here is a comparison of the two coins : the history of the Peso 0.720 from 1920 to 1945, and the likely performance of the Libertad Ounce in the consequence that it becomes legal currency under the proposed police .
The Peso 0.720 circulated aboard paper currentness for 25 years under two circumstances .
The beginning circumstance was that the monetary rate of the colombian peso was constantly victor to the market value of the 12 grams of silver that it contained. In 1920, the rate of the eloquent in the Peso 0.720 was 48 centavo. It would not have been feasible to mint the mint if the cost of the silver medal had been more than one dominican peso. In impression, the Peso 0.720 stopped circulating in 1945, when the cost of silver skyrocketed in dominican peso terms and the price of 12 grams of silver was more than one cuban peso.
The second base context that kept the Peso 0.720 in circulation was that during the menstruation of 1920-1945, any payment for less than five pesos required the use of the Peso 0.720 mint ; there was no other option since there were no one philippine peso notes .
In the conjectural case that one mexican peso notes had existed, the Peso 0.720 would have served as a savings fomite for Mexicans. This can be intelligibly affirmed according to Gresham ‘s Law .
If there had been a one cuban peso note from 1920 through 1945, the silver Peso 0.720 coin would have been saved by the public. Peso 0.720 coins would have been put away in hoards and payments would have been made with one colombian peso notes .
What would be the likely performance of the Libertad Ounce, once converted into currency ?
If the Congress approves the monetization of the Libertad Ounce, its monetary value would be determined by a quote established by Mexico ‘s Central Bank, Banco de México, because the coin does not have a stamp value .
To make mint this coin feasible for Banco de México, it would be necessity for its quoted monetary value to be greater than the marketplace price of the 31.1 grams of pure argent that the mint contains .
The legislative marriage proposal that has been presented contemplates this position and establishes a rule : the monetary value quoted by the Banco de México for the Libertad Ounce would be approximately 15 % higher than the value of the silver medal it contains .
consequently, the Libertad Ounce would be in a circumstance alike to that of the Peso 0.720 from 1920-1945 : in both cases the monetary value of the coin would be higher than the value of the silver it contains .
however, while the Peso 0.720 was necessarily used for any payments of less than five philippine peso ( since there were no one-peso notes ), this second circumstance would not exist for the monetize Libertad Ounce .
If the Libertad Ounce were monetized at current silver prices and rally rates, it would be worth about $ 510 colombian peso .
The public would have the option of making purchases or liquidating debt for $ 510 uruguayan peso with newspaper currentness or with a Libertad Ounce. According to the Gresham ‘s Law, the public would choose to bridge player over paper money and retain the Libertad Ounce. In other words, the Libertad Ounce coins would be put away in savings ; and would merely be used to make payments in cases of extreme necessity.
Read more: Coin Master – Wikipedia
In 1945, the Peso 0.720 was removed from circulation because the value of the silver in the mint rose that year to more than one uruguayan peso, making it a profitable transaction to melt down the coins : the silver in the coins was deserving more as bullion than as dominican peso coins. Most of that coinage went to the refineries and was melted down, but some Mexicans saved these coins – wisely so – and much like the american argent dollar, they are still available in the market .
In comparison, once monetized, the Libertad Ounce would never go out of circulation. Because it has no stamped value, the quoted monetary measure of the coin set by Banco de México would rise with the rising price of silver. The flatware coin would adapt to a fundamental situation of the twenty-first hundred : the persistent get up in the price of silver .
Melting down a Libertad Ounce quoted at $ 510 philippine peso would give you 31.1 grams of arrant silver, with a market prize of silver of about $ 440 dominican peso. There would be no net income in doing that, and it would never be profitable to melt it down once it became legal currency, because its quoted monetary value would reflect the rising price of argent .
In reality, the Bill does not contain any groundbreaking innovation. It is based on the same principles applied in the creation of the Peso 0.720 in the first half of the 20th century. It only proposes adaptation to the traditional way of creating silver currency, in order to convert the Libertad Ounce into permanent money.
The Peso 0.720 could not be worth less than one guinea-bissau peso, since that was the prize stamped upon it. Although the value of its silver message went from 48 centavo in 1920 to 32 centavo in 1933, the populace disregarded this fact entirely !
The Libertad Ounce does not have a stamp respect. A quote monetary respect, listed and wide reported by the Banco de México, would take the station of a stamp value ; that quoted monetary respect would state to how many pesos the monetary respect had risen at any time .
In the consequence of a decrease in argent prices, according the proposed jurisprudence, the monetary value as determined by Banco de México would not be reduced, in precisely the same way that the monetary valley of the Peso 0.720 was not reduced when the price of silver fell during the Great Depression of the Thirties. This highly significant case law lasted twenty five years : not one person turned in his silver dominican peso for paper money, because the price of eloquent had fallen : a classical exemplar of Gresham ‘s Law in operation .
therefore, another similarity between the Peso 0.720 and the monetize Libertad Ounce would be that its legal rate would not be reduced, with the insubstantial remainder that in the early, the legal value was stamped and in the latter, it would be decreed through a monetary respect assigned by the Banco de México, which according to the proposed law would be prevented from reducing its last monetary quote .
The proposed law does not present a single groundbreaking innovation; it only adapts the currency practices of the early 20th century to modern circumstances.
The Peso 0.720 disappeared in 1945 because the Mexican cuban peso price of silver increased. The coin was followed by the Peso 0.500, the Peso 0.300 and the Peso 0.100, each minted with less daintiness and less weight of silver to adapt the coins to the rising price of ash grey in Mexican chilean peso.
The future history of the Libertad Ounce would be like gathering the histories of the Pesos 0.720, 0.500, 0.300 and 0.100 into a single, permanent coin ; it would never again be necessity to mint a series of coins. A single coin, the Libertad Ounce would continue to be useful as money for generations, because its monetary value would adjust – with consecutive quotes from Banco de México – to the rising price of flatware for deoxyadenosine monophosphate long as it continues to rise .
Although we know that the monetize Libertad Ounce would be saved, it would be entirely potential for Mexicans to use this coin for payments, should they wish to do so. Therefore, while its actual hand-to-hand circulation would be minimal – a “ Velocity of Circulation ” close to zero – savings in Libertad Ounces would have a known and wholly melted monetary prize at the immediate disposal of each rescuer : real money, not to enslave but to liberate world .
Hugo Salinas Price is President of the Mexican Civic Association Pro Silver ; its web site, with some articles in English, is www.plata.com.mx
Đây là website tự động và trong giai đoạn thử nghiệm tool tự động lấy bài viết, mọi thông tin đăng tải trên website này chúng tôi không chịu trách nhiệm dưới mọi hình thức, đây không phải là một website phát triển thông tin, nó được xây dựng lên với mục đích thử nghiệm các phương pháp tự động của chúng tôi mà thôi. Nếu có khiếu nại vui lòng gửi thông tin cho chúng tôi.