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.
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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.
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Why the famous statement of, “The rich are getting richer, while the poor are getting poorer” is a mathematically and economically impossible statement. Occupy Wall Street Answered!
Current economic data shown by many economists and journalists out there on income inequality are plain wrong. First, let’s start by checking the famous statement of “The rich are getting richer, while the poor are getting poorer”.
When you sell cars to many individuals, you will end up rich. But do you know that those people buying your cars, will end up far richer combined, than you? The answer is very simple. When they buy your cars, they use the cars to enable them to go to work, earning wealth in the process. Some turn their cars into taxis, generating wealth in a slightly different way.
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Lately, a lot of buzz, cries and shouting out there that the world should go back to using gold as money. The purpose of this article is to show what will actually happen to us, to our ‘gold money’ if gold is actually being used as money, to replace our existing fiat paper standard. Let’s assume that we started to use gold as our money beginning in 1996, which is exactly 15 years ago.
First a little bit of history. Gold was widely used before but was removed by our grandfathers. Perhaps today’s generation forgot as to why gold was removed. Gold was found to be inherently unstable, difficult to be used as money. So it was removed and replaced with a better kind of money, our existing paper money. Paper money was so successful, it was the most successful kind of money ever. It is cheap, easy and almost counterfeit proof. Gold money possesses none of those ideal characteristics.
Now on to gold. In order to get the true value of gold, independent from the changes in paper money’s value due to inflation, we have to filter out the effects of inflation on gold. Once removed, the mask that hides the true value of gold will disappear, revealing the actual price of gold, its true price, due to its own supply and demand. The graph is shown below.
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