If you like drama:

http://seekingalpha.com/article/2736885-pr...and-bears?ifp=0

Of course. If central banks are responsible. I agree.

Gold is not the best money.

Problem is, central bank policies have created an unfair distribution of wealth. The stock market is at an all time high due to the low interest rate policies.
They are now not able to raise interest rate because they know a crash will come once interest rates are raise.

Central Bank policies promote a lot of inefficiencies. Because of central bank policies, you now have too big to fail etc. In a real capitalist society, when companies make mistakes they are supposed to go bankrupt. But what we are seeing right now is that those banks are not allowed to go bankrupt because they are being viewed as too big to fail. What happens when that happen? Those too big to fail companies now take enormous risks because high risk means high return and they know that if they will never go bankrupt because central bank will always bail them out.

Because of easy money, banks lend money easily without validating the credit health of the borrower.

The thing is, you are assuming that wealth can be created out of thin air. But then, when central banks print money to bail out banks or finance the government, the public eventually pays for it.

Often times, war are financed through money printing because with money printing, governments can now have the budget to expand their military at the expense of the people.

Of course, if we have responsible government, then paper money would be a better idea for reasons you discuss. But then, absolute power corrupts. Most people get corrupted whenever they have power.

A gold back currency system ensures that government become fiscally responsible as they now cannot print money just to solve problems. Companies do not have unlimited budget. I do not see why government which is less efficient as companies having an unlimited budget.

The question has been answered a few pages ago. But you obviously do not have the brain cells to compute.

Now i know why you are never taken seriously ever.

haih.. today have fund to buy, but gold price increase so much within few days..

Just wondering why you say gold back currency is bad for economic growth...?

Central banks don't do mortgage or car loans ... i'm assuming you mean the retail/commercial banks... having a gold backed currency would limit money supply... credit supply is a different thing... you can still have unchecked credit expansion with a gold backed currency... esp if you allow fractional reserve banking system to continue... so banks not having money to lend would only happen if ppl pulled deposits from banks and not from a gold backed currency.

Your boss pays you from company accounts... so if he can't give you a pay rise... it means he has no money... not that the bank has no money...

Good answer.

But then. I bet he will not be able to compute.

the gold is dying....sad, last time i bought gold on 166 price...

I really would like to get an answer... i've been trying for a long time to find out why so many ppl keep saying limiting credit/money supply will be bad for economy... but so far the best answer i've heard says that it will cause deflation... which i don't think is bad for the economy either

Deflation or in another words recession is actually good. It removes inefficiency from the system.

A gold backed currency limits the power of the government or central banks. The thing is, if governments are responsible, then the fiat system would be advantageous. Unfortunately, all governments are corrupted.

This post has been edited by sylar111: Dec 10 2014, 01:06 PM

Please somebody help me...I bought 2 kilo at 125rm and now 135rm bank buy from me.20k.... Is it a good time to sell? If I keep it I worry maybe going down in next few days... I search on Internet and I don't know why price going up today.? Gold is going up again? Or just for a short time.?

If there is only 100 ton of gold in Malaysia to back RM, it means there only will be 120 billion RM (1 ton worth 1.2 billion based on RM120k/kg) available in the economy, cannot print more.
So you are limiting money that can be possessed by public at 120billion.

The 120 billion only circulating around, no more no less.
When someone has made profit 1 million, somemore need to loss 1 million based on the limiting supply of money.

When you produce goods like car, house, there is only 120 billion available to buy the goods.
If you produce more than 120 billion, nobody have the money to buy it.
So any extra goods produced will be no buyer, aka no one want to produce more, how can your economy can growth when nobody can buy the extra goods you produced?

Economy growth because you produce more goods/services, which needs to be consumed by extra money created through loan multiplying effect and extra printing by central bank.

But with gold backed currency, cannot create more money if no gold, so no loan can be given. No loan given, no extra consumption power, hence no economy growth.

Payrise, the boss needs to generate extra money to pay for it, same scenario with extra goods produced.
If the whole economy has fix money available, means the boss cannot produce more goods, so the boss need to pay from his pocket instead of business that generated more profit.
Every year keep on payrise from boss pocket, boss goes broke, company closed down. (aka zero sum game as mentioned, some one need to lose 1 million before other get extra 1 mil)

Deflation and inefficiency of the system is 2 different front and totally unrelated to corruption issue.

Gold backed currency has nothing to do with corruption.
Corruption still can happen with gold backed currency.

A gold backed currency is just good to limit the currency supply, aka remove irresponsible central bank that print money rampantly until become "banana money", it doesn't remove inefficiency nor corruption, nothing else.

Deflation is bad for everyone except those has been saving enough or cash rich people.

So deflation will actually hurt poor people more because they may be jobless, loss of income to support their daily life, while rich one has enough money to survive through.

You obviously cannot link the ability to have "unlimited" resources with corruption.

If say you have the ability to print money at will, are you saying that you cannot use that to your advantage?
As I said earlier, a gold backed currency forces government to be fiscally more responsible. They cannot simply print money just to fix problems.

Deflation or economic slowdown looks bad in the short term, but it is a necessity in the long term.
When the fundamentals are wrong. Prolonging the boom will only lead to a harder crash in the end.

This post has been edited by sylar111: Dec 10 2014, 02:19 PM

You forgot that capital inflows to the country can be used to increase the gold reserves in the country so if the country is productive, there will be more monies to back the system as more gold flows into the country.

And you obviously do not understand the fractional reserve system.

Based on your argument, US would not have developed before 1933 since their currency was gold backed before 1933.

It is different issue together, whether one can use the ability to print money at your advantage or not.
We are talking about gold backed currency impact on economy, which is unrelated to corruption.

Can print more money /= corruption
Cannot print more money /= removing corruption or removing chance to gain advantage by someone.

Recession does occur from time to time, which is an essential part to remove inefficient.
Even you have the ability to print money at no limit, it doesn't guarantee prolong boom.
Public will lose confidence on your money if you print excessively, once confidence lose, there goes your economy as well.

Zimbabwe prolong boom?
Banana prolong boom?

No, instead it is the other way round.

Why not.
So you are saying the ability to print money is not a power by itself?

Well, printing the money can prolong the boom. But it will cause massive inflation like what you are observing in Japan.

Bro, you don't know what you are talking about.

If worldwide use gold backed currency, then the money worldwide is fixed at an amount, capital inflow from A to B, B to C, doesn't increase the money supply.

Last time, there is enough gold to back the limited currency in circulation, so gold backed no problem at all.
eg. US had 1000 tons of gold, which equivalent can back let day USD100 billion, while economy size is just 50 billion, no issue, money still can create more.

The world economy does "fly" after removing the gold backed back in 70's.
The world developed fast since after 80's and general public has a better life across.

Last time, in 70's, 80's, you need to beg employer to have a job, those having a job is considered luxury and most people live in poverty.
If want to use gold backed, economy cannot grow, hence people have no chance to escape poverty, rich people remain rich, poor people remain poor.

Japan is facing deflation issue, no inflation.

Why Japan economy is in poor shape?
Because of deflation.
As said, from consumer and rich people, deflation is good, as can pay less.
But in term of macro economy, it is bad, factory has no incentive to produce more. Less profit can be made due to price goes down, less profit, no expansion, no payrise, no new hiring which eventually will haunt back the general public as consumer in term of income power (having a job to generate income)

If printing money can polong boom, Japan already booming non-stop, as since after 80's, Japan already underwent many round of QE or money printing already, instead we see stagnant Japan economy for decades.

I've already mentioned that the act of repatriating gold signifies something, not that it directly affects USD price or any currency. You can't be sure as well that everyone will stick to the USD till the end of the day, however you're entitled to your opinion. There were many instances that countries started to bypass USD in trade (I think sylar111 has mentioned few). Let's not run out from the topic where I originally questioned that "buying gold in the near future is likely to loss value for a number of years". Gold is definitely not a suitable currency tool(I'm not arguing that nor did I brought up the question of gold as currency in the first place!) right now but it has a store of value and possibly multiplies in its value in long term.


So, you're just guessing that they repatriate gold to save on expenses?Doesn't add up. Selling them off without the hassle of arranging the logistics of physical gold transportation from USA to Netherlands will be much easier! I'm not sure if it has any impact on euro and even if it has none, the fact remains that DNB did it. And secretly too.


Check out the Maybank branch that sells Kijang emas on their website. You can sell back to Maybank or any Ar-Rahnu(keep the receipt).

Everyone already try to get rid of USD, but only limited success.

If you doing import export, a lot of stuff still quoted in USD, any payment made in USD.
Our company just recently made enquiry to China machinery company and receive quotation which all quoted in USD and payment is USD.

Gold is not a money nor currency but another asset class which investors can diversify into.

Properties can store value, land can store value, share can store value, oil/iron ore/besi buruk also another one can store value, so does gold, silver, copper etc.