Last couple of days I was in Malaysia meeting with our distributor Quantum Metal and their clients. While it is trite to say that the East views gold differently to the West, it is still striking when sitting in a meeting with a senior executive of a bank to hear them say “buying gold is not actually spending, it is just buying another currency”. Not something I could imagine a Western bank saying. Or for a Chairman of a large Malaysian co-operative to be keen to make it easy for their members to buy gold, seeing it as a smart way to save.
For Western “sophisticates” this would be considered backward but if they lived in a country where their exchange rate had depreciated over 30% in the space of one year, like the Malaysian Ringgit has, their views may be different.
While one does not need to educate Malaysians about why to hold gold, confidence in buying gold has been damaged by businesses like Genneva Sdn Bhd. It is unfortunate that gold trading is not regulated in Malaysia as this makes it a target for Ponzi schemes to use the affinity for gold as a way of attracting customers (although high monthly returns on investments should be a warning sign).