An electronic bank account could allow a depositor to use the “Money” in the bank to pay for goods and services by debit card as is currently done. As the trade flows back and forth an accounting is kept and the settlement made in specie according to the records. The depositor could claim back from the vault up to as much coin as his account now says he owns.
Banks could, of course, buy their own coins to be held on their own account, which they could make available for sale to the public.
The silver coin deposited in a bank or owned by the bank cannot be loaned out in any proportion (no fractional reserve banking) and at all times the amount outstanding to the customer is 100% backed by the coin on deposit. If the customer opts to accept fiat bank notes from the bank to replace the silver the customer no longer owns the bullion which it has effectively sold to the bank.
It is suggested that the Government of Ireland form its own commercial bank to facilitate the distribution of Silver coins in the widest dissemination. It is further suggested that the Irish Postal Service, An Post, be utilized for this purpose. It is already in place in every town and has a courier service component operating.
At a time when the world spot price of silver drops any appreciable amount it is also the time that the seigniorage to the government is greatly increased and so it is an opportunity for the government to buy bullion to issue in to coin at the much higher monetary value or at a later date at a still higher value. However, at no time can anyone demand the mint buy bullion from them. The mint will be instructed to coin silver money to meet demand but it will be the prerogative of the bank to decide when and where the bullion is obtained and how much is paid. The Irish mint will provide the same guaranty of weight and quality of the coins as at present .There will be no taxes on monetary coin.
It is recognized that a .9999 pure silver coin is not the most durable as its softness causes wear and tear. It is further recognized that sterling coin of 92.5% pure with the balance alloyed with copper provides a much harder more durable coin. It is proposed that at a future time consideration be given to production of sterling silver coins but still containing the full one ounce of silver as has the current one ounce silver coin.
As we expect the silver coin to be used initially as a vehicle of savings it is not expected that the one ounce silver coin will go into immediate circulation to any large degree. At some point the coins will start to be useful for circulation and trade and that would be the time for the Irish Mint to provide sterling silver coins in any amount until the demand is sated.
There is recognition that the Irish mint production will not be able to obtain silver in sufficient amounts in the initial introduction. Therefore it is suggested that any silver one ounce coin issued from a reputable mint with the required guarantee of quality and weight will likewise be monetised. For instance the Canadian One ounce silver Maple Leaf and the US silver eagle could also be monetised as described above.
Speech given to the Committee for Monetary Research and Education
At the Fall Meeting, 20th October 2011.
“Please just accept, even if you don’t follow my analysis, that sound money guarantees a stable yet progressive economy where people are truly equal. It allows people to save properly for their retirement so that they will not become a burden on the state. It leads to democracy voting for small governments. It encourages peaceful trade and discourages war. It is the only path, after this mess, that leads us to long-lasting and peaceful prosperity. We really need everyone to understand this for the sake of our future.”
Quote from Detlev Schlitchter in Paper Money Collapse, bottom p157-top p.158
“In terms of the predictability of price trends, the moderate inflation officially targeted in paper money systems today has no advantages over the moderate secular deflation in a commodity money system. But in all other respects, and in sharp contrast to generally held beliefs today, secular deflation has many advantages. In a commodity money system, the monetary asset is likely to provide a small steady return through the on-trend decline in prices, which allows those without investment expertise (or the means to purchase investment advice) to save through cash holdings. On the other hand, the constant injection of new money in a paper money system has to lead to the distortions of interest rates and to the misallocations of capital that we analyzed earlier and that will progressively unbalance the overall economy.”
From the bill to monetize the MEXICAN Libertad coin as put before the Mexican Congress (2011)
“In order to palliate the financial crisis and the economic recession, central banks and governments have reacted by injecting more liquidity and credit; these actions have intensified the causes that provoked the instability, further weakened the whole system, caused a world crisis of deficits and sovereign debt and further increased penury and scarcity in the majority of the population.
These “rescues” and emergency repairs have succeeded in prolonging for some additional months the life of the financial system, but they will cause its collapse to be much more dramatic and painful. The International Monetary Fund has itself warned that “the risk of a double recession has increased” (IMF Report, June 1, 2010).
For families, the inflationary rise in prices, the evaporation of savings and the loss of purchasing power are causing a distressing situation of tightness and anxiety which are depressing and negative for interpersonal relations, as well as setting up a vicious circle of want and scarcity.
The ultimate origin of the financial and economic problems of today dates to August 1971 when real money – backed by precious metal – was substituted by fictitious money, which can be issued exorbitantly because it consists of nothing other than paper and computer digits.
By HUGO SALINAS PRICE in Dorothy’s Silver Shoes delivered at the London GATA conference, London Eng. Aug 6th 2011 (Adapted from Ireland from a US presentation)
“The restoration of the silver currency of Ireland by the very simple procedure outlined here can provide the life-saving alternative. There is, at present, no practical proposal for a viable action in the field of money. Perhaps there can be no other practical proposal? Perhaps a return to silver money is the only path out of the present crisis of civilization?
Let us hope that a political leader in Ireland understands this message. The popular appeal of silver is universal; “silver shoes” will take that leader far- and the Irish people will follow him on that road!”
My thanks to Hugo Salinas Price, President, Mexican Civic Association Pro Silver, www.plata.com.mx
for his patience in reviewing this presentation which has been largely inspired by his writings and those who contribute to LeMetropoleCafe.com