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Gold, Silver and legal tender

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posted on Sep, 20 2006 @ 09:46 AM
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Can pure silver or gold still be used as legal tender in the United States? The Fed are trying to make it seem as if it isn't so. Are they correct in doing that? Or are they then undermining the U.S. constitution?

There is a controversial silver coin being made by NORFED, which the U.S. government is warning consumers about, saying it's illegal to use as legal tender. It's the coin they call the American Liberty Dollar.

So is it illegal to pay with the coins, which are pure silver or pure gold? Is there a law that is making that impossible to do anymore?


www.financialsense.com...


related links:
www.usatoday.com...
www.libertydollar.org...

[edit on 20-9-2006 by TheBandit795]




posted on Sep, 20 2006 @ 09:59 AM
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After reading several posts describing how banks would basically shut incase of a financial meltdown, keep all posessions and thus the official dollar would also collapse- making money useless; after all money is basically an I owe you note.

I see no problem in keeping gold and silver and using as a form of currency- in the case of a melt down the gold and silver would still retain it's price surely?



posted on Sep, 20 2006 @ 10:12 AM
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Gold and silver will definately maintain their price in case of a economic collapse. In fact their value should rise in that case.



posted on Sep, 20 2006 @ 10:17 AM
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The Bandit

It is not illegal for an person to accept a payment in a resourse against the cost of an item as advertised to be sold. However that does not mean its legal tender. Now im no expert on this especially in the USA however I believe its covered (as in the UK) by the Federal Reserve and Banking bill. What that states is similair to a person impersonating the Queen in the UK or you impersonating a FBI member, the offence is if you try and pass of this item as legal tender. If the person you are dealing with accepts it as payment as it is knowing its true status it is ok.

Regards

Elf.



posted on Sep, 20 2006 @ 10:18 AM
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kinda hard to use gold or silver as legal tender for the average joe, it's not like you can go to Walmart or the grocery stores and they'll take your gold and silver pieces, however I would think in certain business dealings you would be able to use gold or silver with the appropriate legal agreements.



posted on Sep, 20 2006 @ 10:23 AM
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WorldwatcherI was under the impression the Liberty dollar was made out of your typical metal, yet it represented an actual amount of Gold, in the even of a collapse the Gold could then be withdrawn. With each transaction the Gold in the bank would be transferred via the coins and be withdrawn at anytime- unlike the official dollar.



posted on Sep, 20 2006 @ 10:38 AM
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We would have to check that out, KNights. I was under the impression that it is made out of pure gold or silver (depending on the $ value)



posted on Sep, 20 2006 @ 10:52 AM
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posted by worldwatcher

Kinda hard to use gold or silver as legal tender for the average joe, it's not like you can go to Wal-mart or the grocery stores and they'll take your gold and silver pieces, however I would think in certain business dealings you would be able to use gold or silver with the appropriate legal agreements.



I agree Mr WW. In America, “legal tender” means the creditor (seller) must accept the offer of payment by the debtor (buyer). I have never heard of the issue arising and maybe it is overkill, but it is an essential part of the fiat money system. Once upon a time, the same law - or Fed Reserve Sys regulation - limited the use of the penny in payment to 25. Now, even that law has been removed. Money is money. And lately, the value of zinc used in the penny is said to exceed $.01 per coin.



[edit on 9/20/2006 by donwhite]



posted on Sep, 20 2006 @ 11:02 AM
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Bandit...
I can make you a deal
dont worry about the legality of using gold or silver as tender.
just trade them to me...
I will trade US dollars even for your liberty dollars... anyday of the week...

you can use them as tender with me anytime...
sell ya my car for 10,000 liberty dollars...
sell ya a soda for 1 liberty dollar...

no problem... in the land of Laz, liberty dollars are as useful as US dollars...
but seriously

IMO gold silver and other precious metals value are too dependant upon industrial demand... and they are SOOOO useful to industry.

but that is where their value is largely derived from presently, rather than as a staple of a monetary system...

they are good investments when prices are down, and bad when prices are up...
there is always ways to produce more gold from present operations that would keep the value fairly stable at a high mark... (much like oil, depends on how worthwhile it is to produce)

but then, what do i know... I have only lost money in metal investments...


and from above


the value of zinc used in the penny is said to exceed $.01 per coin


I think copper is also up... so what is keeping people from melting all those penneys for 1.6cents each? (i think it is officially illegal to melt currency)
maybe its time to sell some "scrap" metal...

[edit on 20-9-2006 by LazarusTheLong]



posted on Sep, 20 2006 @ 01:46 PM
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www.financialsense.com...
The coins are then spent by the group's 2,500 Liberty Associates in stores run by fellow supporters or are accepted unknowingly by clerks who are unaware they are not receiving real money

This is part of the problem, that people are accepting it thinking its legal tender, when its nothing more than a product, likesay, a toaster, that the person has purcahsed.

I am tempted to think that the real conspiracy is in part that the peopel promoting the fake currency, such as that webpage, are really just trying to sell it. THe author notes that he 'endorses' the product and gives an inline link to purchase some.


With the above being fact, does it not seem more likely that, in fact, it is the existence of Federal Reserve Notes [fiat money] that are in contravention of The Constitution and hence, ILLEGAL – and not the other way arounnd?

Clearly, this is just a silly arguement. Federal Reserve notes are not illegal, no matter what anyone likes to think. The real question is, why should the government be able to make these alternatives illegal?

You see folks, according to the Constitution For The United States of America – gold and silver ARE money!

Which was all very well and good back in the days when you kidnapped indian kings and ransomed them for metric tonnes of gold and stamped them with your kings face. The governments of hte world went off the gold and silver standards because having the money based on them resulted in 'small' events like the great depression, and even the economic collapse of germany that resulted in, of all things, WWII.

Originally I felt that these "liberty Dollars" were little more than useful for trade and barter, BUT, looking at the coins, they pretty clearly look like they are capable of decieving people into thinking that they are real money. They could at least be objected to as being akin to counterfiet. Legal Tender must be accepted for payment, you can't refuse a US dollar and say 'no, I want platinum chips'. A person accepting a liberty 'dollar' has, in effect, accepted a promise from some guy to give them some metal, and if they try to use it, anyone else is, sensibly, going to refuse it.


www.usatoday.com...
The United States Mint is the only entity that can produce coins," Bailey says.

Indeed. Not so long ago, people were selling fraudulent 911 'collectors coins'. YOu can sell rounded peices of metal with pics stamped on them, but they are called 'medallions', what these guys did was call them collectors coins, and their company was titled "US Mint" or some such. That was a clear attempt at fraud. THe liberty dollar doesn't appear to be, it appears to be a genuine protest, BUT, if its own members are trying to use the things in regular stores, and defrauding people, its their own stupid fault.


In a case in Buffalo, a man and his son are set to go on trial next month after they knowingly tried to buy beer at a Buffalo Sabres hockey game with Liberty Dollars.

Thats pretty clearly illegal. Is a person agrees in advance to give you something for something else, its called "trade and barter". If I was having a garage sale, and some guy wanted to buy something with a liberty dollar, I'd be inclined to take it, but I know that its pretty much useless.


"We just feel that they are something that educates people as to what the monetary systems are like in the world, that they are a fiat system, that if people lose faith in them, they will collapse," he says. Besides, "They are a good-looking coin."

Indeed. Its difficult to see why this should be seen as a crime. THings might get really interesting if someone tries to pay their taxes in them!


knights
I see no problem in keeping gold and silver and using as a form of currency- in the case of a melt down the gold and silver would still retain it's price surely?

You forget, what you have is a basically a reciept, a reciept that entitles you to withdraw from the Liberty Dollar Company's stockpile, a certain measure of gold or silver. This means that teh Liberty Dollar Company is open to all the problems that have, historically, lead to financial collapse, because, in teh past, all money was just that, a reciept for gold stored in the bank or at national repositories like Ft. Knox.

The liberty dollar is essentially a protest agianst going off the gold standard and the philosophical issues behind the issuing of national currency.


bandit
Gold and silver will definately maintain their price in case of a economic collapse.

Think about it. Would you accept a chip of gold, during a financial collapse, in exchange for any of your personal items?? And, again, a dollar must be accepted for goods being sold, gold doesn't have to be. If you sell your car for a bar of gold, what are you going to do with it? Cut a peice off (gold is sessile, can be cut by a knife) and give it to the grocery store clerk for some bread and meat? He isn't required to accept, and probably won't, not knowing what would even be an equivalent cash value of the gold.

Potatoes would be worth more than gold bars in a real severe economic collapse.


was under the impression that it is made out of pure gold or silver

Some are metal coins made out of silver or some mix involving silver. Others are peices of paper, that sorta look like bonds or dollar bills, that entitle you to withdraw from their corporate stockpile.

I am curious, how much gold do they have? A million dollars worth? Whats to prevent them from, say, printing 2 million dollars worth of paper dollars? Its like the bank, all the money in all the accounts isn't physically in the bank, and if everyone tries to withdraw it all at once, the majority of them can' tget anything, and thus the bank collapses. This was a frequent and periodic problem back when paper money was worth a certain amount of gold.


LazarusTheLongI will trade US dollars even for your liberty dollars... anyday of the week...

Seems like you are going to be overpaying at times then no? I mean, the US dollar value of gold fluctuates. If you pay an even amount, who's to say that you are getting your money's worth? You could just purchase gold at the market price on the stock market, even buy it when its low and sell it when its high. Why bother with an unverified and non-guaranteed gold stockpile?



posted on Sep, 20 2006 @ 06:42 PM
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Why bother with a verified and non-guaranteed piece of paper?


Silver and Gold can buy you things when all else fails, except that hotty booty, that'll always get you cash.



posted on Sep, 20 2006 @ 07:34 PM
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If it was a state or a bank issueing these coins (and cash) then it would seem more .. real?

From my understanding of it anyways, it is a few business men who bought some gold to start it off, they then sold it, with the money coming in bought more gold and no have a vault.

Legal tender is what is excepted by law under the United States Federal Reserve. HOWEVER, because it is backed by a metal, gold and silver it is worth something.

That is two different things, if you gave me a $20 bill for something I sell you, I bring it to the bank and put it in my account or go somewhere to buy something else.

If you give me a receipt (coin) for ONE PUR ONCE of silver - not $20 though it may be $20 when you bought it.. I could trade it in (for however much it is worth?) and still get American Dollars for it. Because forfeiting that coin means the silver goes to the hands of what ever bank I gave it to. I could not find whether or not the coin is minted in silver or is backed by silver.

The other side of this currency, and where it gets smokey and not so clear is the value of your coins and bills.

According to the site selling the money, if you buy a set of coins and bills and one bill is say $100 - they then set aside or mark somewhere using their systems that you bought $100 worth of gold on such and such day with such and such value. Now, if you keep the bill and our set amount of gold (lets assume .5oz) and gold rises 100% over 10 years and the company is still operating (the gold is even there) and you trade it in, theoretically your .5oz of gold would now be $200

That is of course not a fool proof plan because it is a vault in Idaho run by business men, no national baking and not protected by law, though very very hard to counterfeit. If that is the system being used, if my reading and interpritation is correct, the value of goods goes up, as does gold, you are keeping with inflation (where they get the inflation proof gimik from) the American Dollar is adversily affected by inflation, you Dollar does not keep up with goods and you require more of it, if you made $100 10 years ago and the same level of inflation then the man with .5oz of gold, you would need to earn an extra $100 while the gold doubles or works for you on its own.

Basically it is just as good as buying if not the exact same as buying gold off the stock market, it goes up and you sell it back, great for SAVING but not for a trip to walmart. Besides, the price for a set of currency is rather expensive and average joe can't affoard it. Though if he could it would be a great investment.

So far there have been no complaints as to being riped off, not getting cash back when traded in and apparently is legit. So this is not a scam, and is surprisingly gaining momentum and literally could give the Dollar a run for its money. The Dollar is weakening while gold is shooting through the roof. Since 9/11 anyone who had a good stash of it is doing rather well for himself.

If you are interested in the "Liberty Dollar" I would advise (though I am not an economist) that you buy gold in physical form and put it in a bank safe deposit box or have an investor hold on to it for you (however they handle it) because it is safer then a vault in Idaho. < though that is my opinion and would love to here from a real economics professor or anyone else with knowledge about this



posted on Sep, 20 2006 @ 07:41 PM
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I just wanted to add, while look at the Liberty Dollar site, and the accusations it is free of the inflation issues, and they quote Rome as using gold.

Gold can be inflated, it depends on supply and demand just like our current monetary system. If a pound of sugar cost $5 and the fields are taken out by a hurricane in the Gulf, or the supplies get cut by wars or drought the good because more scarce and more in demand, in other words it will take MORE gold for the same amount of sugar say $50. Gold can be used as a savings however in the case of an economic collapse gold will go up beyond 4k an ounce (of course depending on the savarity of the collapse) who would buy it? Why would they buy it? They need what little cash they have to buy food, the gold actually becomes worthless except a pretty metal in the event of an economic colapse because no one can give you anything for it.



posted on Sep, 20 2006 @ 07:56 PM
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posted by Nygdan



“ . . coins spent by the 2,500 Liberty Associates in stores run by fellow supporters or accepted unknowingly by clerks unaware they are not receiving real money . . “
[Edited by Don W]



The person who obtains a thing of value under false pretense is guilty of theft.



I think the real conspiracy is the people promoting the fake currency, such as that webpage, are really just trying to sell it . . “



I’ve seen some slick ads offering $5 silver commemorative coins that do include or formerly included the phrase “legal tender” but failed to mention it was only legal in a Pacific Ocean island, Manua, part of American Samoa, I believe.



Clearly, Federal Reserve notes are not illegal, no matter what anyone likes to think. The real question is, why should the government be able to make these alternatives illegal?



Since the memory of man runneth not to the contrary, it has been the exclusive prerogative of the king (government) to coin money and no one else need apply.



The governments of hte world went off the gold and silver standards because having the money based on them resulted in 'small' events like the Great Depression, and even the economic collapse of Germany that resulted in, of all things, WWII. The US Mint is the only entity that can produce coins," Bailey says.



I’m pretty sure the US (and any other government) can reserve a particular size for its coinage and no one else is allowed to make anything that size. I’m holding an American quarter and it looks to be 23.5 mm in diameter. The Canadian quarter is close, say, 23 mm. Since Canadian money usually trades at a discount to US money, offering to pay for an item with Canadian money would be wrong unless the seller knowingly accepted your tender.


" . . they are educate people as to what the monetary systems are like in the world, that they are a fiat system, that if people lose faith in them, they will collapse" . . [Edited by Don W]


Fiat money comes from the same source as “fiat accompli.” It is done. Or “let it be done.”



posted by knights
I see no problem in keeping gold and silver as a form of currency - in the case of a melt down. The gold and silver would still retain it's price surely?
[Edited by Don W]



Sure they would. Especially gold, but silver may be hard to “pass” since so many nickel-clad coins look like silver. I remember seeing a very small gold coin - like the size of your little fingernail - maybe $1 or $2.50? It was a US coin minted in the late 19th century. I think many of the better known gold coins - the Maple Leaf - the Krugerrand - the Austrian Schilling - the Mexican Peso - contain 1 oz or 28 gms of pure gold.

Being half facetious, I used to tell my friends I was not saving gold but was saving lead to get me over that societal breakdown period. Like 230 grains of .45 caliber lead. ACP. When our world gets to the point that people cannot use the national currency, we are in more trouble that I’d care to imagine.



if everyone tries to withdraw it all at once, the majority of them can' get anything, and thus the bank collapses. This was a frequent and periodic problem back when paper money was worth a certain amount of gold.



That problem was solved in the US by the Roosevelt New Deal’s FDIC - Federal Deposit Insurance Corporation. A private company operating under Federal aegis. Your bank deposits are “taxed” maybe 1/10 of 1% once a year, January 1, I believe. The bank pays the tax, not you, so the average ‘bear’ does not know how the fund is maintained. It assures each depositor he or she will receive 100% of his deposit up to a certain amount - $100,000 - should the bank you chose go out of business in a hurry. Since 1933 no depositor in America has lost one penny. At one time banks had the option of joining FDIC. Not any more.

Back in the 1950s, 1960s, some wiseacre in Panama began selling deposit insurance to small town banks and neighborhood S&Ls. They prominently displayed the words, “Insured” which not unexpectedly caused many citizens to believe it was the Federal Government that did the insuring. Nyet! Of course, when one of those “slick” institutions failed, the guy in Panama moved to Barbados.

I say slick because the owners never had their own money insured in Panama. These operators offered ½% more interest that the FSLIC offered and gave premiums - coffee pots - toasters - for new accounts. They made less desirable loans at 1-2% above the rate good borrowers could get. Risky business. All informed people knew that but in America, we let scams run until they hurt innocent people. Why is that?



[edit on 9/20/2006 by donwhite]



posted on Sep, 20 2006 @ 11:02 PM
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Originally posted by Rockpuck
they then set aside or mark somewhere using their systems that you bought $100 worth of gold on such and such day with such and such value.

Seems like that would only give you 100$ worth of gold, rather than, say, investing in 100$ worth of gold today and selling 50 years from now.



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