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.
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.
Continue reading - Malaysian Province Moves To Gold And Silver-Based Currency In "Main Islamic Event Of The Last 100 Years"
No comments:
Post a Comment