Posted on 07/11/2014 6:28:49 PM PDT by 2ndDivisionVet
Until they devalue it again.
Little by little, the international community is shunning the holding of U.S. dollars.
I’d say that Mexico represents the best chance to do a “Free State” experiment.
China is mining in Chile, and the Chinese have basically slave labor....so money appears to be no object. I would not be surprised if Mexico did exactly what is predicted.
There is a power shift coming. Communism is big business...that is why the left thinks they want it here. I guess it depends if you are on the top or bottom as to how life would be. We all know Zero is giddy lately.
So silver is down from its high of about $30.00. My 1915 Mexican silver peso coin is worth more as a collectible than it was in its weight in silver.
This article is very confusing. We have a lot of silver in the US, esp. in the Western states. We could flood the market and drown any Mexican shift.
Working on mining cases right now. You’d be surprised what still remains under our lands.
Silver peaked at around $47.50 in March, 2011. It’s been staggering down ever since.
I’m not familiar with the silver peso but I’ve always been partial to the Morgan Dollar. Beautiful coin.
Mexico has no legitimate reason to be a third world country. They have an abundance of natural resources, the elite class has tons of money. They laugh at us because we take their poor off of their hands. If this does happen it might bring big changes to that country. Though the changes wouldn’t be that noticeable to most because the money people see no need for things like good roads, reliable utilities, etc. for the masses. To me it sounds like it could just be a plan to do the largest money laundering deal ever. I am just thinking this multi- billionaire has to be getting something out of this deal.
I have found this website to be a very useful source of information on the economy, gold, and silver.
http://goldismoney.info/forums/
Replacement of the dollar will occur slowly. China cannot just back her currency with gold and let the US dollar fall. Overnight Chinese products will cost too much in foreign countries. No one can afford to buy Chinese made goods. If it happen today, there will be total chaos because too many financial systems use the dollar. Sudden conversion and devaluation will implode the world system. China will be engulf by the chaos. China will replace the dollar by the end of the 21st Century by gradual means. Too many freepers think China will use military power like Russia, but if one were to look at the strengths and weakness of US vs China, military power China is a distant second in terms of military budget and third in terms of firepower after Russia (who has 10,000 nuke warheads). However if one looks at China’s economic strength we see a different story. Right now China GDP just turn equal to US GDP. China foreign currency reserves is $ 2600 trillion while the US is only $150 trillion. China’s strength is financial not military. There is an old Chinese adage, cover your weakness by making loud threats, hide your strengths by being modest or silent. Unlike typical third world nations, China did not have a loud celebration or made major gov announcements when the world bank posted that China GDP is equal to or may slightly exceeded the US GDP. The PLA on the other hand has made aggressive demonstrations on sea disputes and their generals urged military action in public. IMHO China uses her PLA to make noise and draw attention away from her real national strength, which is financial. The US fleet will not be sunk by PLA missiles, but rather budget cuts as the US can no longer afford the ships. Example, China just commission her first carrier, the US navy may be forced to reduce her fleet by one carrier due to budget constraints.
Big talk. What would catch my attention would be a country that forswore sovereign debt to finance consumption.
This suggests to me that someone in Mexico knows something we don’t. Perhaps a huge new deposit of minable silver has been found in Ol’ Mexico.
US federal reserve notes.
Won’t work. Gold and silver are no longer what they were.
Gold is just a yellow metal. Why buy it? It’s good in electronics and dentists like it because it’s so malleable and has nice properties but dental fillings look so much better now when they blend in with teeth.
So what is gold good for?
UBS in Zurich is said to have 11 underground floors full of gold as a repository. Can you imagine the security they have to pay for to store all that gold? But why?
Below describes the WHY that explains the historical value of gold or silver.
First, understand that ‘value’ is a psychological construct that is created in many many ways.
The value of gold is said to be tied to its scarcity or rarity or limited quantity. But that is not entirely true. Pearls, before cultured pearls existed, were also historically rare.
The value of gold lay in its institutionalization as a means of money exchange. Romans for example could have opted to pay their armies in Puca Shells. But soldiers wanted something that was more substantial like land. Gold was accepted only to purchase land and buildings because it *had been institutionalized as money*. In other words money is an invention for trading and gold with its limited quantity served to stabilize the measure of ‘value’. Bit not so much any more.
George Washington did not have so much gold to pay the Continental Army. But he had worked many years as a land surveyor in the Ohio territories, wilderness. So, he paid his army with tracts of land that the descendants of that army eventually migrated to.
So what gives ‘gold’ value? It’s all psychology. If there is fear or uncertainty in the world, people for some odd reason will go buy gold even they don’t hold it physically. It’s an emotional statement based on fear.
There do exist conveniences of gold, silver and jewels during times of instability or war. Jewels are easy to carry under cover, hide and not have to declare. It’s always been that way.
But is there a market for it and what is the value? I have a gold ring that I paid $900 for. It’s value at a “We Buy Gold” merchant is less than $100. I could search for a better price but is it worth it to sell it at say $300? I still have a loss.
How about if I possess a dory bar of gold which is worth considerably more? Well now I have to worry about storing it and paying for its storage. But it’s supposed to protect me from severe inflation right? So then I have to ‘time’ when to sell it because just as soon as any panic has passed, the ‘value’ of my dory bar will crash. So I’ve got to sell it when it’s high but how do I know when to sell and in the USA I have to know where to sell it at fair value. So now I have to spend all this time becoming a gold expert and I don’t want to have to do that. It’s not enjoyable.
So what do we do when there is inflation and why is gold valuable to begin with? What is ‘value’?
Value is based on the attractiveness of a society’s living standards.
Well-constructed homes, good roads, sidewalks, good schools and colleges, parks, good hospitals, clean water, good sewage tratment, good health and smiling children are the essence of ‘value’. Gold does not make this come to be.
Where did the value of gold come from? Scarcity? Not really, that was only a convenience to make it stable as a measure. Anything could have been used in place of gold or silver.
So what made it the defacto measure of ‘value’?
It was forced into usage by Ceasar and other rulers of ancient history who had their profiles stamped on it. In other words it never really had value until some force said it did.
What creates value in gold is the ‘force’ behind it.
Does Mexico have the ‘force’ to make silver valuable? No.
Do the Chinese or the Russians have the ‘force’ to make whatever they propose as money have ‘value’? No.
Are Americans attracted to the Mexican lifestyle? To the Chinese lifestyle? To the Russian lifestyle? Aside from a few tourist excursions and beach vacations, Americans and most of the world are not attracted to these cultures.
So how can they ‘force’ silver, or gold or Faberge eggs on the rest of the world?
Money is a reflection of the status of a society somewhere. If there exists an attractive society that people want to live in or replicate, then they want that ‘thing’ and they will trade to have it. They may use gold or they may use paper money; whatever works to get that ‘thing of value’ whatever it is.
The United States of America has been attractive to the rest of the world (and still is) for such a long long that the US Dollar is the ticket to ‘get that thing of value’, not by ‘force’ but by ‘attraction’. The value of a nation’s currency reflects the value of the society, its people, their morality and quality of life.
Mexico has some nice resorts but the rest of it does not stand out. There are better resorts in the world and better societies to emulate.
Mexico’s monetary idea for silver is ‘nice talk’ but there is no there there.
The only way for Mexico to emerge as an ‘attractive force’ is if the USA declines so seriously that Mexico is a better alternative. The odds of that happening are slim to none.
The USA is still the most attractive place on Earth even after 5 years of a poor president, even after 8 years of Bill Clinton and after all the other poor history. It still shines to most of the people on the planet. They want the American dream. It still exists in certain regions of the USA. And in other places it has been abused and appears dead but it is still there ready for a new generation to put a shine on it. Because the American dream is not a ‘thing’. It is an idea based on principles. As long as people remember and ‘value’ the principles that underlie the idea, the currency of America will always be valuable.
But then later they ask why? And they have no answer so they buy dollars again because it makes sense to do so.
And the cycle repeats.
Currency traders and gold dealers do not know, at root, what the hell they’re doing. They think they know, and for a little while it appears like they know, but then reality smacks them and then they appear befuddled and directionless.
And the cycle repeats.
CWII Spark — Altering Mexico’s economy could help to strain our stalled-out economy speeding along its collapse.
It would be a good idea and over time would stem the flow of illegal immigration as well (heck the way we’re going there could be reverse immigration in a few years if this happens).
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