-- Posted 14 July, 2005 | | Source: SilverSeek.com
From the news on this Bastille Day:
July 14th - AcryMed Inc, a medical device company specializing in wound care and infection control technology, today released research findings that show silver to be effective in combating MRSA topically, a potentially deadly infection that is raising growing concern among the medical community. MRSA (Methicillin-Resistant Staphylococcus aureus) is a type of germ dubbed a “super bug' due to its resistance against penicillin and other common antibiotics.
Silver kills bugs dead. Not silver bugs, of course, but micro bugs. The Greeks and Romans knew it, even though they didn’t know about bugs or “super bugs”. Your grandmother knew it – that’s why she used to drop a silver dollar into the milk to keep it from spoiling. And while certain bugs have been able to adapt to resist the finest antibiotics man has developed, I have not heard of one that has been able to develop a silver resistance.
Resistance to silver seems unique to humans.
On the one hand, it’s ironic, because silver has proven to be one of the most valuable metals on God’s green earth. It’s the finest conductor of electricity of all the metals; it’s used in 90% of solar panels; it coats the bearings of jet engines where failure would be catastrophic. It seems that we can’t live without silver.
But it seems we can’t live with it, either, at least not in its most valuable use: money.
According to the silver institute: “Demand for silver is built on three main pillars; industrial and decorative uses, photography and jewelry & silverware.” There is little demand for silver for the use that mankind has longest enjoyed its value, that of a medium of exchange that also stores value. We have become, in that sense, silver-resistant.
But perhaps it is fate that today is Bastille Day, the beginning of the French Revolution that took the head of the French King and symbolically the heads of every other King in Europe. Our modern political world is built on the French Revolution, but our financial one is built on a lesser-known event that happened in the same nation shortly before: the Mississippi Scheme.
In 1716, John Law approached the French King with an idea for solving the monetary crisis caused by Louis’ profligate spending: credit and paper money, organized by a central bank.
According to Mackay:
“He asserted that a metallic currency, unaided by a paper money, was wholly inadequate to the wants of a commercial country, and particularly cited the examples of Great Britain and Holland to show the advantages of paper. He used many sound arguments on the subject of credit, and proposed, as a means of restoring that of France, then at so low an ebb among the nations, that he should be allowed to set up a bank, which should have the management of the royal revenues, and issue notes, both on that and on landed security.”
In short, Law created a central bank that acted in the name of the king and issued notes backed by silver. In fact, as the circulating currency of the nation was being continually debauched by the Royal Mint, the notes rose in value compared to the silver which they represented. Commerce picked up, and a national ‘prosperity’ began.
It didn’t take long for the government to reason that the silver itself was less important than the notes and that paper money was itself all the money that a nation needed. Squeezed on one side by crushing debt and beckoned on the other by the free money the printing press provided, the French King began a credit expansion, issuing millions of livres’ worth of notes that had no backing at all. France became resistant to silver.
With newly-printed money in hand, the nation was grabbed by a frenzy of speculation, speculation which found its largest target in – but was not limited to - Law’s Mississippi Company, established to manage trade to the French regions of the South Seas, the East Indies, and China. New bonds were issued, to be purchased by those with handfuls of new money. The new wealth made its way into every pocket, commerce picked up, and old women, taxi drivers, and cobblers wagered years’ worth of income on the rise and fall of the bonds. Land prices throughout Paris increased in leaps and bounds, and one old hunchback, it is said, gained significant sums for lending his hump as a writing-table to the crowds of speculators. The endless wealth, created by unbacked debt issuance, attracted thieves and muggers and crowds in such volume that the streets had had to be cleared each night by a troop of soldiers. Wages grew fourfold, new houses were constructed, and economic growth seemed the birthright of the French genius.
Until the end came. The scheme, being based on nothing but paper promises, collapsed. Those with new mortgages on houses and farms lost everything. The nation was bankrupted, as was a significant percentage of its inhabitants, and that national bankruptcy laid the foundation for the revolution that took place a few years hence.
What has this to do with silver?
Everything, because not everyone was silver-resistant.
It is said that one Vermalet, a jobber, smelled out the coming collapse and used his profits to purchase specie, gold and silver, which he quietly hauled out of the country in a trailer full of horse dung. He lived happily ever after. Many of the wise did the same thing, trading in the soon-to-be worthless notes for coin, which they secreted away to England or Holland.
It didn’t take long for the government to react to the drain of real money. A law was published in 1720 that limited the silver any person could hold. Soldiers invaded homes and collected jewelry, precious stones, silverware, anything that held its value in the face of the collapsing paper money. Servants ratted out their masters; citizens spied on one another. Coin above just a few cents became illegal tender, but at the same time, no one wanted to take the paper money, since they could be certain that there was now no coin backing it. France found itself without a currency and without the coins necessary to create one. The nation ground to a halt, defaulting on the hopes and dreams of millions of speculators and taking their lives and livelihoods in the process.
But those who saw the storm coming saved themselves. They saw silver for what it was: wealth worth far more than the paper promises of government; real wealth unencumbered by the debts of governments.
Silver can kill a super bug, but silver can save a silver bug, especially when credit issuance, unbacked paper money, inflation, and economic chicanery rule the day.
That which does not kill us makes us stronger, and silver has the power to do both.
Happy Bastille Day.
Bill Hoyt
July 14th, 2005
Bill Hoyt a Investor Relations Manager of Timberline Resources Corp (TBLC). Views expressed herein are purely his own, but he invites you to share them if you wish. Visit his web log, El Borak’s Myopia, for daily commentary and responses to reader email.
-- Posted 14 July, 2005 | |
