"Umar Vadillo", CEO of Kelantan Gold Traders claimed in here below:
Unlike paper money it does not require to be backed up by any legal authority, nor does it seek to be backed. Its value, unlike paper money, does not depend on legal compulsion but freedom.Husam denied the Gold Dinar was to replace the Malaysian Ringgit as local currency but they are building up the base to do so. And now this comment.
Tell us for certain, is it to replace Ringgit or not? With a clear answer, Bank Negara Malaysia can go about to do their job.
This blogger is all for the Gold Dinar. But an affirmative NO when it comes to breaking the law, creating disorder in the economy, and putting into disarray the status of Malaysia as a sovereign nation.
Work for that change peacefully and orderly.
Until such time, the country is broken into 13 separate states or some other neo-colonial power invades it, Malaysia is an independent sovereign state.
She has the right to self govern, apply it's own fiscal and economic policies, institute law and order, and so on and so forth what any free nation would do. The soverignty of Malaysia lies with the Raja-Raja Melayu.
Asean or any regional grouping here has yet to set a common market and common economic policy like the European Union, in which each country converts it's currency to a common regional currency, ECU.
That could be the fashionable way forward if it proves successful. It means the way forward is a common medium of exchange, unit of value and storage of value. Gold dinar is along that idea.
Again, there is no such agenda on the platter of Asean or any other local regional groupings. Until gold becomes currency, the ringgit is the currency reflecting the nation's sovereignty to govern it's own monetary policy.
The power to issue the sovereign currency or that evil paper money lies under the authority of Bank Negara Malaysia. Read this extract of the Central Bank of Malaysia Act (CBMA) 2009 (Part VIII – Currency):
Unit of currency:There is no two way about it. To quote Rocky Bru:
61. (1) The unit of currency in Malaysia shall be the ringgit, which shall be divided into one hundred sen.
(2) The abbreviated form of the ringgit shall be “RM” or “MYR”.
Right to issue, print or mint currency:
62. (1) The Central Bank shall be the sole authority to issue currency notes and coins in Malaysia and such notes and coins shall only be printed or minted by or under the authority of the Bank.
(2) The Government, any State government, public authority, financial institution, other institution or person shall not issue, print, mint or authorise the printing or minting of currency or any document or token payable to bearer on demand being documental tokens, which in the opinion of the Bank, are likely to pass as legal tender.
63. Only currency notes and coins issued by the Central Bank shall be legal tender in Malaysia.
That’s about as clear as you can get legalese to be. Since the Kelantan government is issuing these coins as payment for use in trade and in payment of civil service wages, they are already in violation of Sections 62 (1) and (2), as the dinar and dirham are obviously intended for use as “legal tender”.Look at the other side of the coin, a gold dinar coin for that matter, by having gold dinar by-pass our monetary system, it weakens Bank Negara to monitor the money or currency in circulation and the needed money supply figures M1, M2 and M3.
Unless Bank Negara Malaysia has authorised the Kelantan Gold Trade to issue coins on its behalf, then we’re going to see an early test of the CBMA 2009.
Most of central banks monetary policy instrument are towards controlling money supply to control interest rate, inflation, availability of credit, and so on so forth. Money demand is more difficult to control because it is dependent on Banks, economy vibrancy, company and sectoral needs, Government fiscal policy and so forth.
This means Government and it's agent will not be able to manage, monitor and control the economy within the current existing legal structure and system.
At it's worst senario, this could lead to chaos in the financial system, deem the monetary policies ineffective in controlling money supply and systemic problems. In other words, it leads to economic chaos.
Taking a slight theological detour, there is a Quranic saying that those who create chaos or disorder in this world is condemned by Allah. Will it apply here?
The interpretation of those words with regard to the Gold Dinar will be best assigned to the learned.
As for as this blogger's consumption, there are other ways - diplomacy or parliamentary process or organic gradual change - to bring about this change, but not by breaking the law and causing chaos and disorder.
Returning back to the issue, there is also another law called the Exchange Control Act, 1953 (Act 17) to contend with.
Unless there is or are amendment/(s) to the June 1991 copy in this blogger's possesion, it is cyrstal clear in words stated that Bank Negara is empowered to control the dealing, surrender and bailees of gold. Only Bank Negara authorised dealer can buy, borrow, sell, and lend gold to any other persons in or outside the country.
Gold is defined as "gold coin and bullion and includes any gold in whatever state or form other than gold which has been materially increased in value by skilled craftmanship."
Umar Vadillo is the expert and CEO, thus he should know better and be legally informed. Unless Kelantan Gold Trades Sdn Bhd operates as a jewellery shop, his gold coin comes under the jurisdiction of Bank Negara.
There is no two and three ways about it, there must be authorisation from Bank Negara. The Maple leaves and Krugerrands are sold by Bank Negara-authorised Banks. Bank Negara too had issued commemurative gold coins
The minting was done by that whatcamallit scandalous local minting company authorised by Bank Negara. (Scandalous? Ask Zeti, a Minister, Senator Deputy Minister and one ex Banker.) The company only do pressing of gold blanks that are controlled and kept by Bank Negara. Down to the security of the whole facility was managed by Bank Negara.
My English is not good and at times atrocious, but Umar Vadillo's statement that "it does not require to be backed up by any legal authority, nor does it seek to be backed" does not seemed right.
Seriously, in our pursuit to be purveyor of good things, start with respecting the law of the country you are in. Change can be brought about in a peaceful and orderly manner.
By defying the existing law and order, pursuing policy that could be detrimental to the economic interest of the nation, and cause economic chaos, that can be construed as sabotage done by "economic hitman." Malay Malil columnist, Rusdi Mustafa is short of describing it as an act of treason.
I want the Gold Dinar to thrive, but I also love the independence of sovereign Malaysia.