What’s Backing The Ringgit In Your Pocket

Ringgit MalaysiaThis 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.

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259 Trillion vs 5 Trillion

Recently, one of my friend published a very interesting 3-books-series called “259 Trillion vs 5 Trillion”. I invited him to post an article “What will Happen if Gold is Used as Money?” last December.

The books aim to describe the workings of our economy, banking system and paper money. It contains a lot of illustrations, charts and detail explanations. He is not an economist by education (in fact, he is an engineer!). As such, he tried to explain the details in a very easy manner so that it can be easily understood by anyone.

By knowing him for a few years, I can say that he has depth knowledge in the subject he presented in his book series. The titles of the book series are,

  1. The Conundrum of Assets And Money (published in November 2011)
  2. Paper Money and the Banking System in Action (published in December 2011)
  3. (Will be published in February 2012)

Below are the books summary

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