Hugo Salinas Price: Silver Money for Americans

[shiny!]

Could this actually work? Or is there a "gotcha" that's been overlooked?

http://www.plata.com.mx/mplata/artic...idarticulo=162

Excerpt from the article:

It is very important to reiterate that the US dollar would continue to be the money of the US. The silver coin would exist and float in parallel within the present monetary system; in the long-term, it is possible that it might gradually and naturally displace the present system of “fiat” money.


A proposal for the introduction of a silver coin into permanent circulation in the United States:

1. The Treasury shall mint a new silver coin containing one-ounce of pure silver. No engraved monetary value shall appear on the coin.


2. The Treasury shall issue a monetary quote for the coin upon the following basis:


To the market price of the silver ounce shall be added the cost of minting. The sum shall be multiplied by 1.1 to give the Treasury a seigniorage or profit of 10%. The result shall be increased to the nearest multiple of 50 cents, and this shall be the monetary quote for the silver one-ounce coin.
(Note: the cost of minting, the multiple to be adopted for seigniorage as well as the multiple for purposes of rounding-out the monetary value of the silver one-ounce coin, are all suggested and can be modified to suit.)


3. When the price of silver rises and impinges upon the seigniorage of the Treasury, the Treasury shall issue a new, higher monetary quote to restore its seigniorage to 10% (plus profit from rounding-out the monetary quote.)


4. When the price of silver falls, the Treasury shall retain its last monetary quote for the silver coin and not reduce it under any circumstances.


5. The Treasury shall mint these silver coins in amounts sufficient to satisfy the market and prevent the appearance of premiums upon the monetary quoted value, because such premiums would seriously detract from the use of the silver coins as money.


6. The Treasury shall be allowed a period of six months to ignore speculative peaks in the price of silver, a period during which the Treasury shall not alter its last quote. (During this period, the American people can be expected to hold on to their monetized silver coins and not turn them in for a profit to those who wish to smelt them for their bullion value, if they know that after a period of at most six months, a new and higher monetary value will be assigned to their coins.)

[ThePythonicCow]

Re: Hugo Salinas Price: Silver Money for Americans

3. When the price of silver rises and impinges upon the seigniorage of the Treasury, the Treasury shall issue a new, higher monetary quote to restore its seigniorage to 10% (plus profit from rounding-out the monetary quote.)


4. When the price of silver falls, the Treasury shall retain its last monetary quote for the silver coin and not reduce it under any circumstances.

If we had had this system in affect when the Hunt brothers tried to corner the silver market back in 1979, the U.S. mint would still be quoting silver north of $48.70/oz. Either they would have had to stop doing that, or we would have had a nearly ten-to-one devaluation of the U.S. Dollar back then.

[shiny!]

Re: Hugo Salinas Price: Silver Money for Americans

If we had had this system in affect when the Hunt brothers tried to corner the silver market back in 1979, the U.S. mint would still be quoting silver north of $48.70/oz. Either they would have had to stop doing that, or we would have had a nearly ten-to-one devaluation of the U.S. Dollar back then.

I knew it sounded too good to be true.

Is there any way it could be done that would work?

[ThePythonicCow]

Re: Hugo Salinas Price: Silver Money for Americans

Is there any way it could be done that would work?

I don't see any way that a completely convertible and physically handled gold and/or silver currency can have a large enough float to be a major currency in present times, nor do I think that way lies our monetary salvation.

For anything like this to work, we'd have to do one of three things:

• Find a store of gold or silver many times all that we've ever mined so far in human history.
• Shrink our global economy back to where it was one or two centuries ago.
• Skip the "physically handled" condition, so that microscopic amounts of gold or silver had significant value.

The reason for the "physically handled" condition is that is the condition that keeps a fully metal backed obvious to everyone, and thus resistant to hidden manipulation (such as issuing more gold certificates than there is gold.) The same problem is seen in voting systems. As soon as we get away from plain old fashioned paper ballots and go to some fancy electronic system, all sorts of new opportunities for fraud arise (*).

If all the worlds citizens were perfectly honest and fully trained computer engineers, we could run such electronic voting or monetary systems all day long with no problem. One Dollar could be backed by one hundred quadrillion (10¹⁷) atoms of gold or whatever the ratio was, and all would be fine. An ounce of gold has very, very roughly a million quadrillion (10²¹) atoms of gold, if my math is correct.. I could purchase my pack of chewing gum at the corner store, and one hundred quadrillion atoms of gold (1/10000 oz) could move from my account to the store's account. Over time, the exchange ratio could float up and down, in proportion to the ratio of (1) the size of the real economy to (2) the amount of physical gold in the backing store, all managed by a world wide trusted body of Platonic governor-kings of great wisdom, deep economic insight and impeccable honesty.

However my fingers are too clumsy and my eyes too weak to manipulate 1/10000^th of an ounce of gold, so this would have to be all electronic, like GoldMoney.com, but on a world class scale. Unfortunately GoldMoney doesn't scale. The technology scales fine, no doubt, but the required human trust and understanding doesn't.

We also have this little problem that after two millennia of searching, we still haven't found Plato's philosopher kings.

The bigger the system, the more subject to cross flows of conflicting interests the system, then the more brute force and mind numbingly simple the system must be to remain honest and transparent. Even the unemployed plumbers helper and his ditsy girl friend have to understand it after three beers. That's not GoldMoney.

(*) That's why we saw all the media hoopla over the hanging chads, with that famous picture of the balding man squinting over his bifocals to discern the inscrutable intent of the voter who cast a ballot with an incompletely punched dimple in the Florida recount for the U.S. Presidential election of 2000. It was the setup to justify electronic voting (and thus to provide more opportunities for election fraud, by both parties no doubt.)

[shiny!]

Re: Hugo Salinas Price: Silver Money for Americans

Don't know how I missed your reply, Mr. Cow. I think your reasoning is sound, so where, in your opinion, does our monetary salvation lie? In simple enough terms that an unemployed plumbers helper and his ditsy girl friend can understand it after three beers ;-)

[ThePythonicCow]

Re: Hugo Salinas Price: Silver Money for Americans

... so where, in your opinion, does our monetary salvation lie?

Beats me. I'll take the three beers, thank-you.

I see two insurmountable problems. There's nothing that would work, and even if there was something that would work, the current ruling elite Banksters wouldn't let it happen.

[shiny!]

Re: Hugo Salinas Price: Silver Money for Americans

Beats me. I'll take the three beers, thank-you.

I see two insurmountable problems. There's nothing that would work, and even if there was something that would work, the current ruling elite Banksters wouldn't let it happen.

Well somebody better come up with something good right quick, because it seems things are going all cattywhompus today. Precious metals took off like rockets and the sites that carry the spot prices went down for over 20 minutes.

Which brings me to a concern: what will happen if the trading and quote sites for stocks and commodities go down for a significant length of time? It's kinda like when the lights go out and I'm sitting there waiting for them to come back on, and a little thought in the back of my head asks, "what if they never come back on?"

[shiny!]

Re: Hugo Salinas Price: Silver Money for Americans

Based on what's happening today, this may have some truth to it:

http://kingworldnews.com/kingworldne...for_Years.html

November 4, 2010

A King World News source out of London has confirmed that Goldman Sachs has been long gold for years. The source stated, “Goldman Sachs has been getting long the metals for years. Goldman Sachs has essentially been acting as their own central bank, buying on dips for years to hedge their currency positions which are being eroded through coordinated global money printing or currency debasement which they knew would take place. They are long the metals as a hedge and as I said have been for many years.”


The London source also discussed the silver shorts:


“If silver holds for a few hours above $25.50, they (local traders who have been invited short) will just capitulate. You could see a $1 move in an hour if there is a race for the exits. Above $25.50, the locals that are short will literally get margin calls and will have to exit their shorts and it could become disorderly on the upside.


The jaws are closing on these shorts. The silver market is underpinned by everyone who is waiting in the wings to accumulate, that is why you saw the extraordinary buying yesterday off of the lows which continues in today’s trading.”


There was also mention that the industrial users of silver are close to losing faith in the banks which have been telling them there are no problems with silver supplies:


“The industrials, when they see that there is tightness or delays in shipping, will then go out and stockpile silver so their assembly lines are not shut down. We would then be talking about potentially tens of millions of ounces required for delivery to these industrial users in a short period of time. The banks have told these industrial users for years that there is no problem with silver supplies. When these industrial users lose faith in the banks, they will move right away to secure stockpiles.”


Another extremely high-level source today out of the United States has confirmed that Goldman Sachs made a fortune in the last gold bull market. The source stated, “Without a doubt that the most money was made over the shortest period of time in late 1978 to first quarter of 1980 by the international investment bankers, particularly Goldman Sachs and Salomon Brothers. Keep in mind, Goldman made money long entering the gold market with perfect timing, and then reversed their gold positions as gold was peaking and made money on the downside as well.”


Well there you have it, Goldman Sachs is extremely long both gold & silver and laughing all the way to their own bank. You can bet Goldman along with other players will be enjoying this short squeeze in gold and silver.

[Spartacus]

Re: Hugo Salinas Price: Silver Money for Americans

If we had had this system in affect when the Hunt brothers tried to corner the silver market back in 1979, the U.S. mint would still be quoting silver north of $48.70/oz. Either they would have had to stop doing that, or we would have had a nearly ten-to-one devaluation of the U.S. Dollar back then.

IMHO the prices would have risen but to nowhere near that extent. Most of the Hunts' effect was in the futures market. They were taking delivery, true, but their physical, shiny stuff was a tiny fraction of their Silver holdings. The precipitous drop in Silver prices was precisely because of futures trading rule changes.

By that time Silver had been de-monetized. very few people cared about it one way or the other.

If it was still in use as money possession would have been far more widespread - much harder to move a market of 200 million, with the attendant logistics of obtaining all that Silver from all those hands than a market (COMEX) of a couple of thousand futures and options traders.

[Spartacus]

Re: Hugo Salinas Price: Silver Money for Americans

Yes, standard Silver coinage for the whole world is not practical.

I don't see any way that a completely convertible and physically handled gold and/or silver currency can have a large enough float to be a major currency in present times, nor do I think that way lies our monetary salvation.

If you believe Butler there's less than a billion ounces in good delivery bullion form.

If you belive Jeffrey Christian there's 6 billion that could come to market fairly quickly. That estimate's a couple years old though, I don't know what he claims currently. Butler claims Christian, CPM group and GFMS (both of the latter are closer than Butler to "the establishment") double-count a lot of Silver and make wild guesses about good delivery bullion, and mis-count Silver that has to be further refined as good delivery.

[Chris Coles]

Re: Hugo Salinas Price: Silver Money for Americans

Am I missing something, or is there an underlying meaning to the statement:

To the market price of the silver ounce shall be added the cost of minting. The sum shall be multiplied by 1.1 to give the Treasury a seigniorage or profit of 10%. The result shall be increased to the nearest multiple of 50 cents, and this shall be the monetary quote for the silver one-ounce coin.

Surely, the market price already includes all these "Additionals", so what they propose is just another way to add additional value to the silver..... and increasing to the nearest 50 cents is also very neat. It is pitched as though Silver springs out of the ground fully graded and refined, melted down and manufactured, but without any increase of value on the open market to create the going market price for the day. Surely all one needs to do when minting is roll it to the correct thickness and strike the coins; hardly an expensive operation.

[ThePythonicCow]

Re: Hugo Salinas Price: Silver Money for Americans

IMHO the prices would have risen but to nowhere near that extent.

Likely so.

However there would still be some volatility to the price (unless the market were completely controlled, not what was being proposed.) The only goes up, never goes down, ratcheting of the conversion rate would leave the conversion rate almost always above the market rate, hence apply almost constant downward pressure on the value of the currency.

We don't need yet another inflation generation machine. We seem to do quite well (destroying our currency) with the ones we have.

[ThePythonicCow]

Re: Hugo Salinas Price: Silver Money for Americans

Well somebody better come up with something good right quick, because it seems things are going all cattywhompus today. Precious metals took off like rockets and the sites that carry the spot prices went down for over 20 minutes.

Aye! Gold spot price went from $1326 to $1391 in the last 26 hours or so (http://www.goldprice.org/spot-gold.html).

It's hunky-dory fine by me if they leave things to go all cattywhompus for a while longer (grin).

[DToM67]

Re: Hugo Salinas Price: Silver Money for Americans

aye! Gold spot price went from $1326 to $1391 in the last 26 hours or so (http://www.goldprice.org/spot-gold.html).

It's hunky-dory fine by me if they leave things to go all cattywhompus for a while longer (grin).

snafu? ;)