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Islamic Dinar : 4.25 grams 22 K Gold

Dirham Islam : 2.975 grams Pure Silver
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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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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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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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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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