Stick it to the Federal Reserve: Use sound money

Marketplace
21

If anyone really wants to start buying sliver for use as money or as a safety net in case of the fiat money’s collapse start with generic silver rounds from a reputable mint. They are 1oz 999 fine silver. They can be bought for ~6% above spot. If you are willing to buy in bulk (>=100oz) you can get it for around 3% above spot. There’s always the US silver Eagle as well, although the premium is higher. Again it’s less if you buy it in bulk, though “bulk” for Silver Eagles generally means 500 coin mint boxes. Not inexpensive.

Junk silver is a good way to buy silver as well. Junk silver is old US coins like dimes, quarters, and half-dollars that have a known percent of silver content but that are worthless as collector coins. For example, the old Franklin half dollars are 36.169% silver. The silver was mixed evenly in an alloy, so even though they are old and worn, they are still 36.169% silver. If you have one, or a bag of them, weigh it, multiply by .36169 and then by the spot price of silver. That’s what it’s worth. If you actually need to spend it some day, every one will know how to do this. You’ll be able to spend it easier than a twenty dollar bill. It will probably even buy more. :wink:

Silver is silver, gold is gold, and if the fiat money crashes prices will be in ounces of gold and silver anyway, the face value of the coin will be meaningless. Really, it already is for precious metal coins. There won’t be any need to revalue the coin, as NORFED is going to try to do. Once the money is in circulation people will ignore them if they are out of touch with reality. The market will set the value of the currency. Any attempt by them to manipulate the price with guaranteed exchange rates will just bankrupt them. They don’t have the resources to pull something like that off. Heck, neither do most central banks.

As for gold, there is no need to buy 1oz coins. You can get 1/10 oz coins for around $51 right now, $49 if you shop around. I’ve seen them for ~$47.5 each if you can spring for a mint tube of 50. The premium is higher on the smaller coins, roughly $490 an oz with premium compared to roughly $465 an oz with premium for the 1 oz coins. But, if you ever need to actually spend it, 1/10 oz will probably be as big as you want to go. It’s the equivalent of a 50 dollar bill right now, and there is no inflation to speak of. If the dollar really collapses that little coin will be the equivalent of a $100 bill, at least, and any premium you paid will be forgotten. Trying to spend a 1 oz coin will be like trying to spend a $1,000 bill.

If you’re buying as an insurance policy, never pay more than spot plus the standard premium. If there is ever hyperinflation and the dollar hits rock bottom, no one will care that your gold coin is one of only 1,000 of that type that came from the Denver mint that year. The only thing they’ll care about is how much gold is in it. Same goes for silver.

None of this is really investment advice, just some ideas for people who want to start using gold and silver as money or who want to put some away for a rainy economic day.

Currently, you can even link an egold, or other emetal, account to a debit card and use real money the next time you go to a Wal-Mart, or pay a professional for his services. If a significant percent of the population did this, say 10% ?, the Fed would go into convulsions. The good money would be worth much more than the bad. Then again, they’d probably just make it illegal. Who knows?

22

Currently, you can even link an egold, or other emetal, account to a debit card and use real money the next time you go to a Wal-Mart, or pay a professional for his services. If a significant percent of the population did this, say 10% ?, the Fed would go into convulsions.

Sounds like a plan!

23

Currently, you can even link an egold, or other emetal, account to a debit card and use real money the next time you go to a Wal-Mart, or pay a professional for his services. If a significant percent of the population did this, say 10% ?, the Fed would go into convulsions. The good money would be worth much more than the bad. Then again, they’d probably just make it illegal. Who knows?

This is a good idea, but I don’t see why the Fed would have convulsions. Why would they care?

24

I’m pretty sure that “Liberty dollars are accepted in 95% of the stores in Austin Tx” thing is total crap. I’ve never even seen one and I live here. I mean, I know there’s a significant libertarian population here, but there’s simply no way that’s true.

25

I spent some time telephoning and emailing different minting companies today, including Sunshine Mint, who produce the Liberty Dollar coins.

I can produce 1oz .99 pure silver coins for about $9 apiece in a quantity of 250 or so.

The Liberty Dollar moves to $20 for 1oz silver backing shortly, so I’m thinking of producing “The Libertarian Dollar.” This would have a panic stricken chicken and “CAELUM ES CERNUUS” on one side and “LIBERTARIAN $20” on the reverse.

If I could get $16-$20 apiece on ebay for these, I’d double my money. My coin would be every bit as legitimate and sound as the Liberty Dollar, could be verified by the very same people producing and auditing NORFED’s currency, but would be a whole lot more amusing.

Thumbs up? Thumbs down?

26

LOL…okay McGroarty you win that one. To be honest, I had no idea that precious metals had achieved the type of market that you guys are talking about. I would definitely agree that some of these other solutions are more sound than the Liberty Dollar.

I still want to stick it to the Fed though…to the mints I shall go… :smiley:

27

I would definitely agree that some of these other solutions are more sound than the Liberty Dollar.

I still want to stick it to the Fed though…to the mints I shall go…

I see a larger moral to this: someone making the right philosophical statements is not necessarily philosophically sound. Some will say the right things but not act on it. Others may say a few of the wrong things, but act morally. And there will always be a few who will say anything to make a quick buck.

28

This is a good idea, but I don’t see why the Fed would have convulsions. Why would they care?

The portion of the money supply consisting of gold and silver would be outside of their control. The more of the money supply outside of their control the worse it is for them. There would be no way for them to manipulate it, aside from selling their own reserves of metal to suppress the price on the open market. That would lower the value and increase the amount needed to buy things - a way to inflate even good money. It would be a temporary measure, though. Their reserves are big, but not unlimited, and once their reserves are gone the problem will still be there, only now with even more sound money in circulation. All of their games with the printing press and the actions of the Federal Open Market Committee would be useless. It might actually have to be much greater than 10% to start things going. I don’t know.

I think it is important to not only advocate sound money but to attempt to institute a separate money supply that uses it, making the benefit of sound money clearer to the majority of the population. People would see that the purchasing power and wealth of those with gold money stays the same or goes up while theirs is going steadily down. If the dollar collapses and inflation takes off, the benefits will be painfully obvious and the conversion to real money will accelerate. The existence of an alternative will ease some of the economic shock as well. At some point in the decline no one will want paper money if there is an alternative. Not that I think it is likely soon, but given the nature of fiat currency it will happen eventually. The government’s only option at that point will be to accept it or, like the 30s, make private ownership of gold illegal.

29

I have a serious question on this. Why have a Reserve? I’m not well versed in Economics so I really question what uses are there to a Reserve versus letting market forces reach their natural equilibrium.

And is there any decent books on this that I should pick up sometime?

– Bridget

30

I have a serious question on this. Why have a Reserve? I’m not well versed in Economics so I really question what uses are there to a Reserve versus letting market forces reach their natural equilibrium.

And is there any decent books on this that I should pick up sometime?

– Bridget

Do you mean why is there a Federal Reserve? Or why do central banks have reserves of gold and silver?

Sorry, I am a little unclear about what you mean.

31

Why have a Reserve?

Private banks could print and mint money. They have done so in the past.

It would mean going back to a 100% specie (gold, silver, etc.) standard. A “dollar” would be defined as a certain amount of gold (or silver, or some other such commodity).

32

I think she means Federal Reserve. There is no good reason to have one, or any government involvement in money at all. Bridget, try reading the essay “Gold and Economic Freedom” by Allan Greenspan (yes, the Fed chair) http://www.usagold.com/gildedopinion/Greenspan.html

33

R.W. Bradford writes in Liberty magazine that, as Fed chairman, “Greenspan (once) recommended to a Senate committee that all economic regulations should have fixed lifespans. Senator Paul Sarbanes (D-Md.) accused him of ‘playing with fire, or indeed throwing gasoline on the fire,’ and asked him whether he favored a similar provision in the Fed’s authorization. Greenspan coolly answered that he did. Do you actually mean, demanded the senator, that the Fed ‘should cease to function unless affirmatively continued?’ ‘That is correct, sir,’ Greenspan responded.”

Bradford continues, “The Senator could scarcely believe his ears. ‘Now my next question is, is it your intention that the report of this hearing should be that Greenspan recommends a return to the gold standard?’ Greenspan responded, ‘I’ve been recommending that for years, there’s nothing new about that. It would probably mean there is only one vote in the Federal Open Market Committee for that, but it is mine.’”

I’m glad to hear that he still believes his own essay. My question is still: Why is he the Fed chair? Why didn’t he refuse?

34

I’m glad to hear that he still believes his own essay.  My question is still:  Why is he the Fed chair?  Why didn’t he refuse?

For a previous thread titled “Allan Greenspan” in the “Current Events” forum, click here: