Update 1 adds Murray N. Rothbard’s definition of interest rates

Bring back usury law to control interest rates, campaign urges
Nick Mathiason
The Observer, Sunday 19 July 2009
http://www.guardian.co.uk/business/2009/jul/19/banking-royal-bank-scotlandgroup
SNIP
Wall Street and City of London bank chiefs will be targeted this week at the launch of a new transatlantic campaign to reinstate historic usury laws restricting the interest rates charged by loan sharks and credit card companies. UNSNIP

The Holy Koran says in Verse 161 of Surah An Nisaa’:
That they took usury, though they were forbidden; and that they devoured men’s substance wrongfully;- we have prepared for those among them who reject faith a grievous punishment.

Ivo asks:
When one party gives something of value
and the other party pays him with something,
in this case paper, of no value,
and when one party’s wealth is created out of thin air,
while the other party has to slave and earn to pay off the ill-gotten credit or loan,
is this not devouring of other people’s wealth?

This means that money must have intrinsic value.
If not, the buyer is devouring the seller’s wealth.

There is moreover a Hadith of Prophet Muhammed in the Sahih Muslim which teaches:
“Abu Said Al Khudri reported Allah’s messenger as saying:
“gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt. (When a transaction is) like for like, payment being made on the spot, then, if anyone gives more or asks more, he has dealt in riba, the receiver and the giver being equally guilty.”

This Hadith of Prophet Muhammed establishes two things:

ONE ‘money’ in Islam is either precious metals such as gold and silver, or commodities such as wheat, barley, dates and salt.

TWO when gold, silver, wheat, barley, dates and salt were used as money, their value was ‘inside’ and not outside’ the money. Hence, it is established that ‘money’ in Islam must possess intrinsic value.  (1)

Under the Shariah, no precious metal is borrowed, loaned out and nor does it earn any income. (2)

Now if the Shariah prohibits precious metal to be borrowed or loaned out
then
if that something of value which is money in Islam is a precious metal,
that money, precious metal, can not be borrowed or loaned out. 

If money can no longer be borrowed or loaned out,
then there are no more interest rates
and interest rates do thus not have to be controlled.

Interest rates are however not the price of money. 
Interest rates are the price spreads between the stages of production, says Dr Murray N. Rothbard. (4)

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

NOTES

(1)
Imran N. Hosein, “Explaining the Disappearance of Money with Intrinsic Value”, paper delivered at the International Conference on the Gold Dinar Economy, held in Kuala Lumpur on 24 and 25 July 2007, p. 1

(2)
Investors look for safe asset classes
Mushtak Parker | Arab News
Monday 13 July 2009 (20 Rajab 1430)
http://www.arabnews.com/?page=6§ion=0&article=124504&d=13&m=7&y=2009
SNIP
LONDON: In the aftermath of the global credit crunch and financial crisis, investors have been increasingly on the lookout for value-added and safe asset classes. In the emerging asset classes of exchange traded funds (ETFs) and commodities (ETCs), for instance, investors have tended to favor physically-backed precious metals especially gold, whose price has been appreciating over the last few months. Indeed, commodities in general including oil, gas, coal agricultural products and of course precious metals have been outperforming traditional asset classes such as real estate and equities.
+
According to Tim Harvey [head of EMEA sales at ETF Securities Ltd.], ETF securities physically backed precious metal exchange traded commodities are Shariah-compliant.
+
Consistent with allocated gold, no precious metal is borrowed, loaned out and nor does it earn any income.

(3)
Shariah prohibition of borrowing precious metal as money
Posted by Ivo Cerckel on July 13th, 2009
http://bphouse.com/honest_money/2009/07/13/shariah-borrowing-precious-metal/
[If the link does not work try to copy it and to paste it in your browser]

(4)
Murray N. Rothbard, “Man, Economy, and State – A Treatise on Economics”, Auburn, Alabama: Ludwig von Mises Institute 2001, (originally published 1962), p. 691