Iran crisis
Iran crisis could be a wild ball which will also destabilize the world economy when it escalate out of control in the near future. The immediate impact has been felt in world oil prices have touched $ 105/barrel this morning – as I write this article.
The Iranian crisis could affect the price of gold through two pathways, namely the first rise in world oil prices which are generally accompanied by rising gold prices. And both the economic uncertainties of the world it creates, every time this uncertainty increases – the market will find a place to hold a safe or safe haven, and safe-haven gold was the most proven effectiveness.

China crisis
China which has been strong, began also affected by the quo status protracted crisis in the countries of export destination. In order to boost its economy, China has recently lowered its reserve requirement is expected to impact on improving its economic competitiveness.
America’s main trading partner of China, would also be affected by this policy the Chinese authorities. Means the dollar will fall and gold prices will be pushed up.

The pattern of the influence of the Euro and the Dollar against gold prices this world can be seen on the graphs below. Because the price of gold is calculated by the US Dollar and the price of gold has a reverse relationship – inverse relationship – against the US Dollar which is represented by the US Dollar Index. We can see in the graph below, the grey area represents the US Dollar Index surged very significant past few days.

The chart above also shows that the Euro-one has the relationship upside down with the US Dollar with gold, or in other words, the Euro has a relationship that is in line with the gold price in US Dollar. When the Euro exchange rate, the price of gold fell-fell.

The question is whether the fall of the Euro that makes people flocked to move funds into the US Dollar is going to last long so that the Euro and gold are both will continue to slump?. That possibility remains, at least two factors under which would be the cause.

• When the conditions of the Euro Zone is getting worse and not saved, then breakout into safe haven while the US Dollar will steadily grew. The US Dollar is becoming increasingly expensive and means the price of gold is getting down.

• When the Euro Zone did not undergo deterioration that is fundamentally more – no matter the price of gold could stay off by panic selling as it did in the last few days.

If these two factors led to the price of gold goes down in the near future, thus if there is a factor that will push it up?. Of course there is also, although the possibility of a bit is the long term.

The Euro Zone is a United States major trading partners, therefore, in calculating the strength of the US Dollar or was later mirrored by U.s. Dollar-weighted Index of the Euro is the most massive that 57.6% followed by Yen Japan that only 13.6% and currencies of other countries are less influence.

When the crisis in the Euro Zone is sustainable, United will surely hit the resin also, among others, through exports to the country’s main trade partner countries will decline and the fall in market risk in financial markets due to mutual dependencies between financial with one another. So the US Dollar is only temporary by Euro crisis benefited.

Then how are we supposed to be addressing the fall of the gold price, especially for those of you who are just starting to buy gold or Dinar at the time the highest price that the last few months?.

First keep in mind is the Euro crisis is not unique, the US Dollar-pun (and various other paper currencies) may be subjected to the same crisis – even the US Dollar is also being experienced it, simply because the comparison is the Euro which is worse – U.s. Dollar seems to be improving.

When the bad face of the US Dollar is no longer covered by the ugliness of the Euro, Dollar-will perform like the Euro. Because the Dollar has a inverse relationship with gold, that’s when gold prices will recover as its peak a couple of months ago.

Both been disturbed in world gold prices-trigger by the purchasing power of US Dollar fluctuations, it should be demonstrated to us all – that there is no safe from risk investment.

That is why, through this kind of writing and also the writings of earlier, we would emphasize the signings of society compared to the effort to sell gold or Dinar itself, prior to the charity.

Third, the crisis reminds us of the importance of building the economic power of real sector to meet the minimum basic needs such as food, clothing and the Board. Not easy to do, but the other — any investment anyway also proved no easy task, so it should still continue to try and attempted.

In the first paper sheet, you create horizontal or x axis and the vertical line or y-axis, the horizontal line to represent the frequency of risk while the vertical line to its severity. Or just make a rectangle with length while the high frequency is severity. Then each axis starting from the initial point (0,0) you for three parts and labeled low, medium and high. Square field that is formed will be the place you put the kinds of risks you face. To strengthen the understanding, could you give a color – but left plain paper also does not matter.

Now you just put the kinds of risks you are worried about on the matrix of frequency and severity. Here are some examples.

1. Earthquake: we categorize it has a low frequency (not necessarily happen in a lifetime), but in case of losses, can be catastrophic level or severity of his high.

2. Various forms of a serious accident: its frequency is low enough but the average person never experienced it, the impact is not as high as earthquakes.

3. Robbery: its frequency is lower than the risk of accidents but the impact could be greater.

4. Floods: In some places like Jakarta, flood frequency is between medium high, about five years a big flood. In the event of impact risk can also be fairly large.

5. Theft: fairly common but usually not very big impact.

6. Minor accident: hanging our habits or our daily activities, its frequency can be low to high – but generally low impact.

7. Diseases: This risk includes high enough and its impact-not too serious because sufferers rarely the cause of death.

8. Loss of Value / Purchase Power: Beyond consciousness of many people, the loss of value or purchasing power risk is a statistical near-certainty – that can be faced by anyone at anytime and the impact is very serious. 4.3 Each year we lose half the purchasing power of paper money we have events like the financial crisis and 1997/1998 spend about 75% of the value or purchasing power of money all of us.

Both types of risks as well as its position in the FSM above differ from one individual to another. It’s only natural because it involves a different experience, habits of living, housing, environment etc.. all of which affect the perception of risk.

Risk Identification Matrix

Once we put each of these risks on a matrix of frequency and severity as in the illustration above, the second sheet of paper is paper contekannya more or less like the graphic illustration below.
Risk Management Matrix

By comparing each risk position with contekannya sheet, you are able to decide what will you do about the risks mentioned above.

Risk is high frequency but low severity or impact, then you can hold (retain or absorb) Hopefully it does not matter. While the risk that even if the frequency is low but the impact could be very serious such as an earthquake, then you need to find a solution. Form solution of this second type of risk that are common in the market is insurance.

What about the risks that are relatively common and also quite serious impacts such as flooding?, Wherever possible dijegah (Prevent). These prevention efforts there in the capacity of individuals such as choosing the location of homes / businesses are free to flood, there is also a nature to be done society at large or the government – such as creating water storage reservoirs, flood canals etc..

What about the risks that are in the red zone in the graph above? This is the kind of risks you have to try best to avoid. An example is the risk of inflation or a decline in purchasing power that I put in the red zone, why? Imagine if there is a risk that you take half the treasures every 4.3 years, is not this is a very high risk in terms of its frequency and severity? That’s the reality faced by the inflation of paper money. The solution is to avoid the use of paper money as a means of storing the results of your efforts in the long run because you must lose.

When you move or convert from one type of asset into another asset, automatically change all kinds of risks it faces – that’s why when you do, these risk factors should also be considered. Suppose you switch your long-term savings into property assets; then from paper money at high risk of inflation, you move to a property at risk of floods, earthquakes etc.. But the earthquake and flood risk is lower than inflation, even for earthquakes and floods are still allowed to be protected against through insurance, but there is no insurance t o cover the inflation risk.

We will not use technical analysis, simply by using the three illustrations below to be able to give an idea of ??which one is more profitable when should choose investments between stocks or gold.

The first graph illustrates the performance of stocks in the world are represented by the DJIA. Very easy to see that the performance of the DJIA tends to decrease the range of numbers from the range of 12.500 to 11.500 in the last five years, on the contrary in the same period gold prices jumped from U.S. $ 600-an/ozt range of numbers to the range of numbers close to U.S. $ 1.800 / ozt.

Gold vs. Dow Jones Graph

This means that for the same amount of gold you have five years ago, the average we will get three times the number of shares you more when you spend to buy shares in the company’s world-class international exchanges. The second graph provides an illustration of this in the form of the trend of the Dow Jones Gold Ratio.

Dow Jones and Gold Ratio Graph

So how about the performance of stocks that exist in Indonesia? Average of the last five years is better than stocks in the global market, but still can not outperform gold in the same period. Furthermore, we can know that the performance was more fluctuating stock or more risky than gold. That is the trend of the last five years it gave the impression that gold gives better results and with a smaller risk.

Gold vs. IHSG Graph

But what about when the real sector-do people continue to move into gold? This is what I often say that gold is simply to maintain the value that the results of our efforts are not eroded by inflation. Investment is ideally if we could play our own funds in real sector well, then the result will be better than gold and will automatically be better than stock. So we can conclude that investment in gold is better than stock investment as it has been shown by the graphs above.

The economic uncertainty in Europe this incredible temporarily “hide” the problem of no less magnitude in the United States. Two major economies that are just as bad (the European Union and the United States) is what will continue to shake the market in the coming weeks at least until the end of the year.

Against the worldwide price of gold valued in U.S. dollars, the crisis will have different effects in the short and long term. When the crisis in Europe is increasing, initially respond to the rising gold market because investors need a secure haven for their assets, but as the crisis continues to mount and they need tools to stay in business transactions – then go to the dollar hunting results in a decrease in the price of gold by two causes of the rising dollar and the rising purchasing power of the supply of gold (as many are sold).

After the peak crisis in Europe, gold prices continue to rise because the purchasing power of paper money is reduced because of the way to resolve the crisis by printing large amounts of money with a variety called.

The same crisis event in the U.S. also have a similar pattern of world gold prices, gold prices drop fluctuations only in the height of the crisis is not as good as the same crisis in Europe. This is because the causes of declining gold prices at the peak of the crisis in the United States – when people are in need of liquidity – was offset by a decrease in the purchasing power of U.S. dollars . itself.

To facilitate understanding of the influence of the crisis in Europe and America have in the price of gold can be seen in a graphic illustration below.

So what is the meaning of this chart of gold prices in the short term until the end of 2011 this?. Because the more dominant until a couple of weeks ahead of Europe still seems to be a crisis, then the price of gold fluctuates still tends to follow the blue line – which can fluctuate a sharp decline before rising above the new previous highest figure. So until the end of the year the likely magnitude of the price of gold will not be too high, the estimated range of my own will only in numbers ranging from U.S. $ 1,800 / Oz.

Within one to two years, two long-term effects of the crisis in Europe and America will walk together – they both reduce the purchasing power of money – that’s when gold prices soared again as high gold prices this year are not separated from the long term I facilitate quantitative effects in the United States, as compared to the 2008 crisis. So if you expect the price of gold exceeds U.S. $ 2,000/ Oz, even you probably have to wait until 2012 or 2013.

World gold price boom last night which broke the above U.S. 1.200 USD / Oz prove this point, that the world financial system back pain and possibly severe complications.

Initially the disease was derived from the crisis that hit Greece and then transmitted to a neighbour that the defense of their economic 'body' is also weak such as Portugal and Spain, then across Europe affected by the drop in the Euro near 9% since the beginning of this year.

And peak within a few hours overnight when trading only Index Dow Jones Industrials were cut almost 1000 points. In general in world stock trading yesterday, the average Index fell more than 3%.

With the outbreak was transmitted by the Greeks, all asset values are determined by paper currency became apparent. U.S. $ which seems to be relatively strong only when compared to other paper currencies, last year its value fell by almost 25% compared with the gold – or as of this morning in U.S. $ gold price last year increased by about 32%.

What impact this crisis will also reach us that thousands of miles away from Greece? we are physically far apart from the Epicentrum crisis. But the system, all interrelated. When the world's stock falling, then our stock-no go fall.

In addition to the interconnected system, other complications of internal nature we are also present, namely the 'body' defense of of our financial system more vulnerable to the issue of changing the country's financial authorities. Because of these things we Rupiah value in the past week decreased to about 4% when compared to U.S. $, and decreased by approximately 8% when compared with the gold price.

Because we've been using the unit of account in assessing the Rupiah's assets or our transaction, then the value of paper currency when we fall – the value's assets also fell. Suppose you are negotiating a week ago to buy a house worth Rp 1 billion – at that time equal to 685 dinars, if you complete the transaction today, the house whose price is USD $ 1 Billion – now you just bought for 628 dinars. In a fixed amount, but the dinar has fallen in value the house at 8% more – in a week!.

The same process is what makes this country's assets, both derived from state-owned and private – ownership changed hands from this nation into the hands of foreign post-crisis 1997/1998. When the value of our money to stay a fourth post-crisis compared to before the crisis, how cheap is the nation's assets when purchased with foreign currency a more powerful through the crisis.

So how do we avoid this experience continues, and continues to repeat itself, both in the scale of personal and national scale?. The answer is to keep our property values with the actual unit of account, whose value is not easily damaged by the issue and is not affected by the global disease outbreaks such as diseases that are transmitted by a far away country – Greece.

Dinar can be a concrete solution to this, if you're at the corporate level or the state can not take this as a solution Dinar – after all we've been able to secure the assets of our own with this Dinar. Starting as we can, starting as we know – insha Allah Allah will guide us towards what we do not know yet

This article is summarized from the book Gold Wars: The Battle Against Sound Money As Seen From a Swiss Perspective, by Ferdinand Lips (Foundation for Advancement of Monetary Education, 2001). Interestingly, the book is written by a Swiss Banker – who even had time to establish their own banks to use his name – who know the ins and outs of the game against the world's gold.

According to Lips this war against the gold started in 1933 when then U.S. President Franklin D. Roosevelt confiscated all gold owned by its citizens, and raised the price of gold in that country from U.S. $ to U.S. $ 35.00/Ounce 20.67/ounce. This war is becoming increasingly serious since the abandonment of Breton Woods Agreement in 1971 – which has since practically no one else in the world of money-which is associated with gold – except Switzerland.

Switzerland is a country that last link with gold money until 1992 – that's why until that year the Swiss currency is the Swiss Franc is the most powerful in the world. Switzerland is also a haven for former citizens of the world who want to safeguard their assets.

But since 1992, Switzerland also became a member of the IMF, and as a member of the IMF they shall be subject to IMF rules prohibit members of the IMF, among others, to link the money with gold. Money may be associated with the results of animal husbandry, agriculture, etc. or anything but should not be linked to gold.

Then why the world's central banks in combating the coordination of this IMF gold?. According to Ferdinand Lips This is because gold is a barometer of standards that can easily detect if there is something wrong in the financial system in the world – and the world financial authority would not like mistakes easily read just by looking at the price of gold!.

He exemplifies what is happening in America in the 1960s. Beginning of the country's financial system error read from the rising gold price from U.S. $ to U.S. $ 40/Ounce 35/Ounce during the Kennedy administration. The situation then deteriorated in the late '60s was the decade when America got into a war that could never win the Vietnam war.

Its peak in 1971 when the U.S. really can not control the financial system and forced to release the connection between U.S. $ to gold. The days that gripped the U.S. financial system, which later spread throughout the world – recorded direct perpetrators of the story written by Ferdinand Lips was as follows:

"On August 10, 1971 gathered a group of bankers and economist discuss the precarious financial crisis in the country, including among those present was Paul Volker that when it served as Under-Secretary of the Treasury for Monetary Affairs.

There are two options when solutions were discussed: first to raise interest rates or raise the price of gold – but it seems Paul Volker did not take one of them. He took the solution is not inconceivable that time left the gold at all from the reference currency in U.S. $ U.S.. This decision was announced a week later by U.S. President Nixon at that time which then generate the events that shook the world, known as the Nixon Shock in 1971. "

Since then the war on gold is increasingly portrayed increase described by Lips (died in 2005, reportedly died unnatural because it is too much to know!), Among others, as follows:

"With the help of world governments, in the 1990s, the war against the gold entered the phase that is very destructive. Central banks to sell or lend gold to destroy the gold price …".

When the 'war' which disclosed by Ferdinand Lips are true – chances are that because the 'people in' the world's banking system certainly what he wrote has a strong base – hence the 'war' there are only two parties, namely the system of money justice-based gold and money that destructive system based paper money. Small hearts we are able to answer, the system which we should defend

The Bank for International Settlements (BIS) is an international organization whose members are the central banks of countries in the world. The purpose of this organization is to promote cooperation among central banks is, in addition to working her into a kind of bank the world's central banks.

With members and functions, we can imagine how powerful his influence organization headquartered in Basel – Switzerland is in its up and down the world financial system in this era. Their role is central in the governance of the world's currencies – also make them have a very comprehensive information access in every financial aspect of its members.

With the power and access to information, the consolidated results of research and the claims of BIS is worthy to be a serious input for the financial or economic decision makers in all countries – including us.

Among these reports which I think is we need to understand is the research report last March under the title The Future of Public Debt: Prospects and implications that we can download from their official site.

Here is a statement-core statement of the implications of the report can be very serious in times to come.

Abstract of this report was preceded by (in my free translation): "Since the beginning of the financial crisis, debt industrialized countries continues to increase dramatically, and as far as can be seen in the future (foreseeable future), this debt will continue to rise in the future …".

Then the results of this research conclude the following four things:

First, the fiscal problems of the industrialized countries is actually more serious than official government reports on these countries. "It's scary that their public debt will grow over 100% of the GDP …". See chart above for its trend (click to see more details).

Second, increased public debt of the above has changed this perception during that country's long term debt in its various forms which have been considered low risk, the future will become high risk. Greek government debt for example, has now become a junk – that is a very low value.

Third, debt problems that are too high will suppress the accumulation of capital, lower productivity growth and lower long-term growth potential.

Fourth, gloomy long-term fiscal imbalances pose a risk of monetary instability. Unstable debt dynamics will increase the inflation caused by a temptation on the state financial managers to reduce debt by printing money in various forms.

Tip of the iceberg which is a sign of a very large problems are also emerging in the form of crises in various countries in the last two years. The crisis in America, England, Iceland, Dubai, Latvia, Greece, Portugal, Spain … and God knows where else the country will soon follow … are clear proofs of the above report.

So what to do all this with the gold price?. Gold will become increasingly important role in providing protection against inflation. Because of this awareness will be expanded, then the most likely gold will experience an exponential increase in future prices.

Two things will become exponentially driving the rise of this gold price is first, due to decline in value of paper money. And the second, due to the increase in demand. When the value of banknotes falling gold prices will become very expensive when bought with paper money.

And an expensive gold price will not discourage people to buy gold, in fact just the opposite will be more and more people hunting them, because in situations of high inflation – gold is the net savior. This high demand that drives the gold price increases the next.

Well, the good news is this increase may not happen now or in the near future, but going along with the red lines in the graphs.

“I fell for the first time in 20 years, annual inflation at one-tenth of Iraq, which is to 10.3 in February 2011. After that, the speed is gradually increased until August, 06/07/10, and then declined slightly in September 2011 07/03/10 years “,” Deputy Governor of Central Bank Mazhar Mohammad Saleh said Iraqi Alsumarianews.

“Central Bank of Iraq (CBI) is to monitor the inflation target in Iraq and its progressive increase in recent months,” said Saleh. “CBI monetary policy is capable of inflation,” he said. “Therefore, the bank can respond quickly to achieve the impact of inflation in the case of the phases, the stability of a series of two decimal places, ie 10% or more to stop,” he added.

“Inflation rent in Iraq, mostly imported through food imports, higher world oil prices,” plus a boom in housing prices, “said Saleh.” CBI can inflation through the use of monetary policy instruments to cope, “he said.” The Bank manages the cash flow in order to defend and maintain the currency of Iraq and the exchange of signals and are used to increase interest rates the purchasing power of the Iraqi dinar, “he said.

Lieutenant Governor referred to the Iraqi government “to take full account of Iraq’s total costs of reengineering operating budget and operating budget review .. “” There is a huge waste of energy resources in the operating budget, “he said.

“There are a lot of incorrect operating expenses of the budget and impotent administration, corruption, mismanagement, waste of resources and inaccurate allegations” revealed Saleh. “Many institutions have established the formation of the Iraqi government in 2003, is not effective,” he adds.

August 18 the Central Bank of Iraq announced that inflation has risen to over 7% in July. Monetary policy to curb growth and absorb some of the demands and expectations of inflation, said Saleh expressed his concern about the increase, although still less than 10%.

Source : alsumaria.tv

About thirteen years ago in the early 1997 series of regional-scale crisis began in Thailand. At the start with the departure of investors as the country's economic growth declined, and then exacerbated by the crisis caused currency speculators to the extent the central bank of Thailand had to drain up to 90% of foreign currency reserves just to maintain the exchange rate Baht his money.

Unfortunately, this crisis does not stop in Thailand. Immediate neighbouring countries and even worst infected and are most difficult to heal our land. At the height of the crisis the value of our paper money had lived more or less than the sixth of value before the crisis (Late in 1996 U.S. $ 1 = USD 2.350; July 1998 to U.S. $ 1 = Rp 14.000) compared to the U.S. Dollar. Whereas in the country where the crisis began; money only experience 61% correction only (Late 1996 to U.S. $ 1 = Baht 25.50; July 1998 to U.S. $ 1 = Baht 41.12).

The first lesson we take from the 1997/1998 crisis is that financial crises are very contagious because of the weakness of the current global financial system. Lesson two is that countries infected by the financial crisis, can become victims even worse than countries that experienced the crisis first.

Now thirteen years later, we see the process repeated crises contagion. The world has not recovered by the transmission of the crisis in the U.S. two years ago, a kind of crisis now ready to become an epidemic in Europe. Greece which was the trigger first, per yesterday's government debt has fallen to the lowest value at the level of junk (rubbish!). Greek crisis is infecting Portugal, Spain and probably will soon also be transmitted to other countries.

In every crisis; paper money is always destroyed in the countries affected by crisis. Each time the bills were destroyed, the main escape the easiest for people who want to save asset is to gold. Not surprisingly, gold prices jumped at every crisis actually occurs: first because the purchasing power of paper money had worn down, both because of the increasing demand for encouragement.

Before the crisis struck the country's 1997/1998; the price of gold in Indonesia in early 1997 only in the range of Rp 23.400 / gram; in the 1998 crisis peak gold price in the range of USD 147 000 / gram. Although ultimately could improve the range of number of Rp 65.000-end 1999/awal 2000; slowly but surely the price of gold rose to USD 340 000 / gram now. Current gold price has more than five time when the gold price than the post-crisis, and 5.14 time gold price than before the crisis!.

I present above graph is a gradual increase in gold prices that occurred under normal conditions. When in normal conditions the price of gold rose to over five time in the last ten years, what would happen if Greece extends crisis?.

In the next few weeks the entire financial world will glare at how the crisis was handled by the Greek government and the governments of countries that are interrelated. The climax is dated May 19, 2010 in which Greece debts worth 8.5 billion Euro will be due.

We are far from Greece both physical and economic linkages, our economy is also more good-good, but because without the crisis gold prices rose as reflected in the graph above – the rescue of assets into gold / Dinar to secure the long-term effort is always advisable to be done at any time.