Liberty Dullards

[LDE]

I'm starting this thread 'cause I wanted to address some concepts from the last Liberty Dollar thread, which is already too long.

Steve posted a list titled "There's a few merchants around Austin." Let's take a closer look.

The Black Cat Lounge—burned down about four years ago. I'll bet they stopped taking Libbies a couple years earlier when the club's militia-affiliated owner died in a one-SUV accident, possibly on his way back from a paramilitary drill (but that's speculation).

Dairy Queen—Really? Every DQ in Texas takes Libbies!

Liberty Tax Service—There may be one of these somewhere in Austin, but the one I'm familiar with is in Bastrop (about 30 miles away).

McQueeney Bikini—McQueeney is not "near Austin" by any stretch. Neither is Conroe, as Steve certainly knows, since he is said to live or have lived in the same county.

And so on. The list includes lots of defunct businesses, obscure services such as palmistry, and chains of which a single franchisee, somewhere, took a Libby but the whole chain is claimed as accepting them. Further—without going to the source, so this could be Steve's mislabeling—these are not "Austin-area" businesses, they're from all over Texas. And the list may not have been updated since Von NotHaus started messing with the face value of the Libbies. If this were a real guide to where you can spend your Libbies, it would give addresses and phone numbers, not just "Texas."

A few years ago I actually started calling down that list. The first few businesses no longer existed but I found one (a car-repair shop) that did, because their parts supplier would also take them. But that was just before the $L10 became the $L20 (for a "reminting fee"). And, for me, here's the key to why the Libby is fraudulent.

Most of the discussion focused on whether the person buying one as an ingot is getting had. He is, but you can make the case that a fool should be allowed to throw his money away. But the merchant has been asked to take an ingot marked $10, and Von NotHaus does at least strongly imply that the spender should try to get $10 worth of goods for it. Now what happens on the day the Libby revalues to $L20 an ounce? Does the auto-parts store maintain two price sheets, one in US$ and one in Libbies? What about the $L10s still in the cash box—it's not fair for the supplier to have to accept these, since now they're no good unless you pay a hefty reminting fee. (Which one has to eat the reminting fee, imposed every year or so?) And the discount vs. the actual price in FRNs for the silver ingot keeps getting greater, percentage-wise, so even in terms of melt-down value the merchant gets shafted. Unless the merchant simply says, "That'll be $10 US, or $L22.95."

Either way, this is no "store of value" based on the price of silver. The fact that it goes up and down based on silver's price in US$ makes the whole thing a lie.

Even worse is the idea of base-metal slugs or paper scrip supposedly backed by silver in a vault in Idaho (or being carted around the country in the back of an unarmored truck).

Note that there are alternative currencies such as Berkshire Dollars which are entirely legal. You might look into how those work and you'll see a big difference from how Von NotHaus markets and manages his scheme.

We've found out that some of the biggest, most staid investment executives in America were nothing but grifters and thieves. So the antidote is to trust your money to an obvious liar and crackpot like Von NotHaus? Please.

[fortinbras]

I was unfamiliar with the "reminting fee" - especially an annual (or recurring) one. Please explain.

As you said, a store made it onto this list because, once upon a time, a store clerk accepted a Von NotHaus drachma, maybe without paying much attention. That one instance may been such a fluke, with resulting trouble when the store manager brought the day's income to the bank, that the store (maybe the entire franchise) immediately adopted a strict rule against the Libbys.

[SteveSy]

Either way, this is no "store of value" based on the price of silver. The fact that it goes up and down based on silver's price in US$ makes the whole thing a lie.

How does it make it a lie? Silver will never go to zero.

More importantly no one has ever said the denomination marked on the coin is equal to the going price of silver in USD. Yet all of you keep spewing that argument as if Liberty Dollars has made that claim. Its a strawman argument if I've ever seen one. First off that would be impossible to achieve. The coins would have to be destroyed and reminted daily, if not hourly. The concept is a "base". when the U.S. was on a metal standard we set a dollar value on the metal. That's what he's doing. $20 in liberty dollars is equal to one ounce of silver. Remember these aren't denominated in U.S. dollars they're denominated in liberty dollars. It seems many of you don't even understand the thing you're arguing about. When you look at a Canadian dollar it has the $ on it and the word "dollar", does that mean they're representing a value in USD, of course not.

The concept is not even based on par value in USD v. silver. Its an alternative currency. The benefit is that they have backing, a hedge if you will that they will never be worth nothing. Unlike fiat currency which has proven to be worth nothing many times throughout history. Considering U.S. currency has devalued tremendously just over the last 30 years and will never go back up I don't understand how any of you can take the position that FRN's are so much better in that respect. Yes FRN's are accepted everywhere and? Are Euro's or Canadian dollars accepted everywhere? No banks don't accept liberty dollars, do banks accept silver bullion, diamonds, rolex for deposit? No, but that doesn't mean they're not worth anything. U.S. banks deal in USD. Yes Liberty dollars have a limited acceptance but they are accepted and new merchants are added all the time. Even if the number of merchants remain small what's it to you? Don't use them or accept them but don't make the preposterous claim that they're a con.

Consider this in 1913 when the FED was created a dollar then is worth $22.43 now, that's using CPI. Some would consider that a form of hyperinflation just over a long period of time. When will a liberty dollar be worth 22 1/2 times less than what you bought it for? Assuming its around $13 USD an ounce for $20 in libbies, that would mean silver would have to fall to $.87, that assumes a 1 to 1 ratio ($1 libby should equals $1 Silver based on USD when it drops that low) to equal the loss we've had in the U.S. dollar since 1913...that will never happen. This also assumes Norfed wouldn't rebase the currency and you had a 2009 silver $20 libby coin. From 1776 to 1912 a dollar lost only $.11. While the FED has arguably limited economic swings it has come at a very, very heavy stealthy cost.

CPI retrieved from here.
http://www.measuringworth.com/calculato ... withad.php#

[Joey Smith]

In yet another in a long history of posts made without thought, Stevie writes:

Silver will never go to zero.

Dunno about that; seashells, beads, and tulip bulbs were once currency ..........

BTW, if a nation was to choose a mineral for its currency, it would be wise to choose a mineral that is rare worldwide but found in good quantities within the boundaries of the nation.

One could hardly think of a dumber thing for a nation to do than to choose as its currency a mineral that is largely found, mined and coined elsewhere.

[SteveSy]

In yet another in a long history of posts made without thought, Stevie writes:

Silver will never go to zero.

Dunno about that; seashells, beads, and tulip bulbs were once currency ..........

BTW, if a nation was to choose a mineral for its currency, it would be wise to choose a mineral that is rare worldwide but found in good quantities within the boundaries of the nation.

One could hardly think of a dumber thing for a nation to do than to choose as its currency a mineral that is largely found, mined and coined elsewhere.

Ironic you would start your post with "posts made without thought" considering what follows.

Versus choosing a fiat currency supported almost exclusively by foreign nations like China? Seems a little bit dumber to me Joey. That comment about seashells and tulip bulbs as a reference to silver dropping to zero is, well, about the stupidest damn thing you've ever written. Even when and if they were used as a currency silver was and always has been worth more than zero. Here's a clue Joey, seashells and tulip bulbs are not a limited resource which is a necessity to any currency even fiat types. Its almost painfully funny I have to point that out to you.

btw, the only reason we don't mine very much here is because it isn't very profitable, not because we don't have any. Its far more profitable to mine in places like Mexico and Peru where labor costs are significantly lower than even minimum wage here. If and when silver ever becomes money again or the market reflects congresses madness on debt we'll see mining increase significantly here in the U.S.

[SteveSy]

But it would magically take us back to a time when everything was better........

Everything may not be better but inflation to the degree we've acquired it will be a thing of the past. Considering we've lost over 22 times the dollar's original value since we created the FED and only lost barely more than 1% over the 100 previous years there are benefits. Congress certainly couldn't spend like a drunken sailor anymore.

Someone mentioned that economic hardship used to last an average of 6 years and now only a few. What that doesn't consider is that we massively borrow money to pay for that shorter span. That borrowing is left to future generations to pay. Have we really accomplished so great a thing when we leave such a heavy burden to our children and grand children so that we may avoid a few years of our own discomfort? Personally I think not...its never a good idea to borrow against your child's and your grandchildren future earnings so you can feel better. The painful truth is its immoral...not one of you would support a law allowing a parent signing documents that legally required their children and their grandchildren to pay the debt but you hardly bat an eye when we elect representatives to do it for us.

[Weston White]

OH wow, I mean bravo, wow!

See this is why debating with the majority of the Quatlost is pointless. So "precious" metals hold no value in their opinions? Even though history never at any time agrees with such findings. Precious metals have no intrinsic value, and what paper promises do? Bills of credits, do? Meaning that IOU's hold value? I thought IOU's were worthless until you turn them in and actually receive payment?

You are aware that silver has more than quadrupled in value and that gold has tripled in value within the last eight years, right? Also to note there is a vast difference between the "paper gold" markets and actual bullion markets.

Yea gold and silver and platinum and palladium are worthless, that is why jewelery stores do so well. One reason prices have lowered this last year is because manufacturing which uses such metals in their boards and as apart of material components has greatly dropped world wide (for obvious reasons). Also though the markets are being downright manipulated, greatly. The only thing that is a lie and a scam here is the bankers, the money changers, the monopolizers, and their spiteful push for global hegemony.

[ASITStands]

You are aware that silver has more than quadrupled in value and that gold has tripled in value within the last eight years, right? Also to note there is a vast difference between the "paper gold" markets and actual bullion markets.

The lowest price for silver since January 1, 1995 occurred November 26, 2001 at $4.01.

Quadrupling in value would take silver to $16.04. It exceeded that in 2008 but currently stands at $12.85. Instead of quoting what you've read/heard check out the facts yourself.

If someone purchased silver at the bottom, they would have had to wait until March, 2004, before it doubled, after which it promptly dropped to the $5.50 level. It based and rose steadily until March, 2008, at the $20.00 level, from which it's dropped back to reality.

There are many periods of volatility in commodity markets, and no one could ever have predicted that silver would steadily rise or fall, much less quadrupled over time.

It's extremely unlikely (not impossible) the value could fall to $0.00. However, it could approach $2.00, $3.00 or $4.00, as it has in the past. It all depends on demand.

EDIT: Gold dropped below $253 July 20, 1999. Tripling in value would take it to $759. It didn't rise to or above that level until October, 2007 and currently stands above $913.

You lucked out on that one! Whew!

[Weston White]

You are aware that silver has more than quadrupled in value and that gold has tripled in value within the last eight years, right? Also to note there is a vast difference between the "paper gold" markets and actual bullion markets.

The lowest price for silver since January 1, 1995 occurred November 26, 2001 at $4.01.

Quadrupling in value would take silver to $16.04. It exceeded that in 2008 but currently stands at $12.85. Instead of quoting what you've read/heard check out the facts yourself.

If someone purchased silver at the bottom, they would have had to wait until March, 2004, before it doubled, after which it promptly dropped to the $5.50 level. It based and rose steadily until March, 2008, at the $20.00 level, from which it's dropped back to reality.

There are many periods of volatility in commodity markets, and no one could ever have predicted that silver would steadily rise or fall, much less quadrupled over time.

It's extremely unlikely (not impossible) the value could fall to $0.00. However, it could approach $2.00, $3.00 or $4.00, as it has in the past. It all depends on demand.

I watch the markets everyday, thank you. And trying purchasing silver bullion at that price... good luck to you. Economists have been predicting the current tragedies playing out for at least the last 30-years, you really should get out more often... they have even written books on the issue. Precious metals fluctuate, as do all good things, but ultimately gains in value over time, though the value of fiat money only goes down. So far as precious metals are concerned, nothing gets you more bang for your buck (look at all the investors that are killing themselves around the world because of what is happening this last year, all those that lost their retirements and nest egg savings, all gone or near gone, many people are completely screwed, because of the games of fiat).

BTW, say you saved a $100 [FRN] bill under your bed back in 1970 and in that same year I saved $100 Dollars in silver bullion under my bed, that I had purchased from a local metals dealer... Now today you decide to take and deposit that $100 in your bank account and I decide to sell my $100 Dollars in silver bullion and deposit that into my bank account as well... (Both of us happen upon the same bank at the same time at adjacent windows.) While you are waiting for your receipt you reflect upon how much purchasing power your $100 dollars had back in 1970 in comparison to how weak it is in current times, as you are doing this you see me drop a fat stack of FRN' onto the counter and are suddenly brought back into reality as you overhear me bragging to the teller about how I just cashed in my $100 Dollars worth of silver bullion I had been stashing since 1970... Now are you starting to understand the complete picture, fella?

In 2008, $100.00 from 1970 is worth:
$554.33 using the Consumer Price Index
$444.56 using the GDP deflator
using value of consumer bundle
$566.37 using the unskilled wage
$924.98 using the nominal GDP per capita
$1,373.58 using the relative share of GDP

[SteveSy]

Woodrow Wilson had no problem expanding the size of government in WWI, when we were on the gold standard and neither did FDR and Congress from 1929 to 1939 when we were on the gold standard. Ditto for LB and his position of "guns and butter."

For one we weren't on a true gold standard in the 30's.

We had industry and we had a trade surplus not a deficit. There were limits to borrowing back then, we had plenty to back our money....we have moved far and away from those limits. What we're doing today would have been impossible back in the 30's.

[fortinbras]

The concept is not even based on par value in USD v. silver. Its an alternative currency. The benefit is that they have backing, a hedge if you will that they will never be worth nothing.

(1) Federal law criminalizes promoting an "alternative currency"; 18 USC §486.

(2) LDs might (as ounces of silver) "never be worth nothing" - but if the market price of metallic silver is below the price (in FRNs) for an LD, I immediately lose money. Von NotHaus, et al., keep talking about an apocalyptic collapse of the US currency system, so that FRNs become worthless, at which time precious metal is the only accepted medium of exchange. Not gonna happen. First, buying LDs is essentially betting against the future of America, not a particularly patriotic gesture. More important, if such a devastating collapse should occur it is very likely that even the "barbarous relic" of precious metal as currency will be abandoned in favor of canned food, gasoline, and other consumables.

[SteveSy]

The concept is not even based on par value in USD v. silver. Its an alternative currency. The benefit is that they have backing, a hedge if you will that they will never be worth nothing.

(1) Federal law criminalizes promoting an "alternative currency"; 18 USC §486.

Not its not. "Current Money" is money that has been sanctioned by the U.S. government, in other words legal tender. Norfed can not make its money legal tender, nor are they trying to say its legal tender. In fact liberty dollars are the antithesis of legal tender, because legal tender by their position is crap, and its the very reason liberty dollars were created.

(2) LDs might (as ounces of silver) "never be worth nothing" - but if the market price of metallic silver is below the price (in FRNs) for an LD, I immediately lose money.

Not necessarily so, you can get libbies for cheaper than their denomination in FRN's. But as I've shown above if we're talking about losses you have to consider FRN's have lost big time. A dollar back in 1913 is worth $22.42 today, that means just to compete with FRN's on its massive loos in value silver would have to fall to $.87 which will never happen.

First, buying LDs is essentially betting against the future of America, not a particularly patriotic gesture. More important, if such a devastating collapse should occur it is very likely that even the "barbarous relic" of precious metal as currency will be abandoned in favor of canned food, gasoline, and other consumables.

If the currency collapses gold and silver will instantly become money, how long it will stay money is another argument. There must be a common medium of exchange, you can't transport a thousand cans of food so you can get your new AK47 or 50 cans of food to fill your gas tank. In fact the gas station owner may have plenty of food and may want a new rifle so your food is worthless to him.

It's not betting against American's future is preparing for it. The system will collapse its inevitable. The system can't indefinitely expand on debt, its simply impossible. Just to keep the system going we must perpetually increase our debt. If borrowing stops the system collapses...we see it now. That has an end and its near...maybe this year maybe next decade but it will happen.

[LDE]

SteveSy wrote:

More importantly no one has ever said the denomination marked on the coin is equal to the going price of silver in USD. Yet all of you keep spewing that argument as if Liberty Dollars has made that claim.

I never said they did. What Von Nothaus did say is:

Works Just Like US Dollars
... The Liberty Dollar is easy for merchants and customers to use because it functions dollar-for-dollar with the US dollar and its "unit of account" is identical.

What do you think that means, Steve? There's some weaseliness there, I admit, but under any possible interpretation it's suggesting some sort of peg to the $US, not to precious metal.

Remember these aren't denominated in U.S. dollars they're denominated in liberty dollars. It seems many of you don't even understand the thing you're arguing about. When you look at a Canadian dollar it has the $ on it and the word "dollar", does that mean they're representing a value in USD, of course not.

Then, Steve, why does the face value fluctuate WRT $US? Why not leave it at $10/oz. of silver? If Von NotHaus had done that, I would have considered him merely a kook, not necessarily a fraudster. (Though we haven't talked about gold/silver arbitrage and how convertible those paper certificates really are. I'm betting they're not really backed up. Wanna wager a Chinese dinner in Bellaire I'm wrong?)

P.S. Steve, my thoughts about deficits, bank bailouts, etc. are on record but please stick to the issue at hand, eh?

fortinbras:

When the "face value" of the Liberty Dollar is "adjusted" because the price of silver has risen or fallen substantially against the $US, such that the holder of $L10 coins must have them "reminted" into $L20s etc. at more or less the whim of Von NotHaus but based on how big his franking privilege has to be because the buyers of Libbies are doing so in normal currencies, mainly $US. You've definitely caught on to the many contradictions in this scenario.

[Joey Smith]

Weston White without thinking writes:

Yea gold and silver and platinum and palladium are worthless, that is why jewelery stores do so well.

Yes, they are giving out overpriced and useless mineral trinkets and taking in valuable dollars that can be exchanged for things like Corvettes and cruises in the Aegean Sea ....

The very nature of currency is that it depreciates over time -- name a currency that hasn't.

A currency is simply a medium of exchange. It is worth what it is worth. If $42,000 dollars will buy a Corvette, that's measures value. If $5 will get two Big Macs on Tuesdays, that is what each are worth. If a British Pound buys $1.50 that's what each are worth.

Every wonder why the richest people in the world (Gates, Buffet, et al.) don't hoard gold, and it's always the dufus in the doublewide who is buying libbies?

[SteveSy]

Then, Steve, why does the face value fluctuate WRT $US? Why not leave it at $10/oz. of silver? If Von NotHaus had done that, I would have considered him merely a kook, not necessarily a fraudster.

I would have preferred that myself but I see the problem with it. If silver increases to say $15 USD an ounce its hard to convince someone not up on the spot silver price to accept a coin marked $10 for $15 in goods. You have to whip out a newspaper and show them the spot...don't see it working. Plus he was attempting to make it simplistic for the average citizen. The reason there is such a large margin is due to having to pay for new engraving and reprinting of all the bills in circulation which I'm sure is very expensive.

I think a little more organization on the part of the merchants and a sign showing today's exchange value would work well for a pegged currency. They had or have them in Paris and in London, its been a few years since I've been there, in most market places for USD exchange rates, don't see why we couldn't do it here. The concept is sound if someone with a little more ingenuity and eagerness to form a type of merchant coalition would start a new currency locked solid to say $10 or $5 per ounce I think it could go far. However, I have no doubt the government would kill it quickly regardless of how safe and honest they put it together.

I'm not saying libbies are the best thing since sliced bread, they have many faults and this is one of them. All I'm saying is they aren't nearly as bad as many of you attempt to portray them. The arguments against them are weak and are intellectually dishonest.

(Though we haven't talked about gold/silver arbitrage and how convertible those paper certificates really are. ) I'm betting they're not really backed up. Wanna wager a Chinese dinner in Bellaire I'm wrong?)

I positive they're or were backed up...but I don't think they use paper certificates anymore after the government seized all the metal.

[Judge Roy Bean]

The "doom as a lifestyle" crowd will always predict some kind of dire sociological consequences that enable a rapid, apocalyptic but needed change after which there is some eventually more satisfying outcome. These usually center around the adage that good triumphs over evil via the use of close combat weapons against seemingly overwhelming odds.

Sorry. Good fiction ignores economic reality in today's communication environment.

The movement away from and then back toward various eco-political systems is comparatively glacial. It's satisfying to try to accelerate them through fiction but even with a catastrophic financial "crisis" the possibility of massed citizen armies doing something to establish a new order in advanced countries is patently ludicrous.

Which means those who play the doomsday investment scenarios are lured into them out of ignorance.

Trust me. There are aging stockpiles of now useless and worthless ammunition, textured vegetable protein, survival biscuits, old rations, etc., etc., that have been stashed away 'just in case' in thousands, maybe tens of thousands of basements, closets, rental storage units and spare bedrooms.

Accompanying the survivalist theories are the advisories to have "liquidity" in the form of gold and silver coins with which to engage in the "new" economy.

Sorry, folks. A gold or silver coin won't make the gas pump run except in a couple of places out here on this side of the Pecos that you still crank the handle, pump the gas and pay inside.

Socioeconomic chaos is fun to imagine, but the scenarios are more useful in selling something to the ignorant than they are in dealing with what is far more likely.

[SteveSy]

The very nature of currency is that it depreciates over time -- name a currency that hasn't.

That's not true. US dollars remained equal to one dollar even with CPI for over a hundred years from 1796 - 1912. It fluctuated a mere 10% over that period.

Every wonder why the richest people in the world (Gates, Buffet, et al.) don't hoard gold, and it's always the dufus in the doublewide who is buying libbies?

Damn Joey, you sure do say some really silly things....the irony of it is you make fun of other people as if you're in a position to do so.

Bill Gates, World's Richest Man, Bets Against Dollar
http://www.bloomberg.com/apps/news?pid= ... news_index

Buying Gold, or commodities in general with the exception of oil, is a bet against the dollar. Oil typically drops when the dollar goes to hell because people have no money to travel nor buy goods which need to be transported.

[SteveSy]

Sorry, folks. A gold or silver coin won't make the gas pump run except in a couple of places out here on this side of the Pecos that you still crank the handle, pump the gas and pay inside.

Socioeconomic chaos is fun to imagine, but the scenarios are more useful in selling something to the ignorant than they are in dealing with what is far more likely.

It's not a conspiracy theory or a fantasy. Only a banker or an idiot can think we can perpetually run our economy on an ever increasing debt load. The system is designed in such a way that this must take place or it ceases to function, hence our position now. No loans, increasing debt load, and the economy ceases to operate. The fix, well borrow more money of course, and that's exactly what the government did and will have to continue doing.

The system will collapse its a matter of when. There is a point where even the Chinese and Japanese will cut their losses and stop buying bonds. The FED is completely out of options, they have no more tools left in their box, they've cut rates to zero. They only have the printing press left and that is the last gasp of a decaying currency. The current trade deficits and national debt are unsustainable, and they're increasing because they must in order to keep the con going. It will soon become a losing deal due to inflation and that's why the big countries are talking about a world currency via the IMF.

[SteveSy]

However, there is one huge caveat, unlike Mr. Singlewide, these folks have 5% to 10% in gold/precious metals (probably closer to 5%) as an inflation hedge, which is a traditional and valid use of gold.

Gold/ precious metals is just an easy commodity to acquire for Mr. Singlewide, it could be any commodity with the exception of oil.

I seriously doubt Gates or most of the other super rich have only 5% in commodities at this time. More likely they're heavy in short term T-Bills (preserving capital) and commodities (betting on the decline of the economy) and shorting everything while smiling with dollar signs in his eyes every time the Obama Administration suggests new ways to help too big to fail corporations.

[SteveSy]

Commodities IS NOT gold SteveSy.

Come on Cpt. You can't be serious...you should have done a simple search on google or even your dictionary to save some embarrassment. Anyway, if we have to debate something as fundamental as this there is no need to discuss something far more complicated like who is investing in what and why.

Unless you're playing stupid games and constructing a strawman by saying commodities in their entirety are not gold and gold alone. Gold is a commodity and if you don't know that you have no business whatsoever telling anyone what they should or should not invest in.