how gold prices are fixed and, in some cases, ‘‘stabilized’’ if not manipu-
lated, by speculators and traders. This brief study should shed more light
and give the reader the background necessary to fully understand the RF
commodity indexation rule. It is sincerely hoped that a new pricing system
for world trade will be established, one that is fair to all the citizens of the
world. As we have seen, rice farmers in Asia and other countries were in fact
paid less (in terms of gold) for their rice in 2000 than in 1970 despite the
fact that they collected more dollars (local currency), and the same is true
for farmers of many other agricultural products. This situation makes it dif-
ficult to promote farming and food production, especially in many of the
developing third-world nations.
Gold was the reserve reference currency of the world before the well-
known Bretton Woods agreement set the U.S. dollar as the world reserve
currency, in the ratio of 35 dollars to each ounce of gold. Gold has been
used as a store of value over the years by central banks as well as by hus-
bands showing their love to their wives, and it is used as a precious metal in
industrial applications for its superior conductivity and other physical
EXHIBIT 5.17 Price of rice in terms of cwt rice per bushel of wheat.
122 THE ART OF ISLAMIC BANKING AND FINANCE