This article is an adaptation from a section of Sharif Rahman’s latest book which concluded his detailed explanation on gold’s multitude of failures. His latest book is titled, “Kegagalan Emas Sebagai Matawang” and is sure an exciting read because he also took the time to explain the justice of “interest”.
Ever wonder why the money in your hand is considered valuable, even if the paper it’s printed on is just that, mere pieces of beautiful paper? Many gold bugs made the silly accusation that these pieces of paper have no value and are no match when compared to their shiny gold bars and coins. They claimed that the Ringgit’s value is simply being dictated by the government and the government is forcing the people to accept it. Thus the typical word they used to badmouth the currency is “fiat”. Fiat means decree, and a long time ago, that was the case. However today, our paper money is no longer a mere fiat currency, it is a currency that is soundly backed, and the backing is far superior to using gold as the support.
For the past decade, the gold price increases tremendously from merely USD270 (RM1,026) per ounce (oz) in early 2002 to all-time high of USD1,913 (RM5,685) per ounce (oz) 23rd August 2011. That was 608% increase in US Dollar or 454% in Malaysian Ringgit.
However, since reaching all time high, the price gradually went down to less than $1,200 per ounce at the end of 2014. 2013 is the worst performing year, where the price drop a massive 27%. 2014 also register a price drop in US Dollar albeit small drop but the price increase in Malaysian Ringgit which was due to sudden drop of Ringgit versus US Dollar.
Gold once perceived as a safe haven during uncertainties or economic crises and a hedge against inflation but why it dropped so much? Read the article “Breaking the Myth of Gold as the Ultimate Store of Wealth” and “Why Gold is Damaging to the World’s Economy” which were written by the author of 259 Trillion Vs 5 Trillion book series. Maybe the article could explain why.
I made a compilation table to show the annual gold price changes for the past decades in both US Dollar and Malaysian Ringgit as below.
First-time investors ask this question a lot. Is it better to keep precious metal investments at home or in a secured vault abroad?
The simple answer is to do both. Investors should always keep a portion of their gold investments close by so they can liquidate it whenever they need to. After all, there’s no point in owning gold if you can’t liquidate it right away. The majority of your investments, on the other hand, should be bought and kept safe abroad so you can rely on it in case you need to relocate due to a political catastrophe in your country.
Keeping gold in a private vaults
This article is written by Sharif Rahman, the co-author of 259 Trillion Vs 5 Trillion book series. It was translated from his latest book, specially designed for Malaysians Muslim. However, non-Muslim are most welcomed to read it, either by skipping chapter one or by reading it as it is to understand the inner workings of Muslim Gold Bugs. The book is written entirely in Bahasa Melayu and an interesting portion of it is translated here into English for everyone’s reading pleasure. The title of the e-book is “Kegagalan Emas Sebagai Aset Pelaburan” and is available for order. For previews and sneak peek inside the 300pages new e-book, go here (http://sirikegagalanemas.wordpress.com).
This article is adapted from the chapter “Mengapakah Emas itu Merosakkan”, about the Indian Rupee (which is a hot topic right now) and why it crashed.
In this article, we shall discuss the over-hyped claim that gold is the ultimate store of wealth. Gold is accorded such esteemed honors freely, but where are the facts? Is it true that gold’s value would protect its holders from the ravages of inflation? Is it true that our wealth, our hard work and sweat as it’s often called, can be stored ‘inside’ a piece of yellow metal?
The yellow metal is often hyped as very stable in value, but is there any truth to it? Take a look at the value of gold, priced in US Dollars below.