Hugo Salinas Price pushing Mexico to monetize silver

Mexico's central bank purchased almost 100 metric tons of gold in February and March, another signal that emerging markets are likely to steadily raise their gold reserve holdings, industry participants say.

The purchase--reported in the International Monetary Fund's statistics on international reserves--follows a shift in the gold market to net central bank buying, following years of official sector sales, and should be welcomed as a positive boost for the yellow metal, said Jonathan Spall, Director of Commodities Distribution at Barclays Capital.
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Hugo Salinas Price continues:

“I think our central bank has done something prudent. It signals a difference of opinion with the Fed, and that is strange for our central bank that has always been in great cooperation with the US central bank. Most of our reserves, which are at the highest level they have ever been, are in dollars.

Some have commented, ‘Well where is the gold? Is it in a central bank receipt or is it in a central bank vault?’ It should be in the central bank vault. Is it a paper certificate or is it actual physical gold and if so where is it?

I wrote a letter and told him (Mexican central bank Governor Carstens) that I thought it was a good move in view of the chaos presently prevailing in the United States fiscal situation. I told him also that perhaps the central bank would take another look to monetize a silver ounce as a means of preserving popular savings from devaluation...That is what we are trying to do is to try to have the Mexican people have a lifeboat available in case of a severe crisis. It looks like it will happen.”

When asked about how this central bank purchase might influence his proposal to monetize silver Mr. Price remarked, “I think that maybe the central bank would not look upon our proposal with such a jaundiced eye. I mean if they bought gold maybe it would not be unreasonable to hope that they would see the monetization of a silver ounce as a good thing for the country.

I can’t help telling you that we have very strong support in the Congress for the monetization of silver, very strong support. Congress is not in session now and will not be back in session until September, but I have high hopes that when both the upper and the lower Houses reconvene in September that we will see something very good happen.”
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Why not re-monetize the silver dollar? Re-monetization could put the silver dollar and its subsidiary silver coinage into circulation in parallel with FRNs – “Federal Reserve Notes”.

There are several reasons that make this action possible, and only one that might be considered as an unimportant material obstacle.
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... Hugo Salinas Price stated, “By and large all of the Congressman are in favor of monetizing silver in Mexico. The dirty work is how to get around the blocking that is presented by three or four important party leaders who are bought off by the central bank or intimated by the central bank. The are afraid to go against the central banks desires.”
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HRN: What is the current status of the Mexican legal tender legislation?

Hugo Salinas-Price: In México we have a Congress that is quite well aware of the importance of this legislation and it has broad support both in the Senate and in the Chamber of Deputies, which is like the House of Representatives in the U.S. The idea is well understood and approved, but there is a problem.

HRN: What is the obstacle?

Hugo Salinas-Price: Under our party system, members of Congress rely on the guidance of the party leaders. If they fall into disfavor with their party leader, they will be denied the benefits that the party leader is authorized by law to distribute. The three most important party leaders are under great pressure from the central bank, Banco de México, to prevent party members from voting in favor of this measure.
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HRN: Banco de México is blocking the legislation?

Hugo Salinas-Price: If it wasn’t for the central bank, this measure would have passed a long time ago. The party leaders are afraid to jeopardize their careers by becoming enemies of the central bank.

HRN: What do you think might change the situation?

Hugo Salinas-Price: The Congressional Finance Committee will hold a hearing this month, before the Congress goes into recess, to hear the objections of the central bank. It is possible they may decide that the objections are not materially important and they may approve the bill. In that case, the bill will be sent to the house for a vote. The party leaders will be able to vote for the bill if the Committee approves the law.
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DoChenRollingBearing said:

That would be a fascinating experiment were Mexico to go on a silver standard.

-- Would it cause a sharp rise in the peso such that they would no longer be competitive in export markets?

-- Would investors seek out investments in Mexico because of a presumbaly stable currency?

-- Would that encourage other governments to do something similar?

-- How high might the price of silver then go?

-- Could the Mexicans really pull that off?

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swissaustrian said:

:flail: Sorry I forgot to use the search function

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dereksatkinson said:

Here is your bag...

back on topic...

This would be a very big help to those of us who live in a border state.

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ancona said:

The introduction of a silver libertad as legal tender would cause the price of silver to explode. Demand would outstrip the Mexican governments ability to supply coin. In fact, they would have to assign a face value far above spot, at least they would have to if they didn't want to end up having to constantly revalue the damn things.

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DCFusor said:

On scanning this thread, I'm getting confused. Monetizing silver isn't the same as going on a silver standard, or even making *only* silver legal tender. It's just adding another type of currency, this one not fiat. I don't see the crucial details that would say what's going on here on a quick scan, anyway.

If they still also have fiat - nothing really changes except for a bump in silver demand to make coins, right?

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DCFusor said:

So, if I'm understanding this correctly, the enthusiasm is misplaced here, other than that it will increase silver demand to make the coins. They'll still have fiat, it won't be silver certificates redeemable for silver (at least not guaranteed) and so on - basically it will have the same nil effect as our mint coining silver and gold coins then. No big deal in other words, just a new coin.

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DoChenRollingBearing said:

@ benjamen

I think the Silver Eagle is legal tender, it's worth $1.00, legally.

There was an interesting case in Nevada where some small business man paid his employees with Silver Eagles valued at a buck. The IRS took him to court, but I do not know how the case ultimately turned out.

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In the second half of the video, about 13 minutes in, Max interviews Hugo Salinas Price regarding silver.

Silver Backed Currency Details

It is difficult to fully express ideas in 13 minutes.

For a more detailed explanation of how Hugo’s idea on silver currency might work, please see Silver, liquid and illiquid, the ‘modified open mint’ and gold & silver as parallel monetary systems by Hugo Salinas Price.
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PMBug said:

Max Keiser interviews Hugo:

Keiser Report: Unelected Officials (E295) - YouTube



http://maxkeiser.com/2012/05/31/kr295-keiser-report-with-hugo-salinas-price/

Hugo says Greece has an opportunity to monetize silver in parallel with a return to the Drachma.

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We have been proposing the monetization of a silver ounce coin for Mexico since 2003. Our contacts in our new Congress are stronger than ever – we’ve been educating Congressmen for 9 years now, on the subject of the monetized silver coin, and now have many friends in more influential positions in the Mexican Congress. Plus the idea of the silver coin with a quoted value is now familiar to Mexican politicians; it makes sense to them and they find nothing strange about it. We are preparing a Bill, once again. Maybe this time it will be voted into law.
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At the present time, the prospects for our project are poor, because the world “leaders” are really not independent men or women; they are under the control of their respective Central Bankers, who form an international fraternity whose leaders are the Fed, the IMF, and the BIS. Whenever anything “monetary” is presented to these supposedly top world leaders, they all refer the question to their Central Bankers. These, of course, are completely against anything that will devolve real power to the population, real protection for individuals and their families. They are against all forms of SAVINGS; their whole interest lies in promoting more DEBT, and NOT more savings. They one and all consider that savings are simply a drag on GROWTH, and they want people to spend, not to save. And the silver coin promotes savings, which in fact are the fountainhead of all prosperity.
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For nine years I attempted to convince the Federal Congress of Mexico to approve legislation that would monetize the “Libertad” silver ounce, which is minted by the Mexican Mint; the coin would then have value for a given number of Mexican pesos, by means of a quote on the part of our Central Bank. The quote would be a floating quote, somewhat higher than the value of the silver ounce on the international markets, and would increase with increases in the value of silver on the markets, but never fall (in Mexican pesos value) if the price of silver should fall.

My efforts did not meet with success, but the project gathered quite a bit of support in the Congress, both on the part of Federal Congressmen as well as on the part of Federal Senators. An insignificant dispute between the PRI and the Leftist PRD caused the PRD to withdraw its support, which the PRI required to pass the legislation.

Mexico needs some good news! Mexico is a marvelous country! We have many, many problems, but our Homeland is wonderful and generous.

Mr. President of Mexico, Gentlemen Senators and Congressmen:

The government of Mexico has stepped on the toes of every possible sector of the country with the avalanche of fiscal reforms recently enacted, all of which strengthen the State.

Now that the population is well and fully pissed-off, it’s the Federal Government’s turn to do something for the benefit of the general population.
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In the Eastern provinces of Mexico, the Campesinos already eschew banks, choosing instead to store their money privately. (Chiapas Province is in a virtual economic war with Western Mexico. They value the Libertad as East Indians value gold.) ...

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