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Police issue warning over 'Liberty Dollars'

Discussion in 'Legal' started by rick_reno, Mar 1, 2006.

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  1. rick_reno

    rick_reno member

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    Anyone seeing these in your area?

    http://www.bonnercountydailybee.com/articles/2006/03/01/news/news01.txt

    PONDERAY -- They may look like the real thing, but Liberty Dollars now circulating in the greater Sandpoint area are neither legal tender, nor can they be accepted at banks or deposited in savings and checking accounts.

    That means you can stuck holding a bundle of worthless currency the way the Co-op Country Store did when it recently accepted eight silver Liberty Dollar coins for $160 worth of merchandise.

    The Ponderay Police Department is not quite calling Liberty Dollars a scam, but it wants area merchants and employees to keep a sharp eye out for silver coins stamped "Liberty" on the face and "$20" on the back.

    "No one is required by law to accept Liberty Dollars as payment," said Ponderay Police Chief Mike Hutter. "They're issued by an organization called NORFED, which is an acronym for National Organization for the Repeal of the Federal Reserve Act and Internal Revenue Code.
    "The coins are erroneously believed to be legal tender."

    Hutter said that NORFED does not guarantee that the Liberty Dollars can be converted back at standard U.S. currency.

    "The coins are only worth the current marked price of silver, if you can find a buyer," he added. "In most cases, they're worth half the face value of the coins."

    As of Feb. 28, market value of silver was less than $10 per ounce. The Liberty Dollars passed at the Co-op had an assumed face value of $20 for the one-ounce coin.

    "People do use them for bartering purposes, but we do want to stress that they are not legal tender," said Hutter.

    Legal tender is defined as legal valid currency that may be offered in payment of debt and that a creditor must accept.

    NORFED supporters maintain that by purchasing the Liberty silver certificate, buyers not only receive an instrument that is backed by silver, but also declare themselves as members of a movement to repeal the Federal Reserve Act.

    They also contend its presence in the marketplace "limits the amount of money the government controls."
     
  2. eab

    eab Member

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    One of my friends got a bunch of thease about a year or so back. Started using them for money and stuff. His were only worth about $10.00 and said $10.00 on them. I told him he was nuts, course hes one who belives in no federal reserve and that we should have never left the gold/sliver standered. Any way, I would never except one as cash payment. I will take my "worthless" paper money accepted the world over any day of the week.
     
  3. O.F.Fascist

    O.F.Fascist Member

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    I like silver coins, personally I would rather barter silver eagles for near spot price (almost $10 an oz now) than to have a 1oz coin and claim it was worth $20.
     
  4. Scottmkiv

    Scottmkiv Member

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    The problem with all of these alternative coins is that the face value is way higher than it should be based on weight. Otherwise, I would say they were great.
     
  5. Lucky

    Lucky Member

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    I'm just guessing, but don't the founding documents of the United States of America define specifically what a dollar is? IIRC from econ it's sort or like drachma, I'll look it up. It might be that these people figure out the constitutionally-defined weight of silver that a dollar represented, and are trying to re-institute it.

    If that's what they're doing, then I rather support them.

    m-w.com
    "
    drachma
    One entry found for drachma.
    Main Entry: drach·ma
    Pronunciation: 'drak-m&
    Function: noun
    Inflected Form(s): plural drachmas or drach·mai /-"mI/; or drach·mae /-(")mE, -"mI/
    Etymology: Latin, from Greek drachmE -- more at DRAM
    1 a : any of various ancient Greek units of weight b : any of various modern units of weight; especially : 1DRAM 1
    2 a : an ancient Greek silver coin equivalent to 6 obols b -- see MONEY table
     
  6. wdlsguy

    wdlsguy Member

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    Considering the fact that the silver content in a pre-1965 U.S. dime is currently worth $0.70, I'd say your friend is right.

    ($9.78 * 0.715 * 0.10 = $0.699)
     
  7. eab

    eab Member

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    The Constitution, does not say what a dollar should equal. It doesn't even mention it.

    For the first couple decades we had no centeral bank and there was many independent banks all issuing there own money, then these banks would go under, people would lose there money, it was pretty caotic. Then the central bank was setup to put a end to it. The federal reserve was setup when the goverment put an end to the gold standerd and went to the silver standerd, the silver standerd was taken away some time in 1970. This was done for various reasons. Any way your money is "worth" only what the US goverment says its worth. It delves into politics from here which I am not up to speed on to comment on what I belive is right or wrong and have no feelings on the issue as of now.
     
  8. Lucky

    Lucky Member

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    In Canada we make most of our coins out of steel now. And the Mint is considering following New Zealand's move to eliminate the penny altogether. If penny's were still made out of copper, which they aren't, the copper content would be worth the same as the coin. The real reason they want to get rid of pennies is because of the expense in minting and moving the damned things around.

    But it should be mentioned, that a Federal Reserve Note is not money, it can be exchanged for money, though. Old ones used to say they could be exchanged for the defined amounts of gold, or something along those lines.

    This might be why the people minting those dollars are not being arrested, because they are not breaking the law. If they said their coin was worth 20 reserve notes, lol, then it would probably be illegal.

    ""No one is required by law to accept Liberty Dollars as payment," said Ponderay Police Chief Mike Hutter. "They're issued by an organization called NORFED, which is an acronym for National Organization for the Repeal of the Federal Reserve Act and Internal Revenue Code."

    In Canada people are not obligated to take anything as payment. If a store doesn't want to take credit cards, debit cards, cheques, they don't have to. If they don't want to take bills larger than $20, they can just turn you away. If they don't want a bag of pennies, they don't have to take them.


    "The Constitution, does not say what a dollar should equal. It doesn't even mention it."

    Are you sure? I looked it up, and there is something called the coinage act, from 1792.
     
  9. ctdonath

    ctdonath Member

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    Original text defining a US Dollar in terms of silver: "each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and ten sixteenth parts of a grain of pure, or two hundred and eight grains of standard silver."
     
  10. Lucky

    Lucky Member

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    "For the first couple decades we had no centeral bank and there was many independent banks all issuing there own money, then these banks would go under, people would lose there money, it was pretty caotic.:

    Eab, what you describe is what happens when you allowed banks to operate with 'fractions' of their 'reserve'. This means, in layman's terms, that they don't have the money they are supposed to have. A bank can make money, simply by holding it, paying interest to it's lenders, and charging a higher interest rate to people who borrow it. Right there, a bank could exist and profit. It would provide a service, it would be a hub where people who want to lend money and people who want to borrow money go, and both pay the bank a premium for it's services.

    But bankers wanted more money, faster money, easier money. So they lent more money than they had. Yea, that can get chaotic. Just ask Ponzi. Thus after banks toyed with people (ie financially ruined entire areas) every few years, for a long enough time, the public was willing to accept a 'federal reserve'. This is simply a place where all the banks get together, they actually own 'shares' of the FED, iirc. And if one bank is caught with it's pants down, because it was cheating and lending more money than it ever had, the other banks in the fed lend it money to help it out.

    Me, I've got some gold, and some silver, but not enough to retire on! Some of it is just paper, anyway, certifying that I own a couple bars in a vault somewhere. Lol. The head of the econ dept I went to told us that his life savings was invested in material things, like old cars. In fact many econ profs seem rather skeptical about long-term investments in paper... Might have something to do with the perpetual failure of 'paper' investments to stand the test of time, in every country of the world...
     
  11. mp510

    mp510 Member

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    The Spanish Milled Dollaris only about .85 of an ounce (as your math suggests). I know that is about correct, because I own both a spanish Milled Dollar, and modern one ounce Silver Eagles (gov issue).

    I don't know the reason behind the arbitrary value, but it helps keep an item stable (if it was real currency) during times when the spot changes.
     
  12. brickeyee

    brickeyee Member

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    "Any way your money is "worth" only what the US goverment says its worth."

    Or what you can get for it in trade for goods or services.
    The fact that a dollar bill has no intrinsic value is rather secondary to commerce.
    It is a standard of exchange. Nothing more, nothing less.
    There is simply not enough gold and silver to back the amount of currency required for our economy.
     
  13. xd9fan

    xd9fan Member

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    eab:

    I must be crazy then because IMHO there is a golden rule of the ages....."he who has the most gold makes the rules.." The US taking itself off the gold standard was a great way for the federal Govt to get away with increasing the size and scope of their budget and not be tied down by anything. Now the dollar's value is what the US says it is.........pretty hollow. Taking us off the gold standard pretty much caused inflation.

    I dont like the Fed reserve....but then I not a big fan of statist centralized planning either.
     
  14. Lucky

    Lucky Member

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    "The fact that a dollar bill has no intrinsic value is rather secondary to commerce."
    -In the movies I see people talk about 'pink slips' for cars. Those pieces of paper have no intrinsic value either...


    "It is a standard of exchange. Nothing more, nothing less."
    -I think it's slightly more, involving power and control.


    "There is simply not enough gold and silver to back the amount of currency required for our economy."
    -I don't understand. I'll have to think about that one. Off the top of my head I'd say that would result in price deflation, with no effect on real GDP.

    Right now I feel that currency doesn't limit an economy, though, it simply translates values in the place of barter. But the currency itself must not replace value, it must represent value. Ergo the bank must have $1 million of value in posession if it prints $1 million in bank notes, in my opinion (not law). The bank could own cattle or real-estate or apples, but gold seems easier, impossible to counterfeit (unless there is some material which can be irradiated and then decay into gold?), and it doesn't degrade over time (I think).
     
  15. wdlsguy

    wdlsguy Member

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    If Washington, DC vanished in a mushroom cloud tomorrow, which would you rather have: $1,000,000 in Federal Reserve Notes, or 1776 ounces of gold? :scrutiny:
     
  16. Art Eatman

    Art Eatman Administrator Staff Member

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    http://www.kitco.com will give you the going rates for precious metals.

    I think silver's up to $9.75 per ounce, today. Gold at $561 or some such.

    U.S. "junk silver" has 0.712 ounces per $1 of face value, for dimes, quarters and halves minted in 1964 and earlier. Silver dollars are 0.82 ounces of silver, IIRC.

    There is always some group protesting the Federal Reserve and the IRS and some of them do this silver coin "Eagle" thing. Regardless of one's sympathy in philosophic fashion, stay away. Way away. The coinage is worth no more than its intrinsic content. The Fed and IRS ain't going away, either. Irvin Schiff is going away, not IRS.

    And this thread is off topic, anyhow. I'm letting it run on account of the warning-value.

    :), Art
     
  17. sithanas

    sithanas Member

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    I have no idea what "pink slips" for cars are. But I agree that the lack of intrinsic value of the dollar is indeed secondary to its effectiveness as a unit of exchange. What is important to its acceptance is the fact that nearly everyone in the world is willing to accept it, and the fact that the United States government has in its possession a very large number of guns.

    The Federal Reserve dollar exists because a system based on a "fixed" currency (like silver notes or the pound sterling) didn't, and doesn't, provide enough control over inflationary and deflationary effects on an economy. The idea of price stability and control was seen as more essential to the country than the guarantee of the value of the currency.

    Definite price deflation. Real GDP, by definition, wouldn't change because since it's "real" it's corrected for inflation or deflation. Having the currency backed by gold/silver would cause problems, however, in the sense that it would significantly limit the ability to control inflation and deflation levels, as well as change money markets significantly.

    Other than the fact that you can't make gold, and that gold doesn't decay (both true), I have absolutely no idea what you just said.
     
  18. gc70

    gc70 Member

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    Some people insist that paper currency isn't "real money" because it is not specifically mentioned in the Constitution, while coinage is:
    For those who feel that way, so be it. For my part, ATM cards and credit cards are also not mentioned in the Constitution, but they work fine for my normal purchasing needs.
     
  19. Lucky

    Lucky Member

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    Moderator was right, very o/t! Sorry:eek:

    Fractional reserve banking is where a bank lends more money then it has. When they play with the money supply like that, that is a real source of inflationray pressures. You have to draw 3 graphs and stack them up and connect the dots, though, it's quite involved. How can they lend more money than they have? Simple, they print a 'note' (bank note, federal reserve note) and write a value on it, and pray that all the notes they write don't come back at once. As long as people believe your note is worth what it says it's worth, they treat it like money. But it is not money, it's a promise that the money is available.

    IRL gov'ts have to choose what economic ill to fight #1 inflation, or #2 unemployment. They almost always choose #1. But in the strict economic sense, there is no point in fighting inflation. It has no real effect on the economy, Real with a capital R, wages and prices all rise and fall together, so you'd always be able to afford the same car and food. There is no need to 'fight' inflation, ergo that argument against gold-backed currency falls on its face. When you see 'rampant' or 'super' inflation, guess what is happening? - 'Brilliant' leaders are making a select few people VERY rich, simply printing money as fast as they can. Whether they are in collusion with the guys who walk around snapping up bargains, that's hard to say.

    But never forget, the difference between a $100 bill and toilet paper is often a few days of inflation. (if you have inside knowledge you can make money though, if inflation 'hits' here some day I plan to clean up right along with the big boys, cars and real estate would be affordable to anyone with a couple ounces of gold)
     
  20. antarti

    antarti Member

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    Sure there is, at, say, $5,000.00/ounce valuation.

    If what you are trying to say is that expansion in the money supply would be restricted (because you could only expand supply by mining more gold), then my response would be that's the whole point of a non-fiat currency.

    WHOA! That's some dangerous thinking! Lots of folks are on fixed incomes... what do you think happens over time as inflation in prices occurs to them? Wage inflation is NOT a given!

    What's your reaction today when you think "I'm gonna have $2 million in my 401K at retirement"? YIPPEEE.

    What happens in 25 years (given 2-3% inflation per year) when you retire with that $2 million? Not so cheery now that 50-75% of that is, effectively, gone are you? Hint: It's called robbery!


    This is either the best joke I've heard all day, or you're a central banker.

    A "hard" (gold) monetary standard returns us to more traditional boom/bust cycles, where busts are short and steep, and booms ramp up slower and run longer. The last bust under our fiat system was really 1929, and then we were the world's creditor and a far more capable people. Things like the derivative and carry trades are the bane of fiat systems, just wait until those start to unwind.

    All that said, passing off $10 in silver as "twenty dollars" is going to land that guy in jail for fraud under any monetary system, no matter who minted those coins or what "sign of the sovereign" is impressed on them.
     
  21. Lupinus

    Lupinus Member

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    this makes me wonder how many people think we would be better off returning to a gold/silver standard.

    Frankly, I haven't sat and thought long enough to really make an informed decision.
     
  22. sithanas

    sithanas Member

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    Guilty as charged. I chalk it up to an economics professor who's very fond of the Fed. However, the system does work pretty well.
     
  23. gc70

    gc70 Member

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    Can you explain - in somewhat simple terms?
     
  24. Herself

    Herself member

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    Nawww....

    The .22 Long is the Dime of the Future! ...I'd say you heard it here first, but it's old news.

    If the Norfed stuff sells for the spot price plus a small, um, can't remember the word, but it covers the minting costs, along with the extra you end up paying for buying small amounts, then it's not so bad. If they're sellin' for 2X what, say, fine silver rounds cost, that's iffy. Why pay for the attractive stamping? What's that get you? Artistic value?

    The present price of official (ish) U. S. Mint silver "dollars" and gold "twenties" runs at about 10X the face marking, tracking the actual prices of these commodities closely. And that's what your dollars would be worth in buying power, if the States were still on a hard-money standard: pennies would be dimes and a paperback book would cost 49 cents. Doesn't seem to be happening.

    But .22 rounds have about the same swap value thy have always had: not much, but some. My guess is they'd be a pretty stable currency... :)

    --Herself
     
    Last edited: Mar 3, 2006
  25. O.F.Fascist

    O.F.Fascist Member

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