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Silver Money For Americans
Below I have extracted and reprinted some of the most important points of a fine article by Hugo Salinas Price called "Silver Money For Americans".
Fiat Money in the US is in an Advanced Stage of Decomposition
"Fiat money in the US is in an advanced stage of
decomposition and when money rots, the whole social, economic and political
structure of the nation rots with it. A return to sound money is urgent. More
and more people are aware of the perilous road ahead if nothing is done. The
problems facing the US are so gigantic in nature, that an all-round solution to
them is impossible when analyzed in practical terms. A return to sound money is
a return to gold and silver as currency. Gold is outstanding as money – but how
to realize that goal? Silver is great for popular use – but again, how to
regain it?"
"The only way open to regain a sound footing of real money
for the US economy must be by establishing a process through which there will
be a gradual and natural return to sound money. It is impossible to reform or
improve the present monetary system of the US any other way. The US abandoned
sound money in a series of gradual steps; the first metal out of the monetary
system was gold, in 1933; the second metal out of the system was silver, in
1965. The return to sound money would follow those steps, in inverse order:
silver would return first, because silver has always been the money of the
people; gold would return last, silver having opened the way."
It is Indispensable to the Health and Continuing Existence of
the US to Restore Silver Coin into Circulation
"The powers that be in the US Government must recognize at
some point that it is indispensable to the health and continuing existence of
the US as we have known it, to restore silver coin into circulation. At
present, its policy is to ignore public discontent; the results of the coming
elections will probably do little to change its policy. The discontent of the
American people will increase until the government hears the rumble of distant
drums. Perhaps then, it will be willing to turn to silver, to appease the
population."
"Silver went out of circulation because the monetary value of
silver coins was engraved upon them. When the market price of silver rose, and
the value engraved upon the coins was left behind and below the value of the
silver in the coins, the coins became more valuable as bullion than as coins.
The coins were melted down. The silver coinage disappeared. This gives us the
clue to restoring silver into circulation: eliminate the engraved value."
How Would Silver Coins Be Valued?
"In this case, what would be the monetary value of a silver
coin with no engraved value? The
answer is that – like a stock – its value would be a quoted value; however,
unlike a stock, the quote would not be a market quote but a quote coming from
the Treasury. The legal tender
monetary value of the silver coin quoted by the Treasury would take the place
of an engraved value. This monetary value would be increased to meet rises in
the price of silver, but remain stable at its last quote, during falls in the
price of silver."
"Stocks prices fluctuate, but the monetary value of a silver
coin cannot be allowed to fluctuate, because money must have a stable value. A
silver coin, whose quoted monetary value goes up and down, remains a commodity.
It cannot be used as money. The Treasury must issue a stable quote for the monetary
value of the silver coin with no engraved value."
"Should not the monetary value of the silver coin be reduced,
when the price of silver falls? The answer is: No! During the Depression of the
30’s, the price of silver fell drastically. This did not affect the circulation
of the beloved silver half-dollars, quarters and dimes. They continued to serve
the American people. During that period, the Treasury received a larger profit
from minting those coins, because the silver required to mint them cost the Treasury
less, but the value – the engraved monetary value – of the coins remained the
same. The rising value of silver, which will continue as long as the fiat
monetary system is in operation, will allow Americans to save in a very simple
medium which derives its value from its silver content and becomes more
valuable when the price of silver rises. This is the greatest possible
incentive to popular savings, so desperately needed in America today."
Silver Money Puts Wealth Back into the Hands of the People, QE2 Robs the People of Wealth
"QE2 is supposed to “stimulate” the economy by putting more purchasing
power in the hands of the public by creating more money. However, the effect is
inverse, because increases in the money supply diminish the value of the
dollars already in circulation and cause prices to rise. This is classic
monetary inflation and this is what the Fed wants. The monetized silver coin
will not be inflationary for two reasons. The first reason is that its
“velocity of circulation” will be near zero, because these coins will go
directly into savings (“Gresham’s Law”). People will use paper bills and bank
deposits to pay their expenses, and retain silver as savings. The second reason
is that the increases in the monetary value of the coin will reflect the
increased value of a tangible asset. Purchasing power that increases because what
you own - silver money - is worth more is completely different from increases
in purchasing power because you have more money that the Fed has created out of
nothing: such money will be falling in purchasing power and there is no reason
to keep it for savings."
The Healthy Consequences of Restoring Silver Coinage in America
"Can we know all the consequences of putting a silver coin
into circulation in the United States? Certainly, we cannot. However, we know that it will be good
for millions of Americans to be able to save silver money and prepare
themselves for any adversity; to be able to save in order to have a secure
basis for retirement and old age; to be able to save in order to have that
precious thing called “peace of mind”. We also know that powerful interests will not be happy with
this measure, because it will cause those interests losses and pain. The banks
will not be happy – they want the public to deposit their savings with them;
they will not be pleased with the idea that Americans can save excellently by
saving their ounces at home."
You can find the full text of this fine article here.
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Yes, I was in on that discusion.
Question is, when do you swap your silver for gold.
50:1?
30:1?
20:1?
10:1?
1.5:1?
Answer: You don't know where that stops, so you scale out, and resolve to be happy missing the top tic; because nobody can know it, and it's more than enough to have identified the opportunity and profited by it while others get steamrolled.
Funny thing is, it is a given that it will need to be swapped, in all these discussions.
In the final analysis, there seems to be little dispute that silver is only a leveraged play on gold.
FOFOA:
Risk tolerance is a subjective topic.
ps how did you get the mickey mouse ears into that bag? you were very upfront in that discussion about the fact that you were speculating with silver. this thread is not about speculating.
Agreed. I suspect that the silver play will be used to distract from gold.
Ears? Had to squeeeeeeze them in.
I had my reasons for that.