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Buchan | 12-14-2006 09:26 PM
Is a Mexican Silver Standard Coming? I read this article today, and the last paragraph caught my eye. Is Mexico really seriously considering backing its currency with silver? If so, what will this do to silver prices? <table border="0" cellpadding="0" cellspacing="0" width="100%"> <tbody><tr><td align="left" valign="top"><arttitle>Silver steals the thunder from gold</arttitle>http://economictimes.indiatimes.com/images/spacer.gif http://economictimes.indiatimes.com/images/spacer.gif <artag>TIMES NEWS NETWORK</artag>http://economictimes.indiatimes.com/images/spacer.gif[ THURSDAY, DECEMBER 14, 2006 02:22:41 AM]</td><td valign="top"> </td> </tr><script language="javascript">var msid=808849 var mstatus = false; var sUser, cookiestring; function getCookievalue(strcookie) { var ipos = cookiestring.indexOf(strcookie); var ipos2 = cookiestring.indexOf(';',ipos); if (ipos != -1) { if (ipos2 == -1) ipos2 = cookiestring.length; return unescape(cookiestring.substring((ipos+strcookie.le ngth+1),ipos2));} } try { document.domain='indiatimes.com'; cookiestring= document.cookie; cookiestring = cookiestring.toLowerCase(); sUser = getCookievalue('commlogu'); sUserLength = sUser.length; if (getCookievalue('cmssso') =='true') {mstatus=true;} } catch(er) {cookiestring=' '; sUserLength=0;} try { if ((sUserLength > 0) && (mstatus == true) ) {} else { /*document.write('<tr><td valign="top" align="center" bgcolor="#f9eadd">' + 'Surf \'' + 'N' + '\' Earn -' + 'Sign in http://images.photogallery.indiatime...ges/spacer.gifnowhttp://images.photogallery.indiatime...ges/spacer.gif' + '</td></tr>'); */ } } catch(er) {cookiestring=' '; sUserLength=0;}</script><tr> <td align="center" valign="top"> </td><td valign="top"> </td> </tr> <tr> <td align="center" valign="top"> <table border="0" cellpadding="0" cellspacing="0" width="100%"> <tbody><tr> <td name="bellyad" id="bellyad" class="text" align="center"> <!-- google_ad_region_start=article --> MUMBAI: Silver, always faithfully trailing the fortunes of gold, may well have quietly stolen the thunder from the yellow metal this year. Both precious metals hit multi-year highs in the early half of 2006, but gold hasn�t managed to claw its way back anywhere near these highs. Silver, on the other hand, is hovering around $15 levels seen in May. The high price is being fuelled by the heavy investment demand for the metal. A comparison of gold and silver prices over the year shows that while silver has appreciated 57% since January 2006, gold has risen only 22%. Since the price crash in June following the May highs, silver has managed to recover by 41%, while gold has managed only 11%. From June�s low of $9.82 per ounce, gold has bounced back to $13.90 levels presently. In the comparable period, gold rose from $540 levels to $630. Back home, in the Mumbai market, gold rose from Rs 8,470 to Wednesday�s close of Rs 9,165 per 10 gm. According to bullion consultant Bhargava Vaidya of BN Vaidya & Associates, �Gold requires much higher fund inflows to significantly influence the price movement. In comparison, silver is more price sensitive and high demand from ETFs push the price up. Fresh investments are, however, expected only in the beginning of next year.� Silver surged to a 25-year high of $15.17 in mid-May, partly on worries that the launch of an exchange-traded fund (ETF) will squeeze metal supply and create liquidity problems. Barclays Global Investors� ETF, called iShares Silver Trust traded on the American Stock Exchange, was launched in April. Since then silver held in ETF had touched a level of 110 million ounces. An analyst from Kotak Commodity Services said, � The ETF had secured permission to hold about 120 million ounces, (about a fifth of annual mine production), and has now re-applied to the Securities Exchange Commission in the US to increase this limit.� This will further fuel a price rise. According to Krishna Nathani of India Bullion in Chennai, �In industries like IT, which is growing at a phenomenal pace, the demand for silver (used in chips) has increased. Silver sees high industrial demand unlike gold, which is driven by investment demand. However, as silver is only a by-product, the supply is limited, widening the demand-supply gap.� He further pointed out that Mexico, which is the largest producer of silver in the world, is contemplating decoupling the peso from the dollar, and adopting silver as the national currency. If the proposal sees the light of day, it will put tremendous pressure on silver supplies pushing up the prices. :D :D :D </td></tr></tbody></table></td><td valign="top"> </td> </tr></tbody> </table>

REV127 | 12-14-2006 09:39 PM
Re: Is a Mexican Silver Standard Coming? Mexico is famous for its bountiful silver mines. I've seen 400 year old bars of Mexican silver from the Atocha wreck. 1,000oz if you can believe that, and they bore other markings that would be familiar today. At any rate I suspect Mexico can mine much of its own silver so I'm not sure that would immediately put a crunch on the international supply. It certainly would get more people looking much more seriously at silver, and it would help to strengthen Mexico. I don't know if you noticed or care, but Mexico, like most other countries besides the US and EU, is working hard to make itself better. A stronger Mexico would have much to bring to the table in terms of resources, manufacturing, agriculture and tourism. This in turn could create great demand for silver pesos and spur other nations to adopt a silver standard just as the US's abandonment of the bimetallic standard prompted many nations to ditch theirs. Other up-and-comers that have a lot of silver would include India and allegedly China though I don't know if the latter's in ground silver is real or just a fabrication.

gunner | 12-14-2006 09:45 PM
Re: Is a Mexican Silver Standard Coming? Bringing more fuel to the North American Union/ Amero fire.

REV127 | 12-14-2006 09:50 PM
Re: Is a Mexican Silver Standard Coming? I don't know... I'd tend to see a stronger Mexico with a silver-backed peso as working against the North American Union as they'd no longer have to ride on our coattails to put a meal on the table. Machismo and national pride should take care of the rest. I do realize some believe that the Amero will be backed by precious metals, though. I suspect if that does transpire it will be back by gold, not silver. Gold has long reigned supreme among monetary metals, probably because it is impossible to counterfeit.

Satyr | 12-14-2006 09:52 PM
Re: Is a Mexican Silver Standard Coming? Quote:
Originally Posted by REV127 (Post 445585) Mexico is famous for its bountiful silver mines. I've seen 400 year old bars of Mexican silver from the Atocha wreck. 1,000oz if you can believe that, and they bore other markings that would be familiar today. At any rate I suspect Mexico can mine much of its own silver so I'm not sure that would immediately put a crunch on the international supply. It certainly would get more people looking much more seriously at silver, and it would help to strengthen Mexico. I don't know if you noticed or care, but Mexico, like most other countries besides the US and EU, is working hard to make itself better. A stronger Mexico would have much to bring to the table in terms of resources, manufacturing, agriculture and tourism. This in turn could create great demand for silver pesos and spur other nations to adopt a silver standard just as the US's abandonment of the bimetallic standard prompted many nations to ditch theirs. Other up-and-comers that have a lot of silver would include India and allegedly China though I don't know if the latter's in ground silver is real or just a fabrication.
Maybe this would be enough to drive some Mexicans back to their homes. Especially if it creates more jobs, especially mining jobs, that pay in a currency that is actually backed by something. If nothing else, we could always start to sneak over there. :yippee:

hoarder | 12-14-2006 10:00 PM
Re: Is a Mexican Silver Standard Coming? Quote:
Originally Posted by Buchan (Post 445565) According to Krishna Nathani of India Bullion in Chennai, �In industries like IT, which is growing at a phenomenal pace, the demand for silver (used in chips) has increased. Silver sees high industrial demand unlike gold, which is driven by investment demand. However, as silver is only a by-product, the supply is limited, widening the demand-supply gap.� He further pointed out that Mexico, which is the largest producer of silver in the world, is contemplating decoupling the peso from the dollar, and adopting silver as the national currency. If the proposal sees the light of day, it will put tremendous pressure on silver supplies pushing up the prices. :D :D :D
Just because Krishna Nathani of India Bullion says Mexico is mulling it over doesn't mean this has any chance of materializing. But if it did, it would very bullish for silver. The fiat monetary regime knows this and you can bet they are dilligently working against it.

Horn | 12-14-2006 10:05 PM
Re: Is a Mexican Silver Standard Coming? One can only hope. I think Mexico will erupt before the U.S.A.

fasTTcar | 12-14-2006 10:07 PM
Re: Is a Mexican Silver Standard Coming? Quote:
Originally Posted by REV127 (Post 445585) At any rate I suspect Mexico can mine much of its own silver so I'm not sure that would immediately put a crunch on the international supply. It certainly would get more people looking much more seriously at silver, and it would help to strengthen Mexico.
Mexico can mine all kinds of silver and has for generations. It is trading in range of a generational high right now. Simple supply and demand says that it is producing all it can at a profit at the prevailing price. If the demand for silver as currency is raised the price will increase as well.

REV127 | 12-14-2006 11:25 PM
Re: Is a Mexican Silver Standard Coming? The Mexican government directly aids the illegal immigrants by offering publications and advice on how to exploit the American system. I think that's a pretty clear sign that Mexico is divesting itself of their unwanted and won't be taking them back. Clearing out the undesirables is part of Mexico's strategy to better themselves, it is a 21st century version of the Federalists' plan to deport all African Americans to Liberia after the Civil War. fasTTcar, do you know what percentage of Mexican silver is exported vs what is kept in country? I know the Mexicans mint silver Libertads but I don't know if they maintain a stockpile of any sort. It would be interesting to compare any Mexican silver stockpile's value at current prices to the relative value of the total Mexican money supply to get an idea of how much additional silver they would need to accumulate, and a ballpark of where the final silver price would come to rest. But yeah, monetization will ultimately lead to much higher prices than we see now, even if the Indian and Chinese hoards are real.

fasTTcar | 12-14-2006 11:54 PM
Re: Is a Mexican Silver Standard Coming? I have no idea what the ratio for export:retained is. It can probably be found with a few minutes, but it is the same question as what is the ratio of NG used in Russia vs. import. It really does not matter, because it has an international value. If it is not sold, it is opportunity cost lost. China mines silver as well as making cheap plastic toys. They both have a value and get exported when the value is higher elsewhere. I would also argue that the people who leave their home country for the "easy money" of the US are probably much more desirable citizens to Mexico than the lower social strata who would not.

REV127 | 12-15-2006 12:29 AM
Re: Is a Mexican Silver Standard Coming? Well, the illegal immigrants are either bright bulbs that saw opportunity in foreign lands or they're utter failures who couldn't make it in their own country and are moved by desperation. I have worked with, lived with and even dated illegal immigrants from Central and South America. In truth there are both kinds, some are here because of talent and drive, others are here to be refugees and leaches. Whichever of these two groups ends up being the largest will have a huge impact on Mexico and America's economy. As it stands it appears that parasites outnumber productive new citizens that made a bad choice by coming here illegally. This does seem to be part of Mexico's greater attempt at ethnic cleansing which includes the slaughter and oppression of their Mayan citizens. I'll have to remember to research Mexican silver export, bullion minting and stockpiling tomorrow.

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