In many places around the world, several currencies exist and are used simultaneously.
It's only a problem for the weak currency, which according to Greshams Law, everyone tries to get rid of, while hoarding the stronger currency.
The reason the government doesn't want competition in the currency business is because they like to weaken their currency. The government currency would be discarded quickly, while the competing currency would be hoarded.
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.
If he had just minted gold and silver coins with a stamped weight on them, then they would stand a chance of being actively traded. But then maybe he knew they would be hoarded. To be honest, I don't know the ambitions of an aging hippie with links to the 'bunker' movement.
From what I have read on this case (and I haven't read much) the coins do actually contain precious metals as a backstop to their value. Not so the US currency - although I hear the nickel now has a higher metal content than the face value.
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.
Currency is definitely something you hoard. It's called savings, and plenty of people still do it.
"When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
Or in other words (from the same article): "Bad money drives out good if their exchange rate is set by law."
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.]
https://en.wikipedia.org/wiki/List_of_circulating_currencies...
But with every single listing of a country that has more than one currency, there is a political reason why (see Ecuador) and it has real implications for the society to use a currency that you don't control.
I assume one of the implications you refer to is that the people have a choice of currencies and hence protection against government sponsored inflation.
You seem (correct me if I'm wrong) to be arguing for the former, "gold bugs" will generally argue the latter.
Look at why Europe is so messed up right now - they adopted a single currency without a real government to match. Much as I might not like her, Margaret Thatcher was right when she said that "single currency is a federal Europe through the back door". It's either that or big trouble down the line.
I see you're from Denmark, so think of Legoland (in Billund, I assume you've been - it's silly!). Yes, they take all kinds of currency there, but it's very isolated and localized. At a broader national level, there is just the (sic) kroner. I've never once paid with US dollars at a pølsevogn in Copenhagen. :)
The full argument is quite long, but at heart, yes - I believe that the gold standard was a bad idea and remains a bad idea. Going back to it will not solve any of our current economic problems, it's a waste of time.
Thanks for sticking with the conversation btw! It was fun. :)
Also, I'm not arguing for (or against, for that matter) the gold standard, just that if people feel they're better off transacting in a different currency than the single, nationally sanctioned one, they should be able to do so without incurring a forceful response by the government. For the record, I don't think that freedom extends to producing coins that are easily mistaken for those belonging to a different currency.
> Thanks for sticking with the conversation btw! It was fun. :)
Likewise, although I would still appreciate a response to http://news.ycombinator.com/item?id=4697030
We adopted a single currency, which is the new government-enforced legal tender. You're right that it caused plenty of problems, but it's hardly relevant as an example of destabilization caused by many currencies.
In the days before the Euro, it was quite common for places to accept multiple currencies in the one location, especially in border areas or smaller countries with lower floats.
It's not such a big deal. Just about every international traveller works in two currencies by converting the 'away' currency into their 'home' currency in their head with each purchase. I have actually been offered the opportunity to pay with my home currency on visa POS machines while travelling.
There are undoubtedly efficiencies to having a central currency, but when the central government is systematically destroying the unit of value, inefficiency of multiple currencies is a very small price to pay for being able to escape that. That's why Zimbabwe has the highest number of currencies on the list that was linked above [Edit: position is relative, the list that ianb linked]
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.