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Malaysian Province Moves To Gold And Silver-Based Currency In "Main Islamic Event Of The Last 100 Years"

Tyler Durden's picture




 

More world governments are "just saying no" to the ponzi. Last week, the Malaysian government of Kelantan "said it was introducing a new monetary system featuring standardised
gold and silver coins
based on the traditional dinar and dirham coins
once used by the Ottoman Empire." And as everyone who has taken game theory 101 knows, the first defector wins the most, while the last one is left with nothing. A small province in Malaysia just made the critical first defection. The question now is who will be next... and next...and next.

The FT reports:

Nik Abdul Aziz, the state’s chief minister, spoke in visionary terms of an economy in which state civil servants would be paid in the new sharia currency, and the poor would be protected against inflation by the intrinsic value of the precious metals used to produce it.

About 1,000 shops and restaurants in the state have said they will accept the new currency, which follows an earlier issue of gold dinars in 2006. The coins comply with traditional Islamic teaching on the use of coins with intrinsic value as a medium of exchange, rather than paper money.

While having prior experience with Sharia-compliant debt issuance, Zero Hedge staff was unaware that it is against Islamic beliefs to endlessly dilute linen "money" in the way every central bank is doing now. One learns something new every day.

The coins, minted to a specified weight and purity, are available in a range of denominations from half a dinar to eight dinars, and from one dirham to 20. At the current price of gold, one dinar is worth M$581($183) and one dirham is valued at M$13 ($5).

The launch was lauded by the Muamalah Council, a campaigning organisation that seeks the peaceful introduction of an Islamist social and economic system. The council said it was “the main Islamic event of the last 100 years”.

This whole Sharia situation is troublesome: if the Islamic world, in retaliation for a possible Iran invasion or otherwise, decides to issue a fatwa against the usage of non-Sharia compliant forms of monetary exchange, watch what happens as the developed world wilts overnight. With the bulk of world commodity extraction arising from the Muslim crescent, and wholesale ban on using USD and EUR, a move already underway in Iran, would make for the second coming of von Havenstein very, very difficult.

Yet the Kelantan move may have some stumbling blocks prior to full implementation:

The chief minister also admitted that there were “many technicalities” to be overcome before the scheme could be significantly extended. He did not explain why a switch to gold and silver coins would protect against fluctuations in the value of money, given that the US dollar price of gold has risen more than five fold in a decade.

In spite of its small scale, the scheme may pay political dividends for the state government, which is run by PAS, an Islamist party that is in opposition in the national parliament. PAS is locked in a ceaseless struggle for control of Kelantan with the United Malays National Organisation, the main party in the federal government coalition, which also claims to represent Malay Muslims, the largest population group in Malaysia.

Burnishing its Islamic credentials is unlikely to do PAS any harm. The only certain winner, though, is the gold market. Although small, the scheme will help to increase demand, pushing up prices even further.

And for those who think that the move is a regional hoax that is not being taken seriously by anyone, the Malaysian National News Agency Bernama notes that the repercussions of the "move to gold-standard" decision has reached the very top:

Only Bank Negara Malaysia (BNM) can issue currency that is legal tender, said Prime Minister Datuk Seri Najib Tun Razak.

Unlike the US, where the Coinage Act of 1965 gives citizens the right to use refuse the usage of cash in transactions (and thus opt in for a different form of currency), Malaysia is not quite as liberal:

Commenting on the Kelantan government's introduction of gold dinar and
silver dirham as an alternative currency in the state, Najib said BNM
would be looking into the matter to see if any laws had been broken.

"Follow the laws of the country, only Bank Negara is authorised to
issue currency that is legal tender," he told reporters after handing
over Ramadan aid to mosque and surau from the Pekan parliamentary
constituency here Saturday.

On Thursday, when launching the Syariah currency, Kelantan Menteri
Besar Datuk Nik Abdul Aziz Nik Mat had said the state would strive to
expand the use of the gold dinar and silver dirham in all transactions,
including paying civil servants' remuneration.

However, he said there were still many technicalities that had to be
addressed by the state government over the use of the currency.

The New Straits Times in its front page today said BNM had stated that
only it had the right under the law to issue currency in Malaysia.

If there is one thing we are sure about, is that any time the government steps in before a decision that has been taken by a clear majority, with the purpose of making life easier, the outcome is usually lethal, especially in volatile Islamic countries. Whether the transition from paper to a hard-backed currency will be the first spark in social upheavals as government slowly realize all their printer-induced leverage is slipping away, is still unknown. What is, however, is that many more will soon follow Kelantan's lead to abolish an endlessly dilutable thought experiment, which has no intrinsic value, and whose purchasing power is decimated by the minute, as hundreds of billions in new money are printed every month by the world's central banks. Yet perhaps, this is precisely the example that is needed for the world to realize that someone is actually willing to do more than just talk pointlessly about the transition to a gold standard, and actually is willing to risk enough by following through with it. What happens next is Ben Bernanke's worst nightmare.

 

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Tue, 08/17/2010 - 23:45 | 527561 snowball777
snowball777's picture

One dirham, one dirham foot-looonngggg (at least until gold is $50k/troy and the shitty sandwich costs $208).

<hurts himself attempt to self-pat for previously predicting an islamic gold currency this year>

 

Wed, 08/18/2010 - 01:11 | 527641 greyghost
greyghost's picture

sharia this...sharia that! now i know why all the talking heads on t.v. have been using the "sharia" word non stop. it ain't about stoning someone...they don't give a rats ass about someone stoned to death. BUT bring up sharia money, no debt, no interest and lots of gold.....well i can hear them now...

anything sharia will be tainted by the media as "you will be stoned to death by gold coins". the media is becoming easy to see thru.

Wed, 08/18/2010 - 07:38 | 527798 MarketTruth
MarketTruth's picture

Maybe not stoned to death by coins, though the USA is hell bent on keeping the petro-dollar. When Saddam went off the petro-dollar, not long thereafter.... and the USA is still covering their assets on Iraq with all those (unfound) WMDs.

Iran has now also gone off the petro-dollar...

Gold and silver may be a great first step that might not draw too much attention, yet when you sell oil and decide to avoid the Federal Reserve debit note (US dollar)... wars break out due to those darn 'terrorists'.

 

 

Wed, 08/18/2010 - 08:05 | 527817 SWRichmond
SWRichmond's picture

Yes.  It's almost easy to predict that the West will, in short order, trace Al-Qaeda activity to this small province and start drone flyovers, airstrikes, and then dispatch a few hundred thousand mercs to pacify the area.

Wed, 08/18/2010 - 11:42 | 528219 still kicking
still kicking's picture

Our men and women are not mercs you fucking jackass.  They have been duped the same way the rest of the world has, they think they are fighting for something only to realize too late that they are pawns in a political game.  You owe them an apology.

Wed, 08/18/2010 - 13:25 | 528506 CrockettAlmanac.com
CrockettAlmanac.com's picture

But the "contractors" are mercenaries. Lots of them over there.

Wed, 08/18/2010 - 18:28 | 529213 still kicking
still kicking's picture

when he says "a few hundred thousand" I am pretty sure we aren't talking contractors.  I wouldn't deny or defend any of those Blackwater or KBR fucks.

Wed, 08/18/2010 - 22:12 | 529514 SWRichmond
SWRichmond's picture

Few seem to understand the scope of the "contractor" effort.

http://www.americanprogress.org/issues/2010/08/gates_announcement.html

Reducing the number of contractors excludes the several hundred thousand in Iraq and Afghanistan. And the Pentagon admits it is not sure how many contractors it actually has.

I want the troops brought home immediately, and the contractors to have their passports revoked, be declared "stateless persons" and left there.

Thu, 08/19/2010 - 00:46 | 529701 angela5503
angela5503's picture

 Okay pawn, please accept my fucking apology.

Thu, 08/19/2010 - 11:26 | 530477 still kicking
still kicking's picture

Don't apologize to me fuckwad, I have never served, but I have watched many friends and family go off to war, and feel I have to right to defend them.

Thu, 08/19/2010 - 08:15 | 529899 SWRichmond
SWRichmond's picture

I want to be clear, and I apologize if I wasn't: I mean the merc contractors.  In contrast, our men and women in uniform who have sworn an oath to die for us are our most precious national resource, one that must only be risked and expended when there is absolutely no other choice and when the clock has run out.  Neither of those prerequisites was met in Iraq.  We have no business there; I want them brought home and out of harm's way now, today.  Afghanistan has been dragged out into an endless occupation; I want out of there, too.

Thu, 08/19/2010 - 11:22 | 530461 still kicking
still kicking's picture

Then you have my wholehearted apology.  I overreacted, but I get so very tired of the people that blame our brothers, sisters, children, and neighbors of war mongering, as you so aptly stated those people are doing a job to defend us.  The powers that be have abused that resource to no end and it sickens me that they skate away clean while our loved ones come back in a box or maimed.

Wed, 08/18/2010 - 13:30 | 528515 midtowng
midtowng's picture

That's what I was thinking. When do we start bombing Malaysia?

Wed, 08/18/2010 - 03:15 | 527699 zevulon
zevulon's picture

gold shmold. i've seen buckets of gold melted into bars, i've been around gold my whole life. 

the defining attribute of advanced monetary societies as that they learn to incorporate metals and other non-wasting assets (land) as only a piece of the basic wealth reserve. not all of it. 

 

yes gold may go to the moon. and yes, the dollar may default , as has the currency of many countries. but guess what. you don't see too many gold backed curriencies these days, default or none. and that's because we are not zimbabwe, default or not. 

there is a value, immeasurable as it may seem, that can be attributed to our culture, our beauracracy, our (ostensibly corrupted) legal/political system that actually expresses itself beyond any possible transition towards a stable monetary base. and that value, those values, will preclude the existance of a fully prescious metal backed currency. that is to say , the golden rule no longer holds the force it once did. because whoever holds the gold, only makes some of the rules. not all of them. 

Wed, 08/18/2010 - 03:56 | 527712 faustian bargain
faustian bargain's picture

sez you.

We don't see too many gold backed currencies these days because they are bad for the expansionary ambitions of central governments, and they limit the profits of big banks who like to influence and control governments. Perhaps that is the immeasurable value to which you refer.

Wed, 08/18/2010 - 05:34 | 527741 Bringin It
Bringin It's picture

I'm with the monkey on this one.  End the Fed.  BoooYaaah for Kelantan!

Wed, 08/18/2010 - 06:20 | 527761 ColonelCooper
ColonelCooper's picture

+100.

I think that this move to metal coins is more importantin what they're SAYING than actually doing.

1. It's additional Sharia sabre rattling.  Unlike the poster a couple of comments above me, I'm a little more concerned about people getting stoned to death because some 4th century Mullah deemed it "judicious".  I think it's hard to blame the media for sensationalizing the issue. (for once) They bury you to the waist and fucking pelt you with rocks til you die.  Cool.  Cause some poor bitch looked sideways at a dude who wasn't one of her child molesting relatives?  Cool.

2.  They just told the ponzi to get fucked in the name of Islam.  If the rest of the islamic world did the same....That really would be cool. 

Wed, 08/18/2010 - 10:59 | 528110 Ripped Chunk
Ripped Chunk's picture

++ !!!!

No more FED!

Wed, 08/18/2010 - 06:51 | 527775 Stormdancer
Stormdancer's picture

Amazing!  Around gold all your life and still didn't learn anything? I can see why some need to believe in reincarnation :)

Wed, 08/18/2010 - 07:23 | 527786 Hephasteus
Hephasteus's picture

I met a person that claimed to be 4 billion years old and a very old soul. I told her that it was very nice of them to have such a slow growth plan for her severe retardation and that it hardly shows in all the stupid things she claimed to understand.

Wed, 08/18/2010 - 10:03 | 527985 Uncle Remus
Uncle Remus's picture

She didn't also claim to be a librarian too did she?

Wed, 08/18/2010 - 08:11 | 527827 Sean7k
Sean7k's picture

All you have to know is this: you don't have to force someone to accept good money (legal tender laws). John Adams knew it. We know it. Want to know why the FED produces paper money? The Treasury is not allowed to  by law. Coins (silver and gold), but not paper.

Values and bureaucracy have no intrinsic value- otherwise you could sell them. Government is debt and debt is a violent act against the people. An inefficient act at that.

Go Malaysia, go sharia money law. End the FED. End tyranny once and for always.

Wed, 08/18/2010 - 05:20 | 527734 knukles
knukles's picture

Gresham's Law'll put paid to this experiment rather quickly.  Note that use of the new precious metals based currency is volitional, existing along side fiat.

Everybody'll attempt to take the precious in payment and remit change in fiat, thereby hoarding the quality item.  Reality of the moment, human nature.

Now, if no fiat existed alongside the precious, then it's a different story, albeit debasement occurs.  Still, better than Ponzi Promissory (IOU's) issued at behest of the Power Elite for Basic Bread and Circus Maintenance.

Wed, 08/18/2010 - 06:48 | 527774 Mercury
Mercury's picture

The precious....we wants it!

Wed, 08/18/2010 - 10:31 | 528047 tmosley
tmosley's picture

Gresham's Law only applies when the price of the commodity in question is fixed.  That does not seem to be the case here.  This is a separate, floating currency, and is no more likely to leave circulation than Swiss Francs.

Wed, 08/18/2010 - 11:34 | 528193 Snidley Whipsnae
Snidley Whipsnae's picture

Think of the Numismats around the world that will pay a premium to add these new gold and silver coins to their collections.

This small Malaysian provence will probably be unable to keep up with orders from abroad, much less stamp enough coins for the local economy...assuming they will accept foreign orders.

Wed, 08/18/2010 - 12:26 | 528343 tmosley
tmosley's picture

If enough capital flows in, they can produce any amount, until the whole world runs out of gold.

Again, if the premiums attached to these coins get to be too large, gold will flow there in search of higher returns in terms of paper.  That's all there is to it.  This is nothing but positive.

Wed, 08/18/2010 - 13:30 | 528517 CrockettAlmanac.com
CrockettAlmanac.com's picture

Quite reasonable supposition.

Thu, 08/19/2010 - 06:03 | 529840 virgule
virgule's picture

Before you spend 20 minutes reading all the posts below, as of Wednesday evening, the kelantan government office selling coins...has run out of gold coins!

They apparently sold a miserable USD-equivalent 50K and then "faced technical difficulties....No one is using the coins for payment, buyers are keeping them as investment".

Tue, 08/17/2010 - 23:49 | 527567 tpberg7
tpberg7's picture

Gold Currency Bitchez!

Wed, 08/18/2010 - 04:47 | 527724 Cognitive Dissonance
Cognitive Dissonance's picture

Gold and other hard assets would act like the regulator looking over their shoulder. They'd have a destabilizing effect upon the outright theft of our countries wealth.

Regarding the headline of this article.

Malaysian Province Moves To Gold And Silver-Based Currency In "Main Islamic Event Of The Last 100 Years"

$20 says that the USA will be threatening this Malaysian Province with military and economic consequences within 12 months. Who wants a piece?

Wed, 08/18/2010 - 05:42 | 527744 Bringin It
Bringin It's picture

I can not take your money.  I agree. 

The issues over the border are ripe for exploitation, unfortunately.

On the other hand, maybe NetanYahoo will bomb Iran by Monday and this will be all moot.

Wed, 08/18/2010 - 05:54 | 527747 Cognitive Dissonance
Cognitive Dissonance's picture

I can not take your money.  I agree. 

Thanks because I wouldn't know how to actually "settle" the bet on an completely anonymous blog while still keeping my ID hidden. You saved my ass. :>)

Wed, 08/18/2010 - 08:06 | 527821 cossack55
cossack55's picture

Can I get my winnings in Dinars?

Wed, 08/18/2010 - 09:05 | 527887 Cognitive Dissonance
Cognitive Dissonance's picture

Sure, just as long as we wait until the dollar has been so completely debased that it's worth much less than it is now. Then we shall see how many Dinars the Wiemar dollar buys.

Wed, 08/18/2010 - 12:01 | 528270 Rotwang
Rotwang's picture

Check into something called the "Loom" payment systems.

Actual implementations might exist.

Wed, 08/18/2010 - 05:53 | 527748 Dismal Scientist
Dismal Scientist's picture

I was last in Malaysia some 20 years ago. I seem to remember it was basically the Chinese ethnic minority who did most of the work, and currently represent some 25% or so of the total population. Wonder what Beijing would think of a direct threat...

Wed, 08/18/2010 - 11:37 | 528205 Snidley Whipsnae
Snidley Whipsnae's picture

Perhaps this small experimental move to a gold currency was instigated by Bejing? Sun Tsu would approve.

 

Wed, 08/18/2010 - 08:16 | 527833 Max Hunter
Max Hunter's picture

'$20 says that the USA will be threatening this Malaysian Province with military and economic consequences within 12 months. Who wants a piece?'

I was thinking the same thing.. This is bad for business..

I'm curious as to how they will incrementally demonize them until they are full blown savages that can only be saved by our bombs.. LOL

Wed, 08/18/2010 - 12:01 | 528268 Oh regional Indian
Oh regional Indian's picture

Lament Out Loud

The new LOL.

ORI

http://aadivaahan.wordpress.com

Tue, 08/17/2010 - 23:52 | 527569 flacon
flacon's picture

HONEST MONEY FOR HUMANITY! If the United Nations cares about mankind this ought to be their slogan. But of course we all know that the U.N. is all about CONTROL and OPPRESSION of mankind. 

Wed, 08/18/2010 - 00:04 | 527582 Hephasteus
Hephasteus's picture

Ya but they are doing it from the moral high ground of the biggest lying stealing, opressing, cheating bastards on the planet so of course it will work.

They are way better tranformation symbols than lady gaga. Which is why it's so fucking odd you can't hear nothing but stupid crap about her on MSM. They need to roll out mother teresa but I guess the xanadu treatement didn't stick.

Wed, 08/18/2010 - 00:03 | 527585 NoVolumeMeltup
NoVolumeMeltup's picture

Where did you see Britain being referenced in the article?

Tue, 08/17/2010 - 23:54 | 527573 ZeroPower
ZeroPower's picture

Non-event. Barely a country state, and the wiki entry for it didnt even look one bit interesting.

Wed, 08/18/2010 - 09:01 | 527880 snowball777
snowball777's picture

A child, however, who had no important job and could only see things as his eyes showed them to him, went up to the carriage.

"The Emperor is naked," he said.

Tue, 08/17/2010 - 23:57 | 527579 Hephasteus
Hephasteus's picture

Oops. Everybody done and went and put all their manufacturing plants in the wrong place.

Wed, 08/18/2010 - 00:03 | 527580 Fish Gone Bad
Fish Gone Bad's picture

Perhaps a new money game is afoot?  Now to really fuck things up, someone has to introduce some wild cards, like drugs and weapons.  Hmmmmm who has those all around the place (hint: http://www.marinecorpstimes.com/xml/news/2008/05/ap_marines_opium_050608... )?

Wed, 08/18/2010 - 00:04 | 527587 FEDbuster
FEDbuster's picture

What started as a pinhole leak in the giant dam ......

Wed, 08/18/2010 - 00:06 | 527590 digalert
digalert's picture

I know I read in that article "feral" government.

Wed, 08/18/2010 - 03:10 | 527697 Hephasteus
Hephasteus's picture

They mostly come out at night. Mostly.

Wed, 08/18/2010 - 05:55 | 527751 Cognitive Dissonance
Cognitive Dissonance's picture

Mostly of course, not all.

LOL

Mostly they consist of assorted rats and other stray vermin. Got lice?

Wed, 08/18/2010 - 06:34 | 527766 Hephasteus
Hephasteus's picture

Alien reference.

http://www.youtube.com/watch?v=dsx2vdn7gpY

Don't diss rats. Rat is one of my animals. It's my nervous skiddish completely unpredictable side. And boy are there people who hate it. I know one guy who hates its so bad during the middle of this stupid dream where I was about to keep interupting it and criticize the characterization of it all a guy suddenly came out of nowhere and exploded this rat right by me. The blood and it's teeth got into my mouth somehow someway even though my mouth was closed. See they suck at choreography. But what was really stupid about it was when I spit out a piece of the rats jaw it had sharp canine style teeth not rat incizors.

Watch out for rats. They will keep chewing and chewing and chewing on something till they have consumed every last detail of it. Very dangerous animals for control freaks. When I was in college a squirrel went nuts one day outside the physics building. It was hissing and yelling at everyone who walked by and throwing pieces of branch at them. People were trying to ignore it and walk under the tree it was in but he got their attention really quick.

Wed, 08/18/2010 - 09:09 | 527894 Cognitive Dissonance
Cognitive Dissonance's picture

Sounds like a bad trip man. Call me when you come down. :>)

Wed, 08/18/2010 - 09:36 | 527935 Max Hunter
Max Hunter's picture

I assume you are changing your number..

Is it still.. 555- XXX

Wed, 08/18/2010 - 17:57 | 529167 Hephasteus
Hephasteus's picture

No I think the system works on time slots and focal points as it propagates into time space. So all you have to do to shut out a group is NOT be asleep and at the helpless unconcious state where they can overpower your actions and reactions. So I never go talk to them. I never give them any availabilty to me. This forces them to have to go through other groups at different time slots. This forces the other group to work with them. This provides witnesses. So when I call someone Fucking Lying Little Fucker Fuck Face because that group (simulates) other people to try to pump me for information people know what I'm talking about.

Hey Fuck Face. You're not my ex-girlfriend. You're not my brother. You're not my friend from louisiana. And people know you're not my sister and niece. So quit wearing your little kookie masks. I always know it's you guys within 1 second of transmission. ALWAYS. You're going to get skinned if you keep it up and you're little hannible lector days will be over. Even if the other groups TRY to work with your perfectly It's going to leak. Everybody leaks......

Wed, 08/18/2010 - 00:09 | 527594 Apostate
Apostate's picture

Is this more or less significant than that story about coin barter in Michigan?

Wed, 08/18/2010 - 01:52 | 527661 ED
ED's picture

more or less

Wed, 08/18/2010 - 02:48 | 527686 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

!

Wed, 08/18/2010 - 00:19 | 527598 DoctoRx
DoctoRx's picture

The people's money.  Significant in its implications . . .

Wed, 08/18/2010 - 00:20 | 527599 RockyRacoon
RockyRacoon's picture

When will our security organizations find terrorists and WMD in Kelantan?

Surely we could beat them in a few days and they'd welcome us as their saviours.

Wed, 08/18/2010 - 03:39 | 527707 saulysw
saulysw's picture

Rocky -- when did you become so cynical?

Wed, 08/18/2010 - 04:48 | 527725 Cognitive Dissonance
Cognitive Dissonance's picture

RR's always been this way. It's just harder to hide these days.

Wed, 08/18/2010 - 08:09 | 527824 cossack55
cossack55's picture

If the Maylays are anything like the Afghans we'll be there for decades.  Ever hear of Subic Bay.

Wed, 08/18/2010 - 00:19 | 527600 cxl9
cxl9's picture

I am already thinking about the arbitrage opportunities.

It may not be a well-known fact that right now the only circulating money in the world with silver content are the Mexican 20-peso and 50-peso coins. It's true. Go look it up. Unfortunately, I have yet to actually see a 20- or 50-peso coin, despite having lived here for some time. Seems that the pieces of paper with pictures of dead Mexican presidents and revolutionaries have driven all those coins away.

Wed, 08/18/2010 - 00:21 | 527603 RockyRacoon
Wed, 08/18/2010 - 00:33 | 527613 Coming Down in ...
Coming Down in Powdery Sparks's picture

It's clear what needs to be done....Derrick Zoolander needs to KILL THE MALAYSIAN PRIME MINISTER!!

Wed, 08/18/2010 - 00:57 | 527630 Careless Whisper
Careless Whisper's picture

relax. don't do it.

 

http://www.youtube.com/watch?v=BuQRWEKt4pg

 

 

Wed, 08/18/2010 - 09:44 | 527947 downrodeo
downrodeo's picture

OBEY MY DOG!!!

Wed, 08/18/2010 - 12:17 | 528316 TomJoad
TomJoad's picture

I feel like I'm taking crazy pills!

 

Jump! you Fuckers!

Wed, 08/18/2010 - 00:40 | 527619 Bolweevil
Bolweevil's picture

Maritius is next!

Wed, 08/18/2010 - 00:42 | 527620 Shameful
Shameful's picture

Would love to see the Muslim world use the money as laid out in the Qur'an. Sure it would result in an immediate fresh Crusade, called by Pope Blankfien the Pious. Wonder if they could pin a better excuse then "God loves paper money! Go kill the heaven!"?

Funny how the "extreme" Muslim groups ignore this tenant of faith.

Wed, 08/18/2010 - 00:47 | 527623 Übermensch
Übermensch's picture

...game theory 101 knows, the first defector gets smart bombed back to the stone age.

Wed, 08/18/2010 - 00:52 | 527627 RockyRacoon
RockyRacoon's picture

That might just advance them several hundred years.

Wed, 08/18/2010 - 01:05 | 527637 Otrader
Otrader's picture

According to Islamic prophecies with signs of the last days approaching, Gold will become the global currency prior to that day.

Getting close?

Wed, 08/18/2010 - 05:28 | 527738 Sokhmate
Sokhmate's picture

It is also prophecized that a mountain of gold will be discovered in iraq and people will fight over it to claim it, but 999 out of 1000 will be killed in the process - roughly translated.

Wed, 08/18/2010 - 01:07 | 527639 Problem Is
Problem Is's picture

"...smart bombed back to the stone age."

Hilarious...
But oh so true...

Wed, 08/18/2010 - 00:57 | 527632 Illya Kuryakin
Illya Kuryakin's picture

This looks to me to be more about Sharia vs. federal law than about any loss of faith in the MYR. I frequently go there on my boat and was interested in buying some - the one place I found was selling these coins for about spot plus 10 % - way above the premium for Eagles.

Wed, 08/18/2010 - 10:36 | 528063 tmosley
tmosley's picture

Gold as a currency gains a huge premium over gold as a metal.  The more it is used as a currency, the greater the premium will become.  This is one of the primary reasons gold bugs buy gold.

Wed, 08/18/2010 - 10:42 | 528076 DosZap
DosZap's picture

Illya,

Damn that Sharia Law shit.......NO Usery!

Spot +10%,that should be good for a BEHEADING, and a  blood curdling scream of Allah Achbar!!!!!!!!!.

Wed, 08/18/2010 - 01:04 | 527634 Problem Is
Problem Is's picture

With gold and silver dinars hitting the tail rotor on Bernanke's Marine surplus 1964 Huey helicopter...

The pallet of fiat slid to the side throwing the copter off balance...

Pilot Bennie spun out of control tossing Timmay out of the copter onto the tarmac below...

For the want of a shoe,
the horse was lost.

For the want of value,
the fiat was lost.

For the want of competence,
the Republic was lost.

Wed, 08/18/2010 - 05:24 | 527737 knukles
knukles's picture

For loss of Timmy
Despondency was lost

Wed, 08/18/2010 - 01:49 | 527657 uncletrader
uncletrader's picture

TD, I'm a gold bug from this neck of the woods, but this is really (really!) a non-event. Kelantan is one of poorest states in Malaysia - predominantly agrarian and tourist economy. And despite the fact that its coastline is rich with crude, unfortunately crude revenues go directly to the Federal government, which has been for long now a sticking point between the state government (dominated by Islamic party PAS), and the Federal Government (dominated by the secular National Front). Nik Aziz's dinar insurrection is simply a cheap political attempt to bait Najib (the country's PM) to declare the "dinarization" illegal, thereby allowing Nik to declare himself the more "Muslim" of the two leaders. Believe me, there is no way in heck any sort of "gold insurrection" led by the fundamentalist leaders in Kelantan is going to magically lead to Gold Bitching across Malaysia.  

Wed, 08/18/2010 - 01:53 | 527663 qussl3
qussl3's picture

The "more pious Muslim" angle is being played now as Najib seems intent to roll back at least some of the Bumi priviledges which is hugely unpopular with the Malay population, this dinarization is like you characterize - a political shenanigan.

Wed, 08/18/2010 - 01:50 | 527660 qussl3
qussl3's picture

A gold standard may be more than we bargained for.

Although the current print happy fiat campers are clearly not on the right path, placing a physical restraint on the growth of money supply may very well lead to other unintended consequences - like war.

I wouldnt be so happy to cheer for the death of fiat money.

Wed, 08/18/2010 - 01:56 | 527666 ED
ED's picture

yep

Wed, 08/18/2010 - 09:06 | 527888 snowball777
snowball777's picture

Some people just long for a good, old-fashioned bank panic.

Wed, 08/18/2010 - 02:55 | 527689 faustian bargain
faustian bargain's picture

War is hard to finance when you don't have control of a printing press. And when there is no inflation.

Wed, 08/18/2010 - 03:02 | 527695 Al Gorerhythm
Al Gorerhythm's picture

Ergo, adios amigos. The money printer on the other side of the equation, gets to print himself the payments for an overpowering war machine; provided expeditiously by guess who!

Wed, 08/18/2010 - 10:40 | 528070 tmosley
tmosley's picture

Except the money printers have already sucked everything there is to suck out of their respective economies.  Why do you think they are failing without any outside pressure?

Wed, 08/18/2010 - 07:31 | 527793 nuinut
nuinut's picture

For a monetary system to work, anyone, anywhere, must be able to exchange the currency for gold at a floating rate.

Wed, 08/18/2010 - 02:03 | 527668 carbonmutant
carbonmutant's picture

I'm sure the Thai goldsmiths are taking a strong interest in this story.

Wed, 08/18/2010 - 02:05 | 527669 Moonrajah
Moonrajah's picture

Iceland told the bankers to commit an anatomically impossible act. Noy Malaysia is waving goodbye to paper. Why is it always the little guys that take the leap of faith?

Wed, 08/18/2010 - 02:15 | 527674 Hephasteus
Hephasteus's picture

Because the world is always ballot boxed stuffed full of the weak and the stupid. Only a few percent of people capable of coming to conciousness are allowed on earth at any given moment so that they can be drowned in the idiot soup.

Wed, 08/18/2010 - 02:53 | 527687 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Napoleon complex...

Wed, 08/18/2010 - 02:56 | 527692 faustian bargain
faustian bargain's picture

They have the least to lose...but the rest of the world is catching up in that regard.

Wed, 08/18/2010 - 02:14 | 527673 Artful_Dodger
Artful_Dodger's picture

It always starts from the fringes, an outlier.

Wed, 08/18/2010 - 02:23 | 527676 smartknowledgeu
smartknowledgeu's picture

[sarcasm] Surprise, surprise! [/sarcasm] One day after the Mayalsian Kelantan state declared gold dinar and silver dirham coins as legal tender for the purchases of goods and services, the Malaysian Central Bank issued a statement declaring the gold and silver coins as illegal. The battle begins.

http://www.theglobeandmail.com/news/world/asia-pacific/malaysia-central-...

Wed, 08/18/2010 - 06:00 | 527752 Cognitive Dissonance
Cognitive Dissonance's picture

Wow. I never saw that coming from any direction.

Of course, we know where the real power lay in any country that maintains a central bank, don't we? Does that include the USA?

I thought so.

Wed, 08/18/2010 - 08:53 | 527873 centerline
centerline's picture

Thanks for pointing that out CD.  Gold or fiat... doesn't matter to some degree.  It is in "who" controls the money supply.  With power to mint concentrated, boom and bust cycles can be created with gold and silver backed currencies too.  It is not a cure to fiat.  Just a different frying pan.  History has already shown this.

Wed, 08/18/2010 - 09:15 | 527902 Cognitive Dissonance
Cognitive Dissonance's picture

This always seems to be lost in the shouting. And it isn't a nit picking point either. While Gold has always be accepted world wide for thousands of years as a stable store of value, it can and has been debased throughout those centuries. Just walk over to a museum and take a gander at some late period  Roman Gold coins if you wish to see how Gold can be debased.

It's who controls the currency, no what the currency is made of or is based upon. The central banks are the problem, along with all their hanger one and enablers.

Wed, 08/18/2010 - 09:57 | 527965 downrodeo
downrodeo's picture

Any thoughts on what the world would look like if there was absolutely no control of the currency? Firms and individuals would be able to choose whichever currency they would or would not accept. You could use Rubles at your local Safeway or Reals at the gas station, depending on what the owner would accept. Would that create so much chaos that it would be impossible for a central bank to control anything? 

Wed, 08/18/2010 - 10:54 | 528097 Cognitive Dissonance
Cognitive Dissonance's picture

I most certainly can't do justice to your question here in the comment section. But you do raise a very valid point. What I think you're asking is what would happen if the manipulation and control were suddenly removed.

I think the answer first depends upon when the control/manipulation is released. If you pull the rubber band to near the breaking point (or even break it) and then release it, there will be a greater rebound and social/economic chaos created then if the system were under less stress before release.

But in the hypothetical world that you speak of I suspect that if central governments/powers-that-be were to release control, then individuals would simply step in and assume power, even if it's on a local basis. The solution is not to have no control but to have transparent control of a minimum amount.

I will say this. Humans, if released from currency manipulation and able to act freely on a local basis, will quickly determine what does and does not represent value to them and will quickly erect a method or system to conduct barter and exchange. 

On the other hand, since so much of our current economic "activity" is simply "printed out of thin air" electronic money chasing unproductive assets in order to inflate the system in order to continue to live another day, no matter what is done, collapse is in the cards.

Wed, 08/18/2010 - 12:15 | 528309 Rotwang
Rotwang's picture

Look to USC (United States Code) Title 31, Section 5112.

This is the "Treasury" money, produced by the US Mint. It is also 'legal tender'. All minted coin is.

There is a catch however. If you can force the contractual acceptance of privately circulating this coin, you immediately cause a (25:1 for now) discrepancy in the worth of the rag paper. The Mint/Treasury has prohibitions on themselves for tendering this money into circulation, so they sell it in a bullion transaction at prevailing market.

This is the same in Austria (20 Euro Philharmonics). Every other western nation that coined gold that I have looked at recognizes the coins (as their equivalent of legal tender)

What is not recognized, by the respective taxing authorities, is the claim that you can receive this money at par (and willingly work for less), while settling whatever taxobligations with the tax-clearing rag paper equivalents

 

Wed, 08/18/2010 - 10:52 | 528098 tenaciousj
tenaciousj's picture

Just look at the early US history.  Most states had their own currency, some banks too.

Wed, 08/18/2010 - 10:54 | 528099 tenaciousj
tenaciousj's picture

duplicate

Wed, 08/18/2010 - 12:38 | 528380 tmosley
tmosley's picture

The Romans did not debase their gold coins.  They debased the Denarius, which was a silver coin.

Gold didn't save them, because they were not a productive people.  They spent all their gold on Indian goods, and the trade deficit sucked all the gold out of the empire.

Wed, 08/18/2010 - 02:27 | 527678 Sudden Debt
Sudden Debt's picture

an easy way to buy gold so it seems. Once the issue the gold coins, a flood of black money will be shipped down there to be changed against the coins. It won't be long before they are out of gold and their economy will go down the drain. But the first 10 years will florish.

Wed, 08/18/2010 - 11:07 | 528128 tmosley
tmosley's picture

Eh?  If money floods in to be changed to coins, gold will flood in to take advantage of the higher price.  Arbitrage works both ways, you know.

Christ, people act like having paper money is the natural state of things, rather than the unstable equilibrium that it is.  Gold standards have survived for thousands of years (example-Byzantium).  The longest amount of time a fiat currency has ever lasted was 300 years in Yuan China, though it suffered from multiple currency collapses and at least three bouts of hyperinflation during that time.

The only way their gold will flow out is if they run a trade deficit on a persistent basis, which they don't.  In reality, it probably wouldn't leave at all, as most shippers aren't willing to take gold any more than they are willing to take Malaysian currency--they want dollars or Euros, or another major currency.  They will thus likely change their gold into dollars prior to the funds leaving the country.

Wed, 08/18/2010 - 02:56 | 527688 Mentaliusanything
Mentaliusanything's picture

Now lets see if I've got this right ?

They have minted 22k gold and pure silver coins - enough to circulate in a section of a populous country. And they would have had to 'Buy" the raw metal with paper money. 

Good way to get rid of some Holdings of 'fulus'

Quote "This Fatwa considers paper-money to be fulus(read Fool Us), because it only represents money and does not have value as merchandise. It follows that since Zakat(Read Tax) cannot be paid in fulus, which has no value as merchandise, it cannot be paid in paper-money, which value as weight of paper is null. On this basis, it becomes clear the urgent need to restore the use of the Dinar and the Dirham as payment of Zakat. If the millions of Muslims who now make their payment of Zakat in paper money would do it in newly minted Dinars and Dirhams, they will put in circulation millions of gold and silver coins into the mainstream of daily commercial activities of our communities. That single act will became the most important political act of the century, opening the path towards the establishment our own halal free currency breaking away from the usurious financial system." unquote

I think they are serious - http://www.dinarkel.com/islamicdd.html  But they need the backing of the oil cartel

Wed, 08/18/2010 - 02:55 | 527691 Al Gorerhythm
Al Gorerhythm's picture

Selamat datang kepada anak laki laki perang emas!

Welcome to the gold wars boys!

Wed, 08/18/2010 - 03:22 | 527703 uncletrader
uncletrader's picture

The gold in the dinar is not the key point: it's the "dinar" that matters to Kelantan. In other words, if the gold coin was called "Joachimstahlers" instead of dinar, Nik Aziz wouldn't have bothered.

Wed, 08/18/2010 - 03:25 | 527704 RemiG2010
RemiG2010's picture

'Zero Hedge staff was unaware that it is against Islamic beliefs to endlessly dilute linen "money" in the way every central bank is doing now. One learns something new every day.'

Was ZH aware what US constitution and Islamic monetary beliefs/system have in common?

Wed, 08/18/2010 - 05:35 | 527740 knukles
knukles's picture

US Coinage Act of 1792.  Debasement of US coinage may be penalized by death.

Wed, 08/18/2010 - 08:22 | 527837 Sean7k
Sean7k's picture

Explains the valuations on US silver and gold coins. Thank goodness those debt notes aren't coins! It doesn't explain what the mint asks for them in trade...

Wed, 08/18/2010 - 05:35 | 527742 knukles
knukles's picture

gloorp

Wed, 08/18/2010 - 09:15 | 527900 SheepDog-One
SheepDog-One's picture

Hmm yea our own Constitutional belief system also prohibits debasing the currency. But whats the constitution anymore, with financial terrorists running the show?

Wed, 08/18/2010 - 04:28 | 527722 r50fHBWjzxE2
r50fHBWjzxE2's picture
Gold Dinar, Silver Dirham in Indonesia:

http://www.youtube.com/watch?v=nNtIsSWVJBI

Wed, 08/18/2010 - 05:44 | 527745 virgule
virgule's picture

How interesting! I thought I was the only lone reader from Malaysia on this blog....

Illya Kuryakin, uncletrader, qussl3, Al Gorerhythm, I'd be delighted to meet other ZH readers in person. Feel free to contact me at virgule at virgulesystems dot com if interested.

To add to the "local" comments above, a few pieces of info:
- Gold bullion+coins are available over the counter in Kuala Lumpur, at a hefty premium - but easilly available. You can walk out of KLCC Habib Jewels with a few hundred grams of bullion any time. They recommended that you do NOT make appointment, for security reasons.
- Less known is that Maybank and UOB sell Kijang and resp. Maple, Krugers, Nuggets, etc. also over the counter, at a very reasonable price (close to london fix x exchange rate) and buy back with a 1-2% spread only. UOB is cheaper than Maybank ;-)
- I've never seen a shortage here, even at the peak of the last two crisis in US and Europe

Finally, the idea that Kelantan is starting a new gold-based currency / store of value / medium of exchange is very naive. Anyone who lives in Asia knows that there are 2 kinds of jewelry shops in this part of the world. Those that sell "real jewelry" (not many), and those that sell "simple" gold jewelry, at the price of gold + workmanship (cheap). Every farmer's wife in Vietnam, Thailand, Malaysia, Indonesia, etc. walks around with a more or less thick gold necklace, bracelet, ring, etc, thereby carrying her wealth and the familly's store of value with and on herself. It's normal practice to go to the goldsmith and sell your jewelry back, by the weight, at the published rate. These shops are in every major town, and business seldom slows down. It's not quite legal tender nor THE most marketable / liquid commodity, but it is certainly functioning very closely to money.

Gus

Wed, 08/18/2010 - 06:10 | 527756 Sudden Debt
Sudden Debt's picture

but the cheap ones also sell real gold or fake? Because when they sell the back, they do expect to get money from it right?

A few fake jewelery store could trash the system so it seems.

Wed, 08/18/2010 - 06:30 | 527765 virgule
virgule's picture

Real gold.

They give you a certificate with your purchase, stating that they will buy back from you at the weight written on the cert x day's BUY rate. And you can ask for a scale if you have a doubt regarding the weight.

I think it would be a real pain to make a chain-type necklace with tungsten-filled gold-plated links!

Wed, 08/18/2010 - 07:30 | 527791 Sudden Debt
Sudden Debt's picture

I'm in the metal business. You want it, I can supply it.

You would be amazed how easy that can be done. You can even do it at home with some basic fysic knowledge.

1. Use a silverwire as a base (never metal because that's the most common way to be caught and the easyest way to do it)

2. put it in a alkaline bath what has a 90volts powersource attached to it.

3. put a gold bullion 999 in the bath

4. Let it do it's thing for about 1 day.

And you got yourself a nice 24K thick gold wire you can use as a base.

But to avoid getting caught, you need to erase the cyanide traces left in the gold. You do this by putting it in a liquid sulfite bath (20% pure) for about 10 to 20 minutes. After that, put it in bleach for another 20 minutes and then wash it.

THE ONLY WAY to be caught is when they use a X ray machine. Gold absorbs about 3X more radiation then anything else and the X ray will show a different center. Besides that your home free.

Now this is also a pretty easy way to get get caught because NOBODY wants a real 24K necklace. To fragile.

SO, it's important to add some nickle in step 3, and it's VERY important to get the right amound because the electrolises doesn't go at the same speed for gold then it does for nickle. I don't know the exact proportions so you would need to do a lot of testing.

Cool thing is, you'll never lose the gold. Just melt it and the gold stays at the bottom, silver in between and nicle on top.

And once you get the proportions right you're ready to make some real cash ;)

But never get greedy! Make sure you put on the gold really thick! 5/6th gold mass will keep you from getting caught when they cut it. If the drill it (and why would they do that) you're caught. And still make you a hell of a profit.

But cutting it is done in 99% of the cases.

 

Wed, 08/18/2010 - 08:33 | 527848 hamurobby
hamurobby's picture

I would just guess the goldsmiths and merchants over there would not debase their jewelry as their laws might be a little harsher on such things compared to what we have over here. Its hard to steal without hands. 

Wed, 08/18/2010 - 10:31 | 528036 virgule
virgule's picture

Debasing jewelry (in Asia) wouldn't work very far in practice:
- as long as you can weigh before buying, and have a certificate that guarantees they'll buy back based on weight, even they did silver-wire debase, you'd still be unharmed (unless its the end of the economic world, but were not there yet in Kelantan). The goldsmith essentially practice what sound money used to be - guaranteed exchange between cash and gold based on weight, rather than based on face value - the goldsmith could decide to stop buying back. I'd hate to be one when the local chinese syndicate shows up for redemption
- the farmer's wife has a much more simple way: goldsmith will often make or modify / repair the jewelry in front of you, if you are curious and ask to see. It's quite cool to see a ring turn into a puddle of liquid gold. I think it would be a lot less cool if it turned into a yellow puddle with a silver blob in the center. Farmers have parangs that work about as well as syndicates.
- And finally, farmers tend to like 24k gold. It is soft, but then the necklaces are thick, and the esthaetic value is really secondary most of the time. It also guarantees no silver blobs when you play with fire.

Regarding thieves with hands-chopped off, Kelatan law is still murky in that area. It's sounds exciting on CNN, but in practice I've never seen or heard of someone with hands chopped off in 20 years here. It's a very peculiar state: serious political screw up, yet some of the nicest people in Malaysia, and producing some of the finest businessmen, growing up with sound, traditional values that work in the real world.

Wed, 08/18/2010 - 07:36 | 527796 Sudden Debt
Sudden Debt's picture

Here's a nice starters kit for the DIY'ers ;)

http://www.caswellplating.com/kits/gldbrshsys.html

Wed, 08/18/2010 - 05:47 | 527746 unky
unky's picture

Sharia Banking = A system without interest (compound interest),

thus Sharia conform banking allows you to invest in shares/equity for example. Many banks have specialized on Sharia banking such as Deutsche Bank (for its islamic clients)

Wed, 08/18/2010 - 07:00 | 527779 Mercury
Mercury's picture

So Obama's new $50,000 0 interest, non-recourse, HUD mortgages are also Sharia compliant.  Fantastic.

Wed, 08/18/2010 - 08:06 | 527819 Hunch Trader
Hunch Trader's picture

Sharia banking is full of interest, it's just not called interest.

But this seems to placate your average caveman.

Wed, 08/18/2010 - 10:01 | 527978 Mercury
Mercury's picture

If they're as smart as Western bankers they'll just "fee" the crap out of their customers and it will all even out.

Wed, 08/18/2010 - 06:35 | 527767 morph
morph's picture

Gold as intrinsic value? I'm sorry but what part of my biological makeup is dependant on gold. Food has value, homes have value; Gold is just valued because of belief rather than utility.

Wed, 08/18/2010 - 08:15 | 527832 Stormdancer
Stormdancer's picture

You'd do well to think through the concept of "store of value" until you understand just how valuable that property is to a diversified economy populated by specialists. 

Wed, 08/18/2010 - 11:28 | 528179 tmosley
tmosley's picture

If you don't value trade, then you aren't a human.

Gold facilitates trade between more than two people.  That is where its inherent value comes from.

Just because you can't eat it doesn't mean gasoline doesn't have utility.  Even if you don't have an engine that will run on it, you can trade it to someone who does.

Wed, 08/18/2010 - 07:16 | 527782 Silversinner
Silversinner's picture

where is smoke,there is fire.

Sure looks like the paper ponzi sceme house of cards is on fire.

burn,burn mtf burn!!!

End of paper gouverment party tickets system.

 

Wed, 08/18/2010 - 07:55 | 527787 laosuwan
laosuwan's picture

its hard for me to take Kelaton seriously as a government; they have also instituted the death penalty for changing one's religion and adultry, harbored the terrorists killing buddhists in Thailand's south, and generally made life intolerable for all the few remaining hindus. the corruption there is pretty bad, too, so I would not trust them to adminster coinage honestly, let alone hold them up as an example of governance.

Wed, 08/18/2010 - 07:57 | 527811 Internet Tough Guy
Internet Tough Guy's picture

Great beaches in Kelantan, though. Thailand too!

Wed, 08/18/2010 - 13:11 | 528459 laosuwan
laosuwan's picture

sure the beaches are nice but we have monsoon rip tide six months of the year and now box jelleyfish moving in as the water warms. at least there are no sharks

Wed, 08/18/2010 - 07:49 | 527804 Internet Tough Guy
Internet Tough Guy's picture

This is a power struggle between PAS and the ruling party, which has thrown Nik Aziz in prison in the past.

Malaysia is pretty modern and moderate, except for Kelantan where the PAS are in control. It's the one state where a westerner can get in trouble for doing 'western' things like drinking or spending the night with muslim girls. Been there, done that.

So overall this is Nik's way of sticking his thumb in the eye of the KL government.

Wed, 08/18/2010 - 08:14 | 527830 Hunch Trader
Hunch Trader's picture

PAS is partially in control of the largest and richest state of Selangor (surrounding the capital Kuala Lumpur, which is a Federal Territory) already, through their part in Pakatan Rakyat alliance, comprising of PKR, DAP (chinese) and PAS.

From here, it's a very short step to running full islamization across all of West Malaysia.

Islam is on the run, and the scene in Malaysia is just one of tens of battlefronts.

 

Wed, 08/18/2010 - 08:15 | 527831 ZeroPoint
ZeroPoint's picture

My guess is a cabal will quickly form to starve Malaysia of physical gold to prevent it from happening. Suddenly, WMDs and Alqueda will be 'mysteriously' found there and they will become part of the 'axis of evil'.

Additionally, gold and silver coins while shiny and valuable do wear out just like dollar bills and other coins, thus diminishing individual coins' value. A coin that's been in circulation for 5 years isn't going to be worth the same as a freshly minted one.

I think the long term strategy has to be gold backed notes, where the amount of physical gold is audited independently every year by a number of sources, and where the holders of those notes can demand gold in exchange for them from any bank, and the bank cannot refuse or charge a service fee for making the exchange.

 

Wed, 08/18/2010 - 08:57 | 527878 centerline
centerline's picture

Forget "what the money is" to some degree.  Rather, ask "who" controls the supply.  This is the bigger issue.  History is just repeating itself over and over here.  Gold and silver can be manipulated too, especially if the power is concentrated in a central bank scheme.

Wed, 08/18/2010 - 09:09 | 527895 snowball777
snowball777's picture

Is the ability to manipulate inherent in the abstraction of money itself?

Can you even have a currency without a 'who' that controls it?

Wed, 08/18/2010 - 09:19 | 527907 centerline
centerline's picture

To me, that is the trillion dollar question.  I do not think we can have a system without some sort of manipulation, bias, etc.  Likewise, money is as much geopolitical, social, etc. as it is a mathematical thing.  BUT, one thing is for certain... having it controlled by private interests (bankers) is simply insane.

Wed, 08/18/2010 - 10:12 | 528004 Al Gorerhythm
Al Gorerhythm's picture

When it is coined by the people's treasury rather than the banker's printing press, it sure makes a difference! Imagine a money system where the government didn't have to borrow its own money!?

I know,........  what was I thinking?

Wed, 08/18/2010 - 09:54 | 527960 Thunder Dome
Thunder Dome's picture

Killing in the name of...

Wed, 08/18/2010 - 10:07 | 527991 Al Gorerhythm
Al Gorerhythm's picture

Rumor has it that Bin Laden is holed up in a losman there. He has been seen on a 9'2" nose rider, cutting sick at a well known left hand barreling reef break. Thought I'd sharia that with ya.

Wed, 08/18/2010 - 10:09 | 527994 MrTrader
MrTrader's picture

Dirham coins ? Hum, can they pay at McDonalds with silver and gold coins ? :=)))

No. Thanks. I buy Russian ruble. Makes more sense. At least the Grizzlies there know to enjoy in food....

Wed, 08/18/2010 - 10:17 | 528017 Insert witty title
Insert witty title's picture

'The chief minister also admitted that there were “many technicalities” to be overcome before the scheme could be significantly extended. He did not explain why a switch to gold and silver coins would protect against fluctuations in the value of money, given that the US dollar price of gold has risen more than five fold in a decade.'

That is such idiotic reporting. The obvious correction is that the USD paper money has devalued by 80% in a decade and the gold value has remained unchanged.

Cancelled the FT subscription long ago and never looked back, utter utter dross.

 

Wed, 08/18/2010 - 10:20 | 528022 the grateful un...
the grateful unemployed's picture

chain reaction time? one province in one se asian country backs its currency with gold, taking gold off the market, making that gold more valuable, therefore making that currency more valuable (therefore hurting their export market?)

what sort of sound central banking policy is that?

on the other hand small countries with large relative gold reserves can achieve some sort of instant valuation benefit. the point would be to still print paper, and back the paper with gold. otherwise rich greedy Americans will buy up all those gold coins (and probably charge the purchase on a credit card, hide the coins in an offshore bank and declare CH11) and take them off the  market. 

someone should change the name from the War on Terror, to the War on Error..

Wed, 08/18/2010 - 11:22 | 528152 ArrestBobRubin
ArrestBobRubin's picture
US Prepares For Gold Standard

Bix Weir

"We are on the brink of something the majority of people in the world are not prepared for. The complete elimination of fiat money and a return to a gold standard. The US Treasury and the US Mint are walking the same fine line that the CFTC is walking as they try to slowly introduce position limits on gold and silver COMEX contracts. Nobody wants to ROCK THE BOAT and get blamed for the crash but all are preparing for the END of fiat money.

It's only a matter of time. May the Road you choose be the Right Road."

http://www.roadtoroota.com/public/350print.cfm


Wed, 08/18/2010 - 12:19 | 528325 Scisco
Scisco's picture

Advocates of sound money, gold backed currency does not equal sound money. Theoretically, fiat money can be even made sound. For example, all paper notes could be forced to have unique serial numbers and the range of serial numbers would be fixed. On the flipside, gold can be made unsound through a fractional reserve basis just as the US gov. did while the dollar was pegged at $35 per ounce. Therefore, the battle for a gold backed currency is moot when the real problem is a manipulated money supply.

Wed, 08/18/2010 - 13:36 | 528532 ATTILA THE WIMP
ATTILA THE WIMP's picture

I checked out Malaysia on Wikipedia, They got rubber, palm oil, lumber, cocoa, pepper, pineapples, tobacco, copper, bauxite, iron ore, granite, tin, limestone, phosphates and 4 billion barrels of oil.

They also got the Petronas Towers - the second biggest erection in the world - which would be a whole shit load of fun to blow the fuck up.

According to an unofficial study by the BLAND Corporation they are a bunch of squinty-eyed degenerate commie atheist devil worshippers who make their women wear funny clothes. Their national sport is strangling puppy dogs and they have mosques full of dirty bombs with “FUCK YOU, KANSAS CITY!” spray painted on them.

So let’s get rolling.

Do NOT follow this link or you will be banned from the site!