I'm not too familiar with the World Islamic Economic Forum (WIEF). From looking at it's website, it looks to me like a chamber of commerce amongst Islamic nations. I don't know how influential it is - or how seriously it is viewed - if anyone does - please chime in.

Here is the article, emphasis mine:

Members of the World Islamic Economic Forum (WIEF) have been asked to support former Malaysian Prime Minister Tun Dr Mahathir Mohamad's call to consider gold dinar as a trade instrument among member countries of the Organisation of Islamic Conference (OIC).

In making the call, Cydinar Sdn Bhd chief executive officer Mohd Zahari Osman said the Islamic gold dinar system was simply a gold payment system.

"It's a currency fully backed by gold, not meant to be offensive, rather a defensive mechanism," he told Bernama here on Friday.

Dinar is derived from Latin "Denarius", the gold coin of the Roman Byzantium Empire and dinar is therefore European in origin.

In 2001, Dr Mahathir mooted the idea of a gold payment system -- the gold dinar -- to settle bilateral and multilateral trade payments among countries and thereby eliminate foreign exchange risk.

In this mode, gold is to be used as a medium of exchange and as a unit of account instead of the national currencies.

Prices of exports and imports are to be quoted in units of gold weights.

The proposal was to source for an alternative system in the wake of the uncertain economic situation as the conventional system was vulnerable to currency manipulation and speculation.

Mohd Zahari said the proposal to use gold dinar as a trade instrument should be accepted by all as it would bring about numerous benefits.

He said Islamic Economics differed fundamentally from man-made laws and systems in defining economic problems.

"It represents the only wholly independent, alternative economic paradigm in the world today," he said.

It is based on principles revealed from Islamic sources as norms for human welfare that offer a strikingly alternative set of parameters for economic activity.

According to its proponents, he said, it offered a comprehensive, coherent and better alternative to those currently in use in the Western economics Monetary and Fiscal.

"The role and realm of reign of each will be specified to the set of assumptions that is derived from the Islamic economic system, which include Zakah, prohibition of interest, moderation in consumption, the Islamic inheritance system, Hisbah, Qirad, and the co-existence of private and social ownership of the means of production," he said.

Zakah provides a major means of fiscal policy because it affects the allocation of resources, the level of aggregate demand and the distribution of income as well since the variations in the volume and the timing of collection and disbursement of Zakah creates variations in disposable income and fixed and circulating capital.

"The economic policy has to do with the role of the government. Such a government role is made available through its ownership of the major natural resources and al-Hisbah," he added.
Here is the full article/source:


Now I don't want to start a religious debate (I'm an agnostic, BTW) but I do believe that something more than religion is at work here.

Let's look at the big picture. We westerners, these past 50 or so years, have consumed a disproportionate amount of the world's resources, and continue to do so. Much of this consumption recently has been fueled by the FIRE economy - basically, the West's monetary system(s) have pushed up asset values allowing for greater consumption. Western governments have also been able to increase aggregate demand by inflating their budgets and national debts.

But as 3-4 billion new people from the Middle East and Asia come on stream in the global economy, how will these resources continue to be allocated? Can one nation continue to use debt based paper to compete with another nation that is exporting its oil or productive output, for these same resources? What if the Middle East and Asia begin to have their own super juiced-up FIRE Economy and runaway deficits? Those 3-4 billion people could make competition for resources extremely difficult if aggregate demand skyrockets thru the same run-amok distorted Monetarist/Keynesian policies the West has used.

Will something give eventually? Is the WIEF really using a religious argument, or a self-interested economic one? If such a block of nations trade with gold amongst themselves, how does that effect other trading areas?

I'm not saying that the WIEF will be successful with a gold standard, it remains to be seen what the governments and corporations involved have to say. The fact that it is being brought up is significant, in my view.

But honestly, I do see a day where gold will come back as a reserve currency of sorts for global trade. It's not only because the fiat system we have now is on its last legs (IMHO) but we will need to arrive at a fairer economic and monetary method for nations to pay for depleting resources, or we will just ultimately blow each other up over these remaining resources.