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Got this link from Jesse's blog. Would this work?
We have been proposing the monetization of a silver coin in Mexico since 2001. According to our proposal a one-ounce coin of pure silver, with no engraved value, would be given a monetary value by the Mexican Central Bank. This coin would exist and circulate as money, in parallel with the paper money system of Mexico.
The monetary value would be superior to the bullion value of the silver ounce by about 15%. This margin would allow a profit, called “seigniorage”, for the Central Bank. Since the coin would not have an engraved value, rises in the price of silver (which would tend to eliminate the seigniorage of the Central Bank) would be met with new, higher, Central Bank quotes for the monetary value of the coin.
The rises in the value of silver in the silver markets of the world would no longer cause the disappearance of the monetized silver ounce. As soon as a rise in the price of silver would begin to affect the seigniorage of the Central Bank, it would produce a new and higher quote.
In order for the silver coin to become money and cease to be a commodity, the last quote of the Central Bank would have to remain stable and not diminish if and when the price of silver were to fall, which of course it does from time to time. Granted such immunity from falls in the price of silver, the coin would become legal tender money and could be used for any commercial transaction.
Now we read that China is having problems with inflation of its money supply. We think that if China were to monetize a silver coin, its Central Bank would have an effective instrument to assist in dealing with inflation.
China used silver exclusively as money for many centuries and restoring it to circulation in China would seem appropriate for China, as it aspires to recover its former glory as the richest country in the world.
[snip]
For the purpose of silver in circulation in China, we suggest a small coin, about the size of an American dime, with a pure silver content of 1/10 oz., alloyed with 10% copper to give a fineness of .900. In metric terms, the coin would have a gross weight of 3.45 grams and a pure silver content of 3.11 grams.
Today, November 24, 2010, the exchange rate for the Chinese Yuan is 6.6489 Yuan per dollar, and silver is traded at $27.59 oz.
At these values, the value of silver bullion per ounce, in Yuan, is 6.6489 x $27.59 = 183.44 Yuan per ounce.
The value of silver in a 1/10 coin would be 183.44 / 10 = 18.34 Yuan.
Add to 18.34 Yuan, the cost of minting, which we shall estimate at 10 cents per coin = .67 Yuan for minting costs. Then 18.34 + .67 = 19.01 Yuan.
19.01 Yuan x 1.1 to provide a seigniorage profit to the Chinese Central Bank = 20.91 Yuan.
We round up the Yuan figure of 20.91, to 25 Yuan as the initial official quoted legal tender value of the small 1/10 oz coin, using multiples of 5 for steps in future increases of legal tender monetary value as the price of silver continues to rise. This facilitates public use of the coin.
The Chinese population will snap up these coins in enormous quantities. As they do so, they will initially be handing over 25 Yuan for each coin purchased.
One tonne of silver will serve to manufacture 321,510 coins. One thousand tonnes of silver will allow for the manufacture of 321,510,000 coins. For the population of China, this will be merely the first appetizer. The population of China will gobble up many thousands of tonnes of silver for its savings.
Each 1,000 tonnes of silver that is monetized, at 25 Yuan per coin, will initially withdraw 8.04 billion Yuan from circulation.
The silver coins that go into circulation will be money, but will hardly be used for purchases. It will be difficult to find these coins, as they will all be treasured up by the Chinese population. Their velocity of circulation will be close to zero and thus they will have no inflationary effect upon the economy. Paper Yuan are withdrawn and replaced with silver money which goes into savings; this is a correct way to fight inflation.
Saving these coins will amount to voluntary austerity for the Chinese. Saving is the postponement of consumption. Voluntary austerity is always more effective and sounder from an economic point of view than the forced savings beloved of Statists, who have dictated taxes and scarcity for consumer goods so that the Statists can build factories.
The monetization of a silver coin will be a free-market decision that prompts people to save, spontaneously, of their own accord, and which does not require raising interest rates to draw the people’s money out of the economy into savings.
http://www.plata.com.mx/mplata/artic...idarticulo=163
We have been proposing the monetization of a silver coin in Mexico since 2001. According to our proposal a one-ounce coin of pure silver, with no engraved value, would be given a monetary value by the Mexican Central Bank. This coin would exist and circulate as money, in parallel with the paper money system of Mexico.
The monetary value would be superior to the bullion value of the silver ounce by about 15%. This margin would allow a profit, called “seigniorage”, for the Central Bank. Since the coin would not have an engraved value, rises in the price of silver (which would tend to eliminate the seigniorage of the Central Bank) would be met with new, higher, Central Bank quotes for the monetary value of the coin.
The rises in the value of silver in the silver markets of the world would no longer cause the disappearance of the monetized silver ounce. As soon as a rise in the price of silver would begin to affect the seigniorage of the Central Bank, it would produce a new and higher quote.
In order for the silver coin to become money and cease to be a commodity, the last quote of the Central Bank would have to remain stable and not diminish if and when the price of silver were to fall, which of course it does from time to time. Granted such immunity from falls in the price of silver, the coin would become legal tender money and could be used for any commercial transaction.
Now we read that China is having problems with inflation of its money supply. We think that if China were to monetize a silver coin, its Central Bank would have an effective instrument to assist in dealing with inflation.
China used silver exclusively as money for many centuries and restoring it to circulation in China would seem appropriate for China, as it aspires to recover its former glory as the richest country in the world.
[snip]
For the purpose of silver in circulation in China, we suggest a small coin, about the size of an American dime, with a pure silver content of 1/10 oz., alloyed with 10% copper to give a fineness of .900. In metric terms, the coin would have a gross weight of 3.45 grams and a pure silver content of 3.11 grams.
Today, November 24, 2010, the exchange rate for the Chinese Yuan is 6.6489 Yuan per dollar, and silver is traded at $27.59 oz.
At these values, the value of silver bullion per ounce, in Yuan, is 6.6489 x $27.59 = 183.44 Yuan per ounce.
The value of silver in a 1/10 coin would be 183.44 / 10 = 18.34 Yuan.
Add to 18.34 Yuan, the cost of minting, which we shall estimate at 10 cents per coin = .67 Yuan for minting costs. Then 18.34 + .67 = 19.01 Yuan.
19.01 Yuan x 1.1 to provide a seigniorage profit to the Chinese Central Bank = 20.91 Yuan.
We round up the Yuan figure of 20.91, to 25 Yuan as the initial official quoted legal tender value of the small 1/10 oz coin, using multiples of 5 for steps in future increases of legal tender monetary value as the price of silver continues to rise. This facilitates public use of the coin.
The Chinese population will snap up these coins in enormous quantities. As they do so, they will initially be handing over 25 Yuan for each coin purchased.
One tonne of silver will serve to manufacture 321,510 coins. One thousand tonnes of silver will allow for the manufacture of 321,510,000 coins. For the population of China, this will be merely the first appetizer. The population of China will gobble up many thousands of tonnes of silver for its savings.
Each 1,000 tonnes of silver that is monetized, at 25 Yuan per coin, will initially withdraw 8.04 billion Yuan from circulation.
The silver coins that go into circulation will be money, but will hardly be used for purchases. It will be difficult to find these coins, as they will all be treasured up by the Chinese population. Their velocity of circulation will be close to zero and thus they will have no inflationary effect upon the economy. Paper Yuan are withdrawn and replaced with silver money which goes into savings; this is a correct way to fight inflation.
Saving these coins will amount to voluntary austerity for the Chinese. Saving is the postponement of consumption. Voluntary austerity is always more effective and sounder from an economic point of view than the forced savings beloved of Statists, who have dictated taxes and scarcity for consumer goods so that the Statists can build factories.
The monetization of a silver coin will be a free-market decision that prompts people to save, spontaneously, of their own accord, and which does not require raising interest rates to draw the people’s money out of the economy into savings.
http://www.plata.com.mx/mplata/artic...idarticulo=163
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