James Turk: The world''s most important gold chart

Section:

4:18p ET Sunday, October 30, 2005

Dear Friend of GATA and Gold:

The silver coin legislation that the Reuters story
below says has passed the Mexican Senate is not,
GATA is told, the same version of the legislation
being advocated by Mexico's leading silver advocate,
Hugo Salinas-Price. But the story shows that the
silver coin issue is very much alive.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Mexico Mulls Silver Lining Against Currency Crash

By Pav Jordan
Reuters
via Banderas News
Puerto Vallarta, Mexico
Sunday, October 30, 2005

http://www.banderasnews.com/0503/nr-platapura.htm

MEXICO CITY -- An influential Mexican businessman wants to
reintroduce silver coins as legal currency -- as in Mexico's 16th
century heyday -- and, farfetched as it may sound, the idea is
winning support.

The Senate has already passed the initiative, and the lower house is
expected to vote soon on the bill, which has struck a nerve in a
country where decades of financial crisis have fomented a deep
distrust of paper currency.

The central bank opposes the plan as anachronistic.

Hugo Salinas Price, founder of the specialty retailer Elektra, says
silver could be the shield to protect Mexicans' savings from another
currency collapse.

"The idea was born from the need to protect the currency," said
Price, whose son, Ricardo Salinas, is chief executive of Mexico's
No. 2 broadcaster, TV Azteca.

Mexico's peso is stable now, and has actually strengthened of late,
but fear of currency collapse is etched deep in the Mexican psyche
after previous financial crises.

Mexico was a top supplier of silver coins during the colonial era,
when they were significant components of the Spanish and British
treasuries. The minting of coins in the New World began in 1535 in
Mexico City.

According to Price and advocate lawmakers interviewed by Reuters,
the new coins would be valued according to the price of silver as a
commodity, with the central bank, Banco de Mexico, managing coinage
and charging a 10 percent seigniorage.

The 1-ounce silver coin, called the Libertad (Liberty), would have
no nominal value engraved upon it, and would circulate alongside the
conventional peso currency. Its worth would be stated daily in a
central bank quote.

Silver traded at about $7.50 an ounce on Friday in New York. The
peso was valued at about 11 per U.S. dollar.

Price said the Libertad would be protected from losing value because
losses on commodity markets would be compensated for by central bank
valuations.

Representatives of the central bank could not be reached to comment,
but it has rejected the idea in arguments to legislators, citing
concerns ranging from counterfeiting to minting costs.

Independent economists also argue against monetizing silver, saying
it has no place in a modern world of interconnected and open
economies.

Rafael Urquia, an analyst with Banamex Accival brokerage in Mexico
City, said the plan would limit the flexibility of monetary policy.

"I am inclined to think that this will not pass (Congress)," Urquia
said in a recent interview. "I would like to think that the
legislators sitting on economic committees have some common sense."

Opponents also cite the costs of adapting the currency system to
incorporate silver coins, and list the subsequent transaction costs
and even minting costs as other concerns.

"This idea of a hybrid currency seeks the best of both worlds - and
I think that would be difficult," Urquia said.

Still, the 1994-95 financial meltdown known as the "Tequila crisis"
is just the most recent example of why some Mexicans are eager for
an alternative safe haven for their money.

Despite recent advances, Mexico still has one of Latin America's
lowest rates of savings and bank credit.

Most past crises have coincided with presidential elections, and the
tight, three-way race for the 2006 vote has generated worries that
the peso could be in for a steep decline.

Still, Mexico produced some 3 million ounces of silver in 2004 and
state governors and legislators say the plan could give a boost to
the economies of states producing silver.

"We see this as a viable initiative," said Fernando Guzman, a
federal deputy with the governing National Action Party. "It would
bring a new vitality to the state economies."

Proponents of silver money cite Gresham's law - named after the
financial agent of England's Queen Elizabeth I, Sir Thomas Gresham
(1519-1579) - to support arguments that people tend to save
currencies with intrinsic values when they are traded alongside
fiduciary monies.

"I can tell you one thing for sure, I don't always stop to pick up a
peso if I drop it," said Violeta de la Torre, an office
administrator. "But I certainly wouldn't leave a silver ounce lying
in the street."

----------------------------------------------------

To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

To unsubscribe, send an e-mail to:

gata-unsubscribe@yahoogroups.com

----------------------------------------------------

RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS

Free sites:

http://www.jsmineset.com

http://www.cbs.marketwatch.com

http://www.mineweb.com/

http://www.gold-eagle.com/

http://www.kitco.com/

http://www.usagold.com/

http://www.usagold.com/amk/usagoldmarketupdate.html

http://www.GoldSeek.com/

http://www.GoldReview.com/

http://www.capitalupdates.com/

http://www.DailyReckoning.com

http://www.goldenbar.com/

http://www.silver-investor.com

http://www.thebulliondesk.com/

http://www.sharelynx.com/

http://www.mininglife.com/

http://www.financialsense.com

http://www.goldensextant.com

http://www.goldismoney.info/index.html

http://www.howestreet.com

http://www.depression2.tv

http://www.moneyfiles.org/

http://www.howestreet.com

http://www.minersmanual.com/minernews.html

http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html

http://www.goldcolony.com

http://www.miningstocks.com

http://www.mineralstox.com

http://www.freemarketnews.com

http://www.321gold.com

http://www.SilverSeek.com

http://www.investmentrarities.com

http://www.kereport.com
(Korelin Business Report -- audio)

http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)

http://www.resourceinvestor.com

http://www.miningmx.com

http://www.prudentbear.com

http://www.dollarcollapse.com

http://www.kitcocasey.com

http://000999.forumactif.com/

http://www.golddrivers.com/

http://www.goldpennystocks.com/

Subscription sites:

http://www.lemetropolecafe.com/

http://www.goldinsider.com/

http://www.hsletter.com

http://www.interventionalanalysis.com

http://www.investmentindicators.com/

Eagle Ranch discussion site:

http://os2eagle.net/checksum.htm

Ted Butler silver commentary archive:

http://www.investmentrarities.com/

----------------------------------------------------

COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS

Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
http://www.blanchardonline.com

Centennial Precious Metals
3033 East First Ave., Suite 807
Denver, Colorado 80206
1-800-869-5115
http://www.USAGOLD.com
Michael Kosares, Proprietor
cpm@usagold.com

Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
http://www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net

El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net

Gold & Silver Investments Ltd.
Mespil House
37 Adelaide Rd
Dublin 2
Ireland
+353 1 2315260/6
Fax: +353 1 2315202
http://www.goldinvestments.org
info@gold.ie

Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com

Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com

Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
http://www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com

Lone Star Silver Exchange
1702 S. Highway 121
Suite 607-111
Lewisville, Texas 75067
214-632-8869
http://www.discountsilverclub.com

Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel

Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com

Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
http://www.buysilvernow.com

Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com

The Moneychanger
Box 178
Westpoint, Tennessee 38486
http://www.the-moneychanger.com
Franklin Sanders
1-888-218-9226, 931-766-6066

----------------------------------------------------

HOW TO HELP GATA

If you benefit from GATA's dispatches, please
consider making a financial contribution to
GATA. We welcome contributions as follows.

By check:

Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road
Manchester, CT 06043-7541
USA

By credit card (MasterCard, Visa, and
Discover) over the Internet:

http://www.gata.org/creditcard.html

By GoldMoney:

http://www.GoldMoney.com
Gold Anti-Trust Action Committee Inc.
Holding number 50-08-58-L

Donors of $1,000 or more will, upon request,
be sent a print of Alain Despert's colorful
painting symbolizing our cause, titled GATA.

Donors of $200 or more will receive copies
of "The ABCs of Gold Investing" by Michael
Kosares, proprietor of Centennial Precious
Metals in Denver, Colorado, and "The Coming
Collapse of the Dollar" by James Turk and
John Rubino.

GATA is a civil rights and educational
organization under the U.S. Internal Revenue
Code and contributions to it are tax-deductible
in the United States.