Lively debate, moved back to top.
We’ve written about Liberty Dollars before. Essentially a bunch of militia-type nutjobs think the country should go back to gold backed dollar. So they took the first step and coined their own “dollars” and claim to back them with gold. (Why they didn’t just coin real gold is beyond me!) Well, the party is about over as the Feds are cracking down.
The International Libertarian – September 14, 2006:
In a stunning development in the private currency movement, the US Mint today announced that, along with clarifications about the private collectible medallions of other private mints not being US Mint issued, was the headline story that the Mint claims the Justice Department has declared that the National Organization for Repeal of the FEDeral Reserve Act (NORFED), its widely known Liberty Dollars, and anyone who uses Liberty Dollars in commercial transactions, is in violation of federal law.
This challenge by the Mint is obviously a threat to private minters. The Mint has recently taken up a campaign to “warn” the public about the fact that many privately minted medallions are not US Mint issue. This is rather obviously a ploy to drive down the collectible value of these private coins and drive up the value of official US Mint specie coins.
A possible second consideration may be that the Liberty Dollar is a talisman of the libertarian, anti-tax “Patriots”, anti-Federal Reserve, and other populist movements. That there are other private currencies in wide circulation in four states is not mentioned by the Mint.
The biggest problem with a barter money system is large-ticket commerce and credit. Can you buy a car or a house with this? Pay insurance? Taxes? Will the fed insure your savings? Do the coiners use their revenues to pay for social infrastructure?
This is the actions of a bunch of selfish fools who think that all they have to do is coin money to create a society. if they’re going to barter they should stop trying to make it currency. A barter trade group that helped members establish transactions would be a more honest means of handling their intentions, if barter management is truly their only intention.
Then again, we’ll be in a cashless society eventually where this will all be moot.
I am out the door for the weekend but if you doubt that the Federal Reserve is a private bank and not a government agency, try to find it in the Yellow Pages. You will not find it in the blue section (governmental pages). It is in the business section like IBM or Xerox.
The term Federal Reserve was picked to disguise its true nature. It is not a Federal agency and the do not have a reserve of gold to back up their paper money. But the title exudes authority and confidence.
The Federal Reserve is a private bank that is under charter by the Federal Reserve Act to produce and regulate currency in the stead of the US Congress. Do your research and you will find this is true. Here is the .gov info:
http://tinyurl.com/mupcz
Now, the President does appointment boardmembers of the Fed but that does not make it a Federal agency. A sitting president cannot fire the entire board and replace them. He can only name replacements that serve for 14 year terms. There are seven members and they each serve one term. That way, no one President can make a majority change in the boardmembers. And, the dirty little secret, if a President appoints someone to the board that the other boardmembers don’t approve of that person, the board can retaliate by hiking the prime lending rate thereby assuring that the economy tanks and the President will never get re-elected. Nice, huh? Now that is real power! No President dares piss off the Federal Reserve Board.
That’s enough for now, I am off to enjoy the weekend.
All the gold in the U.S. can be stored in one Fort Knox (BTW, it is up for debate what is actually stored there today)
Didn’t you see Diehard 3, The Federal Reserve in NY is the largest gold respository in the world.
LINK
I think they need to go after ChuckECheese’s tokens next.
US Dollars are not backed by the assets of the United States. They are not backed by anything tangible at all. I has its face value because the government says it does (being fiat currency), but the actual purchasing power of a US Dollar is based upon the faith people have in it along with many other factors.
Mark is also glossing over the simple fact that the amount of currency in circulation is a very small fraction of the actual amount of money that exists. Every time a bank loans out a dollar, it adds one dollar to the money supply. This has a much more substantial role on inflation than anything having to do with how your currency is backed.
A major job of the Rederal Reserve is to control the rate of inflation through its control over the size of the money supply. It controls the rate of money growth from lending by setting the reserve requirement and the discount rate. And it more directly controls the money supply through the FOMC.
Mark. Simply put, the Federal Reserve is created by and responsible to the Federal Government. It is the Central Bank of the Federal Government and as such is responsible for the monetary policy of the US. The Board is arms length from the Federal Government, as it should be, but the Chairman confers with the White House to formulate policy
The actual term fiat is debatable among economists due to the fact that there must be something tangible behind the printed money. If not, then it becomes worthless as has happened many times before. While the US gold reserves constitute some of these reserves, it is the government’s stability and other US assets that back up the money. Almost the equivalent of the government’s personal credit. It is this ability to use the asset credit that permits both, international commerce and monetary policy.
Since this international policy has emerged after WWII, major financial disruptions have been largely averted. There are still many swings to recessions and inflation, but nothing like what happened during the 1870s, 1890s, and 1930s.
Now, take your link, read it, visit several pages and read the whole thing.
#30 Mr. Fusion — Great post..
#4 Proteome, regarding edited posts. Please refer to the commenting guideline here:
http://www.dvorak.org/blog/misc/commentguidelines.html
and when you say “other comments are not getting edited” how do you know? You should note that we are more lax regarding much of this on the Cage Match Forum where you can start your own debate. We are only a little more strict here but there are six editors and a couple enjoy pulling the trigger on “attack” posts.
As for the gold bugs and the value of the dollar I’d like to ask them exactly how my $100 gold certificate is protected by gold (payabel to the bearer on demand) if gold is $35 one year and $700 the next. I get less gold for my dollar.
Or is everyone advocating we move to all coinage and carry around gold in pouches like miners in 1850. Hey, let’s all become hippies too and drink from a sheep bladder and wear a rope belt. Cripes. Check the calendar.
Good point on gold vs dollars. If Liberty dollars just say they’ll give you the dollar equivalent of gold, then they are worthless, linked to the same US dollar. If instead they are linking them to a specific amount of gold, then they’re a good protection against inflation. If they gave you a one oz coin, then the $35 coin is now worth $700, protecting you from the government’s thieves.
NORFED issues several rounds, minted at a private mint:
– The $20 Liberty is a 1-oz. round, 99.9% pure silver
– The $10 Liberty is a 1/2-oz. round, 99.9% pure silver
– The $5 Liberty is a 1/4-oz. round, 99.9% pure silver
– The $1000 Liberty is a 1-oz. round, 99.99% pure GOLD
The paper notes are warehouse receipts for silver and gold. The gold is held in a PRIVATE, THIRD-PARTY vault, and is regularly audited by a DIFFERENT third-party entity. The metal is THERE… I’ve sent in the paper before and gotten it!
And to think, all of this info could have been gotten with just the lightest of digging. Might save one from looking foolish when asking why they didn’t just make gold rounds themselves, when they clearly did (try LOOKING on the front page of their website to see them!)
Sheesh….
Mr. Fusion: “The Board is arms length from the Federal Government, as it should be, but the Chairman confers with the White House to formulate policy”
Well, the way I see it, the Constitution only authorizes the Federal Government itself to coin money. Section 8 states:
“To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”
Furthermore, Section 10 states:
“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”
When the Congress passed the Federal Reserve Act in 1913 (when a vote was cast after all but two Congressmen went home for the Christmas break), the Congress basically gave away a Constitutionally mandated duty of the Federal Government to an independent bank. Yes, the boardmembers are appointed by the President but the President, the Congress, and the Supreme Court have no real power over anything they do.
If the Federal Reserve was a government agency, the President could fire the entire board or the Congress could vote to impeach them. But they can’t. Why? Because they are a privately owned and operated business that, basically, has been contracted to print and regulate our money supply.
All I would like to see is for the Congress, the President, and the Supreme Court to return the power of printing and regulating the money supply to the Federal Government as the Constitution mandates. The Congress, in 1913, gave away the most immense power the government has to a private bank. That power is the power to print money.
#40, I don’t understand your point. You say the Fed is private yet it was created by an act of Congress and the Board is appointed by the President. The Chairman is subject to approval by the Senate.
Congress may change the structure at any time it wishes. Including the very being of the Fed. By an act of Congress, the power to control the money supply and monetary policy is entrusted to the Fed on behalf of the government. Nothing was given away.
And lastly, Congress and the Supreme Court DO NOT make policy. That is the realm of the President through the administration of the government. Congress has the authority to make law and the Supreme Court may interpret it.
So instead of making up these false hoods or gleaning your facts from crackpots with an agenda, take a macro economics coarse or two and learn a little. It has been 30 years since I studies my economics yet I am still amazed at how so many people still can’t get it right.
Mr. Fusion,
Yes, the Federal government allowed for the creation of the Federal Reserve and the President appoints chairmen to the board. This does not make it a federal agency. Hence, you will not find the Federal Reserve in the blue government pages of the telephone book (it’s listed in the business section). And Congress did not “make” the Federal Reserve. They simply authorized the Federal Reserve, an organization created by the major banks of the day, to print money by giving the Fed a charter to do so. It was the same with the First Bank of the United States and the Second Bank of the United States (also privately owned).
http://tinyurl.com/o55cp
Congress could rescind the Federal Reserve Act of 1913 but no politician has the nerve to do it. Only Andrew Jackson and Abraham Lincoln have ever dared to challenge a central bank. The Bank’s power is simply too great. The Federal Reserve has the power to destroy the economy if it so wishes. No politician can compete against that.
As for the Congress and the Supreme Court, the Congress came up with the Federal Reserve Act of 1913. It doesn’t make policy but it does write the law. The Congress could revoke the charter that the Federal Reserve holds. It won’t. And the Supreme Court could find that the Federal Reserve Act was unconstitutional. It hasn’t. I never said either “makes policy”. However, both the Congress and the Supreme Court are complicit in handing a constitutionally mandated government responsibility over to a private bank.
You are correct that the President makes policy. But no president has the power to change any policy within the Federal Reserve. Zero. All he can do is appoint chairmen as the retire or expire. Other than that, all the President can do is make requests of the Fed. He cannot give orders to the Fed. And the Fed can choose to ignore any Presidential request.
That doesn’t sound like any government agency I ever heard of. Can you name one other government agency that can ignore the President’s orders? I know I can’t think of one.
Mark, you are wrong about the removal of members of the federal reserve board. Any of them may be removed for cause by the President.
http://tinyurl.com/eatku
How about the Supreme Court? The President can’t fire anyone there either and the President even picks the Supreme Court Judges. And gee, the Supreme Court must appear before Congress each year too.
Well, the Supreme Court is a branch of government. It is not an agency that reports to the President.
As for the removal of Fed Boardmembers, I am not so sure. They are appointed for a 14 year term and I have never heard of one ever being removed by a president. Nixon wanted to remove William Martin and replace him as Chairman with Arthur Burns. Martin basically said no. Nixon did not have the power to remove him and Martin knew it.
Mike,
I just read your like (sorry, didn’t notice it). That clause about “cause by the President” is totally vague. Unless the guy murdered someone, I doubt a president could get away with removing a chairman without severe reprisals by the rest of the Fed board.
Oops, link, not like
Err… Err… Hmmm… Try as I might I simply don’t care if hill-billies want to have their own currency.
“There are plenty of private currencies in the US. As mentioned, Chucky Cheese tokens are an example. Barter clubs have been a version of this for a long time. What about frequent flyer miles? Any customer loyalty points? Dancer Dollars at your local strip club.”
These things are not currency they are classified as coupons. They are not an acceptable medium of exchange outside the organization that issues them. Unlike the Liberty coins.
Ron, you can have a growing economy and increasing monetary system without the need for money created through debt. I am not talking about international trade fluctuations or international monetary exchange rates here. I am talking about the true nature of our money supply and how it is created.
Do you understand the nature of fractional reserve banking and how the Fed actually creates money? I can go into a long post about this but it would be lengthy and it’s a little disturbing.
The real debate about the Federal Reserve Notes versus the Liberty Coins is about the nature of money. Should it be created through debt with a fractional reserve or should it be created based on actual deposits? Having a fractional reserve means that the economy can collapse if 10% of all outstanding loans from the Federal Reserve are in default.
Remember the Savings and Loan debacle of the 80’s? The Federal Reserve came very close to going belly up. Why else did the Federal Government rush in to bail out a bunch of private banks when they made bad loan choices? They wouldn’t do that for you or I, now would they? They did it because it could have caused the dollar to implode. Once these banks and their loans reach 11% failure rate, the system collapses.
Not a pretty picture.
The other thing that needs to be considered is that the Federal Government is perpetually in debt. Why? Doesn’t the Federal government print money (like most people think)? How can they possibly be in debt at all?
The reason is that the government doesn’t print money and that they borrow money from the Federal Reserve like everyone else. And, since every dollar in existence is effectively a interest bearing loan, the debt grows ever larger. It can never be paid back fully unless all Federal Reserve Notes are removed from the economy (i.e. all loaned out dollars being repaid to the Fed).
And don’t kid yourself with the “lower deficit” talk. As long as Federal Reserve Notes are the de facto US currency, there will always be a national debt.
What good is a $600 gold coin in day to day commerce? Do you really want $599.50 in change from a coke machine?
Comment by Mark T. — 9/15/2006 @ 6:24 pm
NO!
But I would like Cokes that only cost 50 cents.
Christ, Mark T. I wasn’t even going to comment on this thread, but someone has to say something about the awful place you are and the even worse place you are heading. Whether the President can fire officeholders is absolutely not not the criterion determining whether a body is a federal agency. How that agency was established and functions are valid criteria. There is no question that the Federal Reserve is a federal agency. I hope this thread peters out before you get going with ‘ZOG’ and the rest of the conspiracy nonsense that underlies the kind of things you are saying.
Nor is there any real mystery regarding why the government is concerned with the ‘private coinage’ movement. To be blunt, it is much too closely related to the tax evasion movement to be ignored by law enforcement.
My degree is in Computer Science and I work as a database analyst/developer for the leading health insurance company in my state.
Could you post for us the letter you sent your employer to get them to pay you in this funny money?
They pay you in real money, don’t they?
Podesta – “someone has to say something about the awful place you are and the even worse place you are heading.”
Err, what does that mean? Not to worry, I am not a whack job. I work for a large corporation, make a very nice salary (paid in FRN dollars), I have a mortgage, and pay my taxes dutifully like the everyone else.
I am simply having an interesting discussion of the nature of money and our currency. I am not suggesting that the government blew up the WTC or anything crazy. What is the harm in that?
I simply want to see a return to the Constitution like any good Libertarian. I want the government to print money that is backed by something more tangible than good will and to do it without creating debt.
I will close with a few interesting quotes and call it quits:
If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. -Thomas Jefferson
History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance. -James Madison
If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations. -Andrew Jackson
The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity. -Abraham Lincoln
Despite these warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men. -Woodrow Wilson
#51, Mark. I think you went off the deep end on this one. You are so far off reality it is almost funny. Ok, it is funny, but I’ve heard funnier.
A fractional reserve is semi bull crap. Yes the US has quite a bit of gold stored away. But that is only a partial backing of the US money. As I posted earlier, the US dollar is also backed by the US Government and its assets. This allows the Fed to manipulate the economy in a far easier manner. Monetary policy has far less to do with the actual number of printed dollars in the economy. It is the available money for loans that will open or tighten the economy.
The Federal Reserve never came close to going belly up in the ’80s. The amount in question, while substantial to you and me, was a very, very, small amount of money as held by the Fed and the Federally chartered banks. There is no “magic” number that would cause the Fed to collapse.
The Federal Government leaves the application of monetary policy in the hands of the Fed. The Government itself handles the fiscal policy. Monetary policy is the control of the money supply while fiscal policy is the use of that money. While monetary controls the interest rates, fiscal controls taxation and government spending.
Finally, all those dollar bills in my pocket are not interest bearing loans. They are essential a statement or note of value that everyone recognizes as equal value. The use of these notes has nothing to do with fiscal policy. The National Debt is a result of Government expenditures, not national money supply.
Geeze Mark, that must have been some weekend.
#55, Mark,
All those quotes are nice. But how about some sources?
I am not sure why the Federal Reserve has ruffled tailfeathers over this Liberty Dollar. I would think any type of barter system is legal. To my understanding the $20.00 coin is a true Troy ounce of Silver. So if it isn’t legal for me to use this Liberty Coin as a barter at the gas station for 4 gallons of gasoline? That would also make it a felony to barter any other Silver Coins for 4 gallons of gas.
I am not a hippy, but if I want to be a hippy isn’t it my Constitutional right to be a hippy? (as long as I am not breaking any laws).
Last week I traded Honey and Potatoes from a local farmer for a Computer Printer. I hope that’s not a felony.. :LOL
I can’t see how people can get confused over this dollar? It looks different, is sized different, there’s an 800 number on the coin for more information. It is not like the Susan B. Anthony coin which many individuals confused the coin for a Quarter.
Nobody is forcing an individual or business to accept the coin. It is strictly up to the individual or business to decide if they choose to use the currency for barter.
I am not really for or against the Federal Reserve. But.. I am interested in the novelty of it. I might buy a few coins to collect. If someone around my area decides to accept it. I might use it.
The so called bad press looks to be sparking more of an interest in this type of currency. It is my understanding the Liberty Dollar website is reporting record traffic and sales are increasing.
Amazing the number of errors in so few words: “militia type” — no, Liberty Dollar supporters don’t run around in the woods with guns.
“coined their own “dollars” and claim they are backed by gold”. This shows you didn’t even do the first pass of basic comprehension of what you talk about. You’re just a nutjob with a knee-jerk insult.
The liberty dollar is made of silver, its not “backed” by gold, or anything, other than the silver that is in it.
“The feds are cracking down”
No, the US mint said some stupid things, things that would be actionable if you said them, but are not because the US mint claims soverign immunity.
Lets see the government actually take someone to court before you talk about “Cracking down”.
The pathetic thing is, every law the US mint cited (despite their dishonest characterizations, and apparent inability to read these laws an comprehend them) is one the liberty dollar complies with.
The liberty dollar is perfectly legal.
The real question is, what it is about it that makes you so insecure that you insult people when you don’t even have the basic facts about what they are doing?
Oh, wait you’re the guy who loves windows and hates the mac, right? I get it, you’re all about emotional reactions with know basis on fact…. Shit, you got me, why am I rebutting you? You’ve been telling lies about the mac for decades, and its obvious you’re just a fuckwit… a piece of putrid shit from the asshole of your father, that’s all you are. Go kill yourself, you brownshirt sympathizing, idiot.
Those who can do, those who can’t teach., and those who know absolutely nothing about the subject ,write.
And you’re not even a good writer.
“Backed by gold” how stupid ARE you?
I don’t understand the Fed either.. 🙂
I have 10 Chuck E Cheese Tokens
I collect Coupons from the Sunday Paper,
I have a collection of Gift Certificates,
I own Gift Cards
I have Casino Tokens,
I collect Coca Cola Points,
I earn travel points with my American Express card.
I collect Subway stamps.
I got a Ford Ten Dollar bill in the mail today. If I test drive a Ford at the
local dealer show them this fake $10.00 bill. I can exchange it for a legal tender $10.00 bill.
I earned Amazon.com dollars for using my Amazon.com card to buy a free Ipod.
I collect rebates.
Does that make me a radical nutcase? Or does that mean I have too much time on my hands?
Woah, I finally read the first paragraph of actual warning and it hit me—it could be saying that it’s only a crime to claim as “circulating money” the Liberty Dollars are legal tender.
Though this seems to suggest that even Chuck E Cheese tokens, and many others, are illegal.
Congress needs to re-examine that foolish law before it actually gets used against somebody, it’s extremely out-of-date.