Currency notes and loan indexation

How currency existed at the time of the Prophet and how it exists today have changed profoundly. Certain matters in Islamic economics might be affected by the transformation in currency practices. Around the time of the Prophet, all coins were made of precious metal. Early Islamic jurists made their decisions in strict adherence to the social context of the Prophet's time. They most likely were unaware of the behavior of highly volatile inflation because the value of metals relative to real goods changed little in that era. With the end of the backing of paper currency by gold following World War II, the equivalent worth of paper notes of equal face value is questionable. Because indexation ensures compensation for loss of purchasing power, it cannot be said that wealth increases. Some Muslim economists still maintain that indexation of financial assets, including loans, is against shari`a . Their arguments are incorrect because although they could be valid under a gold standa