Talk:Liberty dollar (private currency)/Archive 1

"Unofficial, nongovernmental nature."

"Many merchants have been known to accept Liberty Dollars without realizing their unofficial, nongovernmental nature. "

I would like to take issue with this statement about Liberty Dollars. It implies that the Federal Reserve Note is Official, and Governmental in nature, and while it may be "Official" by some people's terminology, it certainly is not "Governmental" in nature. The Federal Reserve Bank is a private, run for profit bank, and is no more "Federal" in the traditional sense than Federal Express is.

Why don't we change the reference to say "without realizing that it is not legal tender"? That's more to the point anyway. -Will Beback 00:39, 3 February 2006 (UTC)

I think that would be fine. -Mournblade 11:39, 3 February 2006 (PST)

Article trimming

I have attempted to trim the article a bit. I have removed several opinion pieces and moved apologetics snippets for both sides to their appropriate article sections. Wikipedia is not for articles that read "Liberty Dollars are (supposedly bad thing here). However, (supposedly good thing totally unrelated to paragraph or article section)." or "(Insert entire section essentially repeating things already stated five times, but worded to make your POV explicit)."

NPOV does NOT mean bloating the article or embracing bad grammar and style so that both sides can wage a thinly-veiled POV argument throughout the article, as if this was a thread on a forum. It means writing a good article that lets the reader use his own judgement without hitting him over the head with what you hate or love about the Liberty Dollar.

I have also updated the article to reflect that gold LD are no longer one-to-one for USD.

— 131.230.133.186 21:12, 3 September 2005 (UTC)

Thank you for trimming. There is still WAY too much POV in this article. It was laid-out much better a year ago when there were solid facts and little or no POV, it now rambles all over the place. I will try to finish cutting out the POV as I have the time.

--Lance W. Haverkamp 21:56, 3 September 2005 (UTC)

Hoax?

If NORFED is not backed by some kind of insurance as banks do, i.e., $LD depends only on the good will of NORFED, I would prefer to consider it as a huge hoax. Mikkalai 23:52, 22 Mar 2005 (UTC)

Banks need insurance because their money isn't worth anything but their claim as to its face value (think of the S&L failure, if that happened with hard money banks, regulators would go into the vaults, take out the silver and gold, and divvy it up among the depositors based on the face value vs metal content ratio. The metal in the medallion is its own insurance. In the real S&L failure, depositors usually got only pennies on the dollar from the Resolution Trust). NORFEDs silver stocks are independently audited by one company, and secured in a vault by the minting company. Its audit reports are freely available online, while the Federal Reserve System has stopped publishing its M3 money supply because they don't want the public to know how badly the Federal Reserve Note has been over-issued.69.173.98.243 23:34, 20 September 2006 (UTC)

OK. Here is a catch; right from its website:

Currently, silver is quoted around $6.25 per ounce

and

$10 Certificate ... 1 oz. Silver

To me it sounds like someone is bying dimes from NORFED for a quarter each... Mikkalai 01:11, 23 Mar 2005 (UTC)

If you want to debate go somewhere else; if you want to work on a short, informative, non-argumentative article, please do. --Lance W. Haverkamp 22:00, 3 September 2005 (UTC)

I don't understand why anyone would buy anything from this company. What is the point in buying over priced silver? This company is clearly a scam. This article needs to be kept to set people straight.

The point is that people are not buying silver as a commodity, it is not meant to be an investment commodity. It is meant as a medium of exchanged that is backed with, or materially contains something of intrinsic worth. That metal content doesn't match face value is a point of confusion that people incognizant of the history of money often get caught on. Coins have NEVER held their face value in metal. The original Coinage Act of 1794 specced 0.78 ounces of silver for the silver dollar, but the government only paid $0.90/ounce for silver ingot from the mining industry. The consumer price of silver became $1.29/ounce because the government bought up all the mining industry ingot supply, and so the only source of silver for retail jewelry or silversmithing was by melting down silver coin, which if you do the math, means you must melt down 1.29 silver dollars to get an ounce of silver.69.173.98.243 23:31, 20 September 2006 (UTC)

Vfd

On 22 Mar 2005, this article was nominated for deletion. The result was keep. See Wikipedia:Votes for deletion/NORFED for a record of the discussion. —Korath (Talk) 01:38, Mar 28, 2005 (UTC)

Not a hoax.

It's true that the spot price of silver is currently less than $10, but the face value of a liberty dollar includes more than the price of silver. What makes a $10 silver liberty worth $10 is the price of silver + cost of minting and printing.

The raw materials in a one oz. silver liberty is less than $10, just like the raw materials in a car are worth less than $15,000; or the raw materials in a house (lumber, concrete, metal, etc.) are worth far less than the realtor's asking price. Overhead, admin costs and other factors increase the value of a product. The liberty dollar works the same way.

I'm a user of the liberty dollar. Further research will show that the liberty dollar is legal, which the secret service itself has already concluded. Moviecritic

The Liberty Dollar is worth $10 if and only if you can sell it for ten US dollars, overhead costs notwithstanding. If all you can get from the market with them is $8 per coin, then the $10 coins are really only worth $8. $8 is the current market value of a US Silver Eagle coin on EBay, which has equivalent silver content to a NORFED coin, and should therefore be equivalent to the NORFED coin.

I don't know if you have fully investigated this. From what I have observed on eBay, 1 oz. NORFED Silver Libertys with a face value of $10 usually sell for $10 USD or more. That is because they are designed to be used as currency, not bullion. I have read this countless times on the NORFED website. If a merchant will accept a $10 Silver Liberty for $10 USD in goods then doesn't that give it a value of $10 USD in that transaction? Remember, this is a free market currency, people are not forced to accept them (unlike US dollars because they are legal tender).

I just checked on eBay and couldn't find any signs of them selling above $10, except special proofs, etc. Can yuo provide a specific link to support that? Thanks, -Willmcw 03:34, August 2, 2005 (UTC)

Both these ridiculous arguments stem, consciously or not, from the Marxist labor theory of value--a long-debunked concept whose major contribution to modern popular misconception is the erroneous notion that cost of inputs has anything at all to do with the value (not price--that is a related, but separate, concept--which is also not affected by costs of inputs except in a very roundabout way that I can explain if you want) of the object. They do not. There is no such thing as an "objective value" in the economic sense (value in the philosophical sense is, of course, an entirely different story). In fact, it is precisely the subjectivity of value that enables transactions to take place--you buy the loaf of bread because you value it more highly than three dollars, and the store takes the three dollars because it values them more highly than it values a loaf of bread. But the value is entirely subjective, and dependent on (a) the entity in question's other remaining wants and desires; (b) the relative importance of its desire for the good in question relative to all its others; and (c) the wants and desires it has already satisfied that enable it to have something to exchange for this want.

In other words, people in general don't care how much it cost to make something. They only care how useful it is to them. Kurt Weber 19:03, 12 January 2006 (UTC)

Maybe I'm young, but in my short life, I don't ever recall anyone asking a merchant "How much did it cost you to make that cupcake, car, [insert whatever product or service here]." I don't care how much each lugnut cost or how much steel is used to produce a crankshaft. I am just interested in the final product and the value that it may bring. CFVertigo June 29, 2006

A "business opportunity"

"Business opportunity" is the most NPOV term that I can think of to describe this arrangement, where plain old U.S. money is changing hands:

• A Liberty Associate is an individual, business or organization that has signed a contract with NORFED and gets the Liberty Dollar at a discount. As an Associate there are no dues, no meetings, no obligations, and no time requirements. Associates are not required to physically redeem the paper currency for gold and silver, since that is handled by NORFED. Nor are Associates required to exchange the Liberty Dollar back to US Dollars. It only takes $250 to become an Associate. As a new Associate you immediately get $100 Liberty Dollars back, your referrer gets $100 for sponsoring you, and NORFED retains $50 for administration. So you spent $250, got back $100 and are out $150. But as NORFED is opposed to Associates being in debt as much as our country being in debt, we ask you to sponsor two new Associates. And since you get $100 for every Associate you refer, just sign up two friends, and you actually made $50 while doing what is good for your friends and the country! Refer more Associates - make more money.[1]

• NORFED reserves the right to change the terms of this Contract at any time with a 30-day notice, either in writing or in digital form, provided to an existing Associate.[2]

• The applicant is entitled to exchange Federal Reserve Notes (USD) for American Liberty Dollars (ALD) at the current Associate Exchange Rate that is posted on the Liberty Dollar website at http://www.libertydollar.org. Both parties acknowledge that Exchange Rates change daily and are subject to change without notice.[3]

• My $2500 Plan[4]

• If you are attending the new Liberty Dollar University 4 (LDU4)… not only have we turbo-charged the RCO program into a franchise-like business model, but LDU4 is also your opportunity to learn first hand by creating your own business plan with the new 150 page Workbook created by John Franklin, MBA and PhD. And WORKbook it is! John has an impressive record as an educator and as LDU4's cheerleader he will take you from zero to 180 MPH in three days and set you on a course to making $15,000 to $4.8 million. If you are serious about the Liberty Dollar and "Making money, doing good, and having fun" appeals to you, take LDU4 before becoming a RCO. And be sure to bring some money, as the first year is now only $500, so you can sign up to become a RCO and attend the private RCO Congress on Friday, the day after LDU4 and before the Liberty Dollar Fair.[5]

These links make it appear that this is a for-profit business, rather than an idealistic non-profit cooperative that some of the text might lead one to believe. The "monthly report" was last updated in 2004, and the copyright date on all of the other pages is 2004, both of which imply inactivity. The bottom line is that this article needs to be edited with a better appreciation of the reliability of the source. -Willmcw 07:08, Jun 23, 2005 (UTC)

See also this Usenet thread: Liberty Dollar (Norfed) about to be devalued 50% It's not clear that the devaluation took place, but a number of other important questions are raised about how this scheme is organized. -Willmcw 23:57, Jun 23, 2005 (UTC)

Regarding the business opportunity: another editor is perhaps correct that it is not a pure multi-level marketing system, since associates only make a one-time payment. The more appopriate business model may be a franchise, or sales territory model. It appears that RCOs are awarded exclusive territories. It isn't clear what sort of payments or fees that RCOs pay to NORFED. Does anyone have a reason why we shouldn't call it a franchise? Or can anyone suggest a better descripion for the RCOs? Thanks, -Willmcw June 30, 2005 06:07 (UTC)

The requirements for being an RCO are listed on the Liberty Dollar website. Among other things, they put up $1,000 for a yearly charter and receive the LDs at an even greater discount than associates would. They are not referred to as a franchise because there is no official franchise plan yet. This is primarily because the RCO concept is still fairly new. But they do operate on the same principle of a franchise. The only hard and fast requirements for operating a territory is that associate and official merchants order from the RCO that is designated for their area and that RCOs don't interfere with another RCO's territory. CFVertigo June 27, 2006

Thanks for that info. Do we know what discount RCOs receive? That'd help flesh out the nuts and bolts of this. -Will Beback 19:22, 29 June 2006 (UTC)

RCO's receive discounts at $1.50 over spot. So if silver was going for $10.50 today, the RCO could order it for $12.00 an ounce. It is also market driven just like the associates, so the quote goes up and down. CFVertigo June 29, 2006

I like the RCO as a concept. Obviously the discounts and the ideal of a business to business relationship is a big step up from the past redemption center model. But it does have its disadvantages. Namely, it doesn't address issues like day to day operations, marketing and accounting matters to name a few. So, I decided to draft my own business plan and I will use it as my guide. I've had much success as a redemption center/Liberty Associate in the five years or so I've been involved with this. I am certain it will continue to be successful and will get even bigger results now that I have a focused approach with a business plan. A major portion of it draws from my successes and failures in using the currency. CFVertigo July 15, 2006

Various assertions

Thanks to the editor who recently re-wrote the article. It's an improvement. However there are several assertions that I question:

Because not all major banks accept Liberty Dollars, some businesses cannot deposit and will not accept them.

• Are there any major banks that accept LDs?

I believe there was anecdotal evidence in some e-mail newsletter or other.

The Silver Eagles have a face value of $1 which is less than the value of the silver contained in the coin and makes the Silver Eagle more difficult to use than the Silver Liberty for transactions with merchants.

• Do we have any proof that there are merchants who prefer the NORFED Silver Liberty to the Federal Reserve's Silver Eagle?

The statement isn't that they prefer them. The statement implies that most aren't coin collectors and when the coin says $1, they're likely to think that, like nearly all other official coins, it's worth the value stamped on it. I know that's what I'd probably have done when I was a cashier.

Because the Liberty Dollar certificates are fully backed,...

• How can we say "fully" backed when the purported value of the is higher than the value of the bullion backing it?

Fully backed means that the amount of metal stated on the certificate is the amount of metal that is actually stored for the bearer, as opposed to fractional-reserve banking, where banks only keep a certain percentage of account-holder assets in reserve.

This introduces costs for storage, insurance, shipping, and other business activities. This is why the face value of the Liberty Dollar is higher than the gold and silver spot price.

• Doesn't profit for the mint also cause the face value to exceed the bullion value?

True; I'll add this.

Because the warehousing is ongoing, Liberty Dollar certificates expire after several years if fees are not paid by the buyer. This can be avoided by redeeming the certificates and providing storage for the coins.

• Have we made sufficiently clear throughout the article that the paper LDs are really just limited-term certificates?

Yes. I've given it its own paragraph now.

On its website, NORFED will give Liberty Dollars for FRNs at a $1-for-$1 exchange rate, but will not make the reverse trade because NORFED gives a discounted exchange rate to certain suppliers and because it contradicts NORFED's political goals.

• First off, no one can exchange paper or metal on a website. By mail, or in person, perhaps. Second, this calls into question the theory of it being a freely-convertible currency if it can't be exchanged. "Political goals" should not be used as a cover for refusing what would be a (FR) money-losing transaction for NORFED.

I do not understand the technical point you are making about exchange. When you buy the coins, they do come through the mail. I don't believe the Liberty Dollar is intended to be freely-convertible. Nowhere in the article is that stated. I do not understand the basis of your opinion that there is something untoward in avoiding profit-loss. You seem to be assigning motives without evidence.

Some suppliers will, however, exchange either way.

• For example, who?

Research can be done to show that this actually happens, but Wikipedia isn't really an advertising listing.

By periodically doubling this base amount, NORFED adjusts the currency for FRN inflation without devaluing old certificates, which remain backed by the preadjustment amount of metal.

• Periodically? Has it ever happened?

I believe it is about to, but I'm not sure. I do know that this is explained as their policy, if only for the future. It's in the article more as a mathematics or technology article-like explanation of the workings of the system ("how do they avoid problems when inflation carries the price of silver over $10 ?") than a history.

This led Bernard von NotHaus to create NORFED and the Liberty Dollar as a political statement for the return to the gold and silver standards.

• NORFED is a business. Presumably NotHaus owns it and draws a salary. He created it to make money (literally and figuratively).

Earning money does not kill any possibility of putting out a political message nor does it indicate he's not sincere in his political message.

The currency is issued in paper and electronic warehouse certificates, which are redeemable for specially-minted .999 pure silver or .9999 pure gold coins.

• Why does the exact purity of the metal matter? An ounce of gold is an ounce of gold. How does this redemption work? Is it 1-for-1? Or is there a "redemption fee"?

The purity is primarily a "fun fact", to make the article more interesting, much like articles on various atomic elements have facts; it also discourages angry rumors about debasement of the coins. I do not recall the specifics of the contract; I believe you mail in the certificates and they mail back the coins. I'm not sure of any fees, but I doubt there are any.

If anyone has any answers for these I'd appreciate it. Many of these are unsourced assertions and should be removed if we can't find sources to back them up. Thanks, -Willmcw July 1, 2005 05:09 (UTC)

While I don't mind someone providing sources or even toning the article a bit more toward neutrality (it is a bit ad-like), I do mind the general character of your questions. Quite a few of them seem to be assertions that NORFED is being dishonest or immoral because they attempt to make a profit while making a political statement. I get the feeling you are asking these questions in preparation to slant the article to conform with your opinion on mixing profit and advocacy; if this is correct, please refrain from doing so.

I'm not much of a partisan for NORFED; in fact, I've just added that the regional distributors are for-profit to the introduction. I don't think NORFED is trying to pretend to be purely non-profit, and I don't think they mind that being made known. They want the profit there to sustain their organization and provide incentives for participators.

NORFED's price over spot kills the deal for me. So, I don't really have the inclination (I like to spend time on math and Harry Potter articles) to do much more than stop by, add what I remember of what I read about NORFED about a year ago, and leave. Research to support what I remember will have to come from someone else. I strongly recommend the old e-mail newsletters, which are where I learned a lot about NORFED. — 131.230.133.185 1 July 2005 22:33 (UTC)

Thanks for your responses. They help a lot. Yes, I am preparing to edit this article to make sure that the assertions have some basis in fact, and that all the assertions are presented in an NPOV manner. There is nothing wrong with making a profit, but it should be clear that this is also a profit making venture and not just a political statement. Much of what they are selling are promises, like the promise to redeem paper for silver and the promise to redenominate the paper when silver prices rise. (Yes, the Federal Reserve sell promises too). These are promises from a company that doesn't disclose its ownership, that is incorporated under the Nevada non-profit laws that allow many basic facts (like the names of the directors) to be hidden, that includes clauses in its contracts allowing it to change the terms unilaterally, that does not make entirely clear what costs and rules are associated with exchanges, etc. There is a lot to be skeptical about with this group. Also, the article still has no explanation for how the 50 RCOs work. I'm glad you added that they are intended to be profit-making, but a paragraph or section is probably needed to explain the relationship of NORFED, RCOs, Associates, Contracted Merchants, holders of LDs, etc. The newsletters are one source, but they obviously pursue a single POV so other sources are needed to provide balance. One question I have from reading the last newsletter is that they indicate the price for a weekend seminar, ("The cost to attend LDU-6 is as follows: $200.00 for Liberty Associates..." [6]) without indicating if the fee can be paid in LDs. It would be odd if NORFED will not accept its own money in payment for services. Cheers, -Willmcw July 2, 2005 00:03 (UTC)

"Coins" vs "specie" or "pieces"

While the law may require coin dealers to call non-legal-tender coins "specie"[7], it doesn't and can't require Wikipedia to do the same. While NORFED requests that others also call the coins "specie", it is far better (for quick, unannoying reader understanding) to call the coins their common name ("coins") than to force the reader to pause and lose their train of thought to look up legalistic or numismatic jargon. Calling the coins "pieces" also undermines ease-of-reading, can confuse them into thinking we might be referring to unminted metal, and should generally be avoided.

Wikipedia should be oriented far more toward quick reader enlightenment than using special terms for the sole reason of emphasizing the political position of NORFED or making sure the reader learns unimportant legal distinctions. If you want to put a "See also" or "External links" link to more technical numismatic information so that people can but are not forced to learn it, feel free. — 131.230.133.185 5 July 2005 18:00 (UTC)

I agree that we should leave it out of the introduction. That's the part which is meant to summarize the contents for quick reading. However we probably should use the right term somewhere in the article and explain it in passing. It's an odd issue that, as you point out, most readers aren't familair with. If we can go into the size difference between the gold and silver coins then I suppose we can mention that they are formally known as "specie". Cheers, -Willmcw July 6, 2005 07:12 (UTC)

In a generic sense, a layperson could refer to the Liberty Dollar as a 'coin', but for legal purposes, it is best for individuals associated with the Liberty Dollar to not refer to it as a coin. I think this has more to do with the LAs and RCO's protection in the event they are accused of trying to deceive people. CFVertigo June 27, 2006

Tone of the Article

I would just like to say that I think the tone of this article is now slanted in a way that doesn't even make me want to read it. I think there are a few people on here with an anti-Liberty dollar opinion who are slanting the article to their own agenda. I believe it is wrong and sad. I think that Wikipedia deserves better than just a few negative hacks who don't bother to try and understand what they write about--instead they just bash it.

We're trying to understand it. The original article was just a long advertisement. If you see a specific error, please point it out or fix it. Cheers, -Willmcw 23:07, July 27, 2005 (UTC)

It's a fraud, and the original article lies even from its own POV. It pretends to be a hard currency, when, in fact, it is a corporate scrip with an outrageous mark up. Stirling Newberry 14:31, 28 July 2005 (UTC)

There's no fraud here. It is hard currency by definition since it is backed by a certain amount of precious metal. The fact that the amount of fiat money required to buy specie changes over time is true of all hard money. The LD markup may be high in your opinion, but it is advertised openly so is not fraudulent. If you think the markup is too high, then use silver rounds instead. Or stick to fiat currency and risk hyperinflation.

New comment

moved from main article, appears to be a comment

There is a word for this in economics. It is called "debasing the currency". NORFRAUD carries on about the evils of fiat money, but the fact is that the only resemblence between NORFRAUD 6 bit bucks and a hard currency is purely coincidental.

For the record: hard currencies are convertible on demand for full value with other currencies at the equivalent value in bullion. NORFRAUD 6 bit bucks fail the most basic test of a fully backed currency, despite their wild claims and rants about the evils of the federal reserve system.

If people want to pay a 30% mark up to NORFRAUD to show how much they hate the Federal Reserve, that's their perogative. Fools have a constitutionally protected right to be parted from their money. However, NORFRAUD and its POV are against wiki rules for vanity advertising. Stirling Newberry 02:08, 28 July 2005 (UTC)

Ignorant Statements

Attention to the People in Here Who Just Do Not Get It: You'll have a hard time convincing the serious Wiki-pedia people in here that your statements (which include phrases like "NORFRAUD" and "scam and Fraud"), edits, or additions are well-founded or reasonable. I can't believe that the negative Liberty-Dollar people in here don't seem to get it. Liberty Dollars are NOT about investing in silver. If you want to do that, go invest in silver bullion. Its that simple. Instead, the Liberty Dollar is an attempt to provide Americans with a currency that is actually backed by real commodity, and not at the mercy of bureacratic bankers, Saudis, the Chinese government, or inflation. You see, every extra federal reserve dollar that the US government chooses to print makes the federal reserve notes that you and I hold worth consistently less. Since we were taken totally off the gold standard, by holding federal reserve notes, you are basically handing your money to scheisters who expect us to believe that our paper is worth whatever they say it is. Then you have liberty dollars, which are redeemable in actual silver pieces. Granted, the silver is not worth ten dollars, but it maybe in the future. I certainly don't see it going down much further in value though. In fact, if you search Warren Buffett's investing portfolio, you'll see he began to buy silver a few years ago when it hit rock bottom. However, in regards to federal reserve notes, I'm reminded of the old adage of Yogi Berra, in that "A nickel ain't worth a dime no more." The Liberty dollars, over time, will retain value as the dollar continues to sag. So hold onto your fed notes if you want, but I'd rather give my money to, and participate in a system run by, people who can truly see what is going on with our currency.

Can you please clarify some of the questions remaining? Such as how convertible it is with other "currencies", whether NORFED will accept it in payment for services, etc? Unlike other currencies, this one expires and is issued by a shadowy company that stipulates it can change the terms at any time. The exact nature of this company and its product need to be specified, not just their advertising claims. Thanks, -Willmcw 03:48, August 2, 2005 (UTC)

Redeem them for silver and sell the silver. Kurt Weber 19:09, 12 January 2006 (UTC)

Local Economies

Can someone write a paragraph explaining how the Liberty Dollar is helping keep local commerce thriving (in towns like Austin and I believe there is a town in Idaho too.) Because it throws the whole multiplier effect out the window by COMPLETELY keeping the currency in a town where people will continually spend it.

You can write a paragraph IF you find verifiable sources to support it, such as a newspaper article. Thanks, -Willmcw 03:42, August 2, 2005 (UTC)