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Mexico will make 1oz mexican silver coins legal tender?

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Nielsio Posted: Sat, Jan 1 2011 3:08 PM

From Skype:

[9:58:50 PM] :

it looks like mexico will make 1oz mexican silver coins legal tender
[9:59:04 PM] : they have the support of a majority of legislators from all parties
[9:59:26 PM] : they haven't passed it into law yet, but have been talking about it since at least 2006
[9:59:57 PM] : (remember they already have bank accounts denominated in gold)

[10:02:53 PM] Nielsio: Wow, that's big
[10:05:01 PM] Nielsio: Do you have an English link?

[10:05:38 PM] : nobody seems to be paying attention
[10:05:47 PM] : I haven't found any

[10:06:13 PM] Nielsio: But you're confident that what you told me is what they're saying?

[10:06:42 PM] : yes
[10:06:57 PM] : I first heard about this about 4 months ago
[10:07:21 PM] : but it seemed like it was being hyped up
[10:07:26 PM] : now one of the major networks is reporting this

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Merlin replied on Sat, Jan 1 2011 4:20 PM

A country put on the right track by organized crime? Amin! 

The Regression theorem is a memetic equivalent of the Theory of Evolution. To say that the former precludes the free emergence of fiat currencies makes no more sense that to hold that the latter precludes the natural emergence of multicellular organisms.
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The cynical reaction: Expect drugs to be legalized very soon if Mexican drugs maffia wants to make silver legal tender.

The conspiracy reaction: The <name your conspiracy group> will use this event to crash the USD.

The optimistic reaction: Silver becomes legal tender in Mexico in 2011, Ron Paul campaigns on how great their money is doing compared to USD or EUR.

This can become a great topic of discussion in the next few years. May we live in interesting times!

The older I get, the less I know.
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Sieben replied on Sat, Jan 1 2011 5:07 PM

I hope its all smooth sailing when they do it. It would be annoying if there were any "deflationary" hiccups along the way... or any problems created by having a double-standard for currency (assuming they fix the exchange rates w paper). We've all seen what that does in history.

Viva Mexico!

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Hmm. Didn't they plan to make the legal tender of the Libertad higher than its silver worth? It's a step in the right direction for getting precious metals used as currency again don't get me wrong, but it seems like pure novelty the way they're discussing it.

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BioTube replied on Sat, Jan 1 2011 8:30 PM
[quote="Consultant"]The conspiracy reaction: The will use this event to crash the USD.[/quote="Consultant"]If I'm not wrong, the cartels keep large amounts of their assets in USD - if the Mexican government's desperate or ballsy enough, crashing the dollar could be an effective tactic. Of course, there's also the fact that the only official support of a North American Union has been Mexican...
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I think this is a more fun conspiracy (please don't take this seriously):

1. US government pays Mexico (by printing money) to make silver coins legal tender, knowing things are going to get worse in Mexico regardless of the currency.

2. When things get worse, US government and allies pay the media and 'economists' to blame the use of hard currency on the worsening conditions in Mexico.

3. US government and media use this 'consensus' to deride proponents of hard currency and to claim that only fiat money can 'save the economy'.

Result: We are all Keynesians now!

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Altho, I would not put it pass the FED supporters to jump for joy and come to the wrong conclusion if something like that happens in Mexico with silver(like people who jump for joy at trashing libertarians by saying Somali is a libertarian dream) I don't think they'd need to even go to Mexico in the first place.

Just use it here in the United States : The economy is clearly going to struggle terribly for the next decade plus, so why not just let Ron Paul introduce his hard currency alternative - then blame the struggling economy all on that. Krugman would be so happy writing his scathing opinions in the NYT about it.   

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Kakugo replied on Sun, Jan 2 2011 2:20 PM

If I remember correctly it started life as a "make-work" idea to help out Mexican silver mines.

Also I think Mexican legislators will be reminded of what happened to Japan during the Great Asian Crisis of the '90s. Asian investors had bought large quantities of 100,000 yen "Hirohito" gold coins, which back then was still considered legal tender. When the crisis topped and gold tanked investors desperate for cash returned the coins (hundreds of thousand of them) to the Bank of Japan for cash. The BoJ was forced to buy these coins back at face value (100,000 yen each), though their value was less than half as much. It created a huge uproar and did a lot of damage to gold as a currency.

Together we go unsung... together we go down with our people
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limitgov replied on Mon, Jan 3 2011 12:28 PM

I have been googling and cannot find any evidence of Mexico making silver coins legal tender.

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