Is Silver Money? (Revisited)
I just returned from the Cambridge House Investment Conference in Vancouver, BC, and found this to be one of the best precious metals gatherings ever, not so much from the perspective of a number of attendees, but from the quality of the people who did attend.
Many mainline speakers and workshops were made available and it did not take very long for me to "hear through the grapevine" that a well-known personality in the precious metals space had deemed that "silver is NOT money, it is an industrial metal."
Since this is hearsay to me, I want to be careful in that perhaps I don't have the exact statement, but I did get a barrage of people coming to me and reporting essentially the same information.
First, let us be clear: silver is an industrial metal and used in industry it most certainly is. However, a better label might be high technology metal, because silver conducts electricity better than any element; it is crucial to so many applications, our way of life would cease without silver.
The industrial use of silver continues to grow, although admittedly it might slow down during this year due to recessionary pressures, but we cannot be sure of that yet. In any event, silver used to comprise about 35% of the total demand a decade ago, and now, according to the Silver Institute, industrial use is 54%. Clearly, silver is an industrial metal and makes up over half of the total demand. No argument from this writer, but what about silver's role as money?
"The major monetary metal in history is silver, not gold." - Noble Laureate Milton Friedman in an interview with James U. Blanchard III for the 20th Anniversary New Orleans Investment Conference, November 7, 1993.
"To 250 million persons in 51 countries the word for money is the same as the word for silver and silver literally means money." Silver Profits in the 80's, by Jerome F. Smith and Barbara Kelly Smith, copyright © 1982, ERC Publishing Company, page 43.
"Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves." Money and Wealth in the New Millennium, by Norm Franz, copyright © 2001, Whitestonepress, page 154.
The three above quotes might help put the silver-as-money debate into perspective, yet they do not really prove that silver is money. For absolute proof we need to know how the law defines money. As I was doing research for this missive, I asked Google if "Silver is Money" and the first article to pop up was one written by me in 2001.
From that article...
"I took out my Black's Law Dictionary and looked up money. Interesting when we look at the legal aspects of things. I will admit I have an old version, 1968 to be exact. The reason is bias on my part. It seems the definition of things keeps changing as we move forward in time. To quote Black's Law Dictionary, 'In usual and ordinary acceptation it means gold, silver, or paper money used as circulating medium of exchange, and does not embrace notes, bonds, evidence of debt, or other personal or real estate. Lane v. Railey, 280 Ky. 319, 133 S.W. 2d 74, 79, 81.'"
Reading further we find:
"In its strict technical sense 'money' means coined metal, usually gold or silver, upon which the government stamp has been impressed to indicate its value. In its more popular sense, 'money' means any currency, tokens, bank-notes, or other circulation medium in general use as the representative of value." Then under that several more sites are named.
In my view we are all entitled to our opinions, and, to my thinking, the Free Market of Ideas is most valuable to a free society. However, none of us is entitled to make up our own facts, and saying that black is white, under the current Orwellian conditions, does not change reality although a great number of debt burdened can see it that way.
According to the Law of the Land (United States)
"Article I, Section 10, Clause 1. No State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt."
We again see silver clearly defined. In fact let me digress slightly and ask, Have any citizens committed fraud by paying a debt with a debt? In other words, all the circulating currency is loaned into existence . . . are you breaking the law by passing this on as money? Alas, I'm being facetious but could not resist.
Okay, so almost everyone knows about the Constitution and how little respect it receives by all those representatives of the people (debt slaves?), from the President on down, who take an oath to uphold it against all enemies foreign and domestic. Yet, we live in a world that is currently making up the rules as we go along.
And what is the current rule (law) about silver as money? I think the U.S. Mint might make a case that we can establish as to the current status, and this is what is clearly stated on their Web site.
"American Eagle Silver Bullion Coins are affordable investments, beautiful collectibles, thoughtful gifts and memorable incentives or rewards. Above all, as legal tender, they're the only silver bullion coins whose weight and purity are guaranteed by the United States Government. They're also the only silver coins allowed in an IRA." [Emphasis mine.]
So you can pay your heating bill, water, trash, rent, etc., with silver; by law, it is still money. Regardless of what anyone states, like it or not, the law is clear -- you can use Silver Eagles to pay for goods and services within the U.S., and therefore silver is indeed money. I do not, however, advise this at all, because you would need to pay in "legal" terms, meaning "One Dollar" per one-ounce silver coin. As we all know (most of us anyway), the face value is far different from the market price. As this is written, it takes about 15 pieces of paper labeled ONE DOLLAR to buy a coin that says ONE DOLLAR. Interesting?
It is an honor to be.