On the use of gold coins as
money
Hugo Salinas Price
Posted 5 Nov 2012
Why don't humans use gold coins as Money?
The answer is quite simple: because they don't want to, under
present circumstances.
The attachment of humans to gold is remarkable; I suspect there
is something metaphysical about gold that attracts human beings.
Perhaps gold is part of the natural order of things, part of
the Rerum Natura, and the relationship of humans to gold
is "built-in" into human nature, like sexual attraction.
I won't insist upon this, but I think about it.
But getting back to the question and the answer I give. The next
question is: Why don't humans choose to use gold coins as money,
under the present circumstances?
The answer is equally simple: because we humans value gold so
highly (the most significant material gift a man can give a woman
he loves is gold in some form) we will use anything else available
to make a payment, rather than part with gold.
If you have dollars, you will use dollars instead of gold. If
you have euros, you will use euros instead of gold. British pounds,
Russian rubles, Chinese yuan, Japanese Yen, and even that unlikely
monetary unit, the Zambian kwatcha, any one of these will
be used for payments rather than giving up a gold coin.
I read that the Swiss are thinking about allowing gold to have
a monetary role. Someone has quipped that this is like wanting
to re-hydrate water. The Swiss will achieve exactly nothing with
this measure. Do they want to use gold as money? For that to
happen, there would have to be no other currency available to
the Swiss.
Gold will once again be used as money (it actually is
money) when nobody will take anything else in payment or when
there isn't anything but gold (or silver) available with which
to make payments. That was the situation back in the 19th Century
and before. Gold was used because there was no alternative but
silver, and that situation would have continued except for the
fact that the ratio of silver to gold was a fixed ratio,
and was not allowed to fluctuate with the market.
When the present fiat-money madness in the world has run its
course, when no paper of any country can pay for its imports,
then imports will be paid in gold. It may be a long wait.
I should add: if people were able to use 100% gold-backed redeemable
banknotes as money, people would use those banknotes for payments
rather than their gold coins. And they would use fiat-money banknotes
for payments rather than tendering their gold-backed redeemable
banknotes.
The gold coin beats the gold banknote because a gold coin is
a tangible fact but a redeemable banknote is a promise,
and a promise can never be equal to a fact, in the eyes of any
human. This is why women like engagement rings.
If the ancient representation of gold has always been the Golden
Sun, the equally ancient representation of silver has been the
Moon, the Silvery Moon.
For practical purposes, we can state that silver has always been
the money of the people. It is a precious metal, but it does
not enjoy the high regard of gold.
People naturally save silver coins; they will do so all the more
if the coins are given monetary status. Mexicans used the silver
peso in parallel with paper money until 1946 because they had
no alternative: the one-peso banknote did not exist until 1946.
Americans used silver half-dollars, quarters and dimes until
1965 because they too, did not have any alternative; in 1965,
the rise in the price of silver forced that coinage out of circulation
and coins of base metal took their place. In our inflationary
times the tendency will be to use paper money for daily transactions
and save the monetized silver coins; only rarely will they be
used in commerce.
There are now four countries in the world where individuals
are trying to convince their governments to monetize a silver
coin, which people will use to build savings. In a world which
is going bankrupt at an alarming rate, savings not subject
to devaluation from inflation are going to make a life-and-death
difference to millions of humans.
The plan we espouse is simple: issue a silver coin with no stamped
monetary value. Give it a quoted monetary value slightly over
the value of the silver contained in the coin. Raise the quote
as the price of silver rises.
The plan is terribly simple. Anything that is going to be used
by millions has to be simple. Nature does not like complications.
Sex is not complicated and that's why it does its job of producing
people. Nature will eventually wipe out all those worldly-wise
men and women who are dealing in complicated junk like Interest
Rate Derivatives, Collateralized Debt Obligations and all sorts
of clever fiat-money nightmares.
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.
We hope for the best in 2013. Monetizing the silver 'Libertad'
ounce is a great challenge and a great objective to live for.
Which of four countries will be the first to offer its people
silver coins as money?
###
written Oct 26, 2012
 Hugo Salinas Price
President
Asociación Cívica Mexicana Pro Plata, A.C.
Mexico City
email: plata@plata.com.mx
website: http://www.plata.com.mx
321gold Ltd
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