Silver Money Makes A Comeback

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A while back one of our threads turned into debate over whether or not returning to a gold standard would be beneficial. This is an interesting follow up.





http://www.sierratimes.com/03/02/13/arnorfed.htm

Silver Money Makes A Comeback
By The Sierra Times

A small company in the Ozarks is offering business the opportunity to bring Silver Money back into circulation, and has chosen NORFED’s Liberty Dollars for its vehicle. Ozark Monetary Services of Berryville, Arkansas, has created a program that ensures that any business that accepts Liberty Dollars cannot lose money for doing so… and it’s gaining popularity across the country, with some potentially heavy hitters looking it over closely. OMS Spokesman David Cato confirms that the company has had discussions with a couple of nationally known marketing giants, but declined to offer specifics.

“What we’re doing is promoting the program to all businesses, and it’s so simple that it’s basically a no-brainer,†says David. “Any business that signs up for the program agrees to accept Liberty Dollars, and return them to their customers in change. This results in two things happening: first, the customer will in all likelihood return to the store to spend the money again, and other customers who hear about the new money will come to learn more and get some for themselves. For each Liberty Dollar given out in change, the merchant retains a dollar in Federal Reserve money, what we’re all used to.â€


Asked about the possibility of merchants being overwhelmed by Liberty Dollars, which can be traded with customers, but can’t be deposited to most banks or used to pay government debts, David explained, “That’s what the OMS Program is all about; anytime they get too many to keep in local circulation, OMS will buy their Liberty Dollars back from them at full face value.â€


The community benefits, as well, since OMS and others who promote the Liberty Dollar will occasionally offer the local public the opportunity to exchange their regular money for Liberty Dollars at a discount, gaining as much as ten percent in spendable value on the amount they choose to exchange! Christmas and other holidays, as well as graduation time, are likely candidates for the special exchanges. The result is an increase in sales, and thereby an increase in profits, for those businesses who participate in the program, and there are even ways for merchants to purchase them at discount in order to make even more money while making change.


Liberty Dollars are paper “Silver Certificates†which are backed by silver, and there’s even a solid silver ten-dollar “Silver Liberty†piece. Merchants subscribing to the program can accept either the Silver Liberty, or the Liberty Dollar Silver Certificate, which is similar to the “bills†we’re accustomed to and more easily carried around. Either way, customers are almost certain to return to where they got the new money when they need something that merchant sells, so customer loyalty is a direct result of the program.


As for cost, there isn’t any. Merchants can sign up without any cost, and enjoy all of the benefits and guarantees, which are made in writing.


“This isn’t about making money,†says David, “although that’s one benefit of it, and the merchants who participate will see some pretty impressive increases in their sales and profits. What it’s really about is getting real value back into the hands of the Amerian People, and making that value an exchangeable commodity in today’s marketplace.â€
 
Intersting idea... but after looking at NORFED's site, I'm not impressed. It takes the fatal flaw of a metallic standard and actually institutionalises it. The notes are set at approximately double the spot value of the metal. If and when the metal passes the note value, they actually promise they'll devalue their currency to maintain this 1:2 ratio (give or take).

In short, it looks to me like all they're doing is taking over the sovereign's traditional role of devaluing the currency to make an extra buck. Except instead of promising they wont do such a thing, they promise they will. I don't know if that's better or worse... :confused:

Now, if they issed these things in actual metal amounts -- ounces, grams, whathaveyou... I'd be supporting it.



-K


Hrm.. on second hand, I withdraw that objection... I misread their exchange policies on revaluing. Hrmm.. maybe... could work. Definately more user-friendly.. have the think about that one.. interesting idea.
 
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Interesting concept, but I too, immediately had the same concern that Kaylee had.

The pro? The price of silver and gold has been RELATIVELY stable for the last 20 years or so.

The con? If the price of bullion goes insane, as it did in the late 1970s, the program could have serious problems.

With gold and silver now being traded on the commodities market, as opposed to the late gold-standard economy where the price was controlled by the government, not the market, a highly inflationary economy could wipe them out.

I just hope that not too many people are putting everything they own into this.

And why are most of the businesses "redemption" centers?
 
I had seen the NORFED site before. It looks like a good system, but I haven't actually gone out and converted my saving to Liberty Dollars. If the article's mention of "nationally known marketing giants" getting involved is true, that would be great, because what they really need is a critical mass of users to gain acceptance.

The drawback, as alluded to above, is that Liberty Dollars are supposed to match Federal Reserve Notes at face value. If there's a period of inflation or deflation (or other change in value of silver/gold relative to FRNs), the Liberty Dollars have to be reissued to match the new FRN value. For example, if you have the gold certificate ($500 Liberty Dollars) in your pocket today, you could buy a nice handgun with it. If the USA has a period of massive inflation and the FRN loses half its value, you can still buy the handgun, but NORFED will have to announce that its own currency has been revalued so that the gold certificate which was previously worth $500 FRN is now worth $1000 FRN (thus the motto "inflation-proof currency"). The certificate would still be redeemable for an ounce of gold, though. Confusing, but the alternative would be to force merchants to provide two sets of prices, one in FRN and one in Liberty Dollars.

The Digital Liberty Dollars (which I think are new since the last time I checked the site) solve the reissuing problem somewhat, but of course you can't carry them in your pocket. If you prefer electronic transactions using actual grams of gold, check out these sites:
http://www.goldmoney.com/
http://www.e-gold.com/
 
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