Let's discuss 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…”

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).

Due 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.

Source : Geri Dinar