I know I promised to write something else, but I just couldn't wait on this one.
It has long been known that the CIA is at least partially responsible for global drug trafficking. Now there is evidence that they are behind the recent ramp-up in violence along the US-Mexico border. A reasonable question would be to what end this increase in violence?
Part of the reason may have to do with increasing the public outrage at illegal immigration. After all, there are elections to be won and a population to stupify.
Now here is a story that has been circulating for a few months. Hugo Salinas Price has been talking about the remonetization of silver in Mexico. Given the deteriorating state of the US dollar, the Fed's desperate attempts to rob the principal US creditors, and the general "race to the bottom" style of mercantilism the Fed's policy is igniting, backing a currency with silver would likely make the Mexican peso the strongest currency in the world, would ruin the drive for the Amero, and would put tremendous international pressure on the USA to do the same. Naturally, the United States does not wish to see such a thing happen.
Mexican one ounce Libertad silver coin. Gorgeous!
Monetizing silver will not be easy, particularly for the first country to try it. A previous attempt by the Mexican government to monetize silver in the late '70's failed due to the volatility of silver prices, in particular, the breathtaking drop after the fall of the House of Hunt. Allowing the coins to fall in tandem with the silver price really soured the public's taste for them. How to avoid this problem in the future? Mr. Salinas Price has suggested the following:
What happens when the price of silver falls?
The answer is surprisingly simple: nothing happens.
The second indispensable condition for successfully carrying out the conversion of the silver ounce into currency which will circulate in parallel with the euro is: the last monetary quote given
to the ounce by the issuer must not be reducible.
The reason for this unusual condition is that ever since silver ceased to have monetary value according to weight, the monetary value of all silver coins was always and everywhere a fixed value; it was a fixed value because all these coins bore an engraved or stamped value.
In order for the silver ounce to cease being a commodity and be currency it is indispensable that its nominal monetary value be a fixed value which cannot be reduced – just as is the condition of
present euro coins and bank notes – along with which the ounce is to circulate in parallel. If the quote is allowed to fluctuate in value downward, according to the price of silver, then the ounce will not be currency: it will continue existing as a commodity. (pg. 14)
How can Mexico guarantee that the price of the coin does not fall as the silver price falls. The Mexican Central Bank must commit to purchasing silver at a price related to the value of the coin, even if that price is higher than the current market price of silver.
One can imagine that in today's world of levered commodity contracts what a lot of fun some large arbitrageur could have. However the fun could be self-limiting, as the arbitrageur would have to deliver actual silver in order to profit. They wouldn't be able to simply show up with a container full of future's contracts.
It has been widely speculated that a good portion of recent US foreign policy has been devoted to maintaining the dollar as the currency of last resort. The Iraq war began soon after Iraq began dumping dollars for euros and began demanding to be paid for its oil in euros. At various times during the past five years, Iran has demanded the same thing.
Is the rise in violence in the Mexican drug trade a new US foreign policy initiative? One intended to either destabilize the Mexican government with the ultimate goal of making it difficult to properly monetize the Libertad?