Anyone heard of libertydollar.org?

Basically it would be worth how much gold or silver is in the coin. A one dollar coin doesn't have much gold in it. Even a one dollar silver coin won't have much silver. The question I would have is how do you determine it's value if it is not 100% solid gold or silver.

 

The face value is meaningless. If it is 1 oz. of silver, then tonight it is worth $14.58. That is the current spot price as of a few minutes ago. If you paid $20.00 for that coin it would be a poor investment. There are plenty of 1 oz. silver coins out there that you can buy for spot plus a small premium. Check this site out
Monex

 

OK, but why pay $20.00 when you could pay $14.58?

 

There is city in New England that is issuing there own currency. I can't remember where, but the businesses got together with the city to do this. As I Remember, the city issues the money and the tourists and residents buy it for $.90. Basically it is a 10% discount. The catch is that you have to spend all the money in town because the "city issued dollars" are not accepted anywhere else. It keeps the money spent in town. the business can redeem the "city dollars at the city for $.90.

Is this similiar to what you want to do?

Maybe someone else has heard of this.

 

<div class='quotetop'>QUOTE(TheForce @ 2007 11 17 19:22) [snapback]541093[/snapback]</div>

Ok.

<div class='quotetop'>QUOTE(TheForce @ 2007 11 17 20:56) [snapback]541116[/snapback]</div>

Ah, but you can. Money has no value of its own, and is merely a convenient method of trade. Whether it is a chunk of metal, a piece of paper, or numbers on a screen, its only worth is what you can get for it.

 

<div class='quotetop'>QUOTE(hyo silver @ Nov 18 2007, 01:22 AM) [snapback]541143[/snapback]</div>

Yeah; selling something to someone is the best way to ascertain its value at that given moment, too.

I didn't research it yet, but the question seems to be, how the person buying these coins feels about the metals markets.

If someone, for example, finds a sunken ship with a LOT of gold and silver on it --which would then have a tendency to flood the market-- these coins could be worth significantly less than they are now, couldn't they?

 

<div class='quotetop'>QUOTE(TheForce @ Nov 18 2007, 03:37 AM) [snapback]541180[/snapback]</div>

Currently, what it can buy is determined by the value of the metal it's based upon --in the US, in USDollars-- isn't it...? I mean, theoretically I could exchange my Liberty Dollars for metal, then sell that for Euros or something...but, really...

It has no face value above the worth of the metal, at least currently.

I'd definitely be interested in examining another way of determining "value" ---especially for that which we can't really put a price tag upon--- but I'm seeing this as more of a smokescreen for Paul's political ends.

*Ron Paul really would like the US to return to the Gold Standard...wouldn't he?*

That, from what little I know, might be problematic today. Under that idea, if I walked up to the bank and said, "I want to return all my paper certificates, and get metal in return, now" you as the bank would HAVE to always be able to fulfill that request.

Generally, I don't think that it's necessarily a good idea, tying our currency to the metals markets and returning to the Gold Standard, which is what this is all about.

Also, to be perfectly honest, I'm not comfortable with Paul's "if it's not, verbatum, in the Constitution, then government should have no part of it" platform. This monetary proposal we're discussing, by its very association with him, would merit more research on my part.

 

<div class='quotetop'>QUOTE(TheForce @ Nov 18 2007, 03:37 AM) [snapback]541180[/snapback]</div>

How the Gold Standard Worked

The gold standard was a domestic standard, regulating the quantity and growth rate of a country's money supply. Because new production of gold would add only a small fraction to the accumulated stock, and because the authorities guaranteed free convertibility of gold into nongold money, the gold standard assured that the money supply and, hence, the price level would not vary much. But periodic surges in the world's gold stock, such as the gold discoveries in Australia and California around 1850, caused price levels to be very unstable in the short run.

The gold standard was also an international standard—determining the value of a country's currency in terms of other countries' currencies. Because adherents to the standard maintained a fixed price for gold, rates of exchange between currencies tied to gold were necessarily fixed. For example, the United States fixed the price of gold at $20.67 per ounce; Britain fixed the price at £3 17s. 10.5d. per ounce. The exchange rate between dollars and pounds—the "par exchange rate"—necessarily equaled $4.867 per pound.

Because exchange rates were fixed, the gold standard caused price levels around the world to move together. This comovement occurred mainly through an automatic balance-of-payments adjustment process called the price-specie-flow mechanism. Here is how the mechanism worked: Suppose a technological innovation brought about faster real economic growth in the United States. With the supply of money (gold) essentially fixed in the short run, this caused U.S. prices to fall. Prices of U.S. exports then fell relative to the prices of imports. This caused the British to demand more U.S. exports and Americans to demand fewer imports. A U.S. balance-of-payments surplus was created, causing gold (specie) to flow from the United Kingdom to the United States. The gold inflow increased the U.S. money supply, reversing the initial fall in prices. In the United Kingdom the gold outflow reduced the money supply and, hence, lowered the price level. The net result was balanced prices among countries.

The fixed exchange rate also caused both monetary and nonmonetary (real) shocks to be transmitted via flows of gold and capital between countries. Therefore, a shock in one country affected the domestic money supply, expenditure, price level, and real income in another country.

An example of a monetary shock was the California gold discovery in 1848. The newly produced gold increased the U.S. money supply, which then raised domestic expenditures, nominal income, and ultimately, the price level. The rise in the domestic price level made U.S. exports more expensive, causing a deficit in the U.S. balance of payments. For America's trading partners the same forces necessarily produced a balance of trade surplus. The U.S. trade deficit was financed by a gold (specie) outflow to its trading partners, reducing the monetary gold stock in the United States. In the trading partners the money supply increased, raising domestic expenditures, nominal incomes, and ultimately, the price level. Depending on the relative share of the U.S. monetary gold stock in the world total, world prices and income rose. Although the initial effect of the gold discovery was to increase real output (because wages and prices did not immediately increase), eventually the full effect was on the price level alone.

For the gold standard to work fully, central banks, where they existed, were supposed to play by the "rules of the game." In other words, they were supposed to raise their discount rates—the interest rate at which the central bank lends money to member banks—to speed a gold inflow, and lower their discount rates to facilitate a gold outflow. Thus, if a country was running a balance-of-payments deficit, the rules of the game required it to allow a gold outflow until the ratio of its price level to that of its principal trading partners was restored to the par exchange rate.

The exemplar of central bank behavior was the Bank of England, which played by the rules over much of the period between 1870 and 1914. Whenever Great Britain faced a balance-of-payments deficit and the Bank of England saw its gold reserves declining, it raised its "bank rate" (discount rate). By causing other interest rates in the United Kingdom to rise as well, the rise in the bank rate was supposed to cause holdings of inventories to decrease and other investment expenditures to decrease. These reductions would then cause a reduction in overall domestic spending and a fall in the price level. At the same time, the rise in the bank rate would stem any short-term capital outflow and attract short-term funds from abroad.

Most other countries on the gold standard—notably France and Belgium—did not, however, follow the rules of the game. They never allowed interest rates to rise enough to decrease the domestic price level. Also, many countries frequently broke the rules by "sterilization"—shielding the domestic money supply from external disequilibrium by buying or selling domestic securities. If, for example, France's central bank wished to prevent an inflow of gold from increasing its money supply, it would sell securities for gold, thus reducing the amount of gold circulating.

Yet the central bankers' breaches of the rules must be put in perspective. Although exchange rates in principal countries frequently deviated from par, governments rarely debased their currencies or otherwise manipulated the gold standard to support domestic economic activity. Suspension of convertibility in England (1797-1821, 1914-1925) and the United States (1862-1879) did occur in wartime emergencies. But as promised, convertibility at the original parity was resumed after the emergency passed. These resumptions fortified the credibility of the gold standard rule.

Performance of the Gold Standard

As mentioned, the great virtue of the gold standard was that it assured long-term price stability. Compare the aforementioned average annual inflation rate of 0.1 percent between 1880 and 1914 with the average of 4.2 percent between 1946 and 1990. (The reason for excluding the period from 1914 to 1946 is that it was neither a period of the classical gold standard nor a period during which governments understood how to manage monetary policy.)

But because economies under the gold standard were so vulnerable to real and monetary shocks, prices were highly unstable in the short run. A measure of short-term price instability is the coefficient of variation, which is the ratio of the standard deviation of annual percentage changes in the price level to the average annual percentage change. The higher the coefficient of variation, the greater the short-term instability. For the United States between 1879 and 1913, the coefficient was 17.0, which is quite high. Between 1946 and 1990 it was only 0.8.

Moreover, because the gold standard gives government very little discretion to use monetary policy, economies on the gold standard are less able to avoid or offset either monetary or real shocks. Real output, therefore, is more variable under the gold standard. The coefficient of variation for real output was 3.5 between 1879 and 1913, and only 1.5 between 1946 and 1990. Not coincidentally, since the government could not have discretion over monetary policy, unemployment was higher during the gold standard. It averaged 6.8 percent in the United States between 1879 and 1913 versus 5.6 percent between 1946 and 1990.

Finally, any consideration of the pros and cons of the gold standard must include a very large negative: the resource cost of producing gold. Milton Friedman estimated the cost of maintaining a full gold coin standard for the United States in 1960 to be more than 2.5 percent of GNP. In 1990 this cost would have been $137 billion.

About the Author
Michael D. Bordo is a professor of economics at Rutgers University. From 1981 to 1982, he directed the research staff of the executive director of the U.S. Congressional Gold Commission.


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From Wikipedia:

Advocates and opponents of a renewed gold standard

The return to the gold standard is supported by Objectivists, followers of the Austrian School of Economics, and many libertarians.

It is opposed by the vast majority of governments and economists,[citation needed] because the gold standard has frequently been shown to provide insufficient flexibility in the supply of money and in fiscal policy, because the supply of newly mined gold is finite and must be carefully husbanded and accounted for.[citation needed] [dubious – discuss] However the opposite is also believed. The paper money printed based on the finite amount of gold will go up in value as it becomes rarer.

Few economists[attribution needed] today advocate a return to the gold standard, other than the Austrian school and some supply-siders. However, many prominent economists have expressed sympathy with a hard currency basis, and have argued against fiat money, including former US Federal Reserve Chairman Alan Greenspan and macro-economist Robert Barro. Greenspan famously argued the case for returning to a gold standard in his 1966 paper "Gold and Economic Freedom", in which he described supporters of fiat currencies as "welfare statists" hell-bent on using monetary printing presses to finance deficit spending. However, as Federal Reserve Chairman from 1987-2006, he presided over the most expansionary period in US monetary history, in the process creating the stock market bubble of 2000 and the housing bubble of 2005. In debates with US Congressman Dr. Ron Paul, Greenspan has argued that the fiat money system of today has retained the favorable properties of the gold standard because central bankers have pursued monetary policy as if a gold standard were still in place. History will be the judge of whether that has indeed been the case.

The current monetary system relies on the US Dollar as an “anchor currency” which major transactions, such as the price of gold itself, are measured in. Currency instabilities, inconvertibility and credit access restriction are a few reasons why the current system has been criticized. A host of alternatives have been suggested, including energy-based currencies, market baskets of currencies or commodities; gold is merely one of these alternatives.

 

<div class='quotetop'>QUOTE(TheForce @ Nov 18 2007, 03:37 AM) [snapback]541180[/snapback]</div>

The problem I see is who is going to back the new dollar. You say that the dollar will always have a face value. Who is going to back the "face value"? The company? With US dollars the US backs the dollar. With a private company who backs the face value? If the coin has valuable "metal" in it, it will be worth what the metal is worth in US dollars. I would say that if you took a liberty dollar to a business and tried to put it off as a face value equal to dollars that would be dishonest because it is not tied to the dollar.

The only way it could work is if the "liberty dollar" had an exchange rate similar to foreign exchange rates, then that would work, but again what is backing this new dollar? Metal? If that is the case why reinvent the wheel. There are plenty of gold, silver or other metal coins already in existence. Why do you need a private company to create it.

The thing to remember is that all trade is basically bartering. Money is only a piece of paper and coins (gold and silver) are only pieces of metal that are used for bartering. The dollar and coins have no real value. They are only worth what someone thinks they are worth (like gold coins).

Let me give you the following example.

A meteor strikes the earth and the earth is in caos. People are starving. I have gold coins my friend has dollars and another person has food. Basically in this situation the gold coins and dollars are worthless. The person with food has something of real value. Now he may need to protect his food so he barters some of his food to a fourth person who has a rifle but no food. He barters some of his food for the rifle. Essentially the food has become the new currency in this situation. Even today all trade is basically bartering we just use money to facilitate the barter. The medium or currency has no real value unless someone is willing to barter for it.

To sum up

"Face value" is only worth what we all agree it is worth. Now in our society we have a government that has a currency and it is readily accepted and we have confidence in it. We as a society must guard this because it is tempting (as Germany did in the 30's and more recently Argentina in the 90's) to increase the money supply (printed more money) for government spending. This caused inflation. Unfortunatly I feel this is about to happen in the US to pay for the Iraq war. Others must see this also, hence the decline in the dollar.

Now that is another subject.

 

I read something about this quite awhile ago
and as i remember this "dollar" was only in circulation in
the town where the dude who was minting (?) them.....
somewhere in Arkansas if i remember correctly??
In a society where cashiers cannot make change without the
cash register advising them of what to do--i would hate to walk in
somewhere with one of these and try to actually buy something i needed??

A friend and I have an ongoing discussion as to whether money
actually means anything--anylonger--what with digital money--atm cards
and credit cards---he's a gold guy and me i believe money is now 1's and 0's
since most companies refuse to even pay in cash----

Froley

 

Whether the Liberty Dollar folks like it or not, they have created a form of money intended to be used as an alternative for legal tender. Article I, section 8, clause 5 of the United States Constitution gives Congress the exclusive power to issue money in the United States and regulate its value. It is illegal for any entity other than the United States Mint to issue legal tender. 18 U.S.C. § 486, makes it a Federal crime to use any gold or silver coins as money except that which is authorized by federal law.

Here is what the United States Mint has to say about the subject matter.

 

<div class='quotetop'>QUOTE(TheForce @ Nov 18 2007, 12:37 AM) [snapback]541180[/snapback]</div>

Who is going to give you that face value? You may be gullible enough to give this guy US$20 for his "Liberty" one-oz silver slug with $14 worth of silver in it, but no store is going to accept it in payment for $20 worth of groceries.

It basically sounds like a scam to me: This guy is trying to sell $14 worth of silver for $20. And you can bet your pants that if silver goes over $20 per ounce he's going to stop selling one-oz silver slugs for $20.

As several posters have pointed out, you can buy one-oz silver coins, and you can buy gold coins in various weights (typically one oz, 1/2 oz, 1/4 oz, and 1/8 oz.). I knew a guy (they called him Looney Bird for obvious reasons) who refused to deal in anything but metal as his "money." It limited where he could work or purchase anything. Apparently he had convinced his employer and one small grocery store to pay him in silver and accept silver for purchases. They bought one-ounce silver ingots or slugs from the local coin shop, and sold them back to the same shop. Of course, the shop takes a cut on every sale and every purchase.

If you think gold is a good investment you can buy Maple Leaf coins (one ounce, minted and certified by the government of Canada) or South African Krugerrands, or any of several other minted gold coins.

The U.S. government used to fix the price of gold (under the gold standard) at $32 per ounce. But as the world market value of gold rose, the U.S. had to buy back its own dollars for gold, and this would have depleted our reserve of gold. And that's one of the problems of the gold standard.

The nut jobs complain that paper money has no "real" value. Well, neither does gold, as Bestmapman pointed out above. And as IsrAmeriPrius points out, minting money is against the law. You can argue that point, but the courts are going to agree with the government.

Finally, a small, controlled amount of inflation is necessary in a capitalist economy, because without a slight loss of value over time people would not invest. A money standard that fluctuated in value with the metals market would wreak havoc with the market for investment capital, which is critical to a capitalist economy.

P.S. I see that he has paper money ("backed by gold and silver") as well as coins. What happens to the value of these when the guy takes the gold and silver, bought with the money you gave him for his paper) and absconds with it??? Or, what's to keep him from selling more paper than he has metal???

I don't much trust the government, but I don't trust this kind of nut job at all. You're better off buying the Brooklyn bridge, 'because in the end you're more likely to find a buyer for that than for this stuff.

 

From AP (Nov 16, 2007)

Paul's campaign said it had not authorized production of the Ron Paul dollars.

"We have no connection with that," said Jesse Benton, a campaign spokesman for Paul. "He was using Ron as a marketing technique. We didn't have anything to do with that or sanction it or give permission in any way."


Ron Paul intends on returning to the Gold standard legally. As reminded above, currency is one of the few powers expressly granted to the Congress under the Constitution.

These people remind me of those who don't "volunteer" to pay their federal income taxes. Some then involuntarily serve jail time.

Does make you wonder though why the IRS does call income taxes "voluntary".

 

<div class='quotetop'>QUOTE(n8kwx @ Nov 18 2007, 06:20 PM) [snapback]541380[/snapback]</div>

Does the IRS call income taxes voluntary? I was not aware of that. I know some folks on the fringe claim that income taxes are voluntary, and claim that they have the right to decline to pay them. But the courts have ruled that you are required to pay income tax, and the Constitution gives the courts the right to interpret the meaning of that same Constitution.

Many of the same folks who claim they don't have to pay income taxes also claim that paper money is worthless. This leads to a clear solution that should make everybody happy: Pay the taxes you think you should not have to pay with that same worthless paper money. You'll be giving the government something you feel has no value, and the government will be satisfied and leave you alone.

(There is actually a legal way to avoid paying income tax: Live below the taxable limit. I know some folks who do that. And the advantage is that they earn their year's income in 2 or 3 months and have the rest of the year off, which in their case they use to organize peace protests and to educate people against the lunacy of a military economy.)