

Prison May Be the Next Stop on a Gold Currency Journey  - riffraff
http://www.nytimes.com/2012/10/25/us/liberty-dollar-creator-awaits-his-fate-behind-bars.html?hp&gwh=&_r=0

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mseebach
This bit confuses me:

 _At his federal trial, witnesses testified to the Liberty Dollar’s criminal
similitude to standard American coins. They said his coins included images of
Lady Liberty and cheekily reversed “In God We Trust” to “Trust in God.” Then
again, his coins were made of real gold and silver, as American coins are not,
and came in different sizes and unusual denominations of $10 and $20._

They may be similar to US coin, which is, if nothing else, dumb. But if
they're made from gold and silver, wouldn't they be _more_ valuable than the
coins they were confused with? Is that not solid proof against mens rea? Gold
is $55/g, silver is $32/g. A US dollar coin is 8.1g, a quarter 5.6g.

~~~
hristov
He did not use pure gold or silver. The coins had less gold or silver than
their respective face value.

By the way, there are gold and silver american coins that are still legal
tender. There are many different legal tender gold and silver us coins that
have a woman on them and the word liberty and they are often referred to as
liberty dollars.

One side of his coin is especially similar to a silver coin called the peace
dollar (but also often referred to as the liberty dollar).

~~~
bunderbunder
> He did not use pure gold or silver. The coins had less gold or silver than
> their respective face value.

Putting in an amount of gold equal to its supposed monetary value would have
been a losing business proposition. He'd have been losing money every single
time he traded a Liberty dollar for US dollars. If the Liberty dollar is worth
exactly the amount of gold that's in it, then the only way he could even break
even is if the cost of minting coins were zero. He'd essentially be turning
himself into an easy way for currency speculators to avoid brokerage fees, and
losing his shirt in the process. (This is assuming he weren't using gold that
he had previously stockpiled when it was at a lower price.)

Putting only a little precious metal in the coins is a much better business
decision. Having some precious metal in there would be reassuring to members
of his target demographic. Having less than the coin's stated value in there
means that he had some shot at maintaining control over the market and having
a viable business plan.

That, and I suspect that keeping the actual value of gold at arm's length
would be an absolute necessity. Just look at what the price of gold was doing
over the time that Liberty dollars were being issued. A currency that's
constantly strengthening against all others at a double-digit rate is not a
currency on which one could base a stable economy. cf.) Dutch disease.

------
s_henry_paulson
"All the perplexities, confusion and distresses in America arise not from
defects in the constitution or confederation, nor from want of honor or
virtue, as much from downright ignorance of the nature of coin, credit, and
circulation."

\- John Adams in a letter to Thomas Jefferson

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bunderbunder
I'm not sure I buy the idea that this is as simple as the Federal government
wanting to ban all currencies that are not the dollar. I don't buy it because
there's still no sign of them trying to crack down on other alternative
currencies such as Ithaca Hours. And Ithaca Hours are, I believe, older and
more well-established.

It wouldn't be the implication that the alternative currency has a cash value
in US dollars, because Ithaca Hours are pegged at $10 per Hour.

I wonder if it's that the Liberty Dollars were issued by a for-profit
organization rather than being community organized like other alternative
currencies I'm aware of. If I remember right, the "dollar monopoly" was
originally enacted in response to the fracas around Civil War tokens. During
the war companies had been issuing their own scrip that started to be used as
currency in the surrounding communities. There were a number of minor
financial catastrophes that happened whenever the issuing company would stop
honoring its scrip, thus causing the currency to collapse. And the scrip
issuer essentially made off with however much US currency they had received in
exchange for the script. So the government decided to ban that as a form of
(at the time clearly much-needed) consumer protection.

Anyone who's more knowledgeable about the applicable law and its history who
can comment?

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cubicle67
this is where your US infinite detention becomes interesting. Both Obama and
Romney support the infinite detention of American citizens without trial, but
most people aren't worried as it's "only for the bad guys"

What happens when you get on the bad side of the gov, like this guy? Declare
someone a Domestic Terrorist and you can lock them away for good. Sure, it
almost certainly won't be used in this case but that's not the point; the
option _shouldn't event exist_

anyway, good on the guy. Rosa Parks hyperbole aside, what's the problem with
people trading in gold coins if they like? more power to them

~~~
boon
Spot. On.

When the laws can be used to put anyone in jail for just "annoying" the
"civilized and obviously good for you" status quo, you are in big trouble.

------
Kliment
I feel sorry for people whose parents force eccentric names upon them. Random
and Xtra? Really?

------
raverbashing
Gold backed currency is overrated

If you disagree with me you can go and convert your savings into gold (but you
are probably doing it already)

Remember, you still need US dollars to buy oil.

<http://en.wikipedia.org/wiki/Petrodollar>

~~~
ekianjo
Convert your dollars in gold. Wait 10 years. If all goes well you will have
gained a good percentage of US dollars once you decide to sell your gold to
buy stuff again. It's difficult to predict the future value of Gold, but
there's no way a paper money, backed by inflationary FED, is not going to lose
value against something as solid as Gold.

~~~
hristov
There is a way and it has already happened many times. You goldbugs need to
learn some history and gain a bit of perspective.

~~~
wintersFright
I'd agree with your last sentence if you substituted 'goldbugs' for
'paperbugs' :)

Some history for you: A USD until 1971 represented a thing. It was redeemable
for a specific weight of gold. After Nixon shock it become a concept. It is
now only backed by the 'idea' that someone will exchange their goods or
services in the future for the paper you hold - or the full faith and credit
of the USG if you prefer. The value of the USD is only in the prices placed on
the goods. If someone refuses to trade an item with you for your USD then what
value is the dollar? If you also read up on Triffin's Dilemma, you will
understand why the US must run a perpetual trade deficit - to provide
lubricating dollars for world trade. So there are many many many more dollars
in circulation than can lay claim to physical goods in this world. Eventually
all paper money returns to its intrinsic value (Voltaire!). When it happens to
the USD, it's going to be a doozy!

------
carsongross
One thing is clear: the government really hates gold.

Good enough for me.

------
seacond
"...with his sons Random and Xtra..."

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TheAmazingIdiot
This article, and the concept of Liberty Dollar are interesting to compare
with BitCoin.

Whereas the head of the created currency is looking at hard prison time (20
yrs), there is no real one entity involved in BTC.

My next question: will BTC be popular or threatening enough that the US
treasury take hold and launch lawsuits on counterfeiting as they did in the
Liberty Dollar case? And if so, how might they go about it?

~~~
hristov
Bitcoin is clearly not a counterfit. It is not at all similar to us currency.
I doubt any us attorney will even launch a suit against bitcoin. They only
file suits they are pretty sure they can win. So bitcoin is very different
than the liberty dollar in this respect.

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bluedanieru
Whatever asshole compared this guy to Rosa Parks needs to get some
perspective.

~~~
bluedanieru
Downvoted, eh? Yeah I suppose we can compare the struggle of an entire race to
break free from systemic and institutional oppression and exploitation, to a
bunch of illiterate college students playing at economics.

~~~
bitops
The issue here is the tone, not the content.

