Read more at https://www.channelnewsasia.com/news/asia/malaysia-mahathir-new-regional-currency-gold-11579422
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(1) The World Economy is US$81 trillion - is there enough gold to support the pegging of world currencies to US$81 trillion?
(2) If not enough gold, does it means that the price of gold will increase multiple fold to match the World Economy of US$81 trillion - in order for world currencies to peg against gold?
(3) Does it means that a few Countries who mine gold - will have become Superpowers overnight - because they can mine gold eg. China, Australia, U.S., South Africa and Russia --- and not base on economic strength. The rest of the World suddenly lose its economic wealth overnight?
(4) Speculators can start attacking by concentrating its speculation in gold rather than many diverse currencies - and will lead to stunted economic growth of the varying economies. Those Countries that store up the most gold - can then hold the World Economy hostages. So does it make sense for the World Countries to peg to one metal that is of limited supply and can lead to World scrambling to hoard gold?
(5) The world has long abandon pegging its currency in gold -due to its limited supply and in fact bring in silver -- but yet both metals are not able to sustain the World economic growth - and hence peg to US dollar to sustain world economy for trade. When economy grow in strength, more money need to be printed to support the economy. But as gold is limited and cannot be printed - does it mean that the economy cannot print more money because it is peg to gold - and the supply of gold is limited?
(6) US cannot easily print money - because the world can sell its treasury bills - that will cause US curreny to weaken. - if the printing of money is not back by its economic growth.
(7) Gold have varying degree of purities - some are 99.99, 99.5, 98, 91.6 etc purities --- then how do currency peg to the varying purities of gold?
(2) If not enough gold, does it means that the price of gold will increase multiple fold to match the World Economy of US$81 trillion - in order for world currencies to peg against gold?
(3) Does it means that a few Countries who mine gold - will have become Superpowers overnight - because they can mine gold eg. China, Australia, U.S., South Africa and Russia --- and not base on economic strength. The rest of the World suddenly lose its economic wealth overnight?
(4) Speculators can start attacking by concentrating its speculation in gold rather than many diverse currencies - and will lead to stunted economic growth of the varying economies. Those Countries that store up the most gold - can then hold the World Economy hostages. So does it make sense for the World Countries to peg to one metal that is of limited supply and can lead to World scrambling to hoard gold?
(5) The world has long abandon pegging its currency in gold -due to its limited supply and in fact bring in silver -- but yet both metals are not able to sustain the World economic growth - and hence peg to US dollar to sustain world economy for trade. When economy grow in strength, more money need to be printed to support the economy. But as gold is limited and cannot be printed - does it mean that the economy cannot print more money because it is peg to gold - and the supply of gold is limited?
(6) US cannot easily print money - because the world can sell its treasury bills - that will cause US curreny to weaken. - if the printing of money is not back by its economic growth.
(7) Gold have varying degree of purities - some are 99.99, 99.5, 98, 91.6 etc purities --- then how do currency peg to the varying purities of gold?
(1) In the olden day when World Economy are less complex, human population are much lesser than today's population, the vast supply of gold can be used as peg to Countries' currency.
(2) For eg. Countries trade agricultural goods like rice, wheat, coffee, spices, fruits, cow, sheep, poultries, pig etc.
(3) Industrialisation is at its infancy - eg. trade bicycles, bullock cart, tables, chairs etc.
(4) Thus currencies can peg to gold - and when supply is not sufficient, silver is brought in - to make denomination smaller for trade exchanges.
(5) But now, world population is about 6 billion, World Economy is at US$81 trillion - it is simply not possible for Countries to peg their currencies to gold and even silver.
(6) Countries no longer trade in agricultural goods, but also many components, parts, semi-assemble products, raw materials, robots, missiles, planes, computers, smartphones etc -- Industrialisation 4.0 has make many Countries economies to expand significantly, leap and bound. How will the limited gold supply and even silver supply sufficient to peg against currencies. That means the World Economy cannot grow - and will still remain in the 1800 or 19th Century economy - not US$81 trillion. It also means, the World standard of living all go back to 1800s, 1900s - where 5 cents can buy a car?
(7) Moreover, Countries has evolved to trade in services, finances, virtual economy like digitial economy, eCommerce - that even crypto currencies are jumping into the Economy as medium of exchange --- then how will gold and silver be sufficient for Countries' currencies to be peg against - unless people don't want World Economy to grow.
(8) Pegging world currencies to gold --- is akin to going back to use "abacus" to do calculation instead of using computer spreadsheet, blockchain to keep transaction --- not even using calculator.
(9) Thus the hypothesis of pegging currencies to gold --- is flaw, and can't stand up to scrutiny --
- and will cause the economic wealth of many Countries to plummet - and is thus not workable.
(10) A simple analogy, eg. if the World Economy don't grow, then $100 currency is printed for trade and peg against limited gold supply of $100 is feasible.
But what happen if the World invent alot of things like robots, AI, eCommerce, smartphones computer etc - and the World Economy expang to $1000 - then with gold supply of $100 - does it means all this invention is to be traded at $0 - as the gold supply is finite and cannot expand?
But if use printed currencies, Economies that invent all the new stuff can print up to $1000 - to reflect their Economic output and economic growth - but gold cannot be printed.
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(2) For eg. Countries trade agricultural goods like rice, wheat, coffee, spices, fruits, cow, sheep, poultries, pig etc.
(3) Industrialisation is at its infancy - eg. trade bicycles, bullock cart, tables, chairs etc.
(4) Thus currencies can peg to gold - and when supply is not sufficient, silver is brought in - to make denomination smaller for trade exchanges.
(5) But now, world population is about 6 billion, World Economy is at US$81 trillion - it is simply not possible for Countries to peg their currencies to gold and even silver.
(6) Countries no longer trade in agricultural goods, but also many components, parts, semi-assemble products, raw materials, robots, missiles, planes, computers, smartphones etc -- Industrialisation 4.0 has make many Countries economies to expand significantly, leap and bound. How will the limited gold supply and even silver supply sufficient to peg against currencies. That means the World Economy cannot grow - and will still remain in the 1800 or 19th Century economy - not US$81 trillion. It also means, the World standard of living all go back to 1800s, 1900s - where 5 cents can buy a car?
(7) Moreover, Countries has evolved to trade in services, finances, virtual economy like digitial economy, eCommerce - that even crypto currencies are jumping into the Economy as medium of exchange --- then how will gold and silver be sufficient for Countries' currencies to be peg against - unless people don't want World Economy to grow.
(8) Pegging world currencies to gold --- is akin to going back to use "abacus" to do calculation instead of using computer spreadsheet, blockchain to keep transaction --- not even using calculator.
(9) Thus the hypothesis of pegging currencies to gold --- is flaw, and can't stand up to scrutiny --
- and will cause the economic wealth of many Countries to plummet - and is thus not workable.
(10) A simple analogy, eg. if the World Economy don't grow, then $100 currency is printed for trade and peg against limited gold supply of $100 is feasible.
But what happen if the World invent alot of things like robots, AI, eCommerce, smartphones computer etc - and the World Economy expang to $1000 - then with gold supply of $100 - does it means all this invention is to be traded at $0 - as the gold supply is finite and cannot expand?
But if use printed currencies, Economies that invent all the new stuff can print up to $1000 - to reflect their Economic output and economic growth - but gold cannot be printed.
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Soon Hoe Quah
Why is a 94 year old medical doctor and who lost RM30 billion on forex losses in BNM in the 1980's teaching us about currency manipulation prevention by using regional currency based on gold??? Please retire and go play with your grandchildren and let Malaysia have a genuine leader with vision and conviction for a better and united Malaysia! Not bloody sticking to matriculation quotas, ECRL 20% bumi contractor quotas, pink form and AP quotas, etc.
8
用李
Has this old terror of the north found a gold mountain in Malaysia 🤔🤔🤔.
Might as well the world start trading using copper, silver & gold to instead what a joke. There will b no troubles???
Wake up lah.....
Might as well the world start trading using copper, silver & gold to instead what a joke. There will b no troubles???
Wake up lah.....
Mohd Haidres Syahali
Your comment shows how poor is your knowledge and understanding about this. You also maybe failed in history subject. Go back to school and learn who created paper money and for what reason, stupid!
Hamid Sayed
It's good step for genuinely.
To barrier big black mailer..
Why we depends on others
Liquid money more comfortable
Gold is best transaction
To barrier big black mailer..
Why we depends on others
Liquid money more comfortable
Gold is best transaction
Li Ren Zeng
What he says make sense. Basically, he is trying to reverse back to the time of Brentton Wood System, whereby currencies are tied to gold. Back in those times, global economies were much more stable. Currency should be pegged to something of value, and not to other currencies, because everybody will promote their own currencies, which ends up in endless conflicts, because every big guy will want to be the leader with ability to manipulate their own currency.
There will be endless critics on this CNA page about Dr Mahatir, with some people talking irrelevant stuff or very perosnal views. But seriously, can any of the critics here say that they know more about global and macro economics than the 94 year old who spent the bulk of his life in politics.
There will be endless critics on this CNA page about Dr Mahatir, with some people talking irrelevant stuff or very perosnal views. But seriously, can any of the critics here say that they know more about global and macro economics than the 94 year old who spent the bulk of his life in politics.
Tay GuangHong
Ren Zeng, we cannot move back to the Brentton Wood system or gold standards because then the world will be brought back to poverty. There is simply not enough gold to go around the world. The best way forward is to continue the fiat money system. US print money aka mahjong player who lose money, no 1 lose, no 1 win. So the more they print, the more money flowing around in the world which is a win-win situation.
Raymond Goh
Do you know that the Malaysian Ringgit was peg against the US$ during this corrupted Old Dog tenure as PM? Today, the Ringgit is still peg to US$
Agiel Gaap Fairlane
Mahathir trying to be the next Gadaffi? Don't be surprised if he is assaniated or Malaysia is invaded on trumped up allegations if this move gets anymore serious. The superpowers will not allow the balance of economy to shift out of their favor.
Nick Lai
No one in this world will take you seriously
Tonyle Tan
I take him very seriously. In many important world leaders are thinking seriously. Why was Iraq invaded by the US, ? The actual reason was he tried not to use us$. What about those currenc swaps between various nations ?
Johnson Lee
Now who is talking about sustainability through agreement between all nations when he could not even honor the water agreement signed donkey years ago!
Swe San
Backing currency with gold is like saying 'Look. Our government sucks. You'd better rely on gold instead'. So, he's trying to be honest here.😂
Tay GuangHong
gold standard era is over since the end of bretton woods system. there is not enough gold to go around, so using the current US$ reserve currency system is good. At best, create 1 more reserve currency, must be fiat money, not gold backed. Reason why bitcoin will not work is because of the limited circulation. We need unlimited supply of money to fund the world.
Tonyle Tan
This time Dr.M hit the world problem on the nail ! The instability in the world economy is dued to US $. USA is using it as a tool to suck blood from others
Wong Chiew Yuen
Agreed. The world should wake up now. America first. They dont fk care whether other nation live or dead.
Wong Chiew Yuen
US just warn and want Mal Sing and Thai to chose side properly. If not they will get into troubles.
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