Hugo Salinas Price Introducing silver as money in the UK

Discussion in 'Silver' started by BullionBull, Jan 29, 2011.

  1. BullionBull

    BullionBull New Member

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  2. rbaggio

    rbaggio Active Member Silver Stacker

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    Interesting last slide from his presentation:

    [​IMG]

    Not sure if he makes it look worse, because of the constant gold price of US$35/oz assumption.
     
  3. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    How would it work? Silver is scarce but it is used up by industry, thus gradually becoming more scarce and valuable each year. I don't understand how such a material could be used in any stable way as a currency...
     
  4. Silverthorn

    Silverthorn Well-Known Member

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    It makes for interesting reading but I can't see it ever happening. I guess if someone got it up I could see myself saving in those silver dollars though.
     
  5. BullionBull

    BullionBull New Member

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    Will only be considered seriously if fiat system collapses. And even then, we may have grams of gold or silver in banks in our accounts, and we'll use it as collateral against our electronic purchases with bank cards and credit cards. Electronic money is not going away.
     
  6. Guest

    Guest Guest

    This is my view on it as well.

    As much as fiat is constantly declining in value because of it's ease in printing, Silver is becoming more scarce and so by time you put the silver into the system, the intrinsic value of the silver surpasses it's face value and becomes hoarded.

    Look at why the 1966 50c coin in Australia was taken out of production barely half way through it's year of introduction.
     
  7. intelligencer

    intelligencer Active Member

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    Salinas Price and other true hard money enthusiasts never ever talk about FACE VALUE.

    Thats the core problem of hard money. There must NEVER BE FACE VALUE in a hard money system.

    Any circulating currency must be based solely on WEIGHT of the metal. That way, no matter how scarce or common the metal becomes the value of your money depends only on the floating value which is determined by market forces. Salinas Price puts a further condition to stop manipulation.

    That is that the value can only go up. He finds the price of the weight of currency and then it remains at this unless/until silver bcomes more valuable; thereby circumventing the well known Greshams law. Money stays circulating.
     
  8. goldpelican

    goldpelican Administrator Staff Member

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    Which is wrong anyway, as Nixon raised the price of gold twice to $38 and $42 in an attempt to devalue the US dollar in the early 70s.
     
  9. hawkeye

    hawkeye New Member Silver Stacker

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    Only one commodity needs to have a large amount of stock in the world, the one that is used as money, and that is gold. The stock of silver that has gradually been depleting is a relic of it's days as money.

    A large stock of silver is not required for industry just as it is not required for any other industrial commodity. The flow from the mines will meet demand as it does for everything else. There is only those brief periods in history when people run to gold that there becomes a high demand for silver, because it can also fill that monetary role to a lesser extent, where you will get a substantial increase in demand and thus price.

    That the overall stock is decreasing is ultimately irrelevant to industrial demand. And that is why I expect a fairly steep drop with silver when the monetary demand returns to normal.
     
  10. Mark

    Mark New Member

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    If that's the case then maybe i should switch to gold.... but i'll do that when my friends start asking me where to buy silver :)
     
  11. hawkeye

    hawkeye New Member Silver Stacker

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    Don't get me wrong I'm not trying to pour cold water on silver. I'm very much into silver and have been riding the wave for almost 3 years now and intend to for a while longer yet.

    I'm just offering an alternative view to those who think it's endless plain sailing with silver as far as the eye can see. They remind me of many Property Investors on forums like Somersoft. If someone had asked me if a house was a good value in 2000, I would say yes. If someone asks me if silver is good in 2011 I would say yes. If someone asks me about buying house in 2011, I'd say definitely not. If someone asked me about silver in 20??, I would also say no.
     
  12. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    Gold and silver bank accounts are already used a lot in India where identity can't easily be established and fraud is a serious problem. There are plenty of insitutions that will lend you fiat against gold held by them as security, although they don't lend out at stupid LVR levels like 90% (which banks do here with real estate) because the price of gold might drop (which *ahem* would never, ever happen with real estate here).

    South Africa has also been on a quasi-gold standard since 1967 when they indroduced the Krugerrand. Krugers are legal tender in South Africa for whatever the price of gold happens to be at the time, so if you wanted to buy a car (right now) for ~19,000 Rand, you could legally pay for it with 2 Krugers if both you and the seller were happy with the arrangement. The Krugerrand did great things for helping the development of the South African mining industry and it also (indirectly) helped end apartheid. The Isle of Man has a similar thing going with the platinum Noble.

    Fiat doesn't need to collapse for precious metals to be used as currency. They're used as currency now.
     
  13. Guest

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    This is why I have both gold and silver in my stack. Only token gestures, but presence all the same.

    I agree, long term, it's all about gold.
     
  14. villiagegate

    villiagegate New Member

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    I intend to at some point trade the gsr into an entire gold stack. Currently I'm around 50 / 50.

    My thought process has shifted to the building of 'inter-generational wealth' (not like I have much of it, but even so..)

    there is only one vehicle with which you can accomplish that IMO. Gold at fair value.
     
  15. Guest

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    Silver is the speculative play, Gold is for life.

    That's my surmation on my metal holdings.
     
  16. intelligencer

    intelligencer Active Member

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    I'm in denial :)
     
  17. f40

    f40 Member

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    The majority of people here all say gold is for life, but after reading maloneys book and the example he gives regarding using the cycles to your advantage, i think thats a much better option.

    For people who have not read the book, Maloney gives an example of two people who started with $30 in 1903. (1.5oz of Gold)

    One played the Gold / DOW cycles the other didnt.

    One ended up with 11,088 oz of Gold today the other ended up with the mighty sum of $12,000.


    If you had just sat that $30 in Gold for the past 100 odd years you would still only have your 1.5 oz of Gold.
     
  18. Mark

    Mark New Member

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    Yeah i agree with using the cycles, but at the moment there is nothing to play it against that i would trust. Once the GSR drops enough i will buy some gold and then once real estate drops i will transfer gold to there.

    I would love to play cycles on a faster level but at the moment i just have to save up my "money"
     
  19. mistamillions

    mistamillions New Member

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    I am all in silver, i have a little gold just for the heck of it, but Silver is where it is at, it is the real bargain.

    As far as how a silver/gold money system would work... My take on it is this, I believe that one day cash as we know it will cease to exists, ie no more notes or coins that we use for transactions, all transactions will be digital and carried out via a card/pin/chip or some sort of complete personal organiser (like an iphone) which can be used to do everything from making calls to reading news etc.. and paying for stuff, it will all be digital, no doubt about that. But first the current cash based system has to have a complete breakdown which potentially could take everything back to zero, a sort of reset of the system, with a very strong possiblity of people waking up to find that their accounts have evaporated. At this point there would be a new system introduced which could be backed by silver/gold which would be in held accounts and we then spend digitally, the grams on account would be adjusted electronically according to the current spot price, whether this system turns out to be honest or just another manipulation really depends on whether we as a society evolve consciously enough to see through the illusion.

    My concern is that those that pull the levers may well be aware of this and have some sort of trap setup for those who got into gold/silver early ie before the complete meltdown, not sure how they would do it but maybe some sort of excessive capital gains tax, so anyone who holds gold/silver out side of their vaults/system would have to hand it in, otherwise they would not be legally be allowed to trade (digitally), if they handed it in they would be taxed heavily on the gains made. In this situation i would be looking to off load all my pm's before it is to late and buying some land or a house, but timing would be essential as i would not be wanting to be left with PMs that i can't use, but this really is a worst case scenario and is what could happen if we don't wake up!

    Hopefully though we will take the next conscious step and a more honest system will be in place based digitally on gold/silver run by more consciously aware people, then humanity can really move forward and unleash our true potential. Only time will tell.

    Anyway that is my 1oz worth....
     
  20. Mark

    Mark New Member

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    Nice points and it seems the most likely way it would go.

    My only concern in this situation would be that you won't know when the current "system" will crash. You will just wake up one day hoping a shipment of silver will arrive and read in the news that the banks are suddenly having a bank holiday.
     

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