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Silver Rumblings In Mexico

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Published : January 18th, 2001
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Category : Editorials

Senator Fauzi Hamdan Amad, a member PAN, President Vicente Fox's party, and Chairman of the Senate Committee for Treasury, has this to say:

From “El Financiero”, Jan 16, 2001, Mexico City, Mexico.

Monetary Reform

Fauzi Hamdan Amad, Chairman of the Senate Committe for Treasury, Mexico.

It is not possible to conceive a fiscal reform in the State, without including monetary reform. Money is one of the most important instruments of economic policy. Our money is supported by the Dollar; it only has value as a result of the Dollar reserves held by the Bank of Mexico. A decrease, or what is worse, a deficit in our balance of payments, produces a collapse in our economy.

We are mired in a vicious circle: we depend inexorably on external savings without any alternative, specifically on the Dollar, which turns out to be master of the value of the Peso.

As Hugo Salinas Price has stated correctly: “...the present Peso is  a dead-end alley...”

In order to maintain the value of our money and hold reasonable Dollar reserves, we have inordinately emphazised foreign commerce, mainly with the United States. It is paradoxical that the country with whom we have the greatest amount of trade (70% approximately) is also the country that determines the value of our money.

Without Dollar reserves, our monetary and financial system collapses. The great crises we have suffered in the last twenty five years, have originated, in the final analyisis, in dangerous decreases of our Dollar reserves. The value of our goods and services (Gross National Product) which should be the support of the value of our money with its own intrinsic value, has been transferred to American goods and services, and thus produced an economic and financial  dependence and subordination which cannot be sustained.

The monetary system is so pernicious that only a radical change can save it. We are finally dollarized and our money, in and by itself, lacks intrinsic value and confidence.

The need to hold Dollar reserves has forced our authorities to admit, without any restriction, the entry of speculative Dollars, as well as the participation of foreign capital in those activities, which due consideration indicates should be reserved to Mexican nationals, and to obey the guidelines imposed in matters economic and financial by the U.S.A., through the International Monetary Fund, among other institutions; all these, among other situations and conditions which are public knowledge.

Many authorised and recognized individuals have spoken out to demand and promote the adoption of a new currency: silver. Hugo Salinas Price, Luis Pazos, Arturo Damm, Steve H Hanke (Translator’s note: Mr. Hanke should not be listed in this group, as not supporting its ideas) Octavio Fitch, Francisco Helguera, among many others, ask for a new currency with the backing of the real value of silver.

Senator Diego Fernández de Cevallos, in an interview grated to T.V. Azteca in March, 1999, mentioned among other important things, the wisdom of considering the introduction of silver for Mexico as legal tender currency, an intelligent and brave commentary.

At one time, our currency was of universal use, during a period of almost two hundred years, from the 18th to the second decade of the 20th centuries, a time during which the Mexican Peso was legal tender in countries of Africa, the Middle East and Asia. In the second half of the 19th century, the Mexican Peso attained its highest value.

The Peso began to lose its value at the beginning of the 20th century and started a series of devaluations which originated basically in the fall of the value of silver, due to its being displaced by the world gold standard. As we know, the process of abandoning the gold standard began with the World War in 1914, proceeded with Britain’s going off gold in 1931, and concluded with the decision by President Nixon in 1971, in which he declared unilaterally the non-redemption of Dollars for gold; and as a result since then, for thirty years now, we have a real monetary and financial disorder in the whole world.

We must analyze a monetary reform very carefully, in a wide forum, which will include all individuals in this country who are qualified to give an opinion on this theme, so that we may arrive at conclusions which may allow us to define, once and for all, the sense and thrust of a possible monetary reform.

By : Hugo Salinas Price

President, Mexican Civic Association Pro Silver


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Hugo Salinas Price is the founder of Mexico's Elektra retail chain. Hugo Salinas Price currently is retired from retailing and focuses on being a proponent of a sound financial policy for Mexico[1]. Salianas Price is President, Mexican Civic Association Pro Silver, A.C
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