Thursday, January 27, 2011

Another State Introduces Gold & Silver Currency... In Malaysia

Why is the U.S. falling behind? The Malaysian national news agency "Bernama" reports that a second Malaysian state is planning to introduce gold and silver currency, in competition with the official fiat currency (the ringgit):
Perak Launches Gold Dinar, Dirham End Of Next Month

IPOH, Jan 25 (Bernama) -- The Perak state government will launch the gold dinar and dirham currency at the end of next month aimed at diversifying the types of savings for the people.

Chairman of the State Committee on Education, Higher Education, ICT, Human Resources, Science and Technology Datuk Mohamad Zahir Khalid said Perak was cooperating with the Kuwait Finance House (KFH) to introduce the gold dinar and dirham because it had vast experience in handling the currency.

"What is certain is that the currency introduced by Perak is vastly different from the currency introduced by Kelantan earlier. The difference will be explained by the Menteri Besar later," he told reporters after chairing the joint meeting with the top management of KFH, here Tuesday.
As noted in the report, the first Malaysian state to introduce the gold dinar and silver dirham as currency was Kelantan, in August of 2010. Interestingly, the Malaysian constitution (in ninth schedule, list I sub 7.a) does not allow its states to issue coins (much like the U.S. Constitution in Article I, Section 10); however, these coins are being privately minted by the "World Islamic Mint" under the authority of the Kelantan government (the Koran, like the Bible, forbids the use of fiat money and fractional reserve banking). The Perak gold dinars and silver dirhams will be produced by Goldnet International, a joint-venture company with the Perak State Development Corporation, in collaboration with KFH (Malaysia) Sdn Bhd.

Officials in Perak have started to backtrack a little after federal officials expressed concern about yet another Malaysian state introducing competition with their fiat money, insisting that the gold and silver coins will be "for investment rather than a mode of transaction" (good luck with that!), and saying they didn't "want the people to misconstrue that it is another form of currency exchange... We do not want people to misunderstand as the state has no authority to execute such a policy."

After all, banking cartels don't like competition, as we've seen from the Federal Reserve in the U.S. We can expect that the Feds will be just as adamant about stopping the States from returning to the Constitutional mandate that they use only gold and silver coins in their financial transactions.

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