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Support the Montana Sound Money Bill

By: Jason Hommel, Silver Stock Report

-- Posted 24 March, 2009 | | Discuss This Article - Comments: Source:

It appears Montana may need your help in getting them to adopt the HB639 Sound Money Bill.  Montana needs articulate and wise people to contact a few key legislators to help them understand why gold and silver are important as money.

Representative Joel Boniek writes that Reps Wilmer and Barrett won't vote for it, and explains their 4 reasons why they won't, as they have been educated against silver and gold:

Hello all,  I just had a long talk with Rep. Wilmer. I mostly listened, and took notes. I am trying to represent her views fairly.  She will not vote for HB639.  She has some economics training and has been conferring with Rep. Dick Barrett, who has a Ph. D. in economics.  So, I gather, the key to this is Rep. Barrett.  I asked Rep. Wilmer if she had read any Von Mises, Rothbard, Sennholz or Hyeck.  She indicated some knowledge of them.  (?)  She said that Karl Marx had written the best treatise on economics, but people get (diverted) by his politics.  Marx allegedly had a clear understanding that it is labor that makes raw materials profitable, and capital.  These are needed to add value.  Investors are rewarded because they take the risk.  She clarified 4 points of objection to HB639:  (her thoughts follow as I understand them) 1. G/S are just another "in kind" method of payment.  Why not use another?  (chickens, pork bellies)  2. G/S are just a store of value. They do not appreciate.  If you store value, it should appreciate along with the increase in goods and services, and the increase in inflation and productivity.  She allowed that a short term store of value was not bad, but its value depended on the time frame.  She talked about, how does it perform relative to other values, and when you want to exchange it.  She says that G/S have value only because of our beliefs.  Sea shells had value in some economies..  Or wampum.  3. The bill had/  there was no discussion on the role of money/currency.  Money is just a medium of exchange.  (I got the impression that she thought, why not just use paper money?  It is just a medium of exchange?)  4.She objected to the premise that there is something wrong with (our) money.  This refers to Section 1. Findings of the Legislature.  My impression from this was that the idea of political and economic instability, chronic depreciation, incremental confiscation of property, preserving sovereignty, and independence, and promoting the people's welfare, security, and economic prosperity were not  realistic concerns.

     She is in favor of central banks, (since) they are independent of political interests.  Things are more stable if the currency is stable.  ( I know!  Try to be calm.  I was just listening for some way to find clarity in her view)  The value of currency is determined by the Federal Reserve.  Psychology is the biggest factor in market stability.  We have had a century of learning about economics.  (we need to have) confidence in the institutions that manage markets. How to find balance between lessening consequences and increasing competition?  Oligopolies are bad.

     So, I asked, if this bill passes, what do you see as the effect?  She indicated that she saw no effect, just that it would cost thousands of dollars to set up.

    Earlier today she gave me an article from ""   "Keith Olbermann gets tough with bailed out banks-Enough!"  You might read it and see the same contradictions that I saw between her thinking and the problems presented in this article, especially  the call to "Break up the banks,"  and "bust the trusts".  On the last page there was a pointed reference to "naked, unhindered robbery of the public coffers" by those in corporate boardrooms.  (Yes, this is child's play compared to the robbery of us by the FRS)

  There you have it.  I am taking these hours to inform you because it is important, not because I have time.  I am way behind getting ready for tomorrow.  I hope you can do something with this info.  Joel  (PS.  As I see it, for some, there is no cause to worry.  Life is good.  Enjoy)

Representative Joel Boniek
House of Representatives
PO Box 200400
Helena MT 59020

To address 6 points mentioned above by Rep Barrett or Rep Wilmer:

1.  Silver and gold are useful as money because they are more efficient than other physical things of value. Silver and gold are easy to trade because they are lightweight for the value, they have a narrow spread to buy and sell, they are divisible and fungible so each ounce is like another, nearly impossible to counterfeit, a luxury item, and not perishable.

2.  Silver and gold are a better store of value now, because they are relatively cheap now than at other times in human history, and thus stand a better chance of going up in value in the future from here.  Silver is less easy to sell than gold, but even Warren Buffet was able to sell his 130 million ounces when he wanted to, as I pointed out to Thom Calandra who visited with me this weekend.

3.  The role of money is simple, to encourage trade, which encourages the division of labor, which encourages production, which encourages wealth creation.  When paper money falls in value, it robs productive people, and discourages production, and impoverishes us all.

4.  Paper money today has no backing of gold and silver at all, and could easily return to the intrinsic value of the cost to create it, which is 3 cents to make a $100 bill.

5.  Nobody, not even central banks, should have a monopoly on making $100 bills for 3 cents.  Nobody should be able to do that.  Central banks that have the government granted monopoly power to make a $100 bill for 3 cents, and then loan it out at 6% interest, for $6 per year, is indeed the biggest political interest that exists in our day.

6.  I believe the primary effect of this Bill will be to bring real wealth to the people of Montana, which will help them out economically speaking, while the dollar continues to fall in value due to the massive bail outs that have nearly doubled the money supply of the U.S. in the last year, as the total cash and bonds in the banks, M3, was $14 Trillion, and the bail out promise a total of over $10 trillion so far. 

The side effect of increased monetary demand for silver will help the price of silver go up a bit, and increase the stability of the value of silver.  Currently, investment demand for silver is about 50-100 million ounces per year, out of about 600 million ounces of mine supply, and a total market of about 900 million ounces if you include all scrap and government selling.  I would give a wild guess that if Montana adopted this bill, it would cause a demand of very roughly about 5 million more ounces of silver per year, and would have an almost negligible effect on the price of silver, but would put a bit of a strain on the U.S. mint, and their suppliers which made about 20 million ounces of silver in the last year.  Currently, in the past year, the U.S. Mint has had trouble getting enough blanks from their suppliers to meet demand of 20 million ounces, and so the U.S. Mint is rationing silver Eagles.

How to contact Rep Wilmer (D):

How to contact Rep Dick Barrett (D):

Others to Contact, as listed here:

Members of the House State Administration Committee:
Rep. Himmelberger---Chairman---TOP PRIORITY
Rep. Wilmer----PRIORITY
Rep. Washburn
Rep. Van Dyk----PRIORITY
Rep. Phillips-----TOP PRIORITY
Rep. Malek----PRIORITY
Rep. Maclaren
Rep. Ingraham
Rep. Hendrick
Rep. Hands----PRIORITY
Rep. Calf Boss Robs----PRIORITY
Rep. Caferro----PRIORITY
Rep. Brown---already supports HB639
Rep. Boniek----already supports HB639
Rep. Belcourt----PRIORITY
Rep. Bean
Rep. Dickenson----priority
Rep. O'Hara

Look up the priority names above here:

Larry Parks of replied:

Re: Representative Wilmer's reference to Karl Marx

Even Karl Marx was vehemently against paper money, because it violated his Labor Theory of Value (LTV). The premise of the LTV is that things have value because of their labor content.

Since it takes no more labor to create a $100 bill as compared to a $1 bill, Marx took the position that there is no  value in paper money. In fact, he was in favor of gold-as-money partly because of the labor necessary to get gold out of the ground and refine it.

The reason gold is chosen as money (when it is available) cross-culture and cross-time is that gold minimizes the transaction costs of transferring wealth over time. Moreover, the monetary metals, gold and silver, are the only commodities for which there is more than a year's worth of production above ground. Up until the middle of the 19th century, there were no industrial uses for silver. Today, silver is largely an industrial metal.

Gold, on the other hand, has minimal industrial uses, and there is 60 year's worth of production supply above ground. Thus, gold is the only commodity for which pricing arrangements remain stable into the future regardless of whether the mines close down or new gold deposits are discovered.

In addition, as Paul Volcker so eloquently pointed out, a global economy requires a global currency. Volatility in foreign exchange rates destroys the international division of labor, which reduces everyone's standard of living. Gold-as-money solves this problem.


Larry Parks


Videos of HB639 hearing:  -----part one  -----part two  -----part three  -----part four  -------part five  ----part six  --------part seven  ------part eight  --------part nine  -------part ten


    Jason Hommel

    In case you miss an email, check the archives: 

    You can buy silver at my auctions at
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    -- Posted 24 March, 2009 | | Discuss This Article - Comments:

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