Let's start with the first way; through government decree. This way, the government buys silver on the open market, mints it into coinage (or contracts that out), and spends that silver into circulation by adding a 50% to 500% fee called seniorage.
Thus, a government would buy silver at roughly $13/oz., and stamp on it a nice round number, something like $20 to $50 on each 1 troy oz. coin, and force the market to value it at the new level, using that silver to pay government employees or contractors, or welfare recipients, etc.
The benefits and problems with this method are clear.
The benefits are that this "coin making business" is extremely profitable for the government, and it can issue ever more silver into circulation using this method, because it is always profitable to force other market participants to over value the silver being issued.
The problem is the flip side. People don't like to receive silver when it is over valued, and so this kind of silver is not easily accepted by the people, because the people are basically being stolen from, through the excessive profits that go to the government. Over valued silver is also quickly spent, or "dumped" by people, and so it cannot be successfully used as a store of savings for the people for long term wealth creation.
The second problem is that silver tends to rise in value, higher than what is stamped upon it. So, if silver is stamped with $20, then when silver costs more than $20/oz., that silver is then hoarded, and it does not circulate as money, because it's more profitable to hold it, than to spend it, so the entire reason for issuing silver as money is then ended.
So, what about the honest method? How would any government honestly issue silver as honest money? Basically, the government would buy silver on the open market at $13/oz., and not mark any currency value on it. Instead, they would mark it only with what it is, such as the purity and weight, such as "1 troy ounce of .999 fine silver" and then offer it, as a payment option, to all who wanted it, at a relative value of no more than the cost of it, and to make it.
Then, people who choose to take silver, can spend it, or hold it, as they wish. Prices in society may slowly begin to be quoted in terms of government currency, or silver ounces, or both.
The job of the central bank, under those conditions, would be to make silver available to anyone they pay, and even investors who wanted to convert currency to silver. Also, the government would need to accept and take in silver and give out the old paper currency, as needed or desired by the people of the nation. In such a way, silver would be able to circulate side by side with paper currency, as the market chooses, or not.
Such silver would always be able to be traded or hoarded, (and not just hoarded) because it is valued by a different measurement method, as an ounce, and its value would change according to market demand.
If the government were to try to encourage and support silver as money, to encourage the use of silver as money, the government could do two things, both of which tend to interfere with the free market, and thus, have slight drawbacks.
First, a government could help narrow, or even eliminate, the spread on trading silver. Thus, if the government noted that the "free market price" of silver is $15/oz. after minting fees and replacement prices, then that would be the government fixed price, whether a person was buying silver, or selling silver.
But that is a slight problem as people would tend to want to exchange worn out coins with less silver in them, for new coins. And so, perhaps a slight fee should be charged, based on the weight, and a reasonable re-coinage fee.
Second, a government could help reduce silver's price volatility. So if the silver price rose to $50/oz. very quickly, and then dropped, the government could hold silver's price steady for redemptions, so that people could still trade silver back to the government always at a floor price that never declined. Hugo Salinas Price in Mexico is a champion of this idea. This is similar to stamping a currency value on the coin itself. When that is done, the value of that silver in trade is never lower than the price on the coin. So, even in a "free market" changing price for silver, the new silver currency's price should never be allowed to go down in terms of the issuing nation's paper currency. By reducing the price changes, by letting every price change only be upwards, and always be a new floor price, and never letting the price go down, a government would encourage people to trust and use silver as money.
That method also creates a slight problem, as the government might have to print up a lot of paper money in case silver's price dropped dramatically, and the government might end up with a lot of over valued silver that their own population does not want. Thus, I consider that method to be like price fixing, which does not work, or, at least, has drawbacks.
But this would be a mix of the two methods, one part government decree, and one part the free market approach, which is why it has a slight problem.
The specifics on how to implement any of these methods require buying silver coins from a mint, or building your own mint and buying silver bars from a refiner. The challenges there are basically trying to avoid default of your suppliers, as refiners and mints have gone bankrupt in the past, and currently, some refiners and mints are in trouble today, as they have long delivery times. Fortunately, there are several silver minting experts to consult with to avoid such problems, such as:
Or, contact the owner of any successful coin shop which manages to maintain an ample inventory of product available for immediate delivery on a "cash and carry" basis.
Some of the main reasons why the U.S. Silver Eagle program have failed to cause silver to be circulated as currency in the U.S. are as follows.
1. The U.S. Mint stamps the 1 troy oz. coins with $1, which is confusing.
2. The U.S. Mint does not issue the silver coins as currency to anyone that they pay in the normal course of activity, meaning that they do not offer them as a means of payment to any government employees or contractors.
3. The U.S. Government does not accept their own silver coins as a means of payment for taxes or fees.
Lately, the U.S. Mint has created another opportunity, by another failure.
4. The U.S. Mint has been rationing silver coins, as their own suppliers, the mints they are contracting with to make blanks, cannot make enough blanks to meet demand. This last problem has raised the cost of obtaining U.S. Minted silver coins, which means that anyone else who can issue silver coins can make a greater profit by doing so, even at market rates.
Which ever method any government decides to use to issue silver currency, their central bank has to essentially do two things.
1. Mint silver into 1 oz. silver pieces and "spend" them into circulation.
2. Redeem and buy back the silver pieces when people pay taxes or desire to engage in world trade with other nations that do not accept silver as money.
And finally, I believe it would be best to make silver coins that are the world standard weight, which is the 1 troy ounce weight, and to avoid marking them with any paper currency value.
Later, as silver rises in value, it becomes more practical to start making fractional ounce coins, but today, that's just not really needed yet.
There are other bigger problems, of course. The biggest problem is that such a nation would have to risk being branded as a member of the "axis of evil" by nations such as the U.S. government, who is currently being ruled by the paper money mob of world bankers, who hope to strip all nations of their sovereignty, and bring about a world government.
Then again, perhaps the ultimate goal of the paper money mob is to bring about a world government by bankrupting the nations, and by bringing back silver and gold as money, which would tend to unite the people of the world, until they could be enslaved by usury again, one last time.
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