Mexican Congress Debates Monetization of Libertad Silver Ounce

The comments above & below is an edited and abridged synopsis of an article by Mike Shedlock

Shedlock shares Guillermo Barba's post on a debate in the Mexican Congress to monetize the Libertad silver 1-ounce coin. Barba recently took part in the forum for The Promotion of Savings by Mexicans in the Mexican Federal Congress. There, he presented a proposal to give stable value to the Libertad.

The central feature of the proposal is that the central bank of Mexico would determine a value in pesos for the Libertad, and this value would be slightly higher than silver's price in the international market.

If the price of silver plunged, the Mexican central bank would keep the monetary value of the Libertad stable; silver savings would not lose value, and the silver coin would remain in circulation.

If the price of silver rises, the central bank would issue higher quotes for the Libertad. The coin will remain in circulation, and since it has no nominal price stamped on it, it will avoid ending up-like old silver coins that had stamped values-at a refinery.

All the coins currently minted in Mexico are worth less as plain metal than their stamped nominal monetary value, and when their metal is worth more than the stamped value, they go out of circulation and are replaced by cheaper coins.

This won't happen with the Libertad, whose value will be adjusted upward and thus benefit the saver, who will retain purchasing power no matter what happens with inflation. Thanks to owning silver Libertads, the public's savings will float on the ocean of currency through the years.

The resulting peace of mind for the investor will encourage savings and financial responsibility better than any other policy of public stimulus.