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Thursday, March 27, 2008

A Muslim’s Matter is Amazing...

This time I want to share a view on how to react on the ups and down of the Dollar, Oil and Dinar – from the Islam perspective.

I took the title of this article from one of Rasool SAW Hadits in the Riyadhus Shalihin that translate:

Rasool SAW said: “A Muslim matter is amazing, in fact all matter is good for him. That is not owned by someone unless he or she is a Muslim. If he receives happiness, he is thankful and it is good deed for him. But if he receive suffering, he is patient and that is also a good deed for him”. (HR Muslim)

Amongst Rasool SAW Sahabah that inspired by the hadits even analogized the happiness and suffering as two horses, ride on any of them is not a problem. At a times when riding the “horse” of happiness he is thankful, in the other hand at times when riding the “horse” of suffering he can be patient.

What is the relationship between being thankful and patient with Dollar, oil and Dinar?

For the sake of all the people right now – low oil price is good. Our needs will all be more affordable if oil price is cheap. That’s why in my article two days ago I was happy to see that the oil price tends to decline; and at that time I was hoping that the decline will last long. My happiness is seeing the oil price decline is InsyaAllah better that my dislikes looking at a powerful US$ , it is a shame that these two things coincide in the market.

In contrary, the US$ is weakening these days. Last night the US $ Index declined 1.25%; along with the increase of oil price to US$ 106.12/barrel. Even in the famous oil website Oil-Price.Net states that the 1 year forecast of US$137.96/barrel.

We know that 1 barrel equals 117.35 liters, which means crude oil price is US$1.18.liter or Rp10.915/liter..... Then how much will the Government price for the Premium fuel in the market? Worrying right…?
As Muslims we need to know these problems so that we can act correctly and hopefully can make it as praying field for our savings in the hereafter.

Before a energy crisis happen along with the increase of oil price, lets start to think about an alternative energy solution that will benefit a lot of people. Alternative energy sources are abundantly provided by Allah in this earth, and will be enough until the end of the world. One of them is the wind energy I wrote in my article dated 13/3/2008.

So InsyaAllah our concern on the increasing oil price can result in new good deeds for us that is alternative energy for the people until the of time. For readers that have knowledge and experience in alternative energy can help realize this idea. Wallahu A’lam

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Wednesday, March 26, 2008

Dollar Weakens Again...

After showing it’s strength last week, in the last couple days the US$ weakens again. US$ Index, the benchmark of the Dollar towards other strong currencies, after declined by 1.23% two days ago, declined again by 1.25% yesterday.

As a consequence of the weakening US$, the gold price increased by almost 2.5% yesterday and further increase by 1.4 % this morning. Honestly this increase is faster that I predicted on Tuesday, because I was hoping the low gold price can hold on for a few weeks or even months so that Dinar is spread to the society with a more affordable price.

In the short term, the weakening US$ is driven more by perception rather than fundamental. The weakening US$ was triggered by the report by the Conference Board a Business Membership & Research Organization known by international business players with its product, the Consumer Confidence Index.

In its last report, out 25/3/2008; the Consumer Confident Index, a survey from 5,000 US households, showed 64.5 (from 100 in 1985). This number is a serious decline from last month, 76.4.

The low Consumer Confident Index in general is inline with the weakening purchasing power and consumption level of the people, which means a weakening economy. When the economy weakens, the people needs alternative to rescue their investment – from hereon, gold is a safe choice; so the gold price increase.

We need to understand the perceptions that influence temporary trends so we know what is really happening in the market; but in the decision making process, it would be safer if we use fundamental basis.

Because this temporary increase is driven by perception, then in the next few days if there is a trigger that reverse that perception, then gold price will decline again.

In the other hand, if the increase/decline of price is driven by fundamental reasons, then it will need a fundamental change to reverse the trend.

At least, according my own analysis – all the fundamental basis tends to drive the gold price or Dinar upwards in the long term – even though in short term it can be go up and down like what is happening in the past two weeks. Quantitative analytical results, are presented in the form of Dinar price trend in a period of one month, to forty years.

By presenting the trend, hopefully the people will be well informed about the Dinar price before deciding to invest in it.

Besides quantitative data I already present, I am preparing a more qualitative analysis that can explain more on why the Dinar price will keep going upward. In time, InsyaAllah I will present in this blog. Only Allah Most Knowledgeable, while we don know anything expect what Allah tell us.

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Tuesday, March 25, 2008

Oil Price Probably Will Still Decline….

In my previous article, amongst others the one dated 9 March 2008, I presented the tight correlation between the volatility of the gold price with the volatility of main commodity prices, especially oil.

In a few days, the oil price will most likely still decline – so will gold price. The triggers of the oil price decline amongst others are:

1) United States of America, the world’s largest energy consumer nation, is having a decline in economic growth, so its energy consumption is also declining. Last weeks report shows the consumption level for the last four weeks dropped 3.2% compared to the same period last year.
2) USA oil inventory is at its all time high, just for this year it is predicted that they have increased their inventory by 1.5 million barrel to around 311.8 million barrel.
3) Statement from King Abdullah – Saudi Arabia last Sunday that Saudi Arabia will cooperate with the OPEC nations and even other oil producing nations outside of OPEC to guarantee the availability of global oil in an effort to avoid destructive speculation. This statement was said by King Abdullah one day after the visit from the USA vice President, Dick Cheney.

For all of us, the decline of oil price is good because the price of daily necessities goods is affected by the oil price. So we hope that it will continue to reduce our cost of living.

For the spreading of Dinar is also good because Dinar is now more affordable; I see an increase of Dinar purchases in this few days since the significant price decline.

Temporarily, those who purchased the Dinar at the high price, especially the last two weeks will feel they are in a “loss”; but InsyaAllah, you don’t have to worry because you can see that the gold price chart for the last year, last decade, or even the last forty years, have an upward trend.

So the decline of oil price and gold price is temporary, can be one – two weeks, one - two months, but then the oil price will rise again following its main upward trend.

So is with gold, the temporary decline can be taken advantage to optimize the spreading of Dinar in the society – before the gold price return to its main upward trend in a long period. Wallahu A’lam.

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Monday, March 24, 2008

Qirad for Economic Development of Moslems

In the last January 16, 2008 I wrote about the instruction to circulate property widely as an implication of not allowing hoarding as mention in the Phrase of Al-Quran 59:7 “….so that the property is not only run in the circle of the rich amongst you…”

In that article I explained the beneficial of the productive property with the equation of exchange that is M xV = P x Q (in which M= money supply; V=velocity of money; P= average price level goods and Q=supply of goods and service). If it is implemented in the economy that is free from usury it will make Moslems become wealthy.

In today’s article I would like to give a simple example of how the concept of property circulation we implement in the Qirad System that has been introduced in the previous article. InsyaAllah we can see how imposing the phrases from Allah if we really implement them.

Let use the equation of exchange to compare two conditions as follows:

First scenario is that you have money of one Dinar (M=1) and keep it for one year (V=1), assume the level of price in one unit (P=1), the flow of economy that are created by using your money in one economy unit (goods or services) is also ONE (1x1=1xM). One Dinar that circulates in one year is able to move one economy unit.

Second scenario is that we change the speed of the circulation, V, from one to become six, it means your one Dinar circulate once within two months. So unit economy that is circulated by your money is six (1x6=1xM).

I-Qirad : Dinar Minting Financed by QiradDue to the Qirad program that we introduce is Qirad limited in the purchasing of Dinar, so for each Dinar that you Qirad, insya Allah can help produce six other Dinars. See the illustration in the side of this article to picture this explanation. How if you have 1000 Dinars that will be Qirad? What if 1,000,000 Dinars that you Qirad? These days the price of Dinar is cheap, so insya Allah we are able to produce more Dinars from our fiat money – while the value of our fiat money still high.

From this actually it is not difficult to imagine (more precisely to vision it), how Dinar will return amongst the Moslems in line with the awareness to implement Religion directions full heartedly. So it is not the amount that is important, but the circulation is the most important. The instruction from Allah is not to increase your capital, but the instruction to circulate your capital.

For sure it is not stopped here, in a very short time insyaAllah we are able to choose real investment program that can be financed with this Qirad System. Since we introduced Qirad last month, at least I had met two business groups that very possible to be financed with this Qirad System.

The first business group is in organic foods; the future product because people nowadays are very concern of being healthy and the effort to maintain it.

The second business group is linked with my article dated March 13, 2008 about Price Increase and the Shortage…., which one of the issues is to utilize wind power.

With Allah scenario, in this opportunity I met with one of the Governor in this country – I was introduced to a big entrepreneur that has produced a small scale electric wind power. Our theory….has been produced in this country……!

Even though these two kinds of business were potential, I am not in a hurry to recommend you to Qirad your money to that kind of business. I shall review them first and involved further until I am convinced that these are good investments – here and the hereafter – after that I shall offer you in the form of Limited Qirad where you can limit your Qirad only to a specific business that visible.

The road is still long, but after we do what we know – insyaAllah, Allah will always guide us and direct us to things that we have not known yet. Wallahu Allam.

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Understanding More about Qirad...

Amongts the Fiqih Ulama, there are those who said that these two things are the same, but there are those who said that these two things are different. Those who said they are the same amongst others are lain Dr. Wahbah Al-Zuhayli in the book Al-Fiqh Al-Islami Wa-Adillatuh where he explained that Qirad and Mudarabah is just a matter of different wording from different area. The word Qirad is from Hijaz while Mudarabah is from Iraq.

Qirad emphasize on the capital loan aspect and the delivery of part of the profit for the lender, while Mudharabah emphasize on the profit sharing between the capital owner and the entrepreneur that receive the capital.

Consensus of the validity of Qirad Contract is based on ijma (consensus of opinion) amongst the Ulama referred to tradition of Disciples of Muhammad SAW. One of them is narrated by Malik in Al-Muwatta, that: “Abdullah and Ubaydillah, both are sons of Umar bin Khattab RA. When they were on the move with their troops in Iraq, they stopped by to meet Abu Musa Al-Ashary, which is one of Umar bin Khattab’s staff. He offered to support money to both, Abdullah and Ubaydah, and the money will be taken from the State Treasury as a loan, and they could use it for buying goods from Iraq and to be sold in Madinah, took the profit and pay back the nominal to their father. They did it as proposed by Abu Musa, and came to their father. But their father got very angry, then asked whether Abu Musa gave the same offer to their troops? They answered it no! He got angry and said: ”Both of you are the sons of Amirul Mukminin (Commander of the Faithful Muslims) so that Abu loaned you some money for getting a profit?” Then Ubaydilah answered, “Ya Amirul Mukminin, if we lost the money, sure we will guarantee” But Umar RA still doesn’t want that they take the profit. When Ubaydillah expressed the reason again, one of the presence audiences said, “Ya Amirul Mukminin, maybe you can treat as Qirad (that is giving the half profit to them and the other half to the State Treasury). Umar agreed with this rule.”

Hereon, I will use the terminology of Qirad more rather than Mudharabah because this Qirad is used often by Mazhab Syafi’i.
Qirad or Mudharabah will be the answer of the fair investment for the investors and the enterpreuners and also as an alternative from the usury system that the people should abandon.

The main conditions of Qirad or Mudharabah are:

1) The capital has to be in cash or non-cash like in the form of Dinar, Dirham or bank notes (there are some different opinions regarding cash or non-cash amongst the four mazhab. Imam Syafei’i is the only one that thinks it should be cash. But Imam Hanafi, Imam Malik and Imam Hambali have an opinion that the capital could be in the form of properties/goods which are non cash, but the one that count as capital is not the goods but the cash value of them.)

2) The amount of the capital is clear. So we can differentiate which is capital and which is profit.

3) Percentage of profit sharing should be clear between the investor and the entrepreneur. Qirad or Mudarabbah is invalid when one or both of the parties state a certain absolute amount (not percentage) for the profit sharing.

4). The entrepreneur is the receiver of Amanah, and obligated to keep the amanah, even though they don’t need to cover the losses if it’s not in purpose.

5)Qirad could be opened or limited in nature. Opened Qirad means that the kind of business, market, place etc is not limited. In limited Qirad, the business, market, place etc is subject to the investors’ agreement.

Financing through Qirad or Mudharabah will ease people who are honest, fair, careful and competent in certain business to receive amanah from the investors – and for that reason is not necessary to have material collateral. In contrary if people don’t have the character as mentioned above, is difficult to get a financial loan even though they have a lot of material collateral.

This Financial System shall create a business environment based on values that will develop good characters of the players. People who are not honest, not fair, not careful and not competent will automatically be left out from this kind of business environment. The business world will be dominated by honest, fair, careful and high competence people. This generation of entrepreneurs’ will prosper the Moslem people as a whole and will bring back the glory of Islam at the right time.

I-Qirad : Just Financing We developed this theory and basic law of Qirad’s product in Gerai Dinar. To be more impressive in this era of information the Qirad’s product is called I-Qirad; which InsyaAllah if it grows widely in global market shall have a separate domain that is www.i-qirad.com for the samples of application I will write it soon in my next article.


What Happened With Gold Price Last week...?

Over the course of last week, something out of the ordinary happened with International Gold price. After reaching its peak of US$1,030/troy oz early last week, at the end of the long week end the gold price was at the lowest level which was US$910/troy oz or fluctuated by 12% within a week!

Of course we are wondering in our minds, questions relating to the decline of the gold price.

The first common question is what causes this to happen?

As per my article dated March 19, 2008 last week, that the Fed therapy was effective this time. Imagine that since September 2007, the Fed cut their interest heavily, from 5.25% to just 2.25%.

In their minds, this crisis is triggered by the failure of property credit, so the recovery indicator is the successful recovery of the property sector – how? One way is to provide the low interest rate.

There are other steps taken by the Fed to recover the market; some steps are controversial like its step to support JP Morgan in taking over Bear Stearns – the giant investment bank that is going facing bankruptcy – with a loan of US$30 billions.

The Fed steps is important for us to observe, because in America there is the opinion that the most power man after the president is the Fed Chairman, currently Ben Bernanke – they are the ones that have the authority ‘to print money from the atmosphere’.

Next questions that maybe also occurred in your mind, will this decline continue or will reverse?

Both could be happened. Similar with Stock Price – short term gold price also influenced by perceptions rather than real value, so if part of market agents are comfortable with economic recovery in United States – so share price will increase – temporarily people will sell their gold and buy stocks.

If it is perceived that US$ will become better, people will go back to deposit their money and also products that based on US$ - and reduce their gold portfolio. All affect to the decline of gold price.

But, there is a basic difference in Gold that stocks or bank notes doesn’t have, high intrinsic value – which has a stable purchasing power to purchase all the people need in all era.

Gold or Dinar is a representatives of a nation’s wealth. In the mean time bank notes value is not represent able, the increase of its value doesn’t mean the increase of prosperity.

Last Sunday I had the opportunity to read a interesting article from American News Office Associated Press that illustrate that American economy is just like falling into the ungrounded well (abyss)- because it is too deep. The writers gave the title of the article: How Deep Is Economic Abyss?; explored the small but interesting facts such as:
1. Up till end of 2007, 36% of the American population’s income spent for foods, energy and health. This percentage is the highest since 1960.
2. People are become rarely having meals in restaurant; in January 2008 54% of the restaurant have a declining turn over.
3. People seldom throw garbage - due to optimization of their consumption/use of their products!
4. Total value of the property debts exceeds total value of the property owner’s equity.

And there are still a lot of other indicators that indicates the economy will recover soon. It is not easy to raise the economy from the very deep well.

The last question that even more interesting - is it now the right time to buy Dinar?

The answer is really depends on our motivation in buying Dinar. If we buy Dinar merely because of the economic factors, e.g. the rise and fall of the price – so buying Dinar is as complicated as buying shares. Sometime we bought at the high price but the price was still increase- so we still get the profit; or the other way around, even we bought in the cheap price but the price still declines and continue to decline – so still experience a loss.

For those who buy Dinar with this kind of motivation, I apologize that I can advise any tips for you – how to get always the profit.

Another motivation that I always encourage Moslems to use Dinar is as the form of “To built economic strengthen (yukhsinun)”; so that property of the Moslems can not be destroy by the speculator like in the year of 1997/1998. And of course the most important thing is to bring back Moslems to the way of Prophet Muhammad SAW and his Disciples that has Guidance from Allah – that is for using the money as fair as possible in all period for social intercourse. We can not be fair in social intercourse if the instrument itself- which is bank notes - is not fair.
For the buyers with the second motivation, there is no wrong timing to transfer from the unfair bank notes to the fair “money” in al era. Wallahu A’lam.
Labels: Crisis, Housing, the Fed, bank notes.

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Thursday, March 20, 2008

While the Fiat Money is Still Powerful

There is something strange with the capital market and global commodity in the last few days trading. We know that since September 2007 until now the Fed had cut rates six times.

Until the last five cut rates, the impact towards capital markets and commodity is obvious and easy to understand. Every time the Dollar is becoming less interesting, people rush to the capital market or commodity – oil, gold, etc. It means that after the Fed cut rates, usually the stock price increase, so is gold.

This can be seen in the graph, the Dinar price trend for the last year like I always provide in the side of this article; since September 2007 until early this week, the gold price and also Dinar, keeps going up.

The Feds rate cut of 75 basis points four days ago caused a contrary reaction with what has been happening so far. US$ is not down, instead it goes up, indicated by the increase of the US Dollar index in the last three days.

While the experts are busy trying to explain the anomaly, I honestly can’t explain it this time. All I know is that the gold/Dinar purchasing power is stable in all history, like what happened for more than 1400 years, and InsyaAllah will be stable until the end off the world. The decline of the oil price along with the decline of gold during the week, once again proves the accuracy of this gold/Dinar purchasing power theory.

While our fiat money, either US Dollar or Rupiah, is good at this point of time, it is a great time for us to return the the “money” that has a stable purchasing power for all era, the Dinar and Dirham. Dinar is “cheap” right now, in Gerai Dinar, the Dinar price this morning is almost at one month low.

There is a lot of things that we can be thankful of this decline in oil and Dinar Price; first we can breathe better that the scary increase of gasoline price and oil. Secondly, for the people that are not familiar with the Dinar, InsyaAllah the Dinar can be more affordable in the next days or weeks – hopefully enough time before it goes up again.

InsyaAllah the introduction of Dinar does not stop with the holders of Dinar just keeping them, the capital loan (Qirad) program we started in the last three weeks has opened the implementation of Dinar that is Subhannallah.. while there is a lot of time in this long weekend, I will try to write more detail about the capital loan (Qirad) program. May Allah Make Ease of His Way for all of us.
Labels: Dinar Price, Gold Price, the Fed

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Wednesday, March 19, 2008

The Therapy is Effective for Time Being...

This year the US Federal Reserve already tried to save the economy and its currency (US$) several times, take a look at my article, amongst others dated 12/1/06, 26/2/08 and 12/3/08.

The continuous rescue attempt can be viewed from two sides, first we can see how serious is the problem that the Dollar is facing so it needs to be rescued. Second, we can see that the US government is very serious to save its currency.

The first view was seen by the market in previous rescue attempts so the Fed’s efforts were not effective; while last night was different, the second view was seen by the market players therefore the Fed rate cut of 0.75 basis points succeeded in increasing the US Dollar and stock market at once.

In the money market, the US$ strengthens agains 15 european nation currencies, the Euro, from 1 Euro equals US$1.5831 the day before, to recover to US$ 1.5640 in yesterdays closing. In the stock market, the Fed’s latest rescue attempt succeeded in driving the stocks upward significantly. Dow Jones Industrial Average was up 3.51% from previous day, while the NYSE Composite Index was up by 3.97% from the day before.

What does this means for the price of gold and Dinar? The attractive stock market yesterday became the temporary competitor for the gold market. For the some of the players, the gold price is overpriced and was the time to take profit and used their fund to purchase stocks. Thus, the gold price declined to US$985.0/troy oz this morning.

The impact of this decline in global gold price is of course the Dinar in GeraiDinar also declined significantly, 2.25% from yesterday afternoon price of Rp 1,289,200 to Rp 1,260, 200.- this morning.

For every decline in price of stocks or gold, the market players can always have two views. For the decline of gold for instance, the market players can see that this decline will continue or just temporary and will go up again.

Those who view that this decline will continue is based on the reality that the gold price is too high according to them, because even this mornings gold price in US$ is still 51% higher than the gold price last year. Their opinion is that the gold price is too high and tend to decline.

On the other hand, I see that the price is still too low. The basis of my calculation is the real purchasing power of Dinar towards commodities like oil, etc. History has proven that the purchasing power of Dinar is the same in every era; so if it is used to purchase crude oil for example – the purchasing power of gold should be the same.

The steps taken by the Fed last night can only affect the money market and stock market, but the US$ purchasing power towards the majority of commodities like crude oil, nickel, or agriculture products, did not improve. The crude oil price for instance still lays at US$ 108.57/barrel this morning.

In my opinion, sooner or later the gold price will increase again and so will Dinar. But again, this is only my opinion; it can be wrong and don’t have to take my opinion. Only Allah the Most Knowledgeable.

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Tuesday, March 18, 2008

Prepare Your Umbrella Before It Rains...

When I learn about risk management, I learned the term Near Loss Incident. Our people call it… just almost…

The point is that big problems started with series of small problems that over time gets bigger and then it peaks ----bang ---- everything is destroyed.

In the world money market, that is what happened couple days ago. Almost the whole Global financial system collapse when the gold price rose from US$1002/troy oz to US$ 1029/troy oz during that day, before it finally under control again to US$ 1002/troy oz the next morning.

The world financial market has only reached the …just almost…collapse. But does it occur in our minds that the global financial system can really collapse ?.

What if something that happened in Indonesia year 1965 and 1998, or like Germany year 1923 or the Great Depression that started the fall of the US stock exchange in 29 October 1929 was repeated? What can we do?

Besides this blog, it’s good if you read Mindset, a book by John Naisbitt, for the “Angle” of the western futurolog, for him the currency of the future is real commodity that has intrinsic value. Meaning that if the world financial system collapse, what you need to hold at that time is something that does have value, not paper with given value.

This does not have to be gold or Dinar, it can be mining products, agriculture products, animal husbandary, property or other real wealth. From all this, the most practical and easy to get at this moment is Gold Dinar.

Today and the days ahead, the gold price tends to decline, so is Dinar – hopefully; this is a great chance to buy an umbrella before a heavy rain that is almost unbearable like couple days ago. Wallau A’llam.

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Sunday, March 16, 2008

It Can Be That The Fitrah Solution Makes The Stomach To Ache in The Beginning…

I took the title of this article from Rasool S.A.W Hadits, narrated by Abu Sa’id Al- Kudri: A man comes to Rasool S.A.W and said “My brother is having a stomach ache” then Rasool S.A.W said to that man. “Tell him to drink honey”, the man cam back to Rasool S.A.W and the Prophet said again “Tell him to drink honey”, then the man came back again for the third time and Rasool still says “Tell him to drink honey”, then the man came back and said “Rasool S.A.W, I’ve already did it” then Rasool S.A.W says “Allah has conveyed the truth, but your brother’s stomach is lying, tell him to drink honey”. Then the man asks his brother to drink honey again and he was well.
That Hadits is about honey and medication, but we can learn from a lesson embedded in that Hadits, which is… Allah has conveyed the truth, but the situation that we are facing is fooling us….

Last week was a miserable week for the World economy. A week where the US government applied a high dose therapy to save the Dollar (refer to my article dated 12/3/08 ), but it was proven to fail in the next two days (refer to my article dated 14/3/08). This failure is seen again today, when I am writing this article, the Sydney gold market has run for two hours, and in the first two hours the gold price already increased so high.
This failure is admitted by the President of United State himself, George W Bush, quoted from The New York Times dated 14/03/2008 titled, Bush Acknowledges Economic Troubles. In his speech in the Economic Club of New York, Bush said that “the economy is having a though time….If you ever get stuck in a situation like that, you know it’s important not to overcorrect, If you overcorrect, you end up in a ditch.”

If I’m writing and commenting a lot on the US economy and its Dollar, it’s not because I like to or vice versa with US, it is just the reality on the world we live in right now.

The ups and down of the Rupiah, the ups and downs of the Indonesian Stock Exchange is affected more by what is happening in the US$ than the decisions made by the Indonesian monetary authorities.
If the US is in a ditch… so are we; and we were reminded by Rasool S.A.W 1400 years ago with his hadits, “Step by step you followed previous people actions. Until if, they fall in to an Iguana hole, then you follow them into it”. One then asked, “Oh Rasool, are you referring to the Christians and Jews?” Rasool replied “Who else?”
So now we are in a ditch or Iguana’s hole (because Iguanas does live in a ditch!)…because we followed their currency and monetary system..
Then what is the solution? Lets return the Fitrah Islamic solution, the fair Dinar monetary system, usury free capital, and get rid of speculative economic practices, full of Gharar and Maisir…

But we may experience a stomach ache first like the Hadits above…its fine as long as we will heal.
This solution is not just for Islam people; other people that truly seeks for solutions will find the same solution. Look at the GATA proposal to change the US$ with gold and silver that I’ve quoted in my article dated 12 December 2007 in my old blog. Wallahu A’lam.

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Saturday, March 15, 2008

A Chance To Contribute More in Returning the Wealth of Islam

When I wrote the book “Returning the Wealth of Islam with Dinar and Dirham” about one year ago, honestly I was depended on literature studies from different sources – while practical application was a big zero as no body in the market was really familiar with Dinar at that time.

Alhamdulillah it is more obvious how the Dinar will InsyaAllah return to be the tool to prosper Islam now. The micro indicator is clear. When the book was published, 1 (one) Dinar was equivalent to Rp 877,000,- the readers that applied the content of the book has gained a profit of 46% up to today if you look at it from the Rupiah currency point of view, because the Dinar price today is Rp1,282,600,-.

From another perspective, the reader who migrated to Dinar has saved its property from declining value of 32% during the last twelve months.

But Dinar should be the main currency for all the people, not just those who had the chance to read Dinar books and of course not just for those that can access the internet every day, so they are updated in many investment opportunities.

Dinar must and can spread to all the people so that the prosperity is equal, and because of that, the effort to return the Dinar must be a big program that involves as many people as possible that are care towards the prosperity of the people in the future.

For that purpose, I’m asking the readers who have a spare time or money, to participate in spreading the Dinar to the people. The following are some efforts that we can do together:

• Just like what we have done in several Mosque and offices in Jakarta, lectures about the Dinar should be done in other cities in Indonesia or even overseas.
• Bachelor, Masters, or PhD students who are interested in studying Islamic economics can study the Dinar seriously for final paper or thesis.
• We need many books to publish that explain the use of Dinar in the peoples daily lives.
• Continue to develop the technology that allows the modernization of the use of Dinar but not abandoned the basic muamalah principal in accordance with syariah.
• The need to teach and train Muslim entrepreneur with integrity and professionalism; they are to become the mudharib of the future where the shahibul mal can provide capital loan (qirad ) with their Dinar for the real trade or business.
• Islamic Economy in general and Dinar in particular need to be introduced to the Junior and Senior High School Students so generations to come they know about the fair currency and avoid usury.

As it is beyond our own capability to run all of the above, we welcome the reader’s participation who wants to contribute in the development of Dinar in Indonesia. If the contribution is in the form of man power, please contact us via email. If it is a cash contribution, in the right side of this blog there is a donation link to accept donation through all major several credit cards and paypal.

Hopefully, this step can increase our good deeds in the hereafter.


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Thursday, March 13, 2008

US Dollar Therapy Failed – Gold Close to Pass US$ 1,000/troy oz!

In my article two days ago, I doubt the high dose therapy by the Fed to save the US Dollar. My doubt was answered last night – which the therapy by the Fed and four other central banks – failed to save the US Dollar.

kegagalan US Dollar - US $ failureThe indicator of failure is clear if we use the stable purchasing power and the Muamalah scale that is fair for eternity, the gold or Dinar. Gold price in the international market was close to reach the US$ 1,000/troy oz last night. Look at the side chart that portrays the world gold trade since the Fed did the program to save the US economy – which also means the US Dollar. Look at the point that I gave an arrow in the line of 1,000.

Failure of the US Dollar will mean the failure of all fiat currency, including Rupiah. It is because we use US Dollar as the benchmark of the Rupiah value. If the benchmark dropped – then our currency will drop too.

Along with the drop of the Rupiah that follows the drop of the US Dollar, follows with it the wealth of this nation. Try to imagine how steep is the value decline (real purchasing power) of our nations wealth, part of it is our Central Bank’s foreign exchange reserves of US$57.125 billion last month.

The decline of purchasing power is not seen if we use fiat money, like the US$, Rupiah and other currency. The decline of purchasing power can only be seen if we compare with real commodity prices such as oil, rice, wheat, and the most universal one is gold.

I’m trying to understand why IMF in its Article of Agreement (Article IV section 2 ) allows its member nations to relate its currency with any other currency in the world – but prohibit to relating their currency with gold. It seems that only with gold, the failure of the world financial system can be seen clearly.

The failure of the US Dollar yesterday (so as the Rupiah), once again it is the proof of the failure of the paper money, just like in the article I wrote end of last year in The Destruction of Paper Money Follows Fibonacci Numbers.

Lucky, for those who believed my article 2.5 months ago and the safe all your hard work by converting your paper money wealth to real wealth, Dinar.

At the time I wrote the Fibonacci Theory article, 1 Dinar was Rp 1,090,100. This morning, 1 Dinar is Rp1, 272,600. It means that in Rupiah terms, you gained a profit of 16.74% in 2.5 months!

From the Dinar point of view, you have saved your wealth from a decline of 14.34%! In the last 2.5 months! Why different? Because in simple mathematics, (a/b-1) % is different with (b/a-1) %.

My theory and article can be wrong and may Allah forgive my sins if there are mistakes in understanding His Knowledge, the Right is only Allah.

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Build The Family Economic Strength With Dinar, But No Hoarding…!

Looking at this title maybe you are confused, how can we use Dinar or even reserve it but not hoarding? How? What is the limitation? Etc.

Regarding our responsibility to our property, I’ve written it in other article with the topic: “Our Property, Asset or Liability (in the hereafter)”. The point is it is our duty to fulfill the need for ourselves, family, anticipate emergency needs and leave strong children”.

Even Al Quran teaches us how to anticipate an emergency needs in Yusuf 47-48: “He (Yusuf) replied: ‘You will cultivate for seven consecutive years. During these years, you should leave the wheat you reap in the ear, except what may be sufficient for your food. Then, after that period, there will come upon you seven hard years which will eat away all that you had stored except a little which you may have specifically set aside”.

This verse is the basic and also method (minhaj) for Moslems to prepare themselves to face the difficult periods. What is the difficult period for the people in this era? Generally, difficult periods in this era such as monetary crisis that peaked in 1997-1998, a period of many dry seasons, earthquakes, floods - all are triggers of difficult periods for the people.

Individually, difficult periods can mean loosing job/income, pension, sickness, loosing the head of the family, etc.

Then how to anticipate those periods? Store some of your income in the “stem”. The meaning of leave the wheat you reap in the ear, is in order not to be rotten quickly or reduced in quality and value, so it can be a seed to plant again anytime.
The major property and income for people nowadays is not corn, it is money. Then how to preserve the money in order for the value not to be rotten from time to time? The answer is very simple – that is why money in Islam should have a real value (intrinsic value) such as gold, silver, wheat, dates etc.

From those commodities, of course gold in the form of Dinar is the most practical to store. Gold bar is also practical but not too liquid and do not have the flexibility to sum up and divide. For instant you have 100grams gold bar, and you need 10 grams, so it’s difficult to break it into that amount. If Dinar, you have 100 Dinar and you need only 10 Dinar, so just release the 10 Dinar and leave the 90 Dinar with you.

Storing Dinar just as needed - every one of us has the feeling to know how much is our actual requirement (ask your deep heart - and you will know it), we are given inspiration from Allah to know it “and inspired it with knowledge of what is wrong for it and what is right for it” (QS 91:8).

What are the consequences if we store property in whatever form such as banknotes, houses, cars, shares even gold in huge amounts and not spend it in Allah way? The threat is a painful torture for those who is hoarding. (QS 9:34-35)

So store property as needed to fulfill our responsibility for ourselves, family and next generation is something that is allowed and guided, because it is part of the people economic strength – in the Quran surah Yusuf that has been mentioned it is called Yukhsinun (Tukhsinun to refer to a second person).

In the contrary, storing more than needed and not spending it in Allah way is an act of hoarding and prohibited – in the Al Quran mentioned as Yaknizun !.

We should know the different between Yukshinun and Yaknizun, because we are inspired by Allah to be able to distinguish it. Wallahu Alam.

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Inflation that Wipeout Years of Hard work…

Yesterday during the holiday I had a chat with one of the visitor of Gerai Dinar at Depok…, this was the first time that visitor seen Dinar physically and fell in love immediately by transferring some of his savings in to Dinar.

I would like to expose my discussion with that visitor; the reason maybe transferring your saving to Dinar might become an inspiration for the readers of this blog. Listen to his story; I come to a conclusion that he was worried that the value of his savings since several years ago will decline drastically, especially savings in Rupiah and or US Dollar.

According to me the reason is exactly right and this message I shall convey it to the readers of this blog through the tag line: “Investment & Value Protection”. In my previous article, I wrote that Dinar as an investment only sits at number 2, but as Value Protection – Dinar is the best.

To understand how Dinar works as a value protection, I take an example of the productivity of my colleagues which categorize as an Average High in both performance and investment. Currently his age is early 40s and started working since 1990. When he started working, his income was Rp.1, 000, 000, - net, now his income is Rp.37, 000, 000, - net per month.

With his strong willing to be able to get a good education for his children and will have a comfortable life during his old age, he always put aside 20% of his income every month to be saving at the government bank. Last year his saving was Rp.1.033 billion. Is it a satisfactory result of his hardworking for several years?

Lets see these two charts; from the Rupiah point of view – it is true that it is increase – but the increase is less than the Dinar increase. But saving in Rupiah still better than in US$ during the last 18 years – considering that profit sharing in Rupiah is far more higher than in US$.

In Rupiah of course his saving continuously increased. Besides also get the interest (at first start with interest because Syariah Bank was still limited at that time, but then move to Syariah Bank and get a profit sharing), the savings value continuously increase because he put aside 20% of his monthly income to Bank.

Let’s see now with a different parameter which is Dinar. Why Dinar? Because Dinar has a standard value that could be used as a parameter of real purchasing power in all eras. I have explained it in my previous articles, that price of crude oil statistics, one of the parameter of modern economic and also based on Al-Qur’an and Al-Hadits.

By change the Y axis of first chart from Rupiah to Dinar, it is clearly seen that since he start saving 18 years ago, the value was decreased twice. In 1997-1998 decreased drastically and suddenly and everybody in this country suffered the same thing. The last two years the decreased of banknotes to Dinar was also serious – but it happens gradually- most of us do not realize.

Can you imagine with a hardworking and saving for many years in other to safeguard our future and our family future, in fact our wealth is wiped out gradually by inflation.

This does not only happen in our country, but it also happens in a super power country. This analysis was also done by Larry Parks, Executive Director of FAME (Foundation of the Advancement of Monetary Education) which is an non government organization that is trying hard to create awareness of the American public the dangers of banknotes currency system. With full of confidence he give a message to American public: “With the Monetary system we have now, the careful saving of a life time can be wiped out in an eyeblink”.
Wallahu A’lam.

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Price Increase and Scarcity...

This morning when I write this article, international crude oil price is US$110/barrel, so that Dinar’s price is also increased. This time I want to write another issue, scarcity.

The scarcity is always become a main reason for conventional economist to justify the continual price increase. After world war II the crude oil international price was US$1.5/barrel and by this morning its become US$110/barrel, then they blame because of the scarcity of the natural resource which is crude oil (as a scapegoat).

Islam Economic Concept is based on Allah, The Supreme Reach and The Widest Knowledge. Allah provide our need sufficiently until the end of the world, our task is to make use of The Bounty of Allah. To make use of this, we have to be always continuously study of His Guidance by studying Al Quran (qauliyah), and also The Universe (qauniyah).

Because of their limited knowledge, conventional economist uses the scarcity of crude oil as a scapegoat of the increase of prices. Their knowledge is just like a drop of water in the sea if compare to Allah Knowledge.

In the sector of energy, the limited knowledge of human being very often cause energy crisis that seem could not be solved. Just after several years later they aware of what a silly that kind of crisis could be happened. In England year 1500-1650 the price of -fire wood and its derivatives (e.g. charcoal!) increased up to 8 times because their knowledge for energy was limited to fire wood and its derivatives at that era. When the forest land was cleared for the need of fire wood and almost finished, so they start to import fire wood from other countries, and causes the price of fire wood was increased drastically. They had not found the alternatives energy at that time because of still limited knowledge.

In this current era the people also has the same serious problem of energy crisis. The 70 times price increase within the last 60 years, since World War II with US$1.5/barrel up to now almost more than US$110/barrel this morning. Could you imagine how much will be the price for the next 10 years? It could be 10 times from now...or even higher !.

The crucial issue for the next few years is actually not the price, but the availability. If it will not available anymore, so what should we use for the main energy at that time ?.

The scientists from multi discipline have been trying to find alternative energy by doing a lot of research and development since several decades ago to maintain the human life. But up to now it has no sign of common understanding at all where do they go in developing the alternative energy.

There are so many kind of natural resources were developed as alternative energies such as: solar energy, geothermal energy, nuclear energy, waves, wind, bio diesel and even reused cooking oil, but is there any better or more efficient way to find the alternative energy rather than depend to the scientific research and development only?.

This is the importance of His guidance; we could never find the right answer unless Allah Will! So besides doing hard work to find the alternative energy, we have to have His Guidance. This is not something mystery, and only be given by Allah to a certain people, but will be given to anybody that Taqwa and seriously try to find it. And where is His Guidance? It is no where but in the Al Quran! Even Allah has informed us about His Absolute Guidance: “This is the Book (the Quran) in which there is no doubt. It is a guidance for the God conscious,”” (QS 2:2)

As a Guidance for the people in the era of the end of the time, we have to belief and very much believe that the truth of Al Quran is until the end of the world, so as of the guidance too. Everything in the Al Quran is never being out of date until the end of the time. And because Al Quran is the Guidance from Allah for the people, so that no single thing that is not in the Al Quran, more over it is in other to make the people wealthy, such as energy.

Hopefully now we are very much belief on the Guidance in the Al Quran, and His guidance is for sure always right until the end of the time. Let’s find His Guidance in the area of this Energy. My observation on the Al Quran in relation with Energy, it seems that Wind-Energy is dominantly mentioned in the Quran verses as follows:

• "Your Rabb is the One Who drives your ships across the ocean, so that you may seek His bounty; indeed He is ever Merciful to you" (QS 17:66)

• "Of His signs is that He sends the winds as bearers of good news, giving you a taste of His blessing, and your ship may sail by His command, and that you may seek of His bounty, and that you may be grateful." (QS 30:46)

• "Do you not see how the ships sail through the ocean by the grace of Allah so that He may show you some of His signs? Surely, there are signs in this for every patient, thankful person." (QS 31:31)

• "We have left the Ark as a sign, so is there any who would take admonition?" (QS 54:15)

• "We made the raging winds subservient to Sulaiman, pursuing its course by his command to the land which We had blessed; and We have knowledge of everything" (QS 21:81)

• "And We made the winds subservient to Sulaiman, which made a month’s journey in the morning and a month journey in the evening; and We made a fountain of molten copper to flow for him and subdued jinns for him who worked in front of him by the leave of his Rabb; and if any of them turned aside from Our command, We made Him taste the punishment of the blazing fire." (QS 34:12)

• "He is the One Who sends the winds as heralds announcing His Mercy and sends down pure water from the sky "(QS 25:48)

• "It is Allah Who sends the winds to raise the clouds, then He spreads them in the sky and breaks them into fragments as He pleases then you see raindrops falling from their midst . When He showers this rain upon those of His servants whom He please, lo! They are filled with joy," (QS 30:48)

• "It is Allah who sends forth winds to raise up the cloud, then drives them to a dead land and therewith revives the earth after its death. Similar will be to the resurrection of the dead. "(QS 35:9)

• "We accepted his prayer and subjected the winds to his power, which blew gently in whichever direction he wanted" (QS 38:36)

• "If He wants, He can cause the winds to become still and leave them motionless on their backs – surely in this example, there are signs for every such person who patiently endures and is grateful. "(QS 42:33)

• "In the alteration of night and day, in the sustenance that Allah sends down from heaven with which He revives the earth after its death and in the changing of the winds, there are signs for those who use their common sense." (QS 45:5)

• "Surely, in the creation of the heavens and the earth, in the alteration of the night and the day, in the sailing of the ships through the ocean for the profit of mankind, in the rain which Allah sends down from the skies, with which He revives the earth after it s death and spreads in it all kind of animals, in the change of the winds and the clouds between the sky and the earth that are made subservient, there are signs for rational people" (QS 2:164)

• "He is the One Who sends the winds bearing good news of His blessings, so when they light up heavy clouds, We drive them along to a dead country-side and make the rain fall upon it and bring forth all kinds of fruits from the same dead land. Likewise We will raise the dead to life; this example is given so that you may learn a lesson from this observation" (QS 7:57)

So there is a lot of verses in the Al Quran indicating Wind as a source of Energy (such as to move the ship etc), the question is it only valid for the sailboat that at that time that is using the wind to move the sailboat? This for sure not the meaning, because the truth of Al Quran is until the end of the time, so the wind to move the ships (can be also to move the airplanes, cars etc.) is valid until the end of time.

After we belief on this Guidance, so the research and development for energy could be in line with these directions.
The basic principle is that what Allah wants is for sure will be happened, and what Allah doesn’t want, it for sure won’t be happened, so we have to develop the alternative energy to the direction of what Allah wants.

It will be useless to develop the alternative energy that Allah doesn’t want. Until now people have been developing Wind as the alternative energy as follows:

• Wind is happening through a complex process, but in a simple way could be explain that wind is happening because there is a flow of air that have a different temperature. This temperature difference will always exist because of the sun shines the earth in different heat from place to place because of the different distance; the temperature in Equator is always different with the temperature in the Pole, even in the same Equator the temperature between the seasides is different than in the landside. Because there is always a different temperature, so the wind will always exist.
• The researchers indicate roughly that the potency of the wind energy is 5 times of current global energy requirement and 40 times of current global electricity requirement, so it is more than sufficient to fulfill the need energy for the human being.
• Some countries are already using the Wind for alternative energy to reduce the dependency on the crude oil. There are three countries that already significantly using wind for the energy, which are: Denmark (20%), Germany (9%) and Spain (7%) from the total energy requirement.
• In the Scientific Magazine dated 24th of June 2005, it has been exposed that based on scientific analysis by M.Z.Jacobson et al that Hydrogen output through electrolytes process and Electricity output through windmills can be produced economically with the current technology. Based on this experiment, in United State of America in 2005 if the Hydrogen from the wind energy is used for cars. So the price for the fuel is similar with US$1.12 – US$3.2 per gallon of gasoline or diesel, in the meantime they have to pay around US$3.0 per gallon (depend on the location) for gasoline or diesel.

It means actually since 2005, the use of wind energy to produce electricity, and the electricity is used for electrolysis’ process to produced Hydrogen; it has been economically feasible to be used for cars to replace gasoline and diesel. It is only a matter of time that Hydrogen could be used for airplane’s and ship’s fuel.

In the last 25 years the cost of producing wind energy reduces by one fifth (20%) and in the mean time the price of oil increase almost triple! In other word in the years to come the wind energy will be more competitive.

From the scientific findings in the field of Wind Energy which is in line with Al Quran Verses, so it will be more effective if the direction of energy development in our country should be in line with them. It doesn’t mean that another alternative energy couldn’t be developed, but it is better and more efficient if the scientists (especially Moslem) to study Al Quran first, because It will be the best nothing but the best reference.

So what is the connection with the price increase as per our title? Energy resources and all other human needs until the end of the time are available sufficiently if we use Al Quran as our Guidance. So scarcity is not an excuse to justify the price increase. Wallahu A’lam.

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Tuesday, March 11, 2008

Once Again the US Dollar Needs to be Rescued…

Like a rich old man that is sick and dying, at a certain age He must die... but because of wealth, anything is done by the medical team to save Him. Medication after medication, high tech equipment is brought upon – for a while He survives – but in the end, death will come…

So is the faith of the US$ (and automatically all the paper money in the world currently); since the sub-prime mortgage crisis one year – several action is done by the monetary authority of the United States – The Fed. So far the medication is called lowering interest rate; but even after lowering the interest rate several times in past few months, the US$ is still not rescued. The US$ index declined to its lowest point in the past week.

Yesterday at local time or last night Jakarta time; ‘The Medical Team’ the Fed is more creative in searching the ‘new cure’ in its efforts to save its US Dollar. It is so new, the name of this ‘new cure’ is never heard of before by the market – TSLF abbreviation of Term Securities Lending Facility.

TLSF is just another form of a loan facility of The Fed for banks that need help with liquidity. The difference is all this time the loan is given in the form an overnight lending; TLSF is given in one month. The number is outrageous, reaching US$200 billion !!

It doesn’t stop here, The Fed is also involving other Central Banks to help out the ‘sick old man’, they are Bank of Canada, Bank of England, European Central Bank and not to miss out, Swiss National Bank.

Are those extra steps will save the US$? Doesn’t look like it. Please see the graph in the side; the international gold price is getting ready to sky rocket before the Fed announce its move. After the announcement, the extraordinary steps taken can ‘just’ return the gold price at previous closing price.

The therapy by ’the Medical Team’ of the Fed as usual can only reduce the symptoms of the ’sickness’ of US Dollar, but never really cure.

If the following days, the oil price remains high like the oil price this morning; US$108.67 – at the time I write this article; then the US$ will look ‘sick’ again. Following average 9 year statistics, at a US$108.67 oil price; gold price should be in the range of US$1,080.00/troy oz and Dinar price should be in the range of Rp1,400,000/Dinar!

Actually I wanted to write a lot today, but save it for next time. This article is written on my way from Jakarta to Bandung and now I have arrived in Bandung – Alhamdulillah, technology allows me to access all the research materials I need, even when traveling. Wassalam.

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How to Make Your Dinar Productive…

Alhamdulillah since I wrote about how to make the Dinar of our customers productive in the article The Next Step after the Dinar Introduction, we receive many responses.
But since it is a new for all of us, not all the questions regarding the Qirad program are easy for me to explain and not all is easy to understand. To help me explain, I present a graphical illustration of this program.
Dinar Based Qirad System

The explanation of the graphical illustration as follows:
1) If you’re interested in Qirad your Dinar; you could send your Dinar to us or register to us your Dinar to be traded. No need to doubt, the gold/Dinar to Rupiah trade is allowed based on the hadits from Rasulullah SAW narrated by all the big narrators except Al-Bukhari, as follows, from Ubadah ibn Al-Samid: “Gold with Gold, silver with silver, wheat with wheat, wheat rice with wheat rice, dates with dates, salt wth salt, same amount, from one hand to another, if it is a different kind, then trade as you want as long it is from one hand to another”. What is forbidden is trading the same kind of money (i.e Rupiah with Rupiah) but with different amount – because it is usury.
2) After we receive the Dinar or registered in Gerai Dinar, therefore the Dinar is traded and the buyer purchase from Gerai Dinar with Rupiah.
3) From the sale of the Dinar, the Rupiah is then used by Gerai Dinar to order Dinar from Logam Mulia
4) After Logam Mulia finish production and deliver to Gerai Dinar, Gerai Dinar take part of the surplus to net tax allocation (difference between expense tax and income tax), operational cost and delivery/insurance for around about 3%.
5) The net proceeds after deduction from the cost is point 4; let say around 2%, then this 2% is shared between the capital owner of Qirad and Gerai Dinar.
6) The Qirad capital and the share proceeds is given back to the investor, or if agreed by the two parties, can be used for another round of trading.

And so on so that your Dinar is safe in Dinar as well as growing with the permitted trading, not by the prohibited usury.

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Monday, March 10, 2008

Three Choices for Your Dinar….

To answer the question and meeting the demand of the public that is familiar to the Dinar, Gerai Dinar is improving its service so that the public can choose - what to do with the Dinar they own.

In principle, there are three choices now, the first and earliest service is for the public to purchase Dinar at Gerai Dinar and then keep it themselves. The advantage is that the owner keep the Dinar themselves so they can feel more comfortable. Another advantage is the Dinar can be used anytime. The disadvantage is that the owner must think about a safe storage themselves. Another example is that for residents of small cities in Indonesia – most probable is that they cannot have the Dinar because of delivery problems.

Tiga Pilihan Dinar - Three Dinar OptionsThe Second service is the service that we give informally so far for those who ask for us to help with the storage of their Dinar. Because is involves storage responsibility, syariah insurance protection and safe deposit box fee, we are formalizing the service. The implication is that the people that use the storage service for their Dinar is asked to contribute on the cost, currently 0.5% of the value of the Dinar stored. The main cost for is the insurance cost, ranging 60% - 80% of the total storage cost.

The benefit of this protected storage service is that your Dinar is safe and can still be used/ redeemed anytime needed. The disadvantage is that you pay extra fee of 0.5% of your Dinar value annually.

The third service is that your Dinar is loaned for trading ( Qirad) to Gerai Dinar, explained in my article on 29/02/2008 and on 9/03/2008. The advantage of this program is that your Dinar is productive and grows the Halal way because it is through a real trading. The growth will InsyaAllah always more than enough to cover the storage cost, insurance, etc. The other advantage of this service is that it can be the solution for those who is starting to migrate to Dinar but are worried to excessively store the Dinar because it can be categorize as hoarding - which is prohibited in Islam, by Qirad, it will be safer (from hoarding) because the Dinar will be a real trading commodity or investment in the form of productive wealth.

The disadvantage is Dinar that is loaned for trading/Qirad cannot be redeemed anytime, if the owner wants to redeem before expiry date according to the Qirad agreement – then the owner need to wait around one month before they can have their Dinar back. This is because the Dinar that was Qirad is on circulation or in the process of reprinting.

So with the plus – minus of each of the choices; people can choose which is most appropriate for their Dinar. Whichever they choose, InsyaAllah it will be a non losing trade – tijarotan lan tabuur – amin.

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Sunday, March 9, 2008

Where is The Dinar Price Heading …?

I am writing about the trend of the Dinar price again; not to be ahead of the will of Allah, but it is a mere attempt to understand the existing phenomenon. Then using the knowledge blessed to us from Allah to try to understand what might happen in the future.

Don’t think it is some black magic knowledge; it is just a simple statistics study, especially Oil and Gold price statistics. It will be like my article at the end of last year (27/12/07) where I tried to bring up the statistical fact that for the last 60 years, the Oil price is relatively stable if purchased using the Dinar money.

And in my article yesterday In Order Not to be Bankrupt, once again I used statistics to update my previous article that the price of Gold/ Dinar for the last 8 years is relatively consistent with the increase of Oil price.

Now I’m going to use those two statistics to understand where is the Dinar price heading this year; this time I will also use crude oil price forecast from two competent analysts in their field.

First is the oil price forecast by Andurand from BlueGold (Bloomberg 7 March 2008), who forecasted the crude oil price reaching US$130/barrel this year.

Second is the crude oil forecast by Goldman Sachs (Marketwatch- New York, 9 March 2008) that predicted the worst case scenario for oil price is it will reach US$200/barrel in the near future – if there is a serious oil supply disruptions. Looking at the geopolitics map of the world recently, then the serious disruptions to the oil supply Goldman Sachs is talking about, could happen.

Prediksi Harga Dinar - Dinar Price ForecastNow based on the correlation statistics between crude oil price and gold prices I have presented previously, adding the crude oil price forecast of BlueGold and Goldman Sachs; my personal calculation –you don’t have to follow – if someone ask me where is the Dinar price heading to, it will be in the range of Rp1,705,000 (with global gold price of US$ 1,280/troy oz and oil price of US$ 130/barrel – in accordance with BlueGold’s forecast) to Rp2,623,000 (with global oil price of US$ 1,970/troy oz and oil price of US$ 200/barrel – in accordance with Goldman Sachs worst case scenario)

Because it the correlation between gold price and oil price is so apparent – represents the real commodity price most need by the humankind in this era, so starting today, Gerai Dinar will present the crude oil price in real time. Hopefully this global crude oil price information can help us understand the movement of global gold price, automatically the Dinar price.

With the new forecast, therefore forecast/prediction I made before is obsolete. It is just a forecast made by a human being with limited knowledge, it can be wrong. Only Allah is Most Knowledgeable.

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Friday, March 7, 2008

Where is the Dinar price headed this week?

Last week was a stellar week for Dinar price; the price rallied to new record highs. The Dinar price closed at Rp1, 225,000 – historical high. Gold against the US$ is at around US$ 974/troy oz – historical high; and the US$ Index is at around 73.8 – historical low.

In my last writing last Thursday, I’ve already explained Why the Dinar Price Goes Higher, by looking at the declining trend of US$ value driven by the decline of the US$ Index.

US Dollar Index Trend and Its Effect to Islamic Dinar PriceThe decline of the US% Index, looking at a five year trend shown in the graph, looks to continue. Up until now, I don’t see any significant step of actions that can reverse the declining trend.

What does this mean in relation with the Dinar price? Because international gold price still uses US$, it will mean that in US$ the gold price will keep going higher and consequently the Dinar price will go higher too. Even though the Dinar price is at its record high, we might well see new record high in the days ahead.

For those expecting the Dinar price to go lower, most probably will be disappointed. The chances are, it will go even higher.

Once again, this is my personal analysis, I can be wrong, and all I did is point out the statistical facts.

Based on that statistic, if you are thinking to switch some of your saving into Dinar – insyaAllah even with a high Dinar price, you are not late – better to switch some of your savings into Dinar now – before the Dinar price continues it rally to new record highs day after day. Wallahu A’lam.

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Welcome to Gerai Dinar - English Version

Alhamdulillah, as of today Gerai Dinar come with the English Version. I know that about 15 % of our visitors come from 28 countries where you do not use Bahasa as your language. In the past you might had been strugling to understand what I tried to say in this blog; Alhamdulillah - insyaallah you will be able to read all my future posting in English as well.

For the past postings - more then 70 postings so far; I will try to translate one by one. Not so fast - but we will get there within the next few weeks - insyaAllah.


Test - Gerai Dinar - English Version

Test English version of Gerai Dinar