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ppauper
Topic Author
Posts: 70239
Joined: November 15th, 2001, 1:29 pm

Liberty DollarsQuoteEvansville, Ind.-based National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code, otherwise known as NORFED, has been making the Liberty Dollar coins for eight years and claims $20 million is in circulation. The group says the money, unlike official U.S. cash, has a hedge against inflation because it is made almost entirely of silver and is backed by stocks of silver and gold in a vault in Idaho. nazzdack Posts: 256 Joined: March 3rd, 2004, 9:50 am An end to fiat money ? Do the coins offer any deflation protection? Can the coins be exchanged for the underlying bullion at the "vault" in Idaho? Do they "trade" above or below par? Just curious. mdubuque Posts: 2411 Joined: July 22nd, 2004, 9:04 pm An end to fiat money ? This idea of abolishing the Fed borders on the asinine, my friend Ppauper.You say you dislike inflation. So do I. And you want to put the politicians in control of the money supply?Study the 19th century banking panics. That's why we created the Fed.Inflation has come under very good control with the Fed after that uptick in the 1970s, thank you very much.Matt GeneralDude Posts: 86 Joined: August 26th, 2006, 11:44 pm An end to fiat money ? how does having gold help hedge the bet of inflation? I'm not following this... Collector Posts: 4950 Joined: August 21st, 2001, 12:37 pm An end to fiat money ? "how does having gold help hedge the bet of inflation? I'm not following thi"gold supply is strongly limited, paper money not....or are you affraid gold supply also could be unlimited through Alchemy... like Flamel and his philosopher's stone.... don't worry few people know the secret of the thing that not is a thing, the shape that has no shape, and they will only use it wisely ...Flamel suposedly funded 14 hospitals, several Chapels and much more, where did he got all this money from? Last edited by Collector on September 17th, 2006, 10:00 pm, edited 1 time in total. CactusMan Posts: 2990 Joined: October 27th, 2005, 8:26 pm An end to fiat money ? QuoteOriginally posted by: GeneralDudehow does having gold help hedge the bet of inflation? I'm not following this...Because gold has held its value (except for rare exceptions) remarkably well.As the oft-quoted example goes: 400 years ago in Europe, a good mens suit cost 1 oz gold. Today, 2006, a good mens suit costs about, well, 1 oz gold! (Note the word "good", meaning not cheap, but not expensive either.)I just did a quick test. I went to the first apparel site I found, and threw together a "good" mens suite. Here are the results:************************Jacket, Slacks, Shirt, Tie, Belt:$521.00Shoes: $108.00 (Cap-Toe Classic Dress Shoe)------------------------------------Total:$629.00Price of gold: $582************************Oh, have any of you ever seen so-called "Local Currencies" that are done in some places: LocalCurrency Last edited by CactusMan on October 1st, 2006, 10:00 pm, edited 1 time in total. Marsden Posts: 3829 Joined: August 20th, 2001, 5:42 pm An end to fiat money ? I suspect that Spain during the Conquistador period saw a failure in the premise that the gold supply is strongly limited. ppauper Topic Author Posts: 70239 Joined: November 15th, 2001, 1:29 pm An end to fiat money ? QuoteOriginally posted by: CactusManOh, have any of you ever seen so-called "Local Currencies" that are done in some places:http://www.zpub.com/notes/LocalCurrency.htmlwho wouldn't trust money with Malcolm X on it ? Traden4Alpha Posts: 23951 Joined: September 20th, 2002, 8:30 pm An end to fiat money ? QuoteOriginally posted by: nazzdackDo the coins offer any deflation protection? Can the coins be exchanged for the underlying bullion at the "vault" in Idaho? Do they "trade" above or below par? Just curious.This coin has a face value of$20, but only $10.90 worth of silver (based on the current spot price of silver) so it's already a form of fiat money. I don't know if anyone would accept the coin as legal tender or if there's a liquid secondary market for the these coins (physical delivery would certainly broaden the effective spread, though).Even if the coin were legal tender, it would only provide a partial hedge against inflation. For low levels of inflation the coin would buy$20 devalued dollars worth goods. Only if inflation pushed the price of silver above the coin's "strike price" of $20/oz would the coin become a true hedge. CactusMan Posts: 2990 Joined: October 27th, 2005, 8:26 pm An end to fiat money ? I noticed in the article that two had been arrested for using them.That surprises me, because I would have thought that these would be considered a kind of "gift certificate" or "token"--much like arcade game tokens--redeemable for$20 at "participating merchants". Who would confuse these with coins issued by the U.S. mint?I don't know all the issues involved, though.
Last edited by CactusMan on September 17th, 2006, 10:00 pm, edited 1 time in total.

mdubuque
Posts: 2411
Joined: July 22nd, 2004, 9:04 pm

An end to fiat money ?

This analysis is trapped in the 60s. So much has changed. For one thing it is pretty clear that Fed policy is influenced by the price of gold and other indicia of inflation. So it's not truly fiat money.Plus, since Reagan deregulated banking in 1982, the lines between savings and checking accounts (each with different velocities through the economy, if you are a devotee of Milton Friedman, has changed drastically since the advent of Super Now and hybrid accounts like Schwab One accounts.So "control of the money supply" is a concept that most Americans fail completely and absolutely to understand.Study some of the monthly publications from the Cleveland or Kansas City Fed to get up to speed on what has happened in the last 24 years especially. Available for free online, at least the Cleveland ones are. MattQuoteOriginally posted by: Collector"how does having gold help hedge the bet of inflation? I'm not following thi"gold supply is strongly limited, paper money not....or are you affraid gold supply also could be unlimited through Alchemy... like Flamel and his philosopher's stone.... don't worry few people know the secret of the thing that not is a thing, the shape that has no shape, and they will only use it wisely ...Flamel suposedly funded 14 hospitals, several Chapels and much more, where did he got all this money from?
Last edited by mdubuque on September 17th, 2006, 10:00 pm, edited 1 time in total.

ppauper
Topic Author
Posts: 70239
Joined: November 15th, 2001, 1:29 pm

An end to fiat money ?

QuoteOriginally posted by: CactusManI noticed in the article that two had been arrested for using them.That surprises me, because I would have thought that these would be considered a kind of "gift certificate" or "token"--much like arcade game tokens--redeemable for \$20 at "participating merchants". Who would confuse these with coins issued by the U.S. mint?indeed, many merchants issue their own "dollars" as a bonus when you shop, and they can be spent only at that merchant.

ppauper
Topic Author
Posts: 70239
Joined: November 15th, 2001, 1:29 pm

An end to fiat money ?

QuoteOriginally posted by: mdubuqueInflation has come under very good control with the Fed after that uptick in the 1970s, thank you very much.growth doesn't cause inflation.QuoteBut for a newly appointed Fed chairman, the course is pretty clear. Early on, both Greenspan and Paul Volcker embarked on rate-hiking campaigns that sent the economy into recession (and caused an incumbent President to be booted from office). Both came to be revered as defenders of stable prices

ppauper
Topic Author
Posts: 70239
Joined: November 15th, 2001, 1:29 pm

An end to fiat money ?

QuoteOriginally posted by: ppauperQuoteOriginally posted by: mdubuqueInflation has come under very good control with the Fed after that uptick in the 1970s, thank you very much.growth doesn't cause inflation.QuoteBut for a newly appointed Fed chairman, the course is pretty clear. Early on, both Greenspan and Paul Volcker embarked on rate-hiking campaigns that sent the economy into recession (and caused an incumbent President to be booted from office). Both came to be revered as defenders of stable pricesand I'd add the obvious.(i) Inflation is caused by the existence of the Fed(ii) the Fed's job is to fight inflationAbolish the Fed and you eliminate inflation, thereby eliminating the need for the Fed...

CactusMan
Posts: 2990
Joined: October 27th, 2005, 8:26 pm

An end to fiat money ?

I wonder if a smart attorney could not argue that the guys arrested for using those silver tokens merely meant to make an "offer" of the token for the beer, not to pass counterfeit currency. But, I'm not a laywer, and don't know all the issues. I bet OJ's lawyers could pull this off.If I had been the merchant, I would have said, "We don't take 'em, and I don't even know what the hell they are.", instead of calling the cops.
Last edited by CactusMan on October 1st, 2006, 10:00 pm, edited 1 time in total.