A New Service For Silver Savers In Mexico
Banco Azteca, which has about 1,000 branches throughout Mexico, is about to launch a new service for those who like to save silver. It is the first bank in Mexico to offer this service; other banks are expected to follow suit, sooner or later.
The new service is called "Silver in the Vault". This service will provide savers with a safe place to store their one ounce silver "Libertad" coins, which Banco Azteca has been selling for some time now, having taken over the sale of these coins from its parent company, Grupo Elektra, which operates stores that retail durable household goods.
Only "Libertad" one ounce coins will be accepted for "Silver in the Vault". The coins in the Banco Azteca vault will remain the exclusive property of the depositor and the custody is the responsibility of the Bank.
The service will entail a small charge, payable quarterly.
Buyers of silver will be able to buy silver from Banco Azteca and place the silver coins in the Vault, all on-line, with a charge to their Banco Azteca account. They may also take delivery of their coins, at any time.
Sellers may also sell their coins to Banco Azteca, on-line, with a credit to their account.
Buyers may also continue to purchase their silver coins at the teller windows of Banco Azteca and take immediate physical possession of them, and sellers may also bring their coins to the tellers, for immediate sale.
Those who already own coins may bring them to the Bank for deposit in "Silver in the Vault" accounts.
Since the "Libertad" coin is legal tender, albeit with restrictions which impede its use as money, the purchase and sale of these coins causes no Value Added Tax, which exists in Mexico.
All the details will be made public very shortly and this service should be in operation throughout Mexico in the course of the month of February, after an initial pilot run and gradual introduction to all branches.
This service is available only to Mexican residents.
This is an important preparatory step to the possible monetization of the "Libertad" ounce, which is the objective of the Mexican Civic Association Pro Silver. A Bill to this effect will shortly be presented in the Mexican Congress. There is vast popular support for this Bill; the only opponent, the Central Bank, may be hard pressed to defeat its approval.
Once monetized, the "Libertad" ounces held in the custody of Banco Azteca would acquire an ascertained monetary value, closely based on the value of silver; the monetary value would rise as the price of silver in pesos rises, but not be reduced in the event of a fall in the price of silver. (At present, the value of the "Libertad" ounce fluctuates in accord with the international price of silver.)
After monetization, these custody accounts in Banco Azteca would immediately serve as unquestionable collateral for instant loans by the Bank, at low interest rates. The silver would remain the property of the borrower (who has borrowed fiat pesos) but blocked in guarantee against the payment of the loan. Once the loan is paid back, the owner of the silver can once again dispose of it.
The monetization of the silver ounce would provide a great incentive to saving, without the need to entice the saver to save by means of paying interest on his banked funds, which are actually a loan to the bank holding the depositor's funds.
This would ensure that the population of Mexico would always have at hand at least a small amount of real, tangible money savings outside the scope of the banking system which, like banking systems throughout the world, is vulnerable to unexpected financial events.
The monetization of the silver ounce would thus place silver permanently in circulation in Mexico, in parallel with paper money and bank deposits. The fiat peso would remain the official currency of the country.
Hugo Salinas Price, President
Asociación Cívica Mexicana Pro Plata, A.C.
Hugo Salinas Price is a Mexican citizen, born in the USA of an American mother and a Mexican father. He is 81 years of age. Married for 58 years to a Mexican wife; they have 18 grandchildren. He dropped out of three universities: Wharton, Monterrey Tec (Mexico) and National Autonomous University of Mexico. Hugo started out in business life in 1952 as a General Manager of a tiny company manufacturing radios in Mexico City. He was 20 years old at the time and soon learned about the importance of having funds to meet the pay-roll every Friday. The company was owned by his father, and gradually turned into a manufacturing company with its own retailing branch, selling all sorts of consumer goods, including its own TVs. His website is www.plata.com.mx.