Hugo Salinas Price: Dorothy’s silver shoes

wizard of oz© skeeze -

( – Dorothy’s silver shoes or the re-monetization of the silver currency of the United States of America

Speech by Hugo Salinas Price at GATA Conference ‘Gold Rush 2011’, held in London on August 6, 2011

Why not re-monetize the silver dollar? Re-monetization could put the silver dollar and its subsidiary silver coinage into circulation in parallel with FRNs – “Federal Reserve Notes”.

There are several reasons that make this action possible, and only one that might be considered as an unimportant material obstacle.

In favor:

The silver dollar is the money that is still the Constitutional “coin of the realm”, defined by Act of Congress as 371.25 grains of pure silver. (The Troy ounce contains 480 grains.)

The silver dollar is familiar or at least known to almost all Americans.
A considerable quantity of these silver dollars is owned by Americans.

The silver dollar is a cherished symbol of a great past.

The monetized silver dollar would ignite a desire to save such as America has perhaps never seen before. The very first thing that must be done, to encourage people to save, is to give them something worth saving. As the US government gallops toward the abyss of bankruptcy by unlimited spending, the American people desperately require a refuge for their savings!

In this writer’s opinion, a large majority of the American people can see themselves as owners of silver money and, if a poll were taken, one can imagine that most Americans would express themselves in favor of silver money. Not so with gold, towards which the American people have little emotional attachment: gold is seen as the money of the élite. William Jennings Bryan exploited this fundamental attitude of the American people with his “Cross of Gold” speech. (Note: this should not be taken as disparaging gold; it is simply the statement of an opinion about the attitude of Americans regarding gold.)


The silver dollar bears a value stamped upon it: “One Dollar”.


The branch of government which the Constitution has designated as the agency “to coin money [and] regulate the value thereof” is the Treasury.

If the Treasury were to monetize the silver dollar coin by attributing to it a monetary value in terms of FRNs – “Federal Reserve Notes” – the public would very probably ignore the inscription of “One Dollar” upon the coin and accept it as legal tender money for the amount of the Treasury quote given to it. It would not be necessary to explain that twice, to anyone owning a silver dollar coin! In a short time, people would regard the term “One Dollar” as the name of a coin, rather than as a numeric indicator of legal tender value.

Determining the value of the silver dollar falls quite nicely into the Constitutional mandate to the Treasury: “To coin money [and] regulate the value thereof…

How would the Treasury go about determining a quote to regulate the value of the silver dollar? Let bureaucrats and lawyers write books about how it should be done; here it is in a few words:

Suppose the price of silver bullion is $35 per ounce.

The silver dollar contains 77.34166% of a Troy ounce.

$35 X .7734166 = $27.07, the value of the silver in the silver dollar.

The Treasury will quote the silver dollar’s value in FRNs, with a margin of 15%, and round the figure to the next highest multiple of four:

$27.07 X 1.15 = $31.13, rounded up to $32.

The silver dollar as a legal tender coin worth $32 FRNs. The American public would eagerly purchase these silver dollars, worth $32 FRN dollars, and which could be used for all transactions without any haggling. The silver dollar worth $32 FRNs could even be deposited for that value in banks, if anyone had a mind to do such a thing.

If the price of silver rose to $37.61, the margin of profit of the Treasury, or seigniorage as it is formally known, would be reduced to 10%; at that point, a new and higher quote would be issued, to restore the 15% profit of the Treasury:

$37.61 X .7734166 = $29.09 value of silver in the silver dollar X 1.15 = $33.45, rounded up to $36 FRNs – 36 being the next highest multiple of four.

Why “the next highest multiple of four”? Because by doing so, the result would be the re-monetization of the entire silver currency system of the United States as it existed up until the Sixties of the last century.

In the last example, the silver half-dollars would automatically be worth $18 FRNs, the quarter-dollars would be worth $9 FRNs, and the dimes would be worth one-tenth of the silver dollar: $3.60 FRNs.

As pointed out in many articles at, in the section in English, the last quote of the Treasury would remain firm and not subject to reduction, just as if the value in FRNs had been re-stamped upon the coin. The Treasury quote would simply take the place of a stamped quote, which cannot be reduced. The Treasury quote would only be raised, to follow the rising price of silver. In this way, the silver dollar would be a coin that would remain in use permanently.

This program would return the silver dollar and its subsidiary silver coinage of half-dollars, quarters and dimes to the American people in such a way as never to disappear again: all rises in the price of silver would be matched with rises in the quoted monetary value of the silver dollar and by derivation, of its subsidiary coinage: the silver half-dollar, the quarter and the dime.

This program would not cost the Federal Government – or the taxpayers that support it – one single cent! And yet, it would constitute the greatest gift to the American people that any US Congress could possibly invent, next only in importance to the return of the Gold Standard. The restoration of the silver currency of the United States to circulation, in parallel with the fiat FRN, can be considered the prelude to the revived Gold Standard.

By paying the Treasury a premium of 15% over the bullion price of silver, the American people would actually be subsidizing the Treasury’s work of monetization. This cost would be a one-time cost of obtaining real money of permanent value and utility, independent of the Fed and the banking system.

The re-monetization of the silver currency of the United States would create a new, vast market for physical silver and drive the price of silver very much higher. Those who might not be able to afford the purchase of monetized silver dollars could purchase half-dollars, quarters or dimes, which would provide the same security: they too, would rise with the rise in the price of silver. The rise in the price of silver would affect gold, which would also rise in price.

In order to facilitate larger transactions in silver, the Treasury could once again issue “Silver Certificates” attesting to the existence of silver held in its vaults.

With regard to the present faux-silver coinage in circulation, the American people are too intelligent to be deceived by it; this coinage may remain in circulation until the Treasury issues new coins for the purpose of making change in small transactions.

Though the restored silver currency may legally circulate, in practice it will be saved in its entirety and only be used in cases of emergency. Its “velocity of circulation” will be effectively close to zero.


Dorothy wore silver shoes, in L. Frank Baum’s classic book. Silver shoes on the yellow brick road! Dorothy symbolized then and still does today, the American people. Dorothy was unaware of the magic power of her silver shoes – and the American people are still equally unaware of the magic power of the re-monetized silver dollar: the power to recover America as the land of Hope and Opportunity!

What are the obstacles to regaining the silver dollar as money which can circulate in parallel with Federal Reserve Notes? The main obstacle will be the weapon of fear wielded by the entrenched interests of banking and the Federal Reserve, the intellectual centre of the banking cartel. These fiat money-mongers will rely on generating fear of the consequences of silver money so that they can maintain their huge fraud of fiat money FRNs; the Fed and the “Too Big to Fail” Banks are deathly afraid of the competition of silver. They know that the slightest crack in their monopoly of issuing fiat money will expose their scheme.

The Fed and the banking system will without doubt claim that “silver money is very costly”, but they will certainly not mention that the American people will fall over themselves to acquire it and even pay a premium of 15% to the Treasury, for the blessing of owning real money. Nor will the Fed and the banking system ever mention the gigantic costs that the depreciating FRNs have inflicted upon American savers; nor will they wish to recognize that the fiat FRN and the Fed are directly responsible for the present financial and economic destruction of the once great United States of America.

Another objection which will be put forward forcefully is that what the American economy requires is more spending on the part of the public. They will argue that more savings on the part of the American people spells doom for the economy: “More drink for the drunkard” is essential, according to the prevailing Keynesian thinking.

However, the humbug wizard has already been exposed and the Fed has lost its prestige forever. Toto has drawn the curtain! The State of Utah has already voiced its dissatisfaction with the present monetary system, by legislating in favor of gold and silver as legal tender money. If this project – monetizing the silver dollar by the Treasury’s giving it a numeric monetary value in FRNs, which immediately places it alongside the Federal Reserve Note as money – if this project comes to the notice of the several States of the Union, they together may force the issue.

The present policy is to “kick the can down the road” and postpone the final reckoning. But, the end of the road is already in sight! The condition is one of utter helplessness. The re-monetization of the silver dollar is the first step toward regaining health for the economy of America. Paper, fiat money will probably remain in use for some time, but the presence of the monetized silver dollar will force the Federal Reserve, the banking system and the US Government itself, to a more prudent financial course. It will be possible to regain financial health, because an alternative is available. Savings, the foundation of prosperity, will bloom as Americans opt for massive voluntary austerity by saving monetized silver dollars, half-dollars, quarters and dimes.

The banking system in the United States will be anxious to receive the massive savings in silver of the American people as deposits, but this will only be possible when the price of silver bullion has stabilized. Thus, the American people will have the upper hand; they will bend the banking system to their will by refusing to deposit their silver in the banks and thus force the banking system to reform itself to prudent monetary practice and desist from inflating by expanding credit out of nothing. After a stabilization of the banking system, the way would be open to a resumption of the Gold Standard.

Americans are today caught in a financial calamity with no parallel in history. They are being told this every day by every medium of communication. But they watch their crumbling economy in utter paralysis, because there is no alternative to which they may turn. The whole world is a mirror of their plight.

The restoration of the silver currency of the United States of America by the very simple procedure outlined here can provide the life-saving alternative. There is, at present, no other practical proposal for a viable action in the field of money. Perhaps there can be no other practical proposal? Perhaps a return to silver money is the only path out of the present crisis of civilization?

Let us hope that a political leader in the United States understands this message. The popular appeal of silver is universal; “silver shoes” will take that leader far – and the American people will follow him on that road!

Hugo Salinas Price


About the Author

Marion Mueller

11 Comments on "Hugo Salinas Price: Dorothy’s silver shoes"

  1. Maestro Don Hugo Salinas Price, por favor, convenza al Presidente del Perú de poner en circulación la onza de plata, sería todo un acontecimiento a nivel Mundial. Y ayudaría a despertar a la humanidad para conservar este valioso e indispensable recurso no renovable para las nuevas generaciones. LA PLATA SE HA CONVERTIDO EN UN RECURSO EN PELIGRO DE EXTINCIÓN. La plata debería ser utilizada sólo en Industrias estratégicas y en las bóvedas de los Bancos Centrales para conservarla para las nuevas generaciones. Sr. Hugo Price, le deseo mucho éxito en su MAGNÍFICO PROYECTO.

  2. Como bien expone perrillo, es imposible que el establishment pierda tanto poder.
    Tienen el poder de un Dios en el sistema capitalista. La capacidad de “crear” de la nada.

  3. Y con “los demás”, me refiero al “banking system”, ahí es ná… por mucho que se les desmorone el tinglado, poniéndose entre ellos de acuerdo, harán lo que les plazca, privando al Tesoro y al PUEBLO de poder decidir qué dinero usaremos.

    La Banca vende dinero, y el oro y la plata NO los farican ellos y sólo pueden pagar una vez con ellos, siendo FINITOS, mientras que su “fiat money”, teclean INFINITOS números, para lo que ellos quieran, y cobrando encima un interés.

  4. Atención:

    “By paying the Treasury a premium of 15% over the bullion price of silver, the American people would actually be subsidizing the Treasury’s work of monetization. This cost would be a one-time cost of obtaining real money of permanent value and utility, independent of the Fed and the banking system.”

    Entonces, ¿iba la FED a permitir ESTO: que la moneda en circulación (sobre la que el Tesoro cobra un 15%, SÓLO al emitirlo y guardarlo), vaya por ahí y ellos “perder el control”, el monopolio del dinero?

    Ja, la FED (y demás), jamás permitirán que esto suceda… sería acabar con la gallina de los “dígitos de oro”.

  5. Alfredo Corona | August 10, 2011 at 3:02 am |

    A Gerardo. El Banco de México no se va a desvincular de la FED, menos con Agustín Carstens que fue Subdirector Gerente del FMI. Creo que tiene razón Oscar, sería muy bueno que Don Hugo Salinas presentara su magnífico Proyecto al Presidente de Perú, ellos están menos comprometidos que nuestro Banco de México. Si en Perú ponen en circulación la onza de Plata, le harían un gran favor a México, porque subiría la Plata y México y no estaría regalando tan estratégico recurso no renovable a estos precios irrisorios.
    Suerte de Rey para todos y mucho éxito a Don Hugo Salinas.

  6. JUAN”



  7. Sr. Hugo Salinas Price, soy un estudioso de sus excelentes artículos y de sus libros, y por cierto, sería fabuloso que nos ilustrara con un artículo sobre las enormes aplicaciones y consumo industrial de la plata.

    Sobre su grandioso proyecto de poner en circulación la onza de plata en México, y por lo que leo aquí la posibilidad de hacerlo en USA, considero que difícilmente
    se llevará a cabo con gobiernos de “derecha”. Humildemente me permito sugerirle, lo presente al Presidente del Perú, estoy seguro que en ese país tendría un rotundo éxito.

    Muchas gracias por la sabiduría que tan claramente plasma en cada uno de sus escritos.

  8. Alfredo Corona | August 9, 2011 at 16:53 pm |

    Jim Rogers, referente norteamericano de la inversión en commodities dijo en una entrevista para la cadena televisiva CNBC, que tiene muy claro que la situación económica de Estados Unidos (EU) es insostenible, ya que el nivel de endeudamiento no dejará de crecer en los próximos años, por lo que la considera impagable.

    El célebre inversionista dijo: “me parece que es físicamente, humanamente imposible para EU pagar su deuda”. Agregó que la nación “puede darse la vuelta y seguir jugando esta farsa, pero el país está en bancarrota”.


  9. A Alfredo Corona; se requiere que los economistas en el gobierno dejen el dogma que aprendieron en Harvard y Yale, así como que el BdeM se independice mental y practimente de la FED y peinse como Banco Central y no como agencia de lucha contra la inflación.
    Nuevos tiempos requieren mentes jovenes con nuevas ideas y libres del yugo y la rigidez del dogma monetarista.

  10. Soy admirador de Hugo Salinas, me gustaria saber si es posible la traduccion del texto en castellano ya que soy hispano hablante
    Muchas Gracias

  11. Alfredo Corona | August 9, 2011 at 2:55 am |

    Tengo entendido que la producción anual de Plata de EUA es como de 45 millones de onzas (poco menos de la mitad de lo que produce México), tienen el triple de población que México. Ahora bien, considerando la Plata que consume la Industria, estoy seguro que en caso de que circularan monedas de Plata en EUA una buena parte sería con Plata mexicana o de Perú. Bien por EUA si así lo hacen, para mí una pena como mexicano que allá si lo hicieran y en México no, y también una pena como latinoamericano que en Perú tampoco lo hicieran.

    Después de tantos años de lucha con argumentos tan sensatos y contundentes de Don Hugo Salinas Price, me pregunto: ¿ Qué se requiere hacer para qué en México vuelva a circular la moneda de Plata?, ¿Acaso una manifestación multitudinaria estilo partidos políticos?. Ya no sé ni que pensar de cómo si lograrlo, la “bola de nieve sigue para abajo y creciendo. Y los políticos diciendo que la “economía está blindada”, ¿blindada con papeles verdes, no sería mucho mejor un blindaje de metal, con Oro y Plata?.
    Suerte de Rey para todos.

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