You Shall Not Crucify This World On A Cross of Greenback.

Retail investors around the world are increasing purchases of Silver. This is partially due to the renewed demand for Monetary Silver. From its American beginnings as an alternative to inflationary currencies, to an antidote to deflation, silver has returned as the last bastion of safety for those fleeing monetary chaos.

The Founding Era of the United States – Late 18th to early 19th century

During the American colonial period, the British model of imperialism limited the amount of hard currency that entered the colonies. The lack of money made conducting daily business in America extremely difficult. States experimented with alternative commodity-currencies, such as Tobacco, but were unsuccessful.

 

Eventually, state governments began printing money to alleviate the scarcity of money, all inevitably failing due to over-printing and hyperinflation; leaving holders with worthless paper.

As such, foreign silver coins known as “Spanish Dollars” became the dominant form of currency. This silver coin, referred to by the Spanish word for “weight” (Peso), was the prototype for the subsequent weighted-based precious metal-backed US Dollar.

 

The Progressive Era – Late 19th to early 20th Century

William Jennings Bryan: “You shall not crucify this country on a cross of gold.”

The late 1800s saw a renewed demand for silver coinage in America. However, this time the demand was by debtors wanting inflation. This “Silverite” movement spearheaded by American Politician Williams Jennings Bryan, called for adding silver to gold as the metal-backing of the nation’s currency supply.

At the time, the US Dollar was fully backed by gold alone. This would have inflated the currency supply in use at the time and alleviated the debt burden of US farmers and other debtors. They were not successful in monetizing silver.

The Era of Too-Big-To-Fail and Fiat Money – Late 20th and Early 21st Century

The current era arose from the ashes of the 2008 market crash, bringing a return to the ideas of the founding generation. The “Tea Party” label has reemerged and a small but growing number of dollar vigilantes are reigniting the founding generation’s demand for precious metals as money.

Without precious metal backing, the continuous injection of fiat money into the US and international economy may cause an inflationary/hyperinflationary boom. This would help debtors (like the US) pay their debts back easier as Bryan wanted in his time. But would inevitably decrease US global strength due to diminishing faith in its ability to manage the world’s reserve currency.

Chart Below: September 2010: “Buy Silver, Crash JP Morgan” Campaign Launched

A leader in this movement is Max Keiser (MaxKeiser.com): a financial expert, TV/internet personality and international revolutionary. However, Keiser’s movement is very different from the progressive silverites. Keiser protests “Big Finance,” particularly JP Morgan Bank, for massive naked short positions against silver, which he claims is an intentional effort to keep the silver price suppressed. His goal is to hurt the bank’s short position by pulling the price up. Inevitably, this would lead to a return to precious metal backed money and a decrease in the dominance of big finance over the world economy.

As such, in addition to silver’s industrial and monetary uses, it has also become an overtly political tool by international dollar vigilantes, connected through modern telecommunications. The movement has arguably had success since its launch late September 2010. The price of silver doubled shortly afterward, reaching a near all-time high of $50, after bouncing between $10-$20 for several years. Silver’s price only came down after many questionable margin hikes by the Commodity Exchange within a short period of time. Time will tell how this plays out.

 

TheFMN.com Headlines

– Corn in Backwardation

– CA rehires private pension consultant in legal troubles with the pension (Bloomberg)

-Danish nurse pension fund invest half a billion in windmills

– Price of Rare-Earth Metals in China declines

– Netflix enters South America

– Moody’s is first rating agency to downgrade Portugal to junk

– Agencies warn of famine in east Africa

– Pakistans Mercantile Exchange announces 600%+ growth year on year

– World Trade Organization (WTO) rules against China for export restrictions on precious metals such as Rare Earths

– Anger growing over China oil spill

– Treasury to sell $28 billion in bonds

– India consortium in talks to buy Columbian coal mines

– India’s Supere Court Bans Federally Supported Anti-Maoist Policemen

– Inflation: Consumer prices in developed economies rose at their fastest pace since October 2008

– Fannie Mae and Freddie Mac jumbo loan cap to be lowered

– Corn and Wheat rebound

– National Oilwell Varco Inc to buy Ameron International Corp for $772 million. Ameron is a top maker of fiberglass-composite pipes for transporting oil and chemicals

– Norwegian oil-rig operator Songa Offshore SE awarded $2.5 billion contract to charter semisubmersible drilling rigs to Statoil ASA

– Indian billionaire looking to invest in Indias gas pipeline infrastructure (with Reliance Industries Ltd)

– Energy Transfer Equity upped offer to buy pipeline company Southern Union Co. hoping to become the biggest transporter of natural gas in the US ($5.1 billion in cash and stock). Williams Cos., is also bidding

2 comments to You Shall Not Crucify This World On A Cross of Greenback.

  • Paul Prichard

    You Shall Not Crucify This World On A Cross of DEBT.

  • Paul Prichard

    “They were not successful in monetizing silver.”
    You do not need your government’s permission to use it as a barter currency.

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