Silver News
Silver Coin Proposed for Mexico - Proponents Call it Hedge Against Currency Collapse
The Mexican Senate has passed legislation that would reintroduce silver coins as the country’s legal currency. The Lower House is expected to vote soon on the bill, which is backed by Hugo Salinas Price, founder of the specialty retailer Elektra. He says that silver could help protect savings from another currency collapse.
The country’s central bank, Banco de Mexico, opposes the plan as anachronistic, with officials saying that the peso is stable now and has actually strengthened recently. They
also contend that there would be irrevocable costs involved in adapting the currency system to incorporate the new coins.
Still, proponents note that many in the country remember the financial crisis in 1994-95, and silver coinage could be a way for savers to maintain the value of the money. Because
most past financial crises have coincided with presidential elections, the hotly contested, three-way race expected in 2006 is causing anxiety amongst some in Mexico.
The proposed 1 ounce silver coin, called the Libertad, would have no value engraved upon it, and would circulate along with the conventional peso currency. The coin’s worth would depend upon the daily price of silver and would be stated daily in a central bank quote. Price said that any losses in commodity markets would be offset by central bank valuations.
Silver News - Second Quarter 2005
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