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Author Topic: Liberty Dollar in New Hampshire  (Read 13999 times)

Greenbacks

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Re: Liberty Dollar in New Hampshire
« Reply #15 on: May 04, 2005, 02:33:25 pm »

The choice seems obvious to me.  Since you know so much, why not start the SethDollar?  Start competing instead of just talking trash.

Seth - Trash Talking Economist!

First, I'd have to start the SethBank (to back the money with 100% reserves).  Our Banking laws here in NH are not yet ready for that.  Give us a few years..  Peter Hildreth is the Banking Commissioner, I've met him already and we'll take it slowly from there, in small steps.

There was talk of setting up a Credit Union in the past... no idea of the status... perhaps one day...  We'd need many more FSPers to move first.

P.S.  Everyone should go read Economics in One Lesson ASAP as a start to fixing things.


are you familiar with Ralph Borsodi's "Constant" scrip project in Exeter, NH in the early 70's?

http://www.cooperativeindividualism.org/swann_robert_on_borsodi_and_money.html

excerpt:
It was at that point that he decided to launch what he later came to call "The Exeter Experiment."

He was in California at the time and immediately upon his return to Exeter, N.H., his home, he contacted the president of the local bank, a friend of his, to obtain his cooperation in the proposed experiment. The bank president agreed to cooperate by having the bank act as a "money changer" and to accept deposits for the experiment. As a "money changer", the bank would simply agree to exchange dollars which Borsodi would provide, for the notes ("Constants," Borsodi called them) which Borsodi would issue. People wishing to join in the experiment would deposit money in the Exeter Bank in a joint checking account which would, then, be kept in Constants rather than dollars. Since Constants were based on a "basket" of commodities and an index of these commodities which Borsodi had developed, they were in effect, protected from inflation. In addition, Borsodi issued Constant notes as well as silver coins and sold them for dollars at the Constant exchange rate.

To everybody's surprise, even including Borsodi, many people bought Constant notes and made deposits in the bank checking account. At the same time Constants began to circulate around the town of Exeter, where restaurants and other businesses accepted them in payment. If these businesses received more Constants in trade than they could use for their own buying needs, the owners could go to the bank and exchange them for dollars at the then going exchange rate. Since dollars were going down in value relative to Constants as determined by the index, those people holding Constants were reluctant to exchange them since they would lose on the exchange. For this reason, and, therefore, Borsodi did not have to keep many dollars on hand at the bank for exchange purposes.

His objective was to invest the dollar deposits in most, if not all, of the commodities in the "basket" (thirty commodities which represented the most important commodities in World trade -- agricultural products, energy, and minerals). He began investing in the most storable commodity available, silver (gold was still illegal for U.S. citizens to buy at that time). Silver, with gold and platinum, was and is, one of the metals which has been traditionally associated with "real" money in the past. Borsodi, however, wanted to eventually invest much more heavily in the other commodities in the basket -- especially agricultural commodities such as wheat and rice which are universally used and needed throughout the world. But this part of his scheme would be the most difficult, he knew, because he devised a complicated scheme which would have utilized expert "spot market" arbitrages eventually. But that would involve literally millions of dollars (or Constants) worth of grain and other products.

The Experiment, then, was obviously limited in scope. Unless some large bank, or large corporation would step in and involve itself in helping to launch a new, independent and genuine world, as well as local currency, the Experiment would remain just that, an experiment. Whether Borsodi, really expected the Experiment to expand to a world level, I do not know. But it did not happen and again his doctor told him he would have to give up the very difficult job he had taken on in the Experiment with only a small handful of inexperienced volunteers to help him.

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ChrisforLiberty

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Re: Liberty Dollar in New Hampshire
« Reply #16 on: May 04, 2005, 04:08:15 pm »

The fact of the matter is believers in the LDs are more in tune with basic economic principles than the average person. You won't learn basic economic principles in government run schools, so you would have to learn it from other sources.

I have been a Liberty Dollar associate for about 3 1/2 years now and I have enjoyed every minute of it.

As for your claim that it is bad economics. I recently bought a gallon of milk for $3.25. This despite the fact that there is only about 10 or 20 cents worth of milk in the product. How Norfed operates is no different than any other business. You have production costs, overhead, employee pay, utilities, etc... No business person in their right mind would operate at a loss intentionally. It is just bad economics.

I didn't say it was a scam, I said it was bad economics.  Big difference.  One is intentional, the other just misguided.

I'm not going to promote or support _anything_ that is bad economics.  That is what got us in trouble in the first place.

It's really interesting to me how many fervent _believers_ in LDs don't understand the most basic of economic principles.
Have you _read_ Economics in One Lesson, have you read Mises?

Believing is not the problem.... You can believe that your lead is worth the same as my gold until the end of the century, and it'll still be lead.

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jasonpratt

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Re: Liberty Dollar in New Hampshire
« Reply #17 on: May 04, 2005, 04:31:55 pm »

Hey Seth,

Thanks, I've read Economics in One Lesson, and Human Action. Also Man Economy & State, What Has Government Done To Our Money, The Mystery of Banking, Breaking the Banks, The Denationalisation of Money, The Road to Serfdom, et al. So yes, I understand a thing or two about economics.

The Liberty Dollar is a free market product! If you don't like it, don't use it. It's like saying the Prius is a bad car, or bad ecology because it isn't 100% clean and renewable. No it's not, it's a step in a positive direction for those people who like to reduce their impact on the environment. It's not being sold as perfection. There is reality involved. If you like it, buy it, if you don't, buy something else. Sure you have a right to bash it and I won't try to stop you but I will say when you go off spouting about "bad economics" and "bad money" you come across as being pretty close-minded and a bit holier-than-thou when really I question whether your understanding of monetary economics is what you suggest that it is.

If all you were saying is "I don't like the Liberty Dollar," then you would be justified in your opinion. When you say, "The Liberty Dollar is bad money/economics" I think you're overstepping the limits.

Best Regards,

Jason
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"Hagrid"

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Re: Liberty Dollar in New Hampshire
« Reply #18 on: May 04, 2005, 04:37:41 pm »

As for your claim that it is bad economics. I recently bought a gallon of milk for $3.25. This despite the fact that there is only about 10 or 20 cents worth of milk in the product.

What????  Do you have an idea what you are talking about????  Go googling for "Milk Cartel Economics" and learn why that's just as bad...  You are only pointing out worse economics in justifying yourself...  That's so sad.

Quote
How Norfed operates is no different than any other business. You have production costs, overhead, employee pay, utilities, etc... No business person in their right mind would operate at a loss intentionally. It is just bad economics.

There are plenty of critques of Norfed out there... I won't repeat them.  My complaint  and analysis is not based on Norfed's 'profit' margin.. and you're only repeating the same tired defense Norfed has taught you to repeat... That it's their 'profit' at issue.  It's not.  Go reread what I wrote...

The laws of economics don't care about your beliefs... they operate whether you believe in them or not.

"Hagrid"

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Re: Liberty Dollar in New Hampshire
« Reply #19 on: May 04, 2005, 04:54:52 pm »

The Liberty Dollar is a free market product! If you don't like it, don't use it.

I agree with this.

Quote
It's like saying the Prius is a bad car, or bad ecology because it isn't 100% clean and renewable. No it's not, it's a step in a positive direction for those people who like to reduce their impact on the environment. It's not being sold as perfection. There is reality involved. If you like it, buy it, if you don't, buy something else. Sure you have a right to bash it and I won't try to stop you but I will say when you go off spouting about "bad economics" and "bad money" you come across as being pretty close-minded and a bit holier-than-thou when really I question whether your understanding of monetary economics is what you suggest that it is.

If all you were saying is "I don't like the Liberty Dollar," then you would be justified in your opinion. When you say, "The Liberty Dollar is bad money/economics" I think you're overstepping the limits.

If all I was saying is 'I don't like it', you'd be _more_  justified in complaining... but I'm not making personal views, I'm using math and economics.  Either you refute the math or the science, or admit they are right... It's not like I'm saying 2+2=5, is it?

Gresham's Law is an accepted principle.   "Bad Money" means something in that context... it's not a 'value' judgement.

If you want to argue economics, please do... If you want to want to insist it's only my opinion, I'll argue that.  Your Prius argument makes the case that (by metaphor) the LD is more 'economically' sound in the same way the Prius is more 'environmentally' sound.
If you're saying that a generic 50%-70% backed currency ideal is sounder than the nearly nil backed USD, perhaps... but the implementation as done by Norfed, using dealers and discounts and the bi-metallic (Silver and USD) standard, IMHO and the opinion of others, is not, because I can take USDs and use them as legal tender AND purchase gold/silver on the free market... My post above makes clear: in Gresham terms, LDs are 'worse' money than USD...

Pat K

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Re: Liberty Dollar in New Hampshire
« Reply #20 on: May 04, 2005, 05:17:08 pm »

Crap I agree with Seth.
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"Hagrid"

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Re: Liberty Dollar in New Hampshire
« Reply #21 on: May 04, 2005, 05:30:05 pm »

Crap I agree with Seth.

HAHAHAHAHAH  ;D

SteveA

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Re: Liberty Dollar in New Hampshire
« Reply #22 on: May 04, 2005, 05:37:44 pm »

Quote
LDs are 'worse' money than USD...

This isn't correct.  LDs are worse than USDs in how conveniently they can be exchanged.  They are NOT worse in their resistance against inflation.  They are comparable to silver in this regard.  There's a premium to the LD over pure silver, but pure silver isn't as conveniently exchanged between people as a LD though.

So there is a limited realm in which LDs are a more useful than either USDs or pure silver and such is shown by the desire for them by people.

Dollars aren't easily converted into pure silver and pure silver isn't as conveniently exchanged as LDs.  That conversion between dollars and silver is not free and you're missing that point.  There are also costs to marketing a standard currency but there could potentially be a more efficient currency in this regard ...

Quote
I'll use whatever currency is best, Liberty Dollar or SethDollar.  Have at it!

.... as was previously posted.
« Last Edit: May 04, 2005, 05:41:47 pm by SteveA »
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"Hagrid"

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Re: Liberty Dollar in New Hampshire
« Reply #23 on: May 04, 2005, 05:57:19 pm »

Quote
LDs are 'worse' money than USD...

This isn't correct. LDs are worse than USDs in how conveniently they can be exchanged. They are NOT worse in their resistance against inflation. They are comparable to silver in this regard. There's a premium to the LD over pure silver, but pure silver isn't as conveniently exchanged between people as a LD though.

I agree, somewhat.  The 'resistance to inflation' claim is up in the air though...   

http://www.libertydollar.org/html/silverover10.asp & http://www.libertydollar.org/html/Crossover%2020%20base.asp

In my mind, that's a big inflation in one jump.  Oh, that $10 bill is now worth $20, here's a new bill.  What?  You were charging $10 for your product?  Oh, just charge $20 now... you'll still get the same amount, right?  Just double all your prices...

If the USD did that:  Oh, that $10 is now worth $20, here's a new bill, you'd be screaming....

jasonpratt

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Re: Liberty Dollar in New Hampshire
« Reply #24 on: May 04, 2005, 06:16:22 pm »


Gresham's Law is an accepted principle.   "Bad Money" means something in that context... it's not a 'value' judgement.

If you want to argue economics, please do... If you want to want to insist it's only my opinion, I'll argue that.  Your Prius argument makes the case that (by metaphor) the LD is more 'economically' sound in the same way the Prius is more 'environmentally' sound.
If you're saying that a generic 50%-70% backed currency ideal is sounder than the nearly nil backed USD, perhaps... but the implementation as done by Norfed, using dealers and discounts and the bi-metallic (Silver and USD) standard, IMHO and the opinion of others, is not, because I can take USDs and use them as legal tender AND purchase gold/silver on the free market... My post above makes clear: in Gresham terms, LDs are 'worse' money than USD...


OK. Let's talk economics. Gresham's Law states "Bad money chases out good." Your argument is that you would not hang on to the Liberty Dollar, you would want to get rid of it ie., spend it into circulation. From this you conclude that the Liberty Dollar is the BAD money, because it is being spent/circulated, while the USD is the GOOD money as it is being hoarded. This is exactly the reverse of reality. In reality, the Liberty Dollar has a hard time circulating because people hoard it. There is very very little ALD in circulation in relation to USD. Meanwhile the USD is everywhere, circulating freely. Therefore, the Liberty Dollar is the GOOD money and the USD bad, according to Gresham. Q.E.D.

Incidentally, silver and gold bullion are even "GOOD-ER" money than ALD according to Gresham, because they absolutely do not circulate. People will gladly give USD for them, but except dealers will rarely TAKE USD for them. (Especially with U.S. Eagles which have a very low legal tender value. Here's my one-ounce Silver Eagle - can I get an FRN for it please? It says ONE DOLLAR! Yeah, right! When's the last time a cashier gave you an Eagle in your change? Never. There's Gresham's Law in action.)

Your understanding of Gresham's Law and its relation to the ALD seems to be 100% backward.

Since the Liberty Dollar 'suffers' from being GOOD money per Gresham, it has to have features that counteract its tendency to be hoarded. This is why the premium over face value exists (not to mention the reality of free-market enterprise requiring profit.) If the premium did not exist, and the one-oz Liberty were, say, priced at $5USD - they would not circulate at all. They would vanish from circulation just like pre-1964 quarters and Eagles, because of Gresham's Law. So the premium, as pointed out by another poster on this thread, SteveA, serves to make the ALD *easier* to spend (WORSE per Gresham, because without the premium ALD is too GOOD.)

As well, in my usage GOOD vs. BAD has no value judgment. I am merely speaking economically. BAD money chases out GOOD. Stated differently, GOOD money vanishes from circulation, leaving only BAD money in your wallet, your bank account, etc. Gresham showed this inconclusively, as people who have a choice naturally want to get rid of BAD money and save GOOD money for themselves, if both have the same legal tender value.

Jason
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jasonpratt

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Re: Liberty Dollar in New Hampshire
« Reply #25 on: May 04, 2005, 06:22:34 pm »

Quote
LDs are 'worse' money than USD...

This isn't correct. LDs are worse than USDs in how conveniently they can be exchanged. They are NOT worse in their resistance against inflation. They are comparable to silver in this regard. There's a premium to the LD over pure silver, but pure silver isn't as conveniently exchanged between people as a LD though.

I agree, somewhat.  The 'resistance to inflation' claim is up in the air though...   

http://www.libertydollar.org/html/silverover10.asp & http://www.libertydollar.org/html/Crossover%2020%20base.asp

In my mind, that's a big inflation in one jump.  Oh, that $10 bill is now worth $20, here's a new bill.  What?  You were charging $10 for your product?  Oh, just charge $20 now... you'll still get the same amount, right?  Just double all your prices...

If the USD did that:  Oh, that $10 is now worth $20, here's a new bill, you'd be screaming....

The crossover is a controversial feature of the Liberty Dollar. On the ALD-forum (groups.yahoo.com/group/ald-forum) people debate this one all the time. Suffice it to say it is not ideal, but is necessary and is well-conceived. Who knows though, the entire ALD is a big experiment and has never been done before in exactly the same way under the same economic circumstances. We'll see what happens when and if the crossover occurs. I don't think it's likely for 2005, not even sure about 2006.

I do know that if silver is $8USD spot, and the ALD version of it is $20ALD, this is the same as when I started with the ALD when silver was $4USD spot and $10ALD - the ratio is exactly the same. The ALD circulated BETTER then than it does now, so I suspect that the crossover is likely to be a very good thing for the overall adoption of ALD.

Jason
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ChrisforLiberty

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Re: Liberty Dollar in New Hampshire
« Reply #26 on: May 04, 2005, 07:22:35 pm »

Seth, if you don't like the Liberty Dollar, then don't use it. At least you aren't being forced to use it as opposed to FRNs. But don't go around claiming that those who do use them are somehow circumventing the laws of economics or hoaxsters. Any person who does their homework could not possibly come to such a conclusion. Once again, do your homework.
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Gabo

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Re: Liberty Dollar in New Hampshire
« Reply #27 on: May 04, 2005, 08:05:06 pm »

SETH:  You are right that USD will buy you gold and silver, but so can ALD.  The difference is that EVERY SECOND you hold that USD it is worth less and less.  The ALD, on the other hand, retains the same worth indefinitely.




PS:  Given a choice currently, what currency do you prefer to use?
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Re: Liberty Dollar is Voodoo
« Reply #28 on: May 05, 2005, 02:10:30 am »

Economics doesn't quite work like that... despite the best intentions of those who want to...

Say I decide to get involved:
I become a Liberty Associate for $250. I receive $100 Liberty Dollars and my future currency exchanges are @ Associate Rate ($9.22 per $10 right now.)

So I get $100 Dollars for $250 (EEK! That's 40 cents on the dollar, folks) I'm losing lots of money that way...
 In order to break even and get back to par, I must buy just over $1920 Liberty Dollars at a discount.... (if I did my math correctly)
(Let's forget for a second that 10 Liberty Dollars are really only worth $9.22 (or less, see below), because then I'd have to buy even more)

Oh wait, that's right, I can get paid for referrals...

My next-door neighbor is a helluva nice guy, but he's seriously into multi-level marketing. Let's hope he never hears about the LD, or he'll be pushing bullion instead of vitamins.


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I don't like the idea of currency whose value is purely inflated in the minds of those who don't know better... Sounds like Tulips to me... (and if you don't know the Tulips story, you fall into the 'don't know better' class of people)

Thanks, Seth. I have a wonderful facility for languages, but I lack the "economics" gene. You expressed perfectly what I felt in my gut the first time I read about the LD. I was unable to express it or explain why, but you have summed it up nicely.

Kevin
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Mike Lorrey

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Re: Liberty Dollar in New Hampshire
« Reply #29 on: May 10, 2005, 01:34:40 pm »

SETH:  You are right that USD will buy you gold and silver, but so can ALD.  The difference is that EVERY SECOND you hold that USD it is worth less and less.  The ALD, on the other hand, retains the same worth indefinitely.
PS:  Given a choice currently, what currency do you prefer to use?

This is inherently wrong for two reasons:
a) the value of silver fluctuates all the time
b) Bernards doubling algorithm, of doubling in FRN value if silver holds above $7.50/oz for three months, is double edged. Everone who buys ALDs after the doubling is at risk of losing half their value if silver drops below $7.50/oz for three months.

Now, you can say the ALD has the same face value no matter what the value of silver boullion, but so long as Bernard values the ALD in dollars, his currency will suffer the same decline in value as the FRN, because the FRN is the de facto standard of what a dollar is worth. Now, I like Bernard, he is a fun guy to hang out with, and he's done a lot of good stuff, his ALD is a great currency that has educated a lot of people about the difference between currency and value. Please don't make claims about it that just aren't so.

Silver will, over the long term, I am convinced, rise in value against the dollar. The dollar is going to tank badly in the next several years, and people need to get out of it if they want to preserve the value of their investments. This does not mean there won't be fluctuations.
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