Explanation of the reason for prohibiting trade in paper currency.

The questioner : What I understood from your talk is that paper currency, or... paper currency, has no intrinsic value; it has only a nominal value, and you assumed that the state determines this nominal value... But that is not what happens. What happens is that this paper currency is either backed by gold reserves or by a basket of currencies, as they call it, or the state has no real relationship with determining the true value. For example, in many cases, the value of a specific country's currency is determined by other countries as a result of the balance of payments and trade exchange between one state and another. So, what determines it is the value of the national output, or it is the group of goods and resources produced in that state. A state suddenly discovers oil, so it gains options that did not exist before, and its currency rises without its consent. So, what determines the true value of this paper currency, which is a symbol for existing reserves... pounds or gold, plus the commercial transactions between its country, is no longer determined solely by a decree issued by the state, or by the desire of the concerned state. It may even be the exact opposite, where other states conspire to make a specific state's currency value and the value of its paper rise in order to reduce its exports to other states, as happens with Japan and America. Japan is always concerned that the dollar remains high so that people do not import from America; they find it expensive and import from Japan. America declares that it wants to lower it, but it does the opposite. So, it is not always the state that determines or controls the valuation of the paper.

The Shaykh : No problem, I am following you on this, but I do not agree with what you said at the beginning of your speech, even if you "cut" the matter at the end; it is not just this, and that is what it means.

The questioner : ... It is possible.

The Shaykh : This is possible, and this is also observed, and I do not know how this generalization came out of you in your first speech. It is observed that the state, especially America, in order to strike other states, raises and lowers [the currency] according to its personal interest.

Another questioner : It goes to interest.

The Shaykh : Yes?

Another questioner : It goes to interest.

The Shaykh : That is it, but for it to be the only reason, I am not saying it is a single reason, but in any case, the matter falls under the topic of gambling where the situation is not regulated. Why did Allah forbid gambling and betting? It is because it is not based on natural cosmic causes that, if a person adheres to them, like permissible trade, he will mostly succeed, and even if he sometimes loses, there is no harm. So, this is exactly like gambling; therefore, I say that a person cannot live in a country that has a relationship with another country without being forced to convert currency, but the intention is that he does not make that a trade; because here it is said to be within the ruling of necessities, otherwise he would lose his money and his entire trade if he did not perform this necessary exchange; especially the scenario that Abu Muhammad brought up earlier.

The questioner : I am going to speak about it now. I did not understand at all what the difference is between the scenario that Zuhair brought up and the scenario that Tahir brought up. Zuhair said, "I want to import goods from a country abroad. I know now that the value of the pound sterling in which I want to import is low, and I am afraid that in two months, when the goods arrive and I want to pay, the value of the pound sterling will rise. So, I buy my need of pound sterling now to import those goods and convert it, thereby ensuring that I buy it at the current price, just as Tahir said. I agree with Zuhair: I sell him the goods for ten thousand dinars now, the price corresponds to ten thousand, I buy the pound sterling now to reserve it, and I take the goods."

The Shaykh : The scenario has no difference, but the difference is in the intention.

The questioner : The intention is that this price...

The Shaykh : clears his conscience without increase or decrease here, right or not? Whereas here there is a big difference.

The questioner : That he wants to import at the lowest possible cost.

The Shaykh : That is it.

Another questioner : Yes, but the difference, excuse me, the difference is that they say "okay," I am telling you the difference, they say "okay" and it is linked to it, I...

The Shaykh : My sir, the scenarios differ. I am speaking about the intention. I agreed with him; this scenario is exactly the same scenario, but the intention is vastly different between this and that! So, you will now say: "The scenario is one." Did I disagree? Did I disagree with something?

The questioner : No, but I want to give you a third scenario now.

The Shaykh : Bring five, and three, and thirty.

The questioner : Now, in some agreements...

The Shaykh : Professor, no problem; I will save you the trouble, I think. The scenarios and formalities and differences multiply to the point that they cannot be enumerated, but deeds are judged by their endings. The last thing I spoke about with Abu Yahya is that there is no person living in a country who is not forced to bring currency, for example, from a country to spend it in the country where he lives. Did we not discuss this scenario? So, what was our answer regarding this scenario?

The questioner : ... .

The Shaykh : That is it, but the scenario, in terms of the scenario, is the same. So, we need to look not only at the scenario, but also at the motive behind committing this scenario and that one. In terms of formalities, all are scenarios, but the intentions differ. So, between one, for example, who received Iraqi currency, what does he want to do with it? He is forced to spend it here; because he is living in a country whose currency is the dinar, and vice versa.