Prison May Be the Next Stop on a Gold Currency Journey

The point is that they all convert into dollars and I will certainly never use BerkShares for as long as I live. I only take US dollars.

Also, the banking structure around these things is really inconvenient. I worked a short stint as a teller at Bank of America and never once have I seen anything but greenbacks. This was in Santa Cruz county as well, where people would definitely be willing to try such crazy ideas.

You need to back this argument up with a good reference.

[EDIT: multiple currencies in the same country. Argentina is a beautiful country but it has had some severe issues over the years. You need to have one currency before you can do things like local currencies. URVs in Brazil were a genius way of pulling this off.]

The truth is that the US dollar is the strong currency and his one the weak; and he basically made money by having his coins confused for US dollars.

By the way, there are alternative money (such as bitcoin) that are actually honest about being an alternative. The government has not gone after bitcoin yet.

Also, a currency is not something you hoard, it's something you "get rid of" by giving it to someone else in return for goods and services. In your example, the "weak" currency would become the standard medium of exchange, while the "strong" currency would for all practical purposes disappear from circulation.

Even where there is complete freedom of choice like in commodities markets, one currency is usually chosen and then used by everyone. Otherwise things would simply get too complicated, too costly and too risky.

The argument that governments force a single legal currency onto everyone so they can more easily expropriate us through devaluation doesn't hold water at all. After all, everyone is free to use whatever they like as a store of value and trade it.

Yes, 100%.

> Every action has an implication. I would have upvoted you if you'd described what kind of implications rather than implying that having "implications" is something that governments should intervene in.

Fair point, I upvoted you for it.

I agree with your statement - logistical headaches? Wow, just wow.

Anyone who has even a passing familiarity with John Law and the Mississippi bubble would never say such things like centrally controlled currencies are important for political and social reasons.

OK:

You make an 8 gram silver coin and call it a "One Liberty Dollar". It will cost you $256 in silver alone.

You then trick a bank into accepting it, so they deposit it into your account with a value of $1.

The coin isn't a real US dollar, so you're guilty of counterfeiting currency. In reality, however, you've lost significantly more than you've gained, and the bank should be able to recover most of the lost dollar by selling the silver.

It's clearly criminal to pass off something that isn't a real coin as a real coin, and the you should be punished for that. But it seems logical to me that charges of conspiracy and terrorism should be weighed against the fact that any conspiracy certainly wasn't to your financial benefit - as counterfeiting conspiracies very much tend to be.

Other comments have suggested that the coins were indeed worth less than they were accepted for, so that makes it more clear cut. I still think the quoted paragraph is poorly phrased - it would have made sense to include that very simple fact.

http://en.wikipedia.org/wiki/Big_Mac_Index

I agree with that premise - unless hoarding gold becomes a little more popular. It is in e.g. India; It might come to the US as well, especially if Ben & friends keep devaluing the dollar.

I don't remember reading about anyone going to jail, but I do remember reading about federal agents forcibly opening bank safes and such to look for gold. If you have a nontrivial amount, home storage might be problematic.

> Coins from a reputable mint are pretty easy. The tungsten forgeries are only cost effective for the bigger bars.

For now, true, as far as I know.

> If you purchase coins then they can be redeemed for the currency of the day at under the radar levels. I don't see why I should pay tax when trying to preserve purchasing power of my savings.

Well, I was restricting the discussion to a law-abiding regime. If you are willing to break the law, I would expect that there are more lucrative ways to do that, with lesser eventual punishment if caught.

Note that I completely agree with you that this kind of tax is unfair and unethical. Unfortunately, that IS the law. And even more unfortunately, the vast majority of the population in the world does not understand that they pay income taxes of (however much, 20-60% in the western world depending on your income) - and and additional of 2%-5% of their savings every year in currency devaluation.

It's funny, but the government works like a hedge fund: 20% of profit, plus 3% of capital. Except there's no watermarks. And you can't really take your money someplace else that offers better terms (at least not when you area US tax payer, and increasingly in other countries as well)