Liberty Dollar creator convicted in federal court

MaggieD said:

I think the reason much of it exists is to avoid taxes...barter/exchange sorts of things.

If Tom's Deli decides to have his car fixed by Andy and pays him with a gift certificate at his store, the tax man doesn't make any money. I've simplified it here, but I think that's what's going on. Though barter/exchange is very much underground, I think the government doesn't like it -- not because it's creating a new kind of money -- but because it's an effective way to avoid paying income tax. Have to ask....why shouldn't people be able to barter/exchange?

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That would be the misconception that is perpetuated with the use of a non US currency. However, the IRS has a requirement that you report benefits and gifts over a certain dollar amount. In this case, the benefits and gifts are the exchange of services.

Kandahar said:

Individuals issuing their own currencies is a recipe for disaster. It means that there would be little to no stability in our economy, and little ability for the government to tame bubbles or mitigate recessions. The economic problems in Greece are a good example of what happens when a nation can't control its own monetary policy. Greece badly needs to devalue its currency, but it doesn't have one, so it will be stuck in a recession for years.

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Bubbles, recessions, inflation, are largely symptomatic of fiat currency. This does not happen as easily with commodity backed currencies.

You'd think we'd have learned our lesson the first time...

The United States Constitution does not mention paper money by that name. Nor does it refer to paper currency or fiat money in those words. There is only one direct reference to the origins of what we, and they, usually call paper money. It is in the limitations on the power of the states in Article I, Section 10. It reads, “No State shall . . . emit Bills of Credit . . . .” Paper that was intended to circulate as money but was not redeemable in gold and silver was technically described as bills of credit at that time. The description was (and is) apt. Such paper is a device for expanding the credit of the issuer. There is also an indirect reference to the practice in the same section of the Constitution. It reads, “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts . . . .” Legal tender laws, in practice, are an essential expedient for making unredeemable paper circulate as money. Except for the one direct and one indirect reference to the origin and means for circulating paper money, the Constitution is silent on the question.

The Constitution And Paper Money – Tenth Amendment Center

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This is an awesome read... I encourage all to spend the time.

Individuals issuing their own currency is definitely not a good idea on so many levels. However, paper to facilitate trade among peoples I don't have much of a problem with, and in many respects, encourage.

Most of these systems are designed not so much to undermine our worthless debt based fiat currency, but to send a clear message to congress that they have abdicated their constitutional duty to issue money based on gold and silver only.

This talk of anti-governmental terrorism is extremely dangerous to We the People, and very telling of the shift from gov't being servants of the People, and the We the People become subjects of the gov't. It is our right and our duty to undermine, dismantle or replace our gov't if it ever ceases to be a servant of the People and wholly disregards it's duty to keep the Public Trust they have been given.

Not only do I think it's wrong for individuals to issue paper money, it's even more wrong for our government to do so. That's the bottom line.

All this talk of destabilizing our monetary system is a joke... our monetary system is fiat, a ghost, not real, based on belief in value, rooted in debt not wealth. Owning more "dollars", merely means owning more of the collective debt owed the Federal Reserve by We the People, spent by our elected public servants. It's not wealth.

Tell me... if the Fed creates every dollar (paper at a cost of about $0.07 a bill, electronically essentially free) and then charges interest on the money it creates and loans to us for use... where does the money come from to pay that interest back? The Fed then prints more money...

Each dollar in circulation has about 2-3% of it's original value when the Federal Reserve System was enacted. How much longer do you think it can hold on before a complete devaluation?

Read the article... the founders knew what they were doing... and tried to warn us.

Jerry said:

The Constitution is quite clear, only Congress has the authority to coin money. No one else. We can't go back to having competing currencies.

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I think what you need to realize is that the constitution was written by people in a different time. There were assumptions made when it was written, assumptions like "the gov't has no powers except those dictated here" and "the gov't will have responsible monitary policy."

When the gov't is simply printing more money, devaluing the only currency we are allowed to use, I think it is the responsiblity of the citizens to take care of themselves and establish a currency that is immune to the gov't debt and unlimited money printing. One that the amount in circulation will be tightly controlled. If our gov't won't follow the rules, why should we?

dontworrybehappy said:

I think what you need to realize is that the constitution was written by people in a different time. There were assumptions made when it was written, assumptions like "the gov't has no powers except those dictated here" and "the gov't will have responsible monitary policy."

When the gov't is simply printing more money, devaluing the only currency we are allowed to use, I think it is the responsiblity of the citizens to take care of themselves and establish a currency that is immune to the gov't debt and unlimited money printing. One that the amount in circulation will be tightly controlled. If our gov't won't follow the rules, why should we?

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So instead of having a government-issued currency which enables "government debt and unlimited money printing" (policies which are ultimately accountable to the voters) we should instead have private currencies which are NOT accountable to the public and ALSO allow for unlimited debt and money printing?

I think the people who are so eager to criticize the US dollar should be careful that the solutions they're proposing actually solve the problem they've identified...

dontworrybehappy said:

I think what you need to realize is that the constitution was written by people in a different time.

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Yes but it was written for a people of any time.

I appreciate your attempt to apply that anti-gun argument to another topic, that the constitution is somehow outdated and doesn't account for today's circumstances, but that argument fails everywhere it's tried.

Demon of Light said:

Source: The Asheville Citizen-Times

That is right, making money that is clearly distinct from U.S. government money and reaching agreement with businesses to accept said money is terrorism. I am curious when there are going to be federal raids on Chuck E. Cheese's, since it is clearly a hotbed of terrorism indoctrinating our youth with subversive activity.

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Domestic terrorism, that's ridiculous.

I'd support a basket of currencies for individuals to use, to avoid inflation and other problems associated with national currencies.

dontworrybehappy said:

I think what you need to realize is that the constitution was written by people in a different time.

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Does not matter when it was written as long as it is derived from a careful study of societal history and its many failings and brief triumphs. In 5000 years of civilization, the human condition has changed little. It is in fact more important that it was written in a different time, as they were direct witnesses to the many devices of tyranny and far more familiar with the history of tyranny.

There were assumptions made when it was written, assumptions like "the gov't has no powers except those dictated here" and "the gov't will have responsible monitary policy."

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The assumption is on the part of modern forces thinking the founders were in any way whishy-washy in their laws, guidelines and warnings. It is assumptive that the congress can abdicate it's responsibility for the issuing of money based on anything other than gold and silver.

W

hen the gov't is simply printing more money, devaluing the only currency we are allowed to use, I think it is the responsiblity of the citizens to take care of themselves and establish a currency that is immune to the gov't debt and unlimited money printing. One that the amount in circulation will be tightly controlled. If our gov't won't follow the rules, why should we?

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Why? Because it's in the best interest of the common good. That was the whole point of the union in the first place. If our elected public servants have lost there way, it's our patriotic duty to remind them of their role and restore the order and balance of power.

When the gov't fails us, it's not free license for us all to go willy nilly nutso... it's a call to our patriotism to set our gov't back on it's proper path or replace it.

Kandahar said:

Although the rhetoric is a bit over the top, there are very good reasons for the government to tightly regulate currency and monopolize our nation's monetary policy. The Federal Reserve Chairman and the Secretary of the Treasury are appointed by the President, who is elected by the people. Who elected THIS bozo? It could end very very badly if private currencies became widely used.

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I don't get this.
We have a forex market where people exchange out U.S. dollars for other forms of currency, that can debase the national money.
Not to mention that barter "currencies" are already in wide spread use.

All this guy did was make an official barter currency, nothing wrong with that.
More wide spread use could encourage the central bank to keep a more conservative fiscal policy.

Kandahar said:

Yes, that's my point. You claimed that "a currency's life or death will have no impact" as long as people continue to use SOME kind of currency. This is completely belied by many historical counterexamples, of which the death of the Zim Dollar is only the most recent.

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Dude, did you even remotely pay attention to what I was saying? When Zimbabwe was in the throes of that currency crisis it did not allow any foreign currency to be used. Once it did allow other currencies the situation quickly stabilized. In other words, what I said was actually backed up by the situation in Zimbabwe.

I find it ironic that you criticize the Federal Reserve for catering to corporate interests, while supporting a private currency whose SOLE PURPOSE is to cater to corporate interests.

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Whose corporate interests was the Liberty Dollar catering to exactly?

At least the government is in charge of who runs the Federal Reserve, unlike who runs the liberty dollar central bank (or whatever its equivalent is), and they theoretically have the public interest in mind.

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Except the government isn't actually in charge of the Federal Reserve. Weren't you paying attention?

As for being impacted by the debt...OK, suppose that these private currencies became commonplace. What's stopping them from running debt of their own and paying for it by printing more of their currency? You act like the temporal problems of the federal government can be solved by abandonment of our own monetary policy, but it isn't that simple, because the private sector is hardly immune to the same type of problems. And even if they were, they are not motivated by protecting the public interest.

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First of all, the fact of there being other currencies means if one has these problems another can be used. Also, private groups would not be quite as capable of doing what the government does in terms of debt and monetary policy.

The Federal Reserve can raise interest rates when they want to fight inflation, or lower interest rates when they want to fight unemployment. A private currency operator won't give a damn about unemployment, and will only care about inflation inasmuch as it affects their own bottom line.

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It isn't about "fighting unemployment" when they lower interest rates. Call it what it is: protecting corporate profits. The first and most lucrative beneficiaries of a lower interest rate are those who borrow directly from the Fed, meaning the big banks.

Jerry said:

The Constitution is quite clear, only Congress has the authority to coin money. No one else. We can't go back to having competing currencies.

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Show me in the Constitution where it says "only" Congress can coin money. It says Congress has the power to coin money, but at no point gives it the exclusive right. In particular it does not deny the people a right to use whatever medium of exchange they want amongst themselves.

Aunt Spiker said:

Coins for game-machines are not being presented as 'real money' - it's a token piece which was purchased for use in a machine all for the financial security of the business (so there's a reduction in machine-theft and vandalism as they don't have real coins in the games). This is not 'real tender' and it is 'legal' to use in a game-machine but it is *not* legal to use elsewhere - you can't use them to buy a soda at a store down the street.

But making your own money - and then using that money in stores and businesses in town is NOT legal.

ONLY Congress has the authority to make real money to use in exchange for goods or payment of services = legal tender. So, yes, it is a REAL legitimate issue - it is not legal tender.



Do you really think I should be able to print off money at my home computer and go to my local grocery store and buy groceries with it when everyone else has to actually earn their money and become subject to inflation, etc?

Why should someone who decides to make their own money be permitted to do exactly that?

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In this case businesses have reached an agreement to accept Liberty Dollars. These are not being given to businesses under the auspices of being a valid currency across the country, but as a currency only valid where it is accepted. We are talking about a system based entirely on consent between individuals to accept something other than U.S. currency as a method of payment. No aspect of that is in any way illegal unless you don't believe in rights.

Demon of Light said:

Show me in the Constitution where it says "only" Congress can coin money. It says Congress has the power to coin money, but at no point gives it the exclusive right. In particular it does not deny the people a right to use whatever medium of exchange they want amongst themselves.

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This is most ignorant thing I've read on this forum in a long time.

Jerry said:

This is most ignorant thing I've read on this forum in a long time.

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He is right though and the US government did not coin all the money throughout the history of the US

History of US Paper Money

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1836 State Bank Notes
With minimum regulation, a proliferation of 1,600 local state-chartered, private banks now issued paper money. State bank notes, with over 30,000 varieties of color and design, were easily counterfeited. That, along with bank failures, caused confusion and circulation problems.

snip

1866 National Bank Notes
National Bank Notes, backed by U.S. government securities, became predominant. By this time, 75 percent of bank deposits were held by nationally chartered banks. As State Bank Notes were replaced, the value of currency stabilized for a time

1913 Federal Reserve Act
After 1893 and 1907 financial panics, the Federal Reserve Act of 1913 was passed. It created the Federal Reserve System as the nation's central bank to regulate the flow of money and credit for economic stability and growth. The system was authorized to issue Federal Reserve Notes, now the only U.S. currency produced and 99 percent of all currency in circulation

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Lord Tammerlain said:

He is right though and the US government did not coin all the money throughout the history of the US

History of US Paper Money

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Please link to Congress authorizing Bernard von NotHaus to make US currency.

Demon of Light said:

Dude, did you even remotely pay attention to what I was saying? When Zimbabwe was in the throes of that currency crisis it did not allow any foreign currency to be used. Once it did allow other currencies the situation quickly stabilized. In other words, what I said was actually backed up by the situation in Zimbabwe.



Whose corporate interests was the Liberty Dollar catering to exactly?



Except the government isn't actually in charge of the Federal Reserve. Weren't you paying attention?



First of all, the fact of there being other currencies means if one has these problems another can be used. Also, private groups would not be quite as capable of doing what the government does in terms of debt and monetary policy.



It isn't about "fighting unemployment" when they lower interest rates. Call it what it is: protecting corporate profits. The first and most lucrative beneficiaries of a lower interest rate are those who borrow directly from the Fed, meaning the big banks.



Show me in the Constitution where it says "only" Congress can coin money. It says Congress has the power to coin money, but at no point gives it the exclusive right. In particular it does not deny the people a right to use whatever medium of exchange they want amongst themselves.



In this case businesses have reached an agreement to accept Liberty Dollars. These are not being given to businesses under the auspices of being a valid currency across the country, but as a currency only valid where it is accepted. We are talking about a system based entirely on consent between individuals to accept something other than U.S. currency as a method of payment. No aspect of that is in any way illegal unless you don't believe in rights.

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This is not about how people *feel* - this concerns what *did* and *did not* happen. He intended for it to be used *as* money *instead* of our legal currency - that is what he did, there's no arguing that fact

it's cut and dry. .

I wouldn't call it 'domestic terrorism' like they did - nor do I think it's as egregious of a crime as they made it out to be. But illegal? Indeed.

I have Iraqi-GI currency - which are just cardboard disks with images printed on it for use in Iraq and other areas of the Middle East only for Soldiers. This was legitimately created by Congress as a supplement to hardcoin currency for use overseas and has no value outside certain areas. It really represents an actual coin that is reserved - they just chose this as a wise alternative to actually *having* coinage in a warzone for several different reasons.
This is exactly what this guy did, really - an alternative form of 'money' which only certain 'businesses' accept. But he is not Congress. He has no authority to replace our legal tender with his own legal tender - clever spokesman or not.

Just because they didn't think it through doesn't mean it's legitimate.

Demon of Light said:

Dude, did you even remotely pay attention to what I was saying? When Zimbabwe was in the throes of that currency crisis it did not allow any foreign currency to be used. Once it did allow other currencies the situation quickly stabilized. In other words, what I said was actually backed up by the situation in Zimbabwe.



Whose corporate interests was the Liberty Dollar catering to exactly?



Except the government isn't actually in charge of the Federal Reserve. Weren't you paying attention?



First of all, the fact of there being other currencies means if one has these problems another can be used. Also, private groups would not be quite as capable of doing what the government does in terms of debt and monetary policy.



It isn't about "fighting unemployment" when they lower interest rates. Call it what it is: protecting corporate profits. The first and most lucrative beneficiaries of a lower interest rate are those who borrow directly from the Fed, meaning the big banks.



Show me in the Constitution where it says "only" Congress can coin money. It says Congress has the power to coin money, but at no point gives it the exclusive right. In particular it does not deny the people a right to use whatever medium of exchange they want amongst themselves.



In this case businesses have reached an agreement to accept Liberty Dollars. These are not being given to businesses under the auspices of being a valid currency across the country, but as a currency only valid where it is accepted. We are talking about a system based entirely on consent between individuals to accept something other than U.S. currency as a method of payment. No aspect of that is in any way illegal unless you don't believe in rights.

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Whether they have "value" as a "currency" is a red herring. They are made of silver. They have value everywhere silver is valued... which is everywhere. The only worry here was their alleged similarity to coins produced by the US Mint. You may not be able to pay your taxes with them, but you can cash them in for Fed currency to pay them.

Funny thing is... as the Fed Fiat Dollar loses value, the silver in these coins continues to rise far past the face value of the coins. Would I accept them as payment for something? Hell yes I would!

To the issue of the powers to create money... before the Fed, each Bank and each region produced a form of it's own currency as redeemable gold or silver certificates. The only way this would have been possible is on a commodity standard.

Sad when both a government and it's citizens become ignorant of their own history...

Harry Guerrilla said:

I don't get this.
We have a forex market where people exchange out U.S. dollars for other forms of currency, that can debase the national money.

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Forex markets do not debase our national currency, they're merely a reflection of what the value of our currency already is. If people demand more dollars, the value will rise. If people demand fewer dollars, the value will fall.

Harry Guerrilla said:

Not to mention that barter "currencies" are already in wide spread use.

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Depends how you define "widespread." As long as they're relatively small, the government tolerates them merely because they aren't worth the hassle. If they get big enough then the government shuts them down. The key is to make sure that they're only a minor nuisance, rather than a big economic problem.

Harry Guerrilla said:

All this guy did was make an official barter currency, nothing wrong with that.
More wide spread use could encourage the central bank to keep a more conservative fiscal policy.

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For countries with extremely irresponsible monetary policies (e.g. Zimbabwe, Venezuela, Argentina) that is true. For everyone else, it isn't. Especially when the alternative currency in question does not compete with the national currency on the basis of being more conservative. And even if it did, it's not clear to me why a conservative monetary policy is inherently so desirable that we need an undemocratic private currency to establish it for us. Just convince the voters that we need a conservative monetary policy, and they'll elect a President who will appoint Milton Friedman's corpse to chair the Fed. People have no right to subvert the democratic process to establish their own independent monetary policy.

Jerry said:

Please link to Congress authorizing Bernard von NotHaus to make US currency.

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Never said it did

But you can of course use Canadian dollars, UK pounds, Pesos at many places within the US. You can also use ÌOUs as a medium of exchange, you just can not create a US currency on your own. You have to be authorized by the government for that and since 1913 the Federal Reserve has been the only one with that authority

Kandahar said:

Forex markets do not debase our national currency, they're merely a reflection of what the value of our currency already is. If people demand more dollars, the value will rise. If people demand fewer dollars, the value will fall.

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Which can be outside the control of the Federal Reserve.
All/Most of those people in the forex market are unelected.

Kandahar said:

Depends how you define "widespread." As long as they're relatively small, the government tolerates them merely because they aren't worth the hassle. If they get big enough then the government shuts them down. The key is to make sure that they're only a minor nuisance, rather than a big economic problem.

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Widespread, as in common everyday use.
The government tolerates it because they can't do anything to stop it.

Kandahar said:

For countries with extremely irresponsible monetary policies (e.g. Zimbabwe, Venezuela, Argentina) that is true. For everyone else, it isn't. Especially when the alternative currency in question does not compete with the national currency on the basis of being more conservative. And even if it did, it's not clear to me why a conservative monetary policy is inherently so desirable that we need an undemocratic private currency to establish it for us. Just convince the voters that we need a conservative monetary policy, and they'll elect a President who will appoint Milton Friedman's corpse to chair the Fed. People have no right to subvert the democratic process to establish their own independent monetary policy.

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No country remains infinitely responsible with it's monetary policy but it doesn't have to be 1 government currency vs. 1 private currency.
It can be several competing currencies.
Some formal, some informal.

This is the way the international market is moving right now.

Demon of Light said:

Dude, did you even remotely pay attention to what I was saying? When Zimbabwe was in the throes of that currency crisis it did not allow any foreign currency to be used. Once it did allow other currencies the situation quickly stabilized. In other words, what I said was actually backed up by the situation in Zimbabwe.

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So then the medium of exchange DID have an impact on Zimbabwe's economy. Glad we agree.

Demon of Light said:

Whose corporate interests was the Liberty Dollar catering to exactly?

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I have no idea. Why don't you ask the creator of the liberty dollar?

Demon of Light said:

Except the government isn't actually in charge of the Federal Reserve.

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Except the Board of Governors are all appointed by the President with the confirmation of the Senate. And for the second time, I would like to note the irony of your complaining about the government not being in charge of the Fed, at the same time you're advocating for a private currency.

Demon of Light said:

First of all, the fact of there being other currencies means if one has these problems another can be used.

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Currencies are not widgets. It is NOT healthy to have competing mediums of exchange in a single country. The instability you just described (i.e. switching from one private currency to another at the first sign of trouble) is a recipe for economic disaster because it would create so much exchange risk that it would hardly even be worth setting up a business in this country. Furthermore, it would make the economy virtually ungovernable because the government would have no control over its own budget or money supply.

Demon of Light said:

It isn't about "fighting unemployment" when they lower interest rates. Call it what it is: protecting corporate profits. The first and most lucrative beneficiaries of a lower interest rate are those who borrow directly from the Fed, meaning the big banks.

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The tradeoff between unemployment and inflation is well accepted among economists all across the political spectrum.

Harry Guerrilla said:

Which can be outside the control of the Federal Reserve.
All/Most of those people in the forex market are unelected.

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I'm not sure what your point is. I have no problem with the forex market. The goal of the Fed isn't to "control" the currency in the sense that it determines what price it should trade at. That isn't desirable for the US. I'm talking about controlling the currency in the sense that it is able to meaningfully increase or reduce the money supply to affect the economy. If no one uses the US Dollar anymore because they're using Wal-Mart Dollars instead, then the government is no longer able to do that.

We've seen the impact that not having control of one's own monetary policy has had on Greece. And we've seen the impact that having all your debt denominated in currency that isn't your own has had on Iceland. What about their experiences do you think is worth repeating?

Harry Guerrilla said:

Widespread, as in common everyday use.
The government tolerates it because they can't do anything to stop it.

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Obviously they can, as they just convicted the creator of the liberty dollar. Hence the thread.

Harry Guerrilla said:

No country remains infinitely responsible with it's monetary policy but it doesn't have to be 1 government currency vs. 1 private currency.
It can be several competing currencies.
Some formal, some informal.

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See my response to Demon of Light. In what world is it desirable to have many competing currencies within a national border, where one is abandoned at the first sign of trouble in favor of the new kid on the block? Currencies are NOT widgets and should not be thought of like that. If I want to start a business, what currency should I use to take out loans? What currency should I use to extend my customers credit? Hopefully I'll guess right, or else I'll be on the hook for huge debts and/or repaid in worthless paper. Of course, I could hedge against exchange risk...for a large fee. :roll:

Harry Guerrilla said:

This is the way the international market is moving right now.

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So far, private currencies are merely a nuisance in the international market. Hopefully they stay that way.

Lord Tammerlain said:

Never said it did

But you can of course use Canadian dollars, UK pounds, Pesos at many places within the US. You can also use ÌOUs as a medium of exchange, you just can not create a US currency on your own. You have to be authorized by the government for that and since 1913 the Federal Reserve has been the only one with that authority

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You were backing the argument that anyone, just anyone can coin US money since the Constitution doesn't expressly state that only Congress has that authority.

Demon of Light said:

Show me in the Constitution where it says "only" Congress can coin money. It says Congress has the power to coin money, but at no point gives it the exclusive right. In particular it does not deny the people a right to use whatever medium of exchange they want amongst themselves.

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In all things, The People reserve the right unless the Constitution expressly gives that right or authority to the government. The Constitution gave the authority to coin money to Congress, which means that right does not belong to the People anymore.

Jerry said:

Please link to Congress authorizing Bernard von NotHaus to make US currency.

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He doesn't need their authorization. As long as none of the businesses that accepted this as currency were deceived, I see no indication they were, his actions were completely within the bounds of the law. Look at the charges for which he was convicted. It was based on the claim that he was creating money that looks similar to government-issued currency. Specifically their claims were about the coins since the notes were clearly nothing like U.S. dollars. Their claims were ridiculous since no U.S. coin has a phone number or website on it, nor do they say "Liberty Dollar" on the back, but apparently they managed to hoodwink a jury.

Jerry said:

In all things, The People reserve the right unless the Constitution expressly gives that right or authority to the government. The Constitution gave the authority to coin money to Congress, which means that right does not belong to the People anymore.

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That is a distortion of the 10th Amendment.

Aunt Spiker said:

This is not about how people *feel* - this concerns what *did* and *did not* happen. He intended for it to be used *as* money *instead* of our legal currency - that is what he did, there's no arguing that fact

it's cut and dry. .

I wouldn't call it 'domestic terrorism' like they did - nor do I think it's as egregious of a crime as they made it out to be. But illegal? Indeed.

I have Iraqi-GI currency - which are just cardboard disks with images printed on it for use in Iraq and other areas of the Middle East only for Soldiers. This was legitimately created by Congress as a supplement to hardcoin currency for use overseas and has no value outside certain areas. It really represents an actual coin that is reserved - they just chose this as a wise alternative to actually *having* coinage in a warzone for several different reasons.
This is exactly what this guy did, really - an alternative form of 'money' which only certain 'businesses' accept. But he is not Congress. He has no authority to replace our legal tender with his own legal tender - clever spokesman or not.

Just because they didn't think it through doesn't mean it's legitimate.

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Except it is only being used in agreement with businesses and is not in fact intended to be used as legal tender.

Kandahar said:

So then the medium of exchange DID have an impact on Zimbabwe's economy. Glad we agree.

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No we do not agree. I said the life or death of a specific currency has no impact so long as there is some means of exchange agreed upon. You pointed to a case where the currency was dead and there was no other means of exchange available because only the dead currency was allowed. Once alternatives were allowed the situation improved. Your example only backed up my case.

I have no idea. Why don't you ask the creator of the liberty dollar?

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You made the claim bud. If you can't even come up with a name it suggests you were spouting nonsense.

Except the Board of Governors are all appointed by the President with the confirmation of the Senate. And for the second time, I would like to note the irony of your complaining about the government not being in charge of the Fed, at the same time you're advocating for a private currency.

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My complaint is not about the government not being in charge, but that it is by mandate of law a banking cartel with no accountability to anyone but corporate interests as even the government appointments are required to be representative of said interests.

Currencies are not widgets. It is NOT healthy to have competing mediums of exchange in a single country. The instability you just described (i.e. switching from one private currency to another at the first sign of trouble) is a recipe for economic disaster because it would create so much exchange risk that it would hardly even be worth setting up a business in this country. Furthermore, it would make the economy virtually ungovernable because the government would have no control over its own budget or money supply.

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I would agree there is a need for a central currency, but having alternative currencies serves as a check on the potential abuse of that central currency and allows for communities to maintain a stable economy even in the event of that central currency's failure. Of course, I would not really mind either way so long as there is democratic accountability to insure policies do not become abusive towards the people.

The tradeoff between unemployment and inflation is well accepted among economists all across the political spectrum.

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Not what I was saying. I am saying the Federal Reserve isn't acting to prevent unemployment even if they claim this to be the case.

Kandahar said:

I'm not sure what your point is. I have no problem with the forex market. The goal of the Fed isn't to "control" the currency in the sense that it determines what price it should trade at. That isn't desirable for the US. I'm talking about controlling the currency in the sense that it is able to meaningfully increase or reduce the money supply to affect the economy. If no one uses the US Dollar anymore because they're using Wal-Mart Dollars instead, then the government is no longer able to do that.

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If the value of the dollar is driven to nothingness through the forex market, you've achieved the same thing.
Valueless national currency.

Kandahar said:

We've seen the impact that not having control of one's own monetary policy has had on Greece. And we've seen the impact that having all your debt denominated in currency that isn't your own has had on Iceland. What about their experiences do you think is worth repeating?

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I'm not to familiar with their situations.

Kandahar said:

Obviously they can, as they just convicted the creator of the liberty dollar. Hence the thread.

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Well, I should of said there isn't a much they can do to stop it.
They have approximately 7 million worth of liberty dollars in circulation.

There entire barter market is in the billions, I'm thinking.
I'll do some more research to see though.

Kandahar said:

See my response to Demon of Light. In what world is it desirable to have many competing currencies within a national border, where one is abandoned at the first sign of trouble in favor of the new kid on the block? Currencies are NOT widgets and should not be thought of like that. If I want to start a business, what currency should I use to take out loans? What currency should I use to extend my customers credit? Hopefully I'll guess right, or else I'll be on the hook for huge debts and/or repaid in worthless paper. Of course, I could hedge against exchange risk...for a large fee. :roll:

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The most popular currency of course, if it's managed wisely and openly, it shouldn't be a big problem and as a customer of this currency, you'd demand it be so.

Kandahar said:

So far, private currencies are merely a nuisance in the international market. Hopefully they stay that way.

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I'd like to see more experimentation before we call it completely dead.

Harry Guerrilla said:

If the value of the dollar is driven to nothingness through the forex market, you've achieved the same thing.
Valueless national currency.

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The forex market is merely a market. It can't "drive the value of the dollar to nothingness," it just reflects what the value of the dollar inherently is. The value of the dollar is determined by supply and demand, which can be influenced by the Federal Reserve and the Treasury Department.

Harry Guerrilla said:

I'm not to familiar with their situations.

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Greece had a debt crisis, due to longstanding fiscal irresponsibility. If they were still using the Greek drachma, they would have devalued their currency and endured a short, painful readjustment. But since they use the euro, they no longer have control of their own monetary policy. This means that they CAN'T devalue, because many other member states don't have such serious problems and don't want to. As a result, Greece had no choice but to raise taxes and cut spending...which will ensure that they have a lost decade and make little progress on paying down their debt. Moral of the story: Don't lose control over your own monetary policy to outsiders.

Iceland also had a debt crisis, but for a very different reason. Iceland's sovereign debt was not unreasonably high, but it was denominated in US dollars. As soon as it became clear how exposed their banks were to the US mortgage crisis, the value of the Icelandic krona cratered. Iceland's debt was suddenly many multiples of what it had previously been, because they had to pay it back in dollars instead of krona. Moral of the story: Limit your exposure to sovereign debt in currencies that aren't your own.

The reason these stories are related to the topic is because private currencies function very much like foreign currencies, in that the government doesn't have control over them, and they can cause a host of economic problems if they begin to replace the national currency.

Harry Guerrilla said:

The most popular currency of course, if it's managed wisely and openly, it shouldn't be a big problem and as a customer of this currency, you'd demand it be so.

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What makes you think that you can demand that private currencies be managed wisely and openly, but not the national currency? The interests of the public and the interests of the creator of the currency are not necessarily aligned, and you have little recourse if you don't like the decisions (except switch to another currency, which creates the very problem I was talking about previously). The interests of the public and the interests of the public's representatives ARE aligned, at least in theory. If you don't like their decisions, you can elect a president and a Senate who promise to change them.

Besides, businesses are not always responsive to customers' needs. What happens if the guy managing the dominant currency decides to do something stupid and causes it to crater? Yes, you'll switch to a new currency (there's that exchange risk instability problem again)...but in the mean time, our economy would undergo a major recession/depression due to the actions of a single person whom no one elected or appointed to anything.

IMO, although the rhetoric describing Mr. von NotHaus's minting of "currency" as "a unique form of domestic terrorism," goes too far, that does not change the reality that he was engaging in illegal activity. Previously, he deceptively advertised his "currency" as "real money." His website explicitly attempted to raise doubts about U.S. currency, which is legal tender. He had no authorization from Congress to mint money. Due to the confusion Mr. von NotHaus attempted to create in passing off his "currency" as "money," the U.S. mint had to issue a detailed statement informing people that the NotHaus "money" had no legal basis.

Had he minted strictly commemorative coins, there would have been no legal issues. Instead, Mr. von NotHaus went well beyond that. I am not surprised that he was convicted, as the legal case against him was quite clear-cut. Furthermore, I fully expect that the conviction will be upheld should he appeal it.

Kandahar said:

The forex market is merely a market. It can't "drive the value of the dollar to nothingness," it just reflects what the value of the dollar inherently is. The value of the dollar is determined by supply and demand, which can be influenced by the Federal Reserve and the Treasury Department.

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Of course but they could still influence it in a competitive system.

Kandahar said:

Greece had a debt crisis, due to longstanding fiscal irresponsibility. If they were still using the Greek drachma, they would have devalued their currency and endured a short, painful readjustment. But since they use the euro, they no longer have control of their own monetary policy. This means that they CAN'T devalue, because many other member states don't have such serious problems and don't want to. As a result, Greece had no choice but to raise taxes and cut spending...which will ensure that they have a lost decade and make little progress on paying down their debt. Moral of the story: Don't lose control over your own monetary policy to outsiders.

Iceland also had a debt crisis, but for a very different reason. Iceland's sovereign debt was not unreasonably high, but it was denominated in US dollars. As soon as it became clear how exposed their banks were to the US mortgage crisis, the value of the Icelandic krona cratered. Iceland's debt was suddenly many multiples of what it had previously been, because they had to pay it back in dollars instead of krona. Moral of the story: Limit your exposure to sovereign debt in currencies that aren't your own.

The reason these stories are related to the topic is because private currencies function very much like foreign currencies, in that the government doesn't have control over them, and they can cause a host of economic problems if they begin to replace the national currency.

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I take a totally different stance than you do on the moral of these stories.
Don't get yourself involved with to much debt else some very bad things can happen to you.

Kandahar said:

What makes you think that you can demand that private currencies be managed wisely and openly, but not the national currency? The interests of the public and the interests of the creator of the currency are not necessarily aligned, and you have little recourse if you don't like the decisions (except switch to another currency, which creates the very problem I was talking about previously). The interests of the public and the interests of the public's representatives ARE aligned, at least in theory. If you don't like their decisions, you can elect a president and a Senate who promise to change them.

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That exactly how the Federal Reserve is managed though.
It has an unelected governor that see to it's operations.

Kandahar said:

Besides, businesses are not always responsive to customers' needs. What happens if the guy managing the dominant currency decides to do something stupid and causes it to crater? Yes, you'll switch to a new currency (there's that exchange risk instability problem again)...but in the mean time, our economy would undergo a major recession/depression due to the actions of a single person whom no one elected or appointed to anything.

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If they aren't they go out of business.

We've suffered major recessions because of our elected leaders, what's the difference?