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11/18 James Sinclair - The Seriousness of the Gold Dinar

The Seriousness of the Gold Dinar
A presentation made in Kuala Lumpur Malaysia
By
The Honorable Dr. Mahathir Bin Mohammed
Minister of Finance for Malaysia
"The Gold Dinar in Multilateral Trade"

Presented to the Community
by
James Sinclair


I have chosen to delete the first 17 points as they refer to subjects that might cause the western precious metals researcher to prejudice the rest of this extremely important document. There is no coverage in the West of this watershed event in monetary history which is clearly, really and powerfully in the making. Those that wish the first 17 points need only ask for them and I will provide them. They speak to the perspective of an Arab in today's Islamic world. This opening 17 points requires a perspective of high pan-determinish to deal with objectively. That is a quality that the West has always lacked and after September 11th probably will not acquire soon in matters dealing with the Islamic world. I have made the decision to make to present t to you in this manner as it must be read with an open mind.

There is an Islamic currency coming. That is a fact. There is a high chance that this is it. The Dinar is a tactic nuclear monetary weapon of self-protection in the Islamic perspective. It is a statement by them of Islamic Self Consciousness and Islamic Self Esteem. It is an Islamic rally point for all 1.2 billion of that persuasion. It is coming soon and it is real. It may not be viewed objectively by the West, in the environment of a weak dollar now existing. That weak dollar situation looks to me as if it will get significantly worse before it gets significantly better. This is not low amplitude noise. This is a NOISE that may scream soon the unthinkable word, Remonetization. Here are the words of its architect. Pay close attention to the final point in the words of this Minister of finances own words. They need to be understood completely in order to understand what is coming.


Oleh/By: DATO SERI DR MAHATHIR BIN MOHAMAD Tempat/Venue: IKIM HALL KUALA LUMPUR Tarikh/Date: 23/10/2002 Tajuk/Title: THE GOLD DINAR IN MULTI-LATERAL TRADE SEMINAR

20. If the Muslims are going to protect themselves they
must have sufficient wealth. Allah has endowed Muslim
countries with inexhaustible wealth. These need to be
administered for the good of the ummah.

21. But wealth can also be acquired through commercial
activities, through the production and distribution of
goods and services and through trade.

22. Today trade between Muslim countries is small. It
is not suggested that we reduce our trade with the non-
Muslims. But we should endeavour to increase the trade
between Muslim countries.

23. We can trade through the exchange of goods, through
barter. But today we use money. Since we don't have a
currency which is strong enough and stable enough in
exchange rate terms, we have to use the American dollar.
But the dollar is also not stable. Today the dollar has
depreciated against many other currencies. This means
that despite the increase in the price of oil for
example, we are actually earning less due to the
devaluation of the dollar. It is the same with the
other currencies. It is the same with our own
currencies. They all fluctuate in value. And they are
all subject to speculation and manipulation as happened
in Malaysia and other East Asian countries, in Russia
and in Latin America.

24. The reason for this is that paper currency has no intrinsic value. You can print any figure you like on
currency notes but in exchange rate terms the figure
means nothing. The Malaysian Ringgit is 3.8 to one U.S.
Dollar. The Turkish Lira is 1.5 million to one U.S.
Dollar. The Indonesian Rupiah is 9000 to one U.S.
Dollar. The purchasing power within the country is
different from the purchasing power outside the country.
Sometimes countries have as many as four exchange rates
-- one official, one for domestic economy, one for
export and one for import.

25. Clearly this situation in terms of international
finance is chaotic and anarchic. But since the system
benefits the powerful countries they are unwilling to
correct it.

26. If we want to avoid being short-changed we must
have a currency that has intrinsic value. Gold does
fluctuate in price but the fluctuation is minimal. It
is not possible to devalue gold by one hundred percent
or one thousand percent. Nor is it possible to revalue
gold by the same percentage. The fluctuation in the
value of gold can only be by a few percentages, up or
down.

27. When the Allied nations met in Bretton Woods to
determine the principle for the rate of exchange of
international currencies in order to facilitate trade,
they decided to use gold as a standard. The value of
the U.S. Dollar was fixed at one dollar for 1/35 ounce
of gold or 35 U.S. Dollars per ounce. All other
currencies were valued in gold through the rates of
exchange with the U.S. Dollar.

28. This worked quite well until some countries wanted
to devalue their currencies in order to become
competitive in the international market. Then other
countries also decided to devalue in order to remain
competitive. Finally the U.S. Dollar was devalued
against the Gold.

29. At this stage the gold standard could not be
sustained. The market claimed that it could determine
the exchange rate through the demand and supply of
currencies freely traded in the market. But profiteers
moved in and they manipulated the value of the
currencies so that there was chaos in terms of exchange
rates of currencies. Business became very difficult.
Indeed many good businesses went bankrupt when the
domestic currency gets devalued. The hedge Funds which
claim to insure the value of the currencies made huge
sums of money speculating and manipulating the values of
the currencies.

30. This anarchy in the international financial regime
will remain because it benefits the rich and the
powerful. If we want to protect ourselves we must
evolve our own payment system, our own trading currency.

31. The Gold dinar can provide the currency for trade
between nations. If we value all trade items against
gold, then we will have no problem with the exchange
rate. We know that in the last resort we can melt the
gold and sell it in the market. You obviously cannot do
that with paper currency, worst still with figures on a
computer. They have no intrinsic market value as gold
has.

32. But gold is bulky. We cannot be carrying gold all
over the world in order to pay for goods we want to
import. But we need not do that.

33. It is not intended to use the gold dinar as
currency for everyday transactions in the domestic
market. For this we can use national currencies. If
there is inflation then the currency can buy less gold
and other goods. And vice versa. So there is no
necessity to carry bags of gold coins for transaction
within the countries.

34. But even for international trade the transport of
gold bullions or gold coins would be very minimal.
Through bilateral payments arrangements the imports can
be balanced by the exports and the differences settled
in gold dinars. The Central Bank can provide a
guarantee for the gold required for the payments of the
balance. In the following weeks or months the deficits
may be reduced or a surplus achieved. In that case the
payments of the balance can be made through accounting
arrangements between the Central Banks. It is only
occasionally that a necessity might arise for the actual
gold dinar to be used to pay for the purchase of
imports.

35. We cannot really verify the amount of money a
country has. A country's own currency cannot be
regarded as its reserve. But gold dinars or gold
bullion or gold ingots can serve as a country's reserve.
Still in the end we have to trust each other. If we are
good Muslims then the cases of fraud by Central Banks
would be minimal.

36. Assuming that Malaysia exports to a Dinar Area
country a hundred million Dinars worth of motor vehicles
and then imports 110 million dinars worth of oil, then
the payment required by Malaysia would be just 10
million dinars. The ten million dinars is credited to
Malaysia's trading partner. If in the following month
the trading partner buys 110 million dinars worth of
Malaysian cars and Malaysia buys 100 million dinars
worth of oil, then no payment need to be made by either
party. The 10 million dinars that has to be paid by
Malaysia's trading partner for the motor vehicle can be
offset by the credit of 10 million dinars from the
previous month's transactions.

37. Today with computers we can close account and pay
more frequently. Through this method it is not
necessary to purchase or earn hard currency.

38. Of course there may be some countries which are so
poor that they cannot have gold dinars. We can buy some
raw materials to be paid in gold dinars. They can be
helped to build up the reserves of gold dinars.

39. There will be problems. But if we begin with just
a pair of countries we would be able to minimise
problems and demonstrate whether it works or not. We
will be able to identify the weaknesses and the faults
and correct them.

40. Gold is a precious metal. There has never been a
time when there was no demand for gold. It is also not
so plentiful that its price will fall the way paper
currency or even other precious metals can fall. Yet it
is not so limited in quantity that anyone or any trader
can corner it and manipulate the price.

41. In different countries the price of gold will
differ in terms of the currency of that country. That
is a function of the currency of the country. The value
of one gold dinar is one gold dinar no matter what the
exchange rate of a currency is against the gold dinar.
If the value of goods or services is expressed in gold
dinar, the value remains the same no matter which
country is involved in the trade.

42. Thus an exporter can declare the agreed price in
dinar to the importer in another country and to the
Central Bank in his country. Depending on the agreement
reached the Central Bank will pay the exporter the
current local currency equivalent to the gold dinar
price. At the importer's end, he would pay to his
country's Central Bank the local currency equivalent of
the agreed price in dinar. At the end of the week or
month the Central Banks will total up the value in dinar
of the exports and imports between the two trading
countries. If they are not balanced then the country
with a surplus will have a credit account against the
country with a deficit. The difference can be paid in
dinar or in goods or the country with the surplus can
hold the dinar for future purchase from the country in
deficit.

43. In multi-lateral trade, the process may be a little
more complicated but it is entirely, manageable. A
clearing house can be set up for a group of trading
countries and the deficit and surpluses balanced. The
process is not unlike the clearing of the cheques of
numerous banks at a central clearing house.

44. Provided there are goods or services to be supplied
by all participating countries, the amount of gold
dinars that needs to be kept as reserve backing and for
payment in the last resort is very small. Ideally there
would be no need to transport and pay in dinars. The
imports and exports in most instances would cancel
themselves. The profits come from disposing of the
goods or services domestically when the local currency
would be used.

45. There will be problems of course. But there are
problems now. Countries with no"hard currency" i.e.
U.S. dollars cannot pay for their imports anyway. In
addition the U.S. currency is not as stable as gold.
Not only can it appreciate or depreciate widely but a
country's currency can be made to depreciate so much
against the U.S. Dollar that its imports cannot be paid
for, priced as they are in U.S. Dollar. The gold dinar
cannot depreciate much against the U.S. Dollar.

46. Gold price can also be manipulated but not as
easily as U.S. Dollar or other currency. No one can
sell gold at below market price because he just will not
be able to deliver when called upon to do so. Short-
selling will be very difficult if not impossible.

47. However local currency prices of gold can still
fluctuate if left to the market. It is up to the
country concerned whether to control exchange rates or
not. But speculation and manipulation will not be as
easy as when local currency is valued against the U.S.
Dollar.

48. It must again be stressed that the Gold Dinar is
exclusively for international trade. It is not to be
used as local currency. In a sense it is like the U.S.
Dollar now. Some countries of course use the U.S.
Dollar locally for paying hotel bills by foreigners.
But the dinar is heavy and cumbersome to carry. So it
cannot be used as freely as the U.S. Dollar locally.
This again lends credibility to the dinar and the local
currency, which has to be used for local payment.

49. We should not be too ambitious as to launch the
Gold Dinar for multi-lateral trade at one go. We should
begin by pairing off the countries willing to use the
Gold Dinar. A pair of good trading countries with a
fairly well balanced trade should initiate the use of
the Gold Dinar. Problems that arise can be resolved and
the system improved. After the bugs have been got rid
off then the trade using the dinar can be expanded
gradually to involve more countries.

50. Traders in particular will be happy because their
prices in Gold Dinar would not be affected by changes in
the exchange rates of the importing countries or the
exporting countries. In dinar, the prices will always
remain the same.
51. It is not the intention to make the dinar a common
currency for all countries. It is not really the Gold
Standard with a fixed value against local currency. If
countries print more local currency there would still be
inflation within the country. But trade would be stable
and enhanced. Speculators and manipulators will not be
able to undermine international trade.

52. Of course the Gold Dinar can be a trading currency,
for all countries, not necessarily Muslim countries.
But Muslim countries are in the best position to
demonstrate the viability of the system. They are in a
position to manage their economies rationally and in the
process show the world that they are capable of growing
with stability and in peace. And this will do more
towards countering oppressions by their enemies than the
futile violent retaliations.

Sinclair conclusion:


Dear Friends of the Gold Community new and old, this is a very young gold market with a long way to go. It is only in the crawling stage and has done magnificently so far. Soon it will stand up, become strong and be recognized. This time Atlas will not Shrug but rather Gold as an economic Atlas will be used to bolster and restore confidence in the US dollar through a revitalized Gold cover Clause. When the next bull market in equities begins it will be gold that will stand as the foundation to that event and not more paper foolishness from any central bank or international derivative traders. The really millennium begins when gold revitalizes world economies not through convertibility but rather through the gold's real role in the monetary system. Gold is a control item that disciplines the creation of monetary aggregates. That is what the Gold cover clause does and that is why Nixon sterilized it. Mark my words. It is coming and it brings good times, not the four horsemen now looked for as the specters coming over the hill. The ascendancy of gold will be hard fought but will be finally embraced as now popular central bank tools of interest rate manipulation and monetary aggregate expansion are destined by their own definition to fall flat on their political faces. It is amazing that out of Islam comes what will save the Western World's economic system. I am certain that Divinity, whatever He, She or It is or is not, has a unique SENSE OF HUMOR and loves Infinite Variety.



Copyright 1999, 2002 Le Metropole Cafe. All rights reserved.

-->The Washington Times zum gleichen Thema:
<ul> ~ http://www.washtimes.com/upi-breaking/20021115-051010-4184r.htm</ul>

-->Asiens Golddinar: Strategische Antwort auf das Chaos
(EIR, Financial Sense Online)


Die wachsende Sorge, daß die Regierung Bush die Welt in einen permanenten Krieg zu treiben droht, während sie nichts gegen den globalen finanzwirtschaftlichen Kollaps unternimmt, hat eine Reihe asiatischer Staaten veranlaßt, koordinierte Schutzmaßnahmen vorzubereiten. Eine davon ist der Vorschlag eines goldgedeckten Dinars, um den Dollar als Handelswährung zwischen diesen Nationen zu ersetzen, eine Maßnahme, die den IWF aufs höchste alarmiert. Wie weit die Gedanken in Richtung eines sog."Golddinars" bereits gediehen sind, geht aus der (in Europa und den USA nach Kräften unterdrückten) Rede hervor, die Malaysias Premierminister Mahathir als Gastgeber eines Seminars Ende Oktober in Kuala Lumpur gehalten hat. Allein schon der Titel des von hochrangigen Vertretern islamischer Staaten besuchten Seminars ("Der Golddinar im internationalen Handel") muß in den Vorstandsetagen von IWF und Weltbank Panikstimmung ausgelöst haben, zumal das bereits die zweite größere Veranstaltung der"Organisation Islamischer Konferenzen" (OIC) zu diesem Thema war. Bei der ersten Konferenz über"Ein stabiles, gerechtes und globales Währungssystem" im August war ein Abkommen zur Einführung des Golddinars zwischen Malaysia und einigen noch nicht genau feststehenden Partnern für Mitte 2003 angekündigt worden, dem im Laufe der Zeit weitere Länder beitreten sollen. Nun schlug Irans Zentralbankchef Bijan Latif die Einrichtung eines Sekretariats in Malaysia zur Koordinierung der Entwicklung der Politik des Golddinar vor.

In seiner Rede verdeutlichte Dr. Mahathir, daß es nicht darum gehe, einen Goldstandard [wie im britischen Empire bis 1914] einzuführen - wobei die gesamte Geldschöpfung an die Menge des vorhandenen Zentralbankgoldes geknüpft wäre -, sondern vielmehr um die Rückkehr zu einem Goldreservesystem à la Bretton Woods, das z.B. die Politik der produktiven Kreditschöpfung ermöglicht. Mahathir erinnerte die Teilnehmer daran, daß sich die Alliierten, als sie sich"in Bretton Woods versammelten, um die Prinzipien des Umtausches internationaler Währungen zum erleichterten Handel untereinander festzulegen, für Gold als Umtauschstandard entschieden."

Am Beispiel des Handels zwischen Malaysia und Saudi Arabien hatte der Ã-konom Mohamad Yakcop bereits auf der Augustkonferenz das angestrebte System verdeutlicht:"Malaysische Exporteure werden für ihre Ausfuhren am Fälligkeitsdatum von der Bank Negara, der malaysischen Nationalbank, in Ringgit, der malaysischen Nationalwährung, bezahlt... In ähnlicher Weise werden die Importeure den Gegenwert in Ringgit für ihre Einfuhren an die Bank Negara abführen. Die saudische Zentralbank wird für ihre Im- und Exporte gleichermaßen aktiv. Nehmen wir z.B. an, daß nach einem Vierteljahr der Export von Malaysia nach Saudi Arabien 2 Mio. Golddinar betragen und der saudische Export nach Malaysia im gleichen Zeitraum 1,8 Mio. Golddinar erreicht hat, dann wird die saudische Zentralbank für dieses bestimmte Quartal an die Bank Negara 0,2 Mio. Golddinar überweisen. Das kann z.B. so geschehen, daß die Saudis von ihrem Konto bei der Bank von England 0,2 Mio. Unzen Gold auf das Konto der Bank Negara in derselben Bank transferieren. Das Wichtige aber bleibt hierbei, daß es mit dem Einsatz der recht bescheidenen Summe von 0,2 Mio. Golddinar möglich war, ein reales Gesamthandelsvolumen in Höhe von 3,8 Mio. zu stützen."

Der Schwachpunkt dieses Systems liegt allerdings im Gold selbst, das ein Gegenstand der Spekulation ist, besonders wenn es an eine Währung wie den Dollar gebunden ist, der demnächst wegen des Zusammenbruchs des US-amerikanischen Bankensystems abstürzen wird. Mahathir ist sich dieses Problems voll bewußt:"Auch der Goldpreis kann manipuliert werden," erklärte er auf dem Seminar,"aber nicht ganz so leicht wie der US-Dollar oder andere Valuten... Spekulation und Manipulation sind [in diesem Fall] nicht so leicht durchzuführen, wie im Fall der Anknüpfung einer regionalen Währung an den Dollar... Der Wert eines Golddinars bleibt der eines Golddinars, unabhängig vom Wechselkurs zwischen dem Golddinar und einer anderen Währung. Wenn der Warenwert und die Leistungen sich in Golddinar ausdrücken, bleibt sein Wert gleich, egal, welches Land am Handel beteiligt ist."

Weiterhin betonte Mahathir, daß die ökonomische und strategische Krise die Politik des Golddinar vorantreibt. Die katastrophale Lage im Nahen und Mittleren Osten, der Terroranschlag vom 11. September 2001 und der drohende Krieg gegen den Irak hätten dazu geführt, daß die Weltwirtschaft derzeit nicht mehr wachsen könne,"denn der Westen ist sehr zornig, insbesondere die Amerikaner. So auch die Moslems. Zornige Leute können nicht rational handeln." Natürlich könne der Golddinar"die Handelswährung aller Länder werden, nicht nur der muslimischen; aber die islamischen Länder sind [jetzt] am besten in der Lage, die Wirksamkeit dieses Systems zu demonstrieren... und im Zuge dessen aller Welt zu zeigen, daß sie mit Stabilität und Frieden wachsen können. Und damit wird mehr gegen feindselige Unterdückung getan als durch unnütze gewalttätige Vergeltungsmaßnahmen."

Auch andere Stimmen warnen, daß die derzeitigen Fehler Washingtons den Bruch mit dem bankrotten IWF-System beschleunigen werden. James Sinclair, der Leiter des Bergbauunternehmens Tan Range Exploration schrieb am 28. Oktober im Editorial der Financial Sense Online:"Mir ist zugetragen worden, daß im Falle eines amerikanischen Angriffs gegen den Irak sehr wahrscheinlich mit einer vereinten islamischen Salve gegen den US-Dollar vermittels des Golddinar zu rechnen ist." Die Saudis, so Sinclair weiter,"werden nicht so freundlich sein, wie es die meisten Beobachter glauben, den Dollar dieses Mal zu retten." Sowohl Sinclair als auch Bijan Latif von der iranischen Zentralbank bezeichneten die Einrichtung einer - nach den Statuten des IWF verbotenen - goldgedeckten Währung als"Aufstand gegen den IWF". Sinclair ergänzt:"Die Einführung des Golddinar wäre für IWF und Weltbank der absolute Tiefpunkt."

Andere verweisen auf die Sorge in Saudi Arabien, die USA könnten saudische Guthaben einfrieren, was die Saudis nur dazu trieb, den Golddinar als Ersatz für den Dollar einzuführen und, wenn nötig, sogar alle in Dollar ausgewiesenen Kapitalanlagen aufzulösen. Tatsächlich ziehen die Saudis bereits Geld aus den USA ab, was sich am Anstieg der Einlagen in saudischen Banken im September um 30 Mrd. Dollar zeigt. Hintergrund ist die Tatsache, daß die Kriegspartei in Washington schon seit Monaten eine saudifeindliche Hysterie anheizt. Unter dem Eindruck einer solchen Politik dürften Saudi Arabien und andere Staaten kaum einen anderen Weg sehen, als sich aus dem Dollarsystem zurückzuziehen. Dies könnte schon bald zur Einführung des Golddinar unter den islamischen Nationen und weiteren Fortschritten zu einem neuen Bretton-Woods-System führen.

Zum

-->>Dies könnte schon bald zur Einführung des Golddinar unter den islamischen Nationen und weiteren Fortschritten zu einem neuen Bretton-Woods-System führen.

Sollte ein Neues Bretton Woods kommen, ich rate euch, tauscht eure Neuen-Bretton Woods-Scheine immer fleißig gegen Gold. Der Tag wird kommen, an dem das neue Bretter-Wald-System falliert, geanuso wie es das alte tat.

Bretton Woods = Sand in die Augen.

Gruß
Diogenes

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-->Hi Theo,

Der Golddinar ist kein Bretton Woods. Bretton war ein Golddevisenstandard, d.h.neben Gold sind auch Golddevisen (in diesem Fall USD) zulässig.

Der Golddinar hingegen ist ein goldbasiertes Clearingsystem zwischen den Staaten. Das ist eher vergleichbar mit einem Wechselsystem mit Clearinghaus. Allerdings ist es kein sauberer GS sondern ein Hybrid aus GS nach außen und Fiat money nach innen. Das Hybird-System hält nicht, eines wird geben müssen, und zwar das Papier. (!)

Der Vorteil ist, daß Auslandsverschuldung und Handelsdefizite sich nicht akkumukieren können, wie das unter Bretton Woods der Fall war. (vorausgesetzt man pfuscht nicht hinein)

Das Problem beim Golddinar ist, daß im Inland nach wie vor die lokale Pappe verwendet wird. (Begründung Prenmierminister: Gold ist so umständlich zu tragen *LOL*) Das bedeutet die Volatiliät/Wertverfall der Pappe bleibt nach wie vor, er wird nur nach außen hin abgeschirmt.

Langfristig wird sich der Golddinar auch nach innen etablieren. Und zwar zunächst über den Improt/Export Handel. Denn dieser ist unter dem Golddinar immer noch der Volatilität der lokalen Währung unterworfen.

Um diese Risiken zu eliminieren, werden/müssen die Unternehmen in Golddinar kontraktieren: Zulieferer<->Exporteur<->Importeur<->Abnehmer. Über den Gebrauch zwischen Importeur und Exporteur kommen auch die Zulieferer und Abnehmer im jeweiligen Lande dazu und damit wieder deren Abnehmer Zulieferer.... Derart wird sich der Golddinar nach innen verbreiten.

Damit kommt auch der Privatsektor ins Wechselsystem/Clearingsystem hinein, womit man bei einem sauberen Goldstandard landet - Geld, Diskont und Darlehen sind separiert.

Das hat gewaltige Tragweite, man muß sich mal überlegen: London wurde DAS Finanzzentrum für die Welt, weil es das Clearing unter dem GS gemacht hat.

Aufpassen muß man dann darauf, daß die Banken nicht wieder anfangen, die Trennung von Diskont und Darlehen durch borrow-short-lend-long zu unterminieren. Dann würde sich die Geschichte wiederholen: Bankenruns, dann ZB, dann Fiat Money.

Gruß
Diogenes