Malaysia Proposes Gold Standard

Yesterday the Malaysian Prime Minister implicitly endorsed Gold Standard, Ainslie’s gold backed currency.  Speaking at the Nikkei Future of Asia conference in Tokyo, Mr Mohamad proposed the launch of an Asian currency backed by gold.  Mr Mohamad cited the manipulation of currencies in the region as the core reason as we’ve seen China devalue the Yuan in response to the trade war with the US and the US Treasury yesterday release the Currency Manipulation report that saw 6 of the 9 countries on their ‘watchlist’ (of those treading a fine line) from Asia.

The watchlist of ‘currency practices’ included China, Germany, Ireland, Italy, Japan, Malaysia, Singapore, South Korea and Vietnam.  The bi-annual report, which covers any country that the US does more than $40b of annual trade with, yet again avoided labelling China as a manipulator despite strong evidence and political pressure to do so.  Indeed it hasn’t named China since 1994, and many consider that to do so now, amid the very tense trade negotiations, could lead to a severe breakdown in relations.

The Malaysian PM’s solution would resolve this.  As he said at the conference:

“In the Far East, if you want to come together, we should start with a common trading currency, not to be used locally but for the purpose of settling of trade……The currency that we propose should be based on gold because gold is much more stable.”

Whilst the opening line above about them using our Gold Standard token may have been a little tongue in cheek (they’ll probably come up with their own…), this again highlights gold’s role as a stable store of value and medium of exchange.  Backing a currency with gold helps the ‘medium of exchange’ part of gold’s monetary properties* as it can be more readily traded between parties than exchanging physical bars.  So too is the case with our Gold Standard and Silver Standard tokens, backed 100% by physical gold and silver bullion.  You can learn more here >

* Gold, along with Gold Standard, ticks all 7 of the fundamentals to be classed as ‘money’, being:

  1. Durable        
  2. Portable
  3. Divisible
  4. Intrinsic Value
  5. Medium of Exchange
  6. Unit of Account
  7. Fungible