Let’s Use Gold, Silver, and Copper as Global Currency!

Zimbabwe Dollar

Currently some countries ask for the new global currency to replace US Dollar. The exchange rate between US Dollar and Local currency in many countries are very unstable and causing many monetary crises. For example in Indonesia, in 1946 USD 1 = IDR 1.88. In 2009 the rate become USD 1 = IDR 12,000!

In 1970 the Pilgrimage (Hajj) cost in Indonesia only Rp 182,000. In 2009 it become naik jadi US$ 3.500 (Rp 36,750,000). The Rupiah value drops 201 times  (20,100%!) in less than 40 years!

 

In Zimbabwe in 2003, USD 1 = 697.42 Zimbabwe Dollar. But in 2008 the rate become USD 1 =3.333.333.333.333 Zimbabwe Dollar! Inflation and prices change happen every hour ruining the economics! The funny thing is, Zimbabwe actually rich with natural resources such as antimony, asbestos, chromium, coal, cobalt, copper, gold, graphite, iron ore, magnesite, nickel, silver, and tin. Gold, chrome, and asbestos are the major mineral exports (Microsoft Encarta). With area of 390,000 km2 and population of 13 million people, Zimbabwe should be a prosper country. Yet, the “important” and uncertain of US Dollar value make all those natural resources worth almost nothing in dollar! The exchange rate is unclear. Set by speculators only.

The instability happen because all currency using Fiat Money which is not guaranteed by valuable thing such as Gold or Silver. All currencies made of paper which worth only around USD 0.25 cent. However the Forex Speculators which are the main player set the value USD 1 equal to IDR 12,000 or 3,333,333,333,333 Zimbabwe dollars. And those Forex Speculators could change the value every second in the Forex market. Instead of exchange tool and the measure of products or services, money become speculative object. Speculation in foreign exchange by dealers, brokers, or others becomes a major influence on exchange rates (MicrosoftEncartaEncyclopedia).

 

The currency such as Zimbabwe dollar or IDR could flunk as low as their value as paper.

 

Currently, many countries depend on US Dollar for the payment of products, services, or debt to foreign countries. Unfortunately, US dollar only produced by the US Government and designed for the US citizens. Not for all citizen of the World!

 

At first, US government produced Gold and Silver coins as their money (Commodity Money). No Gold or Silver means No Money. Then they use Credit Money where the paper money backed by gold reserves.

 

During Civil War, the US government needed a lot of money to fund the war more than the gold they had. So they issued Greenback money in February 1862 which was not backed by gold reserves. The value dropped immediately and caused sharp inflation. In 1866 an act was passed to withdraw the greenbacks (MS Encarta). However the Greenbacks were still used widely and made redeemable in gold in 1879. The Fiat Money causing sharp inflation in just 3 years and 17 years later the US Government use Credit Money back.

 

In 1970 foreign government holdings of U.S. dollars were over five times greater than the U.S. gold stock. In August 1971 President Richard M. Nixon suspended gold payments of U.S. dollars. Then devalued the dollar to 1/38 and in 1973 to 1/42.22 of an ounce of gold.

 

In 1978, in conjunction with reforms made by the International Monetary Fund, Congress formally removed the U.S. from the gold standard on an international basis. At the end of the decade no major currency was redeemable in gold. Since then, the value of money is set by forex speculators and causing many monetary crisis (MS Encarta).

 

So the world had been using Gold and Silver as money direct or indirectly for about 4,500 years, from 2500 BC in Mesopotamia until 20th century in US and European countries.

 

The stability of Gold Value describe in a Book of Saheeh Bukharee where a friend of prophet Muhammad bought a sheep for 1 gold dinar (1 dinar = 4.25 gram of 22 carat gold) and sell it for 2 dinars 1,400 years ago. Now we still could get 1 or 2 sheep for about 1 dinar. That is the real proof.

 

Beside gold, silver also has a stable value. In the Quran, Al Kahfi:19, told that 5 people who live in a cave bought some food for about 3 Dirham (1 Dirham = 2,975 gram of Silver). Now the price of food for 5 people about that price.

 

Many people question if Gold or Silver supply is enough if Gold and Silver are used as money. Well, the stability of Gold and Silver against other commodity such as sheep or food has proven that the supply is good. Not over supply which will cause the devaluation of gold. And not under supply which will cause the inflation of Gold. People have used Gold and Silver as money for about 4,000 years, so there should be no doubt about it.

 

Gold production still continues since Egypt civilization around 7,000 years ago until now. The discovery of America make the world gold output totaled about 4,665,000 kg from the end of the 15th century to about 1850.

 

South Africa producing 376 metric tons of gold in 2003 while US producing 277 metric tons of gold. Some 70 other countries produce gold in commercial quantities, but two thirds of the total worldwide production now comes from South Africa, the United States, Australia, China, Canada, and Russia. New gold deposits found in Australia, Alaska, Canada in 19th and 20th century. So the supply is enough.

 

Though some “Gold Money” Dinar sold in www.wakalanusantara.com, but people still could found gold jewelry in many gold stores in Indonesia and use them as wedding ring and wedding gift.

 

If people use Gold, Silver, and Copper as money, then we don’t have to worry about their number will be rare/scarce. There is Gold with high value, and there is also Copper which has low value as small change.

 

Gold, Silver, and Copper as money? Isn’t that too much? Well, currently people use local currency, US Dollar, Euro, Yen, British Pound, France Franc, Deutsche Mark, etc. That is way too much…

 

The advantage of Gold, Silver, and Copper as Global Money:

1.Stable value

2.Universal value

3.Found in many countries

4.Have real value

5.Stable prosperity

6.Monetary Crises proof

 

The disadvantage of paper money US Dollar as Global Money:

1.Unstable value

2.Local value. Even US dollar could not be used directly in many markets in Asia. There is no way we could buy thing in Indonesia using Zimbabwe paper money. But we could do that using Zimbabwe gold especially if the rate is good.

3.US dollar as the International money only produced and monopoly by US Government

4.No real value. The value set by forex speculators. Local currencies such as Zimbabwe dollar will become a toy

5.Inflation leads to global poverty

6.Monetary Crises every 5-10 years. In Zimbabwe, inflation happen every time.

 

So, let’s use Gold, Silver, and Copper as money for a better, stable, and universal currency. Let’s stop the monetary crisis which is caused by unclear paper money right now.

 

https://islammyreligion.wordpress.com

 

Just see what happen with Zimbabwe paper money. If Zimbabwe uses Gold, Silver, and Copper which are many in Zimbabwe, none of these would happen.

 

Zimbabwe dollar dead, says top economist

The Zimbabwe dollar is dead, one of the world’s leading experts on hyperinflation said today.

 

 

By Sebastien Berger Southern Africa Correspondent

 

The comments came as the Morgan Tsvangirai appointed Tendai Biti, one of his party’s highest ranking officials, to be the country’s new finance minister in a government of national unity.

 

Professor Steve Hanke, a senior fellow of the Cato Institute in Washington, has been involved with the governments and currency reforms of a dozen different countries around the world, and in 2007 developed a hyperinflation index for Zimbabwe.

 

It used stock market and other non-cash transactions to derive an inflation figure that bypassed the desperate shortages of goods in shops and actual banknotes, and peaked at an annual 89.7 sextillion per cent in November last year – after which it became impossible to calculate.

 

At the time the daily inflation rate stood at 98 per cent, with prices doubling every 24.7 hours.

 

As the Zimbabwe stock exchange had stopped trading and the non-cash banking system seized up, he said, reliable data disappeared. “The non-cash Zimbabwe dollar is, therefore, dead,” he said.

 

“Ashes are all that is left of the Zimbabwe dollar – a remnant of paper money,” he said in a commentary on the Cato Institute website.

 

Zimbabwe failed to break Hungary’s world record for hyperinflation, which it set at 195 per cent a day in 1946, but easily beat Yugoslavia’s 1994 mark of 313 million per cent a month to secure second place in the record books.

 

Read more at:

http://www.telegraph.co.uk/news/worldnews/africaandindianocean/zimbabwe/4580364/Zimbabwe-dollar-dead-says-top-economist.html

 

Hyper Inflation in Zimbabwe:

In late December 2008 and early January 2009 the use of foreign currency as a common medium of exchange has become increasingly popular as fewer goods and services are being offered in local currency. In a move to help businesses suffering from chronic shortages of foreign currency to import goods and spare parts the Zimbabwe’s central bank licensed around 1,000 shops to sell goods in foreign currency.[34][35]

 

On 12 January 2009, Zimbabwe introduced the $50,000,000,000 note. [36]

 

On January 16, 2009, Zimbabwe announced plans for imminent issue of banknotes of $10 trillion, $20 trillion, $50 trillion, and $100 trillion. At the time of the announcement, the latter was valued at ca. 30 US dollars, but that value is expected to evaporate swiftly. [37] Notably, these plans open a gap in the banknote series: there are none on the order of $100 billion or $1 trillion. It would take 200 of the $50 billion notes to make the same value as the next larger note, $10 trillion.

Read more at:

http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

 

 

Final humiliation for Zimbabwe dollar as foreign currency legalised

Robert Mugabe’s government has bowed to financial reality and legalised the use of foreign currency in Zimbabwe’s shattered economy.

 

By Sebastien Berger, Southern Africa Correspondent

Last Updated: 1:28AM BST 11 Sep 2008

 

A Zimbabwean man counts a big stack of money to buy some bananas in Harare Photo: GETTY

 

It is the final humiliation for Zimbabwe’s battered currency, which was worth more than the US greenback at independence in 1980.

 

Even after two revaluations that have knocked a total of 13 zeros off it, it was trading on the black market on Wednesday at around 6,000 to the USD – or 60,000,000,000,000,000 to one in terms of the original Zimbabwe dollar.

Gideon Gono, the reserve bank governor and a key player in the ruling Zanu-PF party, said that 250 wholesalers and 1,000 retailers would be licensed to accept foreign currency as an 18-month “experiment”.

 

Read more at:

http://www.telegraph.co.uk/news/worldnews/africaandindianocean/zimbabwe/2778562/Final-humiliation-for-Zimbabwe-dollar-as-foreign-currency-legalised.html

One Response

  1. Nice concept
    better for every country with the gold as currency
    many advantageous stable rates for gold

    gold value does not get down
    more gold more rich

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