Steve Quayle News Alerts

October 28, 2002
By James Sinclair

The planned introduction of the Gold Dinar is not an act revenge by Malaysia. It is true that there was a huge and devastating currency raid a few years ago by a famous US trader, who leveled Asian monetary units and caused the major Asian economies to falter. It is true that some of those economies have not fully recovered. However, it is also true that history may point to this currency raid and raider as the germination of the seed for the uniting factor of Islamic economic power that changed the economic and monetary world. That currency raid, which I believe never considered the ramifications to human life, is a watershed example of the devastating negative potential of personal enterprise versus the positive attributes of free enterprise.

I am however starting to think that the plan for the Gold Dinar and support from other Islamic nations is a planned offensive against the use of the dollar as a settlement currency for oil. It is perceived, and correctly so, that the Islamic world is controlled via the use of the US dollar as the main settlement currency. When I say "controlled" I mean whatever happens economically in the USA is exported there via the dollar. Dollars exchanged for the Gold Dinar currency as a measure for gold settlements quarterly or gold convertible to pay for certain oil imports would end all the debate of whether or not gold has a place in the monetary system. What we are hearing now is that the Gold Dinar will be used as a "measure" settled quarterly in gold on an Islamic intra-nation basis but that could change quickly. A review of the trade balances of Malaysia and its intra-Islamic trade partners indicates that if the gold Dinar is employed as now suggested, it would tie up approximately 200 tonnes of gold production equal to 10% of new mine supply. If Malaysia went all the way and went to convertibility with a 15% gold cover they would utilize more than 300 tonnes of new production. Either way this is the Wildest of Wild Cards for Gold. The advent of the Gold Dinar, as now envisioned, would remove any discussion of if or not we are embarking on a very long term bull market in gold. I have already told you that I believe this is not just a gold recovery, not just a gold bull phase, not just a gold bull market but the advent of the return of gold to a monetary application in which gold will be in a bullish posture on balance for the rest of my life. I expect to live until at least 2030. Gold Producer Hedger Take Note.

Few Islamic nations have affinity with Hussein but fewer like the idea of the US attacking Iraq, an Islamic country. For what it is worth, I am told there is a significant possibility that when the US attacks Iraq, the united Islamic salvo back will be at the US dollar via the Gold Dinar, not as a measure but rather as a convertible currency. Confidence that the Saudis will come to the rescue of the dollar stands on thin ice. The Saudi Royal Family is under significant pressure from the fundamentalist influence there. They are less likely than most observers think to rescue the dollar this time. The Gold Dinar the major wild card in the entire history of gold. It must be monitored very closely.

"(Translated from the "Al-Fath Al-'Ali Al-Maliki" pp. 164-165).

This Fatwa considers paper-money to be fulus, because it only represents money and does not have value as merchandise. It follows that since Zakat cannot be paid in fulus, which has no value as merchandise, it cannot be paid in paper-money, which value as weight of paper is null. On this basis, it becomes clear the urgent need to restore the use of the Dinar and the Dirham as payment of Zakat. If the millions of Muslims who now make their payment of Zakat in paper money would do it in newly minted Dinars and Durham's, they will put in circulation millions of gold and silver coins into the mainstream of daily commercial activities of our communities. That single act will became the most important political act of the century, opening the path towards the establishment our own halal free currency breaking away from the usurious financial system.

The return to the payment of zakat in gold and silver is an essential part of the reestablishment of Islam."

Those are serious words and should not be taken lightly. You see, the establishment of a gold-based currency is rebellion against the IMF as it is distinctly forbidden under IMF rules. The advent of the Gold Dinar would be the "Nadir" of the IMF & World Bank. These are uncharted times. I believe that the Islamic Nations are quite serious about this and that in some form, it will happen on schedule or sooner.

Now we can add to the 5 elements for a long term bull market in gold a "Nuclear Wild Card," an independent gold based Islamic currency.

4 of the 5 elements for a long term bull market in gold are in. The 5th element may well be here as well. Now the Wild Card has raised it's head. Where is the greatest risk in gold now?
In my opinion, the short side of gold has infinite risk. The long side of gold has significant fundamental support.

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