Restoring Faith In Dollars Via Silver Without Denominations

Using bullion silver for trading would not work. There is simply not enough of it, and would badly skew it's price for use in industry.

Gold is much more useless, and much better suited for use as money. Only a small portion of it is is actually used for industrial purposes.

It has to be a sad statement of fact that fiat money has to be foisted on us to allow the banking industry to be sometimes dishonest.

I would rather be in debt in fiat money terms than in precious metal value terms.

It is much easier to fight a war with fiat money than with precious metal values.

Sel_169, I think that you are right in one regard, the western consumption based economies could not exist in their current format.BUT, it could work if our economy was more sustainable, eg. people tried this novel idea called only buying things they could afford. (in other words no credit cards/mortgage/car payment)Will this happen, probably not, but one can dream

Yep, it's a Mexican silver lobby spokesman. Gotta give 'em credit for trying. But his face-valueless coinage proposal is impractical in the real world, for several reasons.

- A one ounce coin is simply too big and unwieldy for anyone to be happy using them in day to day commerce. Even a half-ounce or third-ounce is considered too big for a circulating coin these days. You'd need to make them quarter-ouncers, or maybe use goloid or a similar electrum alloy to boost the value of a smaller coin.

- He talks about money needing to be "stable", and it's true. People need certainty that the pieces of money they have are constant, neither going up nor down. While I'm sure many people would be happy to discover that some of their money was suddenly worth more, it would create a nightmare for others.

- How easy would it be to find out what the face value for the coin is at any given moment? For normal coins, it's easy - you just read what it says on it. But if you've got to go to a website, or look it up in a newspaper, or sign up for an SMS message service... it's extra inconvenience. And heaven help a merchant who was unaware of a face value increase and "ripped people off" by only crediting them for the old amount.

- Other ramifications would have to be considered. Banks, for instance - if people deposited silver coins into their accounts, would the banks be forced to credit the extra money from a face value increase to their customers, or would they be allowed to keep it themselves? If the former, you've basically created an entire second currency system they'd have to keep track of separately. If the latter, then I think you'd quickly find the banks themselves hoarding the silver coins all up and never issuing them to the public.

- Then there's taxation. Would people have to declare any increases-in-face-value for their hoard of coins as a capital gain?

- Finally, what government is going to sign up to a scheme where they would be forced to buy back their own silver coins at a huge loss if the price of silver collapses again?

Technically, what they are proposing is a silver "Krugerrand" coin with legal tender status but no denominated value. In the most extreme scenario, the monetary value of these coins would simply inflate relative to the continued debasement of the fiat dollar. And since these coins actually exist as legal tender, they could never inflate beyond their own monetary value.

Are there any non-wealthy billionaires from Mexico?

As to silver as money and whether or not it would work... Hmmm... seems we do have about 4,000 years of history that say that it has worked in the past. Yes, there IS enough of it if the price is equal to the value of the silver and not to the manipulated paper numbers.

As to a 1-oz. silver coin being worth too much, I seem to recall using $50 and $100 paper currency quite often and both of those are worth more than an oz. of silver, at least at the current price. No reason that we also could not have fractional silver coins down to 1/20th or 1/25th of an oz. Better yet, use a gram or grain system of coin silver content measurement if smaller amounts are needed. What we do not need, however, are silver coins that have a value stamped on them. All that is needed are the weight, metal type, and purity. For coins, we already have used a 90% silver content standard, so 2 of the 3 have already been used successfully. It isn't as if this is an experiment of unknown result.

Like oil and water, it is possible that fiat and real money cannot exist in the same place at the same time. If so, then I vote for real money and to heck with fiat!

I dunno, Libertad. Putting the words "trust" and "government" in the same sentence without the word "not" in their somewhere does not seem reasonable to me. I guess the older generations, such as mine, still believe that trust is EARNED, not given, and from what I see happening these days, no one in government seems to be working very hard on doing that.

My question about all this is this... if silver money is circulated, will it be used in commerce or will it all end up in private silver hoards and not circulated? Back in the early 1960s and before, silver money was circulated because that is all that there was in terms of coins. You could hoard some of that if you wanted but you still needed to spend it for things. If you have fiat, why not spend that and hoard the silver? That's what I would do and I suspect that a lot of others would do the same.