.

I would argue is the world more productive, More financial services, entertainment, consultancy, insurance etc are produced today manufacturing and agriculture contribute much less to the world economy today than in the past.

In regards improving productivity, well every individual will want to increase their wealth, the amount of gold in circulation has no bearing on that, as long as the amount of gold in the economy circulates in an unristricted manner there will be no problem

I remember seeing a show on the BBC that praised t...

2008-11-23T02:26:00.000Z

I remember seeing a show on the BBC that praised the non-inflationary nature of gold. It compared the amount you could buy with gold today and found it was the same as in Roman times.

However when I pointed it out to my father he told me that didn't that actually point to the decreasing value of gold because the world was a lot more productive today? He was right of course. The reason why gold was not as valuable as it should be is because people keep their wealth in fiat currencies.

So the point is that if gold is made the legal tender then you can buy a lot with it. But doesn't that mean that there is no longer an incentive to improve productivity?

Because if you can improve productivity and produce more with the same amount then you can earn more gold in the short term. But in the long term because the supply of gold is limited the value of gold will rise (while that of your goods will fall) and you will not really profit from becoming more efficient. So what is the incentive for a business to grow?

In answer to your questions.Q. Wouldn't the lack o...

2008-08-12T20:28:00.000+01:00

In answer to your questions.

Q. Wouldn't the lack of gold decrease the distribution of wealth?

A. The lack of Gold or the decrease in the amount of Gold would not have a huge impact on wealth distribution but more on prices. Wealth distribution is decided more by the spending and consumption patterns of society as well as the rules any nation has on hoarding wealth etc.

An increase in Gold at a rate more then national production would lead to inflation, whilst a decrease in Gold would have the affect of reducing prices.

One of the key characteristics of the Gold standard is that gold has an intrinsic value internationally and is recognised by all peoples. Since the Caliphate will have most of the world resources then other countries will be forced to use gold. Over time more and more countries will adopt the gold standard. When comparing the prices of goods in gold over the past few hundred years the prices have remained relatively stable. Therefore gold's value is intrinsic and not based on the amount of people that use it, although supply and demand will influence the value to some extent but not as much as you mentioned.

Q. Because as you wrote, the money would have to represent the gold but if there is more paper money in the market, wouldn't it still decrease the value of the paper money?

A. The same technical measures the west uses in preventing money laundering will apply in the Caliphate. Domestically with the power of the Islamic value permeating society crime will be much lower than in the individualistic, athiestic west.

Salaam,Wouldn't the lack of gold decrease the dist...

2008-07-28T17:55:00.000+01:00

Salaam,

Wouldn't the lack of gold decrease the distribution of wealth?

So is the gold currency's value based on the amount of people that use it.

For example, if there is total of 10 gold and 20 people, gold would be worth twice as much, but in contrast if there is 5 people, gold would be worth twice less.

Also, does this currency make it worse or better for stopping money laundering.

Because as you wrote, the money would have to represent the gold but if there is more paper money in the market, wouldn't it still decrease the value of the paper money?

For example, I'll go to the bank to convert my paper money into gold and I get my gold.

Some other person goes and gives illegally printed money and receives the gold.

I go again to get more gold but its not there! because it was given to the criminal. So i'm out of money while he is not >.<