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raja
10-08-12, 04:51 PM
There are various opinions out there about the likelihood, or not, of hyperinflation.
EJ and Mish say not likely, Rickards and other say likely.

I ran accross a link in the Comment section of one of Mish's posts. It's from the blog of Vincent Cate.
I found it very worthwhle.

Several excerpts follow . . . go here (http://howfiatdies.blogspot.com/2012/08/mish-on-hyperinflation.html) if you want the whole thing.
It is a friendly criticism of Mish's position, but it also could be applied to some of the other doubters . . . .




Mish thinks you need some major trouble like losing a war and paying reparations to get hyperinflation. The US won the Revolutionary War, did not pay any reparations, and still had hyperinflation. Remember, "not worth a Continental"? There was hyperinflation in the South during the Civil War. So I think it is fair to say that America has had hyperinflation twice already. As someone pointed out in the comments, there were more cases of hyperinflation in America's colonial period. I also think that if the US had not made it illegal to own gold in 1933 that the Fed would have gone bankrupt (http://howfiatdies.blogspot.com/2010/11/feds-ponzi-gold-standard.html), because they did not really have enough gold to back all of the notes they had issued, and that paper money would have become worthless then too. The US was not in a war in the 30s. Hyperinflation is more common than most people realize. The time periods from the Revolutionary War hyperinflation, to the Civil War hyperinflation, to the 1930s currency crisis, to now, are all similar. To me this looks like some major currency crisis cycle is about due.

Mish will say that the Fed cannot give money away or spend it and that banks only want to lend to credit-worthy businesses but those and consumers are still deleveraging. So Mish can not see how the Fed can put money into the economy. He is not seeing that the government has no real limit on the amount they can borrow and spend. They have a debt limit but they increase it anytime they get close, so it is not a real limit. This government deficit spending, financed by the central bank making new money, is the real source of inflation but Mish never talks about it.

Mish does not think the US central bank would willingly destroy their currency. He thinks this alone debunks hyperinflation. Why did that same logic not protect all the other central banks from making hyperinflation? The government writes the laws, appoints the people to the central bank, and controls the guns. When the government is desperate for money from the central bank they get it. But also remember that the central bank is created by the government. If the government collapses because it does not have enough money to pay for things, the central bank will probably go down as well. The survival of the central bank does depend on the survival of the government. I think this is the core of why central bankers risk their currency to support their governments.

Mish thinks it is silly to compare the US to Weimar Germany or Zimbabwe hyperinflations because the situations are so different. Hyperinflation happens because debt gets over 80% of GNP and deficit gets over 40% of spending. It does not matter how you get into that situation. Hyperinflation works the same if you lose a foreign war, a civil war, a dictator goes crazy, a government with excessive foreign debt, nationalizing too many businesses, rampant corruption, productive collapse, excessive regulation, a regime change, too many taxpayers fleeing high taxes, a massive depression, or whatever. It just matters that the government is spending nearly twice what they get in taxes and has already borrowed more than is reasonable. When they are in this situation they can not borrow more, except from the central bank under their control. So they get the central bank to make money and give it to them.


Mish thinks that the US having around $400 billion in gold would prevent a complete loss of faith in the currency. It does not matter how much gold the US is holding if they are spending 50% more than they get in taxes. They will have to keep printing money, so there is not a finite amount of paper money. With a constantly increasing quantity of paper money it is not possible to hold any fixed exchange rate of dollars to gold. It is the debt and deficit and the fact that when the government will always get the central bank to print money and buy government bonds when things get desperate that causes hyperinflation.

Mish thinks people would not decide to have hyperinflation. I don't believe there has ever been a "decision to have hyperinflation". Hyperinflation is when things get out of control. It is not something central banks or government voted on. No group in government or a central bank has had a show of hands like "all in favor of hyperinflation raise your hands". Not the way hyperinflation happens. Hyperinflation is a market response to government debt over 80% of GNP and deficit over 40% of spending when the central bank starts printing money and buying up government debt. Everyone thinks they just need to print a bit more money to make it through the next week or month and there is nothing else they can do since the government needs money to keep in operation. Nobody votes for hyperinflation. Nobody wants it. It just happens.

Polish_Silver
12-29-12, 09:00 AM
. Hyperinflation happens because debt gets over 80% of GNP and deficit gets over 40% of spending. It does not matter how you get into that situation.





That is my thinking. As for the gold, unless the US can balance the budget (or, get deficits are growing more slowly than real gdp and tax revenue) it is a temporary fix, like selling off some federal land.

The underlying problem is that what is good long term hurts in the short term. All these people criticizing austerity never talk about the situation 10 years out. Like running a deficit now will make things easier in 2022? What are historical examples of that? I could buy the idea of real debt reduction by inflation (printing, not borrowing, the money) , but in the US right now, the federal deficit is growing faster than inflation. If the debt is mostly held by the fed, maybe that part can be cancelled, and it is equivalent to printing money. Dollar devaluation!

raja
12-29-12, 09:39 AM
I've been reading Peter Bernholz's Monetary Regimes and Inflations, in which he points out that the hyperinflations of Bolivia, Argentina and Brazil in the 1980s occurred during peacetime . . . and that during the French Revolution, the new state had assets -- confiscated church lands -- but hyperinflation happened anyway.

I believe it's EJs contention that hyperinflation cannot happen unless tanks are rolling in the streets, and also cannot happen in the US because of its gold stash. The Bernholz's research seems to contradict that.

I wanted to re-read EJs comments and make sure I was remembering them correctly, however, after a search of iTulip I was not able to find EJs post where he made those assertions. Can anyone point me there? Metalman?

Polish_Silver
12-29-12, 11:04 AM
Bernholz seems to be a very deep thinker. He has said that a US hyperinflation (http://www.american.com/archive/2009/december-2009/how-likely-is-hyperinflation)is unlikely in the next few years.

EJ's argument is that reserve currencies are invulnerable to hyperinflation. However, EJ has also said that USD is losing status as reserve currency. So, if USD is not international reserve currency, we have:

1) Large public sector debts
2) uncompetitive economy due to outrageous health care costs
3) few international friends due to perpetual military beligerence in the name of "war on terror"
4) dependence on foreign capital (trade deficit, government budget deficit)
5) dollars trying to come home as regional currency blocks/gold replace USD as global reserve currency.

hyperinflation results when demand for the currency falls to near 0, which might be a result of
1-5


Bernholz "reassuring" conclusion:


But does this mean that inflation may evolve into a hyperinflation in the United States? I believe not. Though it is true that budget deficits with government expenditures covered by 40 percent or more through credits have historically led to hyperinflation, it has been stressed in Monetary Regimes and Inflation that it is not only the size of these credits but also their composition that is important. This is noted in the book thus: “It will be demonstrated by looking at 12 hyperinflations that they have all been caused by the financing of huge budget deficits through money creation“ (p. 70 ). This expresses the fact that only credit extended directly or indirectly by the monetary authorities to the government leads to the creation of money, that is, an increase of the monetary base. This is not true for borrowings taken up in the capital markets if they are not resold to the Fed. Looking from this perspective at the U.S. deficit, by far not all of the credits borrowed by the government were financed by the Fed. According to preliminary and rough estimates, not 40 percent but "only“ about 13 percent of U.S. expenditures are presently financed this way. Moreover, in discussing this problem it has to be taken into account that about two-thirds of dollar bills are estimated to circulate abroad. This—together with the fact that incredibly huge holdings of dollar assets are owned especially by the central banks of China, India, and the Gulf States—may pose other and later dangers. But these dangers will be, except for a return of the dollar bills and a purchase of foreign-owned dollar assets by the Fed, of a different nature. Inflation may rise more or less strongly during the next years, but there is presently no danger of a hyperinflation in the United States. http://www.american.com/archive/2009/december-2009/how-likely-is-hyperinflation

So, is the fed buying more of the UST debt ?

BadJuju
12-29-12, 11:11 AM
Bernholz seems to be a very deep thinker. He has said that a US hyperinflation (http://www.american.com/archive/2009/december-2009/how-likely-is-hyperinflation)is unlikely in the next few years.

EJ's argument is that reserve currencies are invulnerable to hyperinflation. However, EJ has also said that USD is losing status as reserve currency. So, if USD is not international reserve currency, we have:

1) Large public sector debts
2) uncompetitive economy due to outrageous health care costs
3) few international friends due to perpetual military beligerence in the name of "war on terror"
4) dependence on foreign capital (trade deficit, government budget deficit)
5) dollars trying to come home as regional currency blocks/gold replace USD as global reserve currency.

hyperinflation results when demand for the currency falls to near 0, which might be a result of
1-5



Thoughts on your 1-5:

1 and 2: Really up for the US to decide on a course of action to tackle them. So far, not much has gained traction; however, there is still plenty of room for both to be curbed significantly. I just fail to understand why these issues have become so intractable. It would be so much easier to take the medicine now than to suffer the effects of the illness.
3. What about NATO? What about a permanent seat on the security council of the UN? How about our relations with non-Chinese Pacific Asia countries? Given the Chinese bent, these countries will look increasingly westwards for help.

Polish_Silver
12-29-12, 11:30 AM
3. What about NATO? What about a permanent seat on the security council of the UN? How about our relations with non-Chinese Pacific Asia countries?

Nato is basically the EU. Not in a position to help.

United Nations: no taxing authority.

Pacific Asia countries:
Japan: not in a position to help
Korea: if they are absorbing north korea soon, also not in a position to help
Taiwan, Singapore, et. al. Too small, and what's in it for them?

The US could consider selling the UN security council seat to Iran.

BadJuju
12-29-12, 11:44 AM
The US could consider selling the UN security council seat to Iran.

And Alaska to China or Russia. Problemo solved! :)

But really, all of fiat seems to be on the trajectory towards debasement. What is hyperinflation in a world where every other significant currency is exceptionally stressed as well? You might be one of the worst guys in the neighborhood, but you are all still in the same neighborhood.

jabberwocky
12-29-12, 12:48 PM
The Bernholz article is from 2009. I doubt he contemplated the activity of the Fed in ignoring/abetting rampant fraud, monetizing worthless paper, and interferring in global capital markets at the scale presently evident.
I "feel" that our biggest error, cumulatively, has been to persist in trusting institutions and persons to behave as though future generations mattered.
It would be interesting to hear his views today.

globaleconomicollaps
12-29-12, 01:45 PM
I've been reading Peter Bernholz's Monetary Regimes and Inflations, in which he points out that the hyperinflations of Bolivia, Argentina and Brazil in the 1980s occurred during peacetime . . . and that during the French Revolution, the new state had assets -- confiscated church lands -- but hyperinflation happened anyway.

I believe it's EJs contention that hyperinflation cannot happen unless tanks are rolling in the streets, and also cannot happen in the US because of its gold stash. The Bernholz's research seems to contradict that.

I wanted to re-read EJs comments and make sure I was remembering them correctly, however, after a search of iTulip I was not able to find EJs post where he made those assertions. Can anyone point me there? Metalman?
I'm especially interested in the hyperinflation in Mexico. This happened in a country that was a major oil exporter, right on the border with the US and very recently. I have never seen anybody in the US write about it.
http://www.itulip.com/forums/entry.php/225-Hyperinflation-in-Mexico
No war, just too much debt.

Polish_Silver
12-29-12, 09:28 PM
I wanted to re-read EJs comments and make sure I was remembering them correctly, however, after a search of iTulip I was not able to find EJs post where he made those assertions. Can anyone point me there? Metalman?


Try EJ's last review on financial sense. He criticizes the Rogoff book about inflation, saying it "ignores history". EJ says inflation happens to countries which are small and politically isolated.

Well, Weimar Germany was not "small" and not really isolated, either.

EJ's 2009 Hyperinflation (http://www.itulip.com/forums/archive/index.php/t-8160.html)analysis:
http://www.itulip.com/forums/archive/index.php/t-8160.html



The US will, of course, do likewise should it be threatened with the risk of capital flight. This will help contain the cycle of currency depreciation and cost-push inflation that feeds a hyperinflation. Jim Sinclair rests his hyperinflation case on cost-push inflation from a collapsing dollar resulting from capital fight. We don’t see it; the US will shut it down. EJ

I don't buy EJ's argument. The US is dependent on capital inflows. All the foreigners have to do is stop lending to us. And what about the $trillions over seas? They can unload those when ever they want. If we refuse to sell assets for $usd, the demand for those $USD will be no better than $ Zim.

BadJuju
12-29-12, 09:59 PM
Try EJ's last review on financial sense. He criticizes the Rogoff book about inflation, saying it "ignores history". EJ says inflation happens to countries which are small and politically isolated.

Well, Weimar Germany was not "small" and not really isolated, either.


Weimar Germany was in shambles after the war. Exports collapsed, the most industrially productive region of Rhineland was occupied, they lost Alsace-Lorraine, reparations, the military-industry was in tatters, loss of supplies, and they were under blockade still. And then one still has to consider the massive death toll visited upon a whole generation of German men of working age. They were as isolated and trivialized as one could become. I don't really think they are comparable.

Polish_Silver
12-29-12, 11:07 PM
Was germany not allowed to export goods? How universal was the ban, and when did it end?

The war repairations were huge, though!

Weren't Germany, austria and hungary allowed to trade with each other?

By the mid 1930's, Germany had extensive trade with the Soviet Union.

Was germany in shambles after the war? Allied troops did not conquer it. The condition of the armistice was that Germany had to withdraw from France and other countries still occupied by german soldiers.

The US has something comparable to war payments: a big trade deficit.
The energy trade deficit is declining, which makes hyperinflation seem less likely.

BadJuju
12-29-12, 11:45 PM
Was germany not allowed to export goods? How universal was the ban, and when did it end?

The war repairations were huge, though!

Weren't Germany, austria and hungary allowed to trade with each other?

By the mid 1930's, Germany had extensive trade with the Soviet Union.

Was germany in shambles after the war? Allied troops did not conquer it. The condition of the armistice was that Germany had to withdraw from France and other countries still occupied by german soldiers.

The US has something comparable to war payments: a big trade deficit.
The energy trade deficit is declining, which makes hyperinflation seem less likely.

Weimar Germany was immensely affected by the war and the extreme demands placed upon it by the victors. Reparations had to be paid both in currency and in goods with some of the most damaging reparations being in the form of coal payments. The military-industry that had fostered prior to the war and that had grown considerably during it was wrecked as a result of the Treaty of Versailles. It also lost a lot of territory, such as Alsace-Lorraine, tons of Polish land, a lot of strategic and oftentimes economic sites were lost, and so forth. The occupation of Rhineland and subsequently of the Ruhr robbed much of Weimar Germany of its productive capacity. Its overseas colonies were also confiscated, so the empire of Germany was essentially destroyed.

The relationship with Russia developed after much of Weimar Germany had suffered tremendous economic losses. You have to remember that Russia and Germany had warred with each other in WW1 and that Russia actually had to cede a lot of territory and resources to Germany that were subsequently lost by Germany. They were not good trading pals. It was only after the Soviet Union came to power that relations started to normalize. Even then, it didn't represent anything significant for Weimar Germany as it was in its death throes at that point.

Austria-Hungary was fractured heavily after the war with it being divided into several political entities. It represented a massive disruption to the empire as Austria-Hungary was an economic powerhouse for it. The divisions wrought by the Treaties just caused utter havoc.

You are right about the trade deficit and its impact, but you are also right about the energy trade deficit. Most of the US trade deficit comes from its energy deficit. If it can wean itself off of its overconsumption while developing its energy production base, it could significantly influence the events ahead.

*T*
12-30-12, 04:57 AM
Bernholz says savjngs equals investment. Could anyone explain why this is so? Isn't he forgetting about credit?

bart
12-30-12, 03:23 PM
The five top inflationary periods in US history since 1800, one of which satisfies the hyperinflation definition from the IASB - prices doubling in 3 years.


<tbody>
115%, end 1864


65%, end 1920



33%, end 1948



40%, end 1981



32%, end 2007


</tbody>

Polish_Silver
12-30-12, 07:05 PM
Weimar Germany was immensely affected by the war and the extreme demands placed upon it by the victors. Reparations had to be paid both in currency and in goods with some of the most damaging reparations being in the form of coal payments. .

From your description, it was the terms of the treaty, more than damage during the war, that
caused problems for Germany.

I think a key difference is that Germany was required to pay in gold. The US debts are in its own paper currency. However, the US is highly addicted to foreign capital inflows.

ocelotl
12-31-12, 12:14 AM
I've insisted on terms definition on this. In my point of view, Rampant inflation, the one you are talking about, is noted in a monthly period and there is time for government to replace the full coinage cone and to add and retire pertaining note denominations. In hyperinflation you lose track of values within days or even within hours and the cash becomes worthless before it can be replaced since there is a limited capability of designing and manufacturing new coins and notes.

Mostly a major economy nowadays, given the extent of its worldwide commerce network, can get reserves at a speed that can reduce or offset the possibility of hyperinflation up to a certain limit. If things get worse, trade will suddenly stop, given the inability to import the overpriced stuff needed and the losses that could be carried selling price depressed goods. I remember personally seeing between the years 1982 to 1987 that the imports here in Mexico were non existent in stores or very expensive and that the grey market (known here as "fayuca") became a flourishing industry amid the stagnated local manufacturing.

globaleconomicollaps
12-31-12, 05:33 AM
I've insisted on terms definition on this. In my point of view, Rampant inflation, the one you are talking about, is noted in a monthly period and there is time for government to replace the full coinage cone and to add and retire pertaining note denominations. In hyperinflation you lose track of values within days or even within hours and the cash becomes worthless before it can be replaced since there is a limited capability of designing and manufacturing new coins and notes.

Mostly a major economy nowadays, given the extent of its worldwide commerce network, can get reserves at a speed that can reduce or offset the possibility of hyperinflation up to a certain limit. If things get worse, trade will suddenly stop, given the inability to import the overpriced stuff needed and the losses that could be carried selling price depressed goods. I remember personally seeing between the years 1982 to 1987 that the imports here in Mexico were non existent in stores or very expensive and that the grey market (known here as "fayuca") became a flourishing industry amid the stagnated local manufacturing.
What would "replacing the full coinage cone" mean in the case of the US? The largest circulating note is the $100 bill. We have already abandoned the penny and the nickel. The US does have bills the go up to $100,000 ( the Woodrow Wilson bill) but they do not circulate. It looks to me like the US is dangerously close to "hyperinflation" by this metric.

Polish_Silver
12-31-12, 10:45 AM
Bernholz says savjngs equals investment. Could anyone explain why this is so? Isn't he forgetting about credit?

I am also very interested in this idea. I think he should have said, real investment can never be greater than real savings. It means that total output = consumption + investment + other.

Savings = Output - consumption.
I don't think the amount of savings is always equal to the amount invested.

The "other" category is things like waste, warfare, and bubbles. They consume resources without producing any commensurate value.

raja
12-31-12, 04:10 PM
Weimar Germany was immensely affected by the war and the extreme demands placed upon it by the victors. Reparations had to be paid both in currency and in goods with some of the most damaging reparations being in the form of coal payments.

Vince Cate says: "Many people dismiss the German hyperinflation, saying it was caused by war reparations and we don't have those. However, war reparations were only 11.8% of the German governments budget in 1921 (http://www.fff.org/freedom/fd1005e.asp)."

http://pair.offshore.ai/38yearcycle/

raja
12-31-12, 04:18 PM
Thanks for the article link.

Here's a link to Bernholz's book -- .pdf format.
It can be downloaded for free.

http://www.goldonomic.com/Monetary_regimes_and_inflation.pdf

BadJuju
12-31-12, 04:32 PM
Vince Cate says: "Many people dismiss the German hyperinflation, saying it was caused by war reparations and we don't have those. However, war reparations were only 11.8% of the German governments budget in 1921 (http://www.fff.org/freedom/fd1005e.asp)."

http://pair.offshore.ai/38yearcycle/

You are overlooking all of the other things I listed. Reparations were not the only thing. Germany lost a lot due to the Treaty of Versailles and it was very marginalized by it. Germany lost significant amounts of territory, its overseas colonies, its most industrious areas were occupied, it was blockaded, and all the other things I said. Weimar Germany and the USA are not alike. Not even remotely.

jabberwocky
12-31-12, 04:55 PM
Bresciani-Turoni discusses this book, and concludes that reparations were not the critical factor leading to the hyperinflation. His brief, but poignant description of the societal effects of the monetary debauch is haunting, and, it seems to me, vaguely analagous to that of today.

raja
12-31-12, 05:01 PM
EJ's 2009 Hyperinflation (http://www.itulip.com/forums/archive/index.php/t-8160.html)analysis:
http://www.itulip.com/forums/archive/index.php/t-8160.html

Thanks for the link.
I re-read the whole thread.
This post by Fred jumped out:
Imposition of taxes is the usual method.
For example:
Problem: Capital flight into gold
Government response: Tax gold sales at 80%





This agrees with Rickards prediction of 90% windfall profits tax on gold.

There are a lot of people counting on gold to be their savior . . . .

My thought is that if there is hyperinflation, it's best to have gold to trade on the black market.


Vince Cate says: "People start to use a foreign currency or gold as store of value, even though government may forbid it. The black market starts in currency exchange."

And, "At this point the government has some hard choices if it is not going to fail. It needs to do something so that the "black market" is legalized and taxable and deficits are nearly eliminated. It could just legalize a foreign currency or gold. But then it would forever give up on collecting any "inflation tax". It could get rid of budget deficits and stop printing money. However, people will still fear that it could start again at any time and so be hesitant to use that money. I think the most frequent end to hyperinflation is by making a new fiat money but with enough governmental changes that deficits and inflation are under control and people will use the new money. If they switch to a new currency then old money is no longer used as a store of value, or unit of account, or even for transactions. It has died."



http://pair.offshore.ai/38yearcycle/

raja
12-31-12, 05:06 PM
EJ's argument is that reserve currencies are invulnerable to hyperinflation. However, EJ has also said that USD is losing status as reserve currency. So, if USD is not international reserve currency, we have:

Being the reserve currency, the US can print up free money anytime it wants.

But there is a limit.
I think many of the countries of the world will get tired the US free lunch.

Of course others, like Saudi Arabia, will support the US because in return they get the US's military power guaranteeing their continuation in power.

ocelotl
01-01-13, 02:44 AM
To show how the money evolves in a rampant inflation period and the way the cone is modified I'm focusing on one of the longest lived denominations of the past century that appeared as something as strange as the Woodrow Wilson bill and evolved into nothingless.

In 1943, the Bank of Mexico first emitted the American Bank Note produced MXP 10,000 note (http://banknoteworld.com/banknote/mexico/10000%20Peso/20074). It was very rarely used and the common people rarely saw it in its first emission. Even it was one of the main subjects of a mexican movie from 1963 "El Hombre de Papel (http://www.imdb.com/title/tt0057147/)". By 1978 inflation had accumulated to the point that it was placed again into circulation. It was the epoch when I knew it first hand. Later it was replaced with the Banxico made Lazaro Cárdenas (http://banknoteworld.com/banknote/mexico/10000%20Peso/20088) variation. Later inflation made the cost of producing it quite high and the watermark was retired and the design modified in 1987 (http://banknoteworld.com/banknote/mexico/10000%20Peso/20112). At the revaluation it was again modified (http://banknoteworld.com/banknote/mexico/10%20Nuevos%20/20126) and then replaced (http://banknoteworld.com/banknote/mexico/10%20Nuevos%20/20130) before dumped because of its low value.

Now another example, but in metallic, that is more difficult to replace, same initial condition. That was what I was referring to as coinage cone.

The largest circulating gold coin emitted by the Mexican Mint in the past century is, without a doubt, the "Centenario (http://worldcoingallery.com/countries/display.php?image=nmc3/121-481&desc=Mexico%20km481%2050%20Pesos%20%281921-1947%29%20Centennial%20of%20Independence&query=Mexico)", emitted first in 1921 with a face value of 50 MXP. It has remained as one of the standards of bullion coinage up to present, but it was pushed out of circulation (Gresham Law) by the beginning of WWII. A 50 MXP coin was not emitted until the Copper-Nickel "Coyolxauqui (http://worldcoingallery.com/countries/display_wd.php?dir=img5&image=121-490&desc=Mexico%20km490%2050%20Pesos%20%281982-1984%29%20Coyolxauhqui%20-%20Mayor%20Temple&query=Mexico)" was emitted in 1982, but it didn't last long. In 1984 it was replaced by the smaller "Benito Juarez (http://worldcoingallery.com/countries/display_wd.php?dir=img5&image=121-495&desc=Mexico%20km495%2050%20Pesos%20%281984-1988%29%20Benito%20Juarez&query=Mexico)". That also was replaced from Copper-Nickel to Stainless Steel (http://worldcoingallery.com/countries/display_wd.php?dir=img5&image=121-495a&desc=Mexico%20km495a%2050%20Pesos%20%281988-1992%29%20stainless%20steel&query=Mexico) in 1988. At the revaluation of 1992, it was equivalent to the new MXN 5c coin (http://worldcoingallery.com/countries/display_wd.php?dir=img5&image=121-546&desc=Mexico%20km546%205%20Centavos%20%281992-1997%29&query=Mexico) that was dumped before the end of last century due to its low value.

It's worth noting that according to mexican monetary law, all coined precious metal (gold, silver, platinum or palladium) is seen by authority as per its precious metal market value when it is larger than the face value.

GoldMiner
07-23-13, 02:45 AM
Thanks a lot for the post, I simply love Professor Fekete!

Will print this out fast and read thoroughly! :(