Sunday, August 15, 2010

The Islamic Gold Standard

Paper money is so old hat.

... one part of Malaysia, they are looking at an ancient alternative - gold.

In a move applauded by some local Muslims, the state 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.

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.-Malaysia looks to ancient alternative currency - gold


  1. I know I find comfort when my ideas are adopted by sharia law...

  2. Your silly comment is nothing but a logical fallacy, but then the same could be said of almost every argument you make, so at least you're consistent.

  3. I didn't say the gold standard is wrong, I just made a snarky remark. I don't have a problem with gold backed economies, but you do realize there isn't enough gold mined or in the Earth's crust to back the US money that's been printed, right?

    Looks like it's time to start converting my dollars to dinars...

  4. I didn't say the gold standard is wrong, I just made a snarky remark.

    You're right, and I actually appreciate your snarky remarks. This blog wouldn't be what it is today without them.

    I'm to going to post more on this gold topic soon, and some of what I post might even be more in line with your view of the matter

  5. What is my view? I'm not an economist, and I frankly find gold to be a flimsy measure of wealth. It is essentially worthless in a catastrophe, so it's ironic that I don't really value it while believing we are not headed for a crisis, while you value it while believing we are bound for calamity.

    "Everything is worth what its purchaser will pay for it." - Publius Syrius

    Can you eat gold? Can you drink gold? Well, you can (a little thing called Goldschlager), I guess. But what I'm saying is, gold relies heavily on the luxury market for value. Without jewelry and other gold luxury items (which are rarely purchased in times of intense struggle), or when industries using gold collapse, gold can be near worthless. In a sense, even lead can be worth more, since at least you can make decent bullets from lead.

    That said, in times of relative stability (or even foreign stability, assuming a non-global incident), gold is a great store for wealth. But we're way past the point of correcting the fact that the US govt have been printing itself out of jams for decades.


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