Recently, there was a debate in the Mexican Congress on the proposal to monetize the Silver Libertad Coin. The debate took place during a forum for ‘The Promotion of Savings for Mexicans.’ If Mexico decided to monetize its Silver Libertad Coin, it could have a severe impact on the silver market and price.
How much of an impact would the monetization of the Mexican Silver Libertad have on the market? There could be serious ramifications if we consider the vast amount of silver consumed by the minting of Mexican silver coins in the past. Before I get into that data, let’s look at the following text from the article, The Mexican Congress Debates the Monetization of the ‘Libertad’ Silver Ounce, on Hugo Salinas Price’s plata.com site;
The central feature of the proposal is that the Central Bank of Mexico (Banxico) shall determine a value in pesos for the ‘Libertad’ silver ounce; and that this value shall be slightly higher (by a percentage that would be defined in the corresponding Law) than the price of silver in the international market, in order to provide Banxico with an assured profit in minting and placing these coins in monetary circulation.
…. if the price of silver should shoot upward, Banxico would have to issue new, higher quotes for the ‘Libertad’ silver ounce (according to the formula to be established by Law). In this way, again, the coin will remain ‘in circulation’, and since it has no nominal price stamped on it, it will avoid ending up – like all the old silver coins that had stamped values – at the refineries.
This post was published at SRSrocco Report on SEPTEMBER 15, 2017.
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