Re: Silberwährung für Mexiko!

verfasst von R.Deutsch, 27.12.2000, 11:37

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A letter from Hugo Salinas Price to J.N. Tlaga

Dear Sir:

I have continued to give thought to your proposals in Part II of"Euro and Gold Price
Manipulation."

You proposed a 5 Euro coin containing 5 grams of silver. The idea is lovely, but I can
perceive difficulties.

Such a coin might circulate as long as the market price of silver remained below Euros
31.1/oz; but, if the ECB is going to be the buyer of each and every gram of silver offered to it,
the ECB is then - am I right? - going to be setting the world market price of silver. The ECB
would begin bidding up the price of silver, up to a theoretical limit of some Euro 31.1/oz or a
little less.

What would then happen, is that the 5 Euro coin you visualize would no longer circulate; it
would be hoarded: Gresham`s Law. A legal tender coin with a precious metal content equal
to, or even somewhat under the face value of the coin, is going to be retained by the owner,
and payments (i.e.circulation) will be made in paper equivalents, that is, the currency of
inferior quality. A concrete case: in Mexico, during the Presidency of Salinas de Gortari,
1988-1994, coins containing silver were put into circulation. They immediately disappeared,
as even a minute quantity of silver which they contained, made the holders wish to hold on to
them, and use other coins for payment, rather than hand over the coins containing a very
small quantity of silver.

Further thoughts: if a large purchaser of silver such as the ECB came into the market with
such a plan, the price of silver would not rise to Euro 31.1/oz. The purchases by the ECB
would set off immediately, a competitive war between the industrial users of the metal, and
the ECB. The price might rise to who knows what levels - over $100/oz, perhaps very much
higher.

It seems to me that as in the case of gold, trying to find ways to introduce silver into an
existing monetary system - any monetary system - leads only to"puzzlement" and
innumerable obstacles. This is telling me something.

What it is telling me, is what I believe I came to understand about the Mexican monetary
system, back in the throes of the 1995 crisis.

Robert Mundell asked me how I came to what I am about to outline to you; I answered,"It
was an epiphany". Here is what I arrived at in that"epiphany":

Any and all monetary systems in the world today, are in a deadly and irreversible downward
spiral into destruction, including that of Mexico, to which I directed my thought.

This process, a sort of monetary cancer, has its roots centuries back, but for practical
purposes, we can identify the moment it became apparent: when Britain went off gold in
September 1931, followed by the rest of the world in the next three years.

During the next 69 years, the economic structure of the entire world has been so distorted by
the lack of real money, that the cancerous-like growth cannot be extirpated or even modestly
contained, without killing the world economy as we know it.

There are no remedies. The eventual destruction of the monetary system prevailing in the
world, and the economy built on it, is inevitable.

All that the most sensible men can do, is try to delay the arrival of that terminal point. It is a
valid endeavour, I must say. Like a good doctor, who knows his patient is dying, these
economists are thinking of ways to prolong the life of the patient, which they know they can't
save. They offer palliatives to the pain, medicines to sustain life; they resort to ever more
complicated apparatus to keep the economy of the world turning over. The Euro is one of the
medicines offered to the world; it may delay death, but it will not produce health.

These economist-doctors know that the amount of precious metals in the world, is insufficient
to carry out a kind of transfusion, supplanting gold and/or silver in place of fiat money. They
cannot do the transfusion, because the structure of debt in the world, having been
ever-expanding in disorderly fashion since September 1931 and the thirties, requires
servicing, and the servicing can only be done with a monetary system which can produce the
additional liquidity (inflation!) requisite to service the debt. A monetary system based on
precious metals, presupposes a healthy economic body, not one cancer-ridden with debt and
uneconomic productive structure. A precious metals monetary system will simply kill a world
economy based on fiat.

The debt is the question, the debt which has been growing since the thirties and has produced
disorderly, un-economic investment which cannot service the corresponding debt.

It is simply impossible to return to sound money, without a TOTAL COLLAPSE of all of
present-day world economic structure. The practical economists know this, but they cannot
advertise this. All they can do is try to keep things going as long as possible, as I have
already said.

Taking all this into account, I came up with the following:

We must begin to work in preparation for the final demise of the world's monetary system.

We must put as much precious metal in the hands of humanity, as possible.

We cannot try to put gold into the hands of a great many people, because gold has always
been the property of the wealthy. Even at today's very low prices, gold is out of the reach of
the world's masses. But, there is a"poor man's gold", and that is: silver.

Thus, what I have been working on during the past six years, it to get as much silver as
possible into the hands of Mexico's people.

The idea is to introduce a SILVER PARALLEL CURRENCY, which can circulate alongside
the paper peso and of course, the Dollar. We cannot reform any present-day monetary
system, they are beyond reform. But we must not abolish any present-day fiat system: we
must graft on to society, a parallel sound system, based on silver or gold. (I think silver is the
preferable metal. Gold will follow, in due course.) We must rebuild gradually,fostering a new
economic life based on real money. We cannot reform, but we must not kill the patient, either.
We must work our way out of this monetary and financial mess, with a corresponding
re-structuring of the world's productive system.

This can only be done with a coinage bearing no face value, its exchange value determined
solely by its silver content. Such a coin can circulate alongside the paper peso and the Dollar,
if its daily value can fluctuate in adjustment to a changing silver price. The Dollar circulates
in Mexico, precisely because its daily value can fluctuate. A fixed peso value would drive it
out of circulation and into hoarding, and availability only on a"black market" - we know this,
because it has happened!

When a substantial amount of silver has been sold to the Mexican public, and when the
spread between bid and offer rates has closed, then the public will begin to use the coin in
everyday transactions, just as it can, and does, use dollars.

A further development, silver banking, or the use of silver in transactions which involve a
period of time between purchase and settlement (credit transactions), is some distance off; it
cannot begin to function until the price of silver is released from its straitjacket of"paper
silver" which operates in New York. When the"paper silver" shorts are blown away, and a
true market price arises, based on supply and demand, then it will be possible, on the basis of
the new, higher price, to begin the construction of a new financial system based on silver.

There is no other way, in my humble opinion, to conserve a civilized, industrialized world.
What I visualized in my"epiphany", is valid for the whole world as well.

We must begin to lay the foundations for a"NEW WORLD ORDER", but not the one
visualized by the present powers, based on fiat money and a cancerous world economy, rather
one rebuilt from scratch on precious metals.

This NEW PRECIOUS METALS-BASED WORLD ORDER can come about by a gradual
process of introducing a parallel world currency, which can be the one ounce pure silver coin,
legal tender with no face value. (This coin can also be.900 fine, but containing one troy ounce
of pure silver with some alloy, for the practical purpose of preventing excessive wear). This
coin can circulate anywhere, it requires no"passport".

From credit transactions, including banking, as I have said, it will be necessary for the paper
stranglehold imposed by the silver shorts, to be destroyed, and a new price level arrived at,
which will reconcile industrial use with monetary use. It may be very high, in today's terms.

What I have outlined may be a very long shot, but so far as I can see, there is no viable
alternative to it. If we do not lay plans for what comes after the inevitable collapse, the
human race may be in for centuries of life on a primitive, barter level.

A question arises: is it right to support the work that GATA is doing, given the drastic
consequences which would accompany a substantial rise in the price of gold? Fundamentally,
this is a moral question which we must face: it can never be right to support a fraud. Not even
if it means accepting worldwide chaos? No, not even then. And, besides, the chaos will come
anyway, if we do nothing.

Evidently, what we must urgently attend to, is the creation of means of sustaining world
civilization (no less!) by taking thought and laying out the plan for the coming, necessary
alternative: the re-creation of a new, reality-based monetary and financial system using
silver, and gold, too, eventually; a system which is to be introduced gradually, and for which
system we have elaborated the necessary intellectual underpinnings: precious metal coinage
with no face value to commence circulating in parallel with the paper fiat, for the reasons
given, represents the first step.

Let us not perplex ourselves with thoughts about saving the present world monetary and
financial system. It is going to die.

Let us think about a sound system which will come into being with fresh life.

Fitting for this end of year, end of decade, end of century and end of the second millenium:

Ring out the old! Ring in the new!
Ring in a thousand years of peace!

Hugo Salinas Price





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gesamter Thread:

• Artikel dpa: In Lateinamerika wächst der Trend zur Währungsunion mit den USA - Frank1, 27.12.2000, 10:39
  • Re: Silberwährung für Mexiko! - R.Deutsch, 27.12.2000, 11:37
  • Re: Artikel dpa: In Lateinamerika wächst der Trend zur Währungsunion mit den USA - Diogenes, 27.12.2000, 21:23