Liberty Dollars seized in gov raid -- MERGED THREADS

[Len Budney]

Technically there's nothing wrong with private currency: if both parties agree to use it, that's their business.

It has already been established that these guys did intend to defraud.

Has it now. Where and when was that established?

A government monopoly on the issuance of money is (arguably) constitutional, but it's unjust--and it makes eternal inflation inevitable.

What is wrong with steady, controlled inflation?

Plenty of things, but that's a red herring: it's impossible to produce "steady, controlled inflation" in the first place. What we get instead is wild, uncontrolled swings like the '70s and boom-bust cycles like the '30s and the current "sub-prime mortgage" implosion.

If "steady, controlled inflation" were possible to achieve, it would still be theft: it means that savers' money is devalued in a "steady, controlled" fashion as surely as if it were gradually taxed away to nothing.

--Len.

[HankB]

In terms of ". . . intent to defraud . . . "

The Ron Paul liberty dollars are marked as containing one ounce .999 fine silver; assuming this is true, they have some intrinsic value. (Silver spot price is somewhere around $14 or $15 last time I looked.)

Other than their bullion coins, how much intrinsic value do the circulating coins coming out of the US Mint have?]

WHO is doing the defrauding?

[CAnnoneer]

Has it now. Where and when was that established?

Other posters covered that several times already. For some reason, you obstinately ignore it. But, that does not make it cease to exist.

Plenty of things, but that's a red herring: it's impossible to produce "steady, controlled inflation" in the first place. What we get instead is wild, uncontrolled swings like the '70s and boom-bust cycles like the '30s and the current "sub-prime mortgage" implosion.

I am afraid the above statements betray substantial ignorance of economics. The money supply has to keep up with the expansion of the economy. Headless already explained this in another thread. Roughly speaking, the Great Depression was deflationary because production greatly outpaced money supply. An opposite example is the huge inflation the Europe experienced in the 1500 and 1600s as the Spaniards brought so much silver from the New World that money (which was mostly silver at the time) lost value with respect to the production of the period. Incidentally, that is a good historical example of why there is nothing magical about  a silver/gold standard and how it is susceptible to money supply problems as well.

If "steady, controlled inflation" were possible to achieve, it would still be theft: it means that savers' money is devalued in a "steady, controlled" fashion as surely as if it were gradually taxed away to nothing.

A controlled inflation is what we have had since the foundation of the federal reserve. How well controlled is another matter. It is not always perfect and there are stresses to the system from internal and external sources, but generally and most of the time, the fed keep a tight leash on the economy through interest rates and money supply.

As regards the saver's devaluation, welcome to the real world. You cannot just put money in a pot and forget about it. You have to invest in something. If you do not know how and do not wish to learn, give it to somebody else to manage. If you are willing to take a bit of risk, you can configure your portfolio with more equity and consistently beat the inflation over the long term and make pretty money in the process. If you are very risk-averse, configure the portfolio to money-markets, which essentially keep with the inflation. Even something as simple and dumb as sticking the money in a savings account will allow you to offset a lot of the inflation if not all. That's the magic of interest rates.

Now if an individual saver feels he cannot be bothered with any of the options above and just sticks paper money under his mattress, that's his business. In a free country, people are free to be stupid and pay for it.

Finally, if you are so worried about inflation but do not want to invest, buy ingots and hold them. But even that is no guarantee to stability or value preservation. What if tomorrow Chile discovers a huge new silver mine or South Africa discovers a huge new gold mine? The value of your ingots will plummet, while the paper money will not be affected nearly as much.

The bottom line is that in economics, there are no guarantees. Supply and demand are the general rule, and risk is inherent. Return to the gold standard is an ignorant, impractical idea. People support it not because they understand modern economics but because they think that will somehow curb gov spending. Except, throughout history, even when money was precious metal, govs have run deficits in one way or another, generally with little input from the governed. The whole idea is preposterous.

[Len Budney]

Has it now. Where and when was that established?

Other posters covered that several times already. For some reason, you obstinately ignore it. But, that does not make it cease to exist.

In which post number was "intent to defraud" proven?

Plenty of things, but that's a red herring: it's impossible to produce "steady, controlled inflation" in the first place. What we get instead is wild, uncontrolled swings like the '70s and boom-bust cycles like the '30s and the current "sub-prime mortgage" implosion.

I am afraid the above statements betray substantial ignorance of economics. The money supply has to keep up with the expansion of the economy.

I am afraid the above statements betray substantial ignorance of economics. In an expanding economy with a stable currency, prices simply fall.

Roughly speaking, the Great Depression was deflationary because production greatly outpaced money supply.

Accurately speaking, the Great Depression was a massive correction of malinvestment through the 1920s caused by the Fed's artificial lowering of interest rates. Attempts to inflate the economy out of the depression prolonged the depression, though your remarks prove that Keynes and the forces of ignorance won the propaganda war: they blame Hoover for failing to inflate enough.

If "steady, controlled inflation" were possible to achieve, it would still be theft: it means that savers' money is devalued in a "steady, controlled" fashion as surely as if it were gradually taxed away to nothing.

As regards the saver's devaluation, welcome to the real world.

In the real world, we rob people. Get used to it. 

That you're factually wrong is obvious: the folks who put gold in their mattresses, instead of FRNs, are virtually unaffected by inflation. "Virtually" because gold prices do fluctuate in terms of FRNs, but the purchasing power is very stable.

That you're morally wrong is doubly obvious. If I point out that rape is routinely practiced in Pakistan, a Sindhi from Karachi might say, "As regards rape, welcome to the real world." He'd be (rightly!) shouted down by folks such as frequent this forum. So why the hell does calling robbery "the real world" justify it?

--Len.

[K Frame]

""Liberty" is not a requirement or a unique feature of US coins"

We've already established that.

We've also established the fact that I'm GUESSING what the government's motivation is. Is that so hard to comprehend?

[Brad Johnson]

Brad Johnson

Their recommendation was specifically intended to have the coins be used in lieu of government-minted money (coin or paper).  That is, to make them a direct competitor of circulating legal tender.

But that is what barter is all about to start with - one way or the other - inevitably.

We can say, "in lieu of", "instead of", "rather than", etc etc; regardless, barter is a de facto "direct competitor" if it is used.

It is barter if you have an established free market value for a product, and with both parties' knowledge of that value.  Barter deals with products of known or commonly accepted value.

In the case of the coins they were "suggesting" you use them as a substitue for common currency, and that you "encourage" the recipient (who has no foreknowledge of the coin, it's metal content, or any intrinsic value) to accept it at a worth in excess of the metal content's market value.  That's not bartering.  That's deceiving someone intentionally just to "get back at the government."  And it's wrong, both morally and legally.

Brad

[Len Budney]

It is barter if you have an established free market value for a product, and with both parties' knowledge of that value.  Barter deals with products of known or commonly accepted value.

Nonsense. Value is subjectively established between the parties conducting the transaction. I can barter for a back-rub, a ham sandwich or a pretty rock.

The subjectivity of value applies to currency as well; what fools you is that numbers are involved. Whether your "three dollars" is worth more or less than my "gallon of milk" is between you and me to sort out. When you say that "is" the value of a gallon of milk, you are simply expressing an awareness that (1) I won't accept less than $3, and (2) plenty of other people out there are willing to part with $3 for it. Since you are in competition with those other buyers, you have no choice but to pay the $3.

The practice of valuing things in dollars is convenient, because a common unit of account facilitates deciding between alternatives. But those dollar prices are fixed by a process of bargaining amongst agents each of whose valuations is purely subjective.

--Len.

[Brad Johnson]

Nonsense. Value is subjectively established between the parties conducting the transaction. I can barter for a back-rub, a ham sandwich or a pretty rock.

By definition "free market value" is completely subjective.  That's the "free" part.  Once everyone begins to trade a particular product or service on that subjective free market a particular value becomes established, be it in dollars, gold, chickens, labor, whatever. Now you have an established free market value that people can agree to when bartering unlike goods or services.

Boy, you really have a burr under your saddle about this coin thing.  Why?  These people were producing a product that was intended to be easily confused with common currency, and trying to push a product value in excess of the actual content value (a content value established on the "subjective" free market, by the way).  They were trying ... no, that's not corecct ... they were strongly suggesting you insist an unknowing third party accept that product at its inflated value and in lieu of common and familiar paper and coin money, thus defrauding that party of the difference in insisted value and actual content value.  Doing that is called Theft.  Suggesting that is called Conspiracy to Defraud.  Defending that is called Stupid.

Brad

[Len Budney]

Nonsense. Value is subjectively established between the parties conducting the transaction. I can barter for a back-rub, a ham sandwich or a pretty rock.

By definition "free market value" is completely subjective.  That's the "free" part.  Once everyone begins to trade a particular product or service on that subjective free market a particular value becomes established...

Still nonsense. Prices fluctuate constantly.

Boy, you really have a burr under your saddle about this coin thing.  Why?  These people were producing a product that was intended to be easily confused with common currency...

I believe they were doing exactly that, and I believe that it constitutes fraud. On the other hand, nailing them for fraud shouldn't involve promulgating economic ignorance or disparaging sound currency. Legitimate competition from a stable currency would be a godsend, and if such a thing arose the feds would shut that down just as quick as NORFED.

--Len.

[Brad Johnson]

Still nonsense. Prices fluctuate constantly.

That's right, they do.  But that fluctuation goes up or down based on peoples' confidence of the current established market value.  More confidence, it goes up from that value.  Less confidence and it goes down. 

To claim that product value fluctuates completely independent of current accepted value is silly.  It completely ignores human nature and our innate desire to perceive, promote, or establish an intrinsic worth for our "stuff."  The only things that fluctuate independent of a current or accepted value are those things so unique that there is no current value.  In those casesd we, as is our nature, try to make an association with some other item in order to at least establish a relational value.

Legitimate competition from a stable currency would be a godsend,

We already have that.  It's called "commodities" and the value is established in free trading.  There's no decree in Heaven or on Earth says that "currency" must be in the form of a coin, so why insist on having one?  Carry around a pocket full of gold and silver bullion.  10 oz bars for the big stuff, 1 oz bar for small.  Check the market price each morning and carry the list with you as proof of the intrinsic value of the metal content.  You can use them all day long, legally and without fear of the fed nailing you for it, just as long as you are getting fair market value for them.

Brad

[Len Budney]

Still nonsense. Prices fluctuate constantly.

That's right, they do.  But that fluctuation goes up or down based on peoples' confidence of the current established market value.  More confidence, it goes up from that value.  Less confidence and it goes down.

No. It fluctuates based on the same subjective valuations that established the price in the first place.

To claim that product value fluctuates completely independent of current accepted value is silly.

"Currently accepted value" is a meaningless term. What's a BMW worth? $50K? Not to me. To me it's worth about $10K, because I won't pay any more than that for one. What you call the "value" of a BMW is nothing more than the observation that the marginal purchaser (who isn't me!) is willing to pay $50K for one. Any number of things can change their minds, and in that case what you call the "value" will change.

You're reiterating the crisis of classical economics: the diamond/water paradox. Water is worth so much less than diamonds that you'd need a truckload to buy an engagement ring. But in the desert, a man would trade a sack of diamonds for a single drink of water. The only solution to the riddle is Menger's, which ushered in the modern science of economics: the realization that "value" has nothing to do with the item in question, and everything to do with the state of mind of the buyers at the time of the transaction.

--Len.

[Brad Johnson]

You are intermixing "Value to You" and "Value in General." 

Just because you place a particular value on something doesn't mean that everyone does.  The market is a summary, a generalization.  It is a Confidence Gauge of the buying/selling public.  You may not put $50k on a BMW, but obviously there are people out there who will or the price would be different.

I've figured you out, Len.  You're an old-fashioned horse trader.  You're that guy who will offer $80k for a house because "it ain't worth any more than that" then get all kinds of mad because your offer wasn't graciously accepted.  Never mind that it's exactly like every other house in the neighborhood and they've been selling all year for $100k.  You are thoroughly convinced that everyone in the world except you has a warped idea of what things should be worth, and that your idea of value trumps all.  You spend your days wondering what the heck is wrong with everyone else and why on earth would they pay/ask that kind of price for something.  I have some bad news.  They aren't the ones out of the loop.

The economic world has progressed in the last century.  Competition, consumer information, and product availability have gone a bit beyond "here's your product and the price is $x if you want it."  Short of having something so unique that it creates its own market, you are dealing with a force greater than You. 

Market strength and vitality is determined by consumer confidence in general economic health.  Within that market, consumers create their own perceived value for products and services.  Those change over time based on consumer confidence in that product/service value, as well as confidence in the economy in general.  You can choose to live within it, adjusting to changing dynamics and finding ways to make it work to your advantage, or you can stand in the middle of the flow and attempt forcing it to your will.  Based on history's example, the latter option is inherently self-defeating. 

One person's opinion of worth is a single warm drop of water in a large and very cold ocean.  Some people think they can mix the two and they will stay seperate.  Then there are those who will throw in their drop, expecting the ocean to warm up and match temperature.  The first is an unreasonable expectation.  The second is gross naiveté.

Brad

[Len Budney]

You are intermixing "Value to You" and "Value in General." 

There is no such thing as "value in general." Therefore, there's nothing to "intermix." There's a current price, but it's a crucial error to confuse "price" with "value." NOR is there a current price for every good; that's why auctions are still an important market activity. They establish prices, particularly for one-of-a-kind objects.

I've figured you out, Len.  You're an old-fashioned horse trader.  You're that guy who will offer $80k for a house because "it ain't worth any more than that" then get all kinds of mad because your offer wasn't graciously accepted.

Actually, the asking price on my current house was $80K. I offered $52K, and it was graciously accepted. So if I'm a horse trader, I'm not a bad one. I can tell the whole story in a more appropriate thread if anyone's that interested.

But we're talking about economics, not business. Your understanding of economics appears limited to the classical period; a lot has happened since Menger was born.

--Len.

[Brad Johnson]

There is no such thing as "value in general."

If that was the case there would be no economy and no market.  To have no general value means, by definition, that everything is worth nothing.  It also means that your idea of value is the only one that counts.  Walk into Wal-Mart see how far that gets you.

If the majority of consumers have an expectation of worth that is "value in general."  It's kind of hard to argue that something right there in front of you doesn't exists.  That is, unless you are consider the economy as some kind of existential or philosophical exercise.

I take that back, there IS a time when there is "no such thing as a value in general."  Two times, in fact.  One is communism, the other socialism.  In both cases there is no intrisic value for goods or services.  In one you own and equal share of everything, in the other you own zero shares of anything.  So, in both cases, there is no market to establish a shared idea of value.  Are you suggesting that's what we have here?

But we're talking about economics, not business. Your understanding of economics appears limited to the classical period; a lot has happened since Menger was born.

Economics is dynamic, driven by consumer confidence and supported by creativity, production, and innovation.  It is ever-changing.

Funny you should mention Menger because he happens to be right.  The engin of Supply and Demand with human desire as the fuel...

Menger viewed exchange as the embodiment of the essential desire and search to satisfy individual human needs. It follows that the intersection between human needs and the availability of goods capable of satisfying those needs is at the root of economic activity.

Brad

[Len Budney]

There is no such thing as "value in general."

If that was the case there would be no economy and no market.  To have no general value means, by definition, that everything is worth nothing.

STILL nonsense, I'm afraid. For transactions to take place, it only matters that the participants value the goods they exchange. If your statement were correct, a Da Vinci would be impossible to sell because it has no "value in general."

But even more importantly, you resolutely persist in confusing value and price. Many goods have published prices at any given time. But price is not value. Specifically, the dollars in which the prices are denominated themselves do not have fixed value. When you reply, "Duh, sure they do! They're worth a dollar!" you're again confusing price and value. I'm not kidding: you really need to learn about developments in economics since Menger published Principles of Economics in 1871. You're persistently confusing basic economic terms.

--Len.

[Brad Johnson]

If your statement were correct, a Da Vinci would be impossible to sell because it has no "value in general."

Incorrect.  Chances are that particular DaVinci has been sold, or at least appraised for insurance purposes, prior to the sale.  There is your general value.  Besides, I addressed the "so unique there is only one" issue in a prior post.

But even more importantly, you resolutely persist in confusing value and price. Many goods have published prices at any given time. But price is not value. Specifically, the dollars in which the prices are denominated themselves do not have fixed value.

You are trying to tie it back to the dollar-has-no-value relationship that is your hot button.  Guess what, the rest of us don't care.  To us a dollar IS a dollar.  It spends just like a dollar's worth of any thing else.  That, by definition, gives it value to us.  Whether or not you feel it has value is irrelevent to everyone but you.

Look, if you hate U.S. Govt coin and paper money so much, don't use it.  I will gladly take your gold, silver, rocks, chickens, labor, etc. in exchange for whatever goods of mine you want to purchase.  I will then, in turn, take that gold, silver, rocks, chickens, labor, etc. and turn it into dollars that the rest of the world will accept in trade.  Everyone goes home happy.

Brad

[Len Budney]

You are trying to tie it back to the dollar-has-no-value relationship that is your hot button.  Guess what, the rest of us don't care.  To us a dollar IS a dollar.

NO! I am not in ANY way talking about inflation, fiat-money-versus-specie-money or anything else!

I'm explaining the fundamental economic law of diminishing marginal utility. If you have $1,000 in your hand, in $1 FRNs, the first $1 is much more valuable than the thousandth $1. If you take money out of the equation altogether, the principle remains: if you have 1,000 apples, the first apple is worth much more than the thousandth apple. Every good has diminishing marginal utility. Therefore an apple is NOT worth an apple; a dollar is NOT worth a dollar; a parakeet is NOT worth a parakeet. Every good in the universe gets its value from the marginal unit, and the marginal unit has a value which constantly changes depending on context.

This is NOT a political discussion. It's a brief summary of the ABCs of economics. Something one must understand before one can discuss the monetary system with any intelligence at all.

--Len.

[Brad Johnson]

if you have 1,000 apples, the first apple is worth much more than the thousandth apple. Every good has diminishing marginal utility. Therefore an apple is NOT worth an apple; a dollar is NOT worth a dollar; a parakeet is NOT worth a parakeet.

In some parallel dimension, maybe.

Brad

[cassandra and sara's daddy]

and one again ron paul suffers from marginalization by association

lens not here for the hunting

[Len Budney]

if you have 1,000 apples, the first apple is worth much more than the thousandth apple. Every good has diminishing marginal utility. Therefore an apple is NOT worth an apple; a dollar is NOT worth a dollar; a parakeet is NOT worth a parakeet.

In some parallel dimension, maybe.

Sigh. It's clear you've never studied economics. But where did you get the idea that arguing on in profound ignorance of the subject would be a good idea? You just plain don't have any idea what you're talking about. Here: read yourself rich.

--Len.

[MechAg94]

Len, I think you are dragging economic concepts into this discussion that serve no purpose. 

I think you are the one that need to work on your economics.  Just my opinion though. 

[CAnnoneer]

In an expanding economy with a stable currency, prices simply fall.

If the prices fall, money will steadily appreciate, so people that have to borrow money to run their businesses (i.e. most people) will find themselves bankrupt because they will not make enough to meet their pre-negotiated loan payments. Congratulations, you crashed the economy!

Accurately speaking, the Great Depression was a massive correction of malinvestment through the 1920s caused by the Fed's artificial lowering of interest rates. Attempts to inflate the economy out of the depression prolonged the depression, though your remarks prove that Keynes and the forces of ignorance won the propaganda war: they blame Hoover for failing to inflate enough.

Actually, they did not inflate fast enough. They were afraid of inflation and stuck their heels, then very belatedly started inflating. The problem is once you start the panic, there is no turning back. If they had printed more money, allowed more inflation from the get-go, and raised interest rates simultaneously, the burst would not have been so bad. Incidentally, that we do not have 1929s anymore is to a large extent due to much more competent regulation nowadays, something that you are clearly against. Yet another contradiction in your stance.

In the real world, we rob people. Get used to it. If I point out that rape

There we go again with the robbing and raping. 

I hate to break it to you, but we live in times when the wealth generation rate is at virtually highest known. The number of millionaires minted every year is staggering. Somehow those guys are not robbed or raped. They are smart investors. What separates them from others? They educate themselves about how the economy works and then take reasonable risks, putting their money where their mouth is. If by comparison, others are too lazy or cowardly to do that, but prefer to sleep on a green paper mattress, then that is their free choice and they should be men enough to own up to it. There is no free lunch.

Finally, if you are convinced the buying value of precious metals remains constant, then just buy ingots and sleep on them. No need to move EVERYBODY ELSE to the gold standard then. You will never be rich, but at least you will be secure from FRN inflation. At least, that is until Chile, South Africa, and Siberia open huge new deposits or there is another major war and a Roosevelt reincarnate starts confiscating bullion. 

I am not certain what is more amusing - the ridiculousness of your ideas or how smug you are about them. 

[Len Budney]

Len, I think you are dragging economic concepts into this discussion that serve no purpose. 

I think the topic of this thread IS economics. At least insofar as the LDs relate to the monetary system.

--Len.

[Len Budney]

In an expanding economy with a stable currency, prices simply fall.

If the prices fall, money will steadily appreciate, so people that have to borrow money to run their businesses (i.e. most people) will find themselves bankrupt...

That would be true if prices fell precipitously. But that's not what happens; prices fall commensurately with increases in productivity and decreases in costs. The prime example is computer hardware. Computers have improved so rapidly that their prices have steadily fallen despite inflation! Yet nobody is greeting this as a tragedy.

Accurately speaking, the Great Depression was a massive correction of malinvestment through the 1920s caused by the Fed's artificial lowering of interest rates. Attempts to inflate the economy out of the depression prolonged the depression, though your remarks prove that Keynes and the forces of ignorance won the propaganda war: they blame Hoover for failing to inflate enough.

Actually, they did not inflate fast enough.

Right. You're quoting Keynes exactly. And Keynes was full of baloney.

Incidentally, that we do not have 1929s anymore is to a large extent due to much more competent regulation nowadays, something that you are clearly against.

Post hoc ergo propter hoc. Anyway, you're wrong: we've had several bubbles since then. That they haven't been as bad has been mostly pure luck, and partly a result of inflation putting off the day of reckoning. The problem is that inflation can't paper over a correction forever; it only makes the resulting bust worse. We are already at a point where interest rates have very little wiggle-room left, and the only two choices will be to hyper-inflate or to permit the long-overdue correction. Either way, there are rough times ahead.

Yet another contradiction in your stance.

My stance did not contradict itself; you contradicted it. Even if you weren't wrong (which you are), it would not be a contradiction in my stance, but a contradiction of it. Please try to keep things straight.

In the real world, we rob people. Get used to it...

There we go again with the robbing and raping. 

You seem to have missed the part about inflation being robbery. Look, you have the world's only $1 in your mattress. I print a second $1 bill and spend it. You now have exactly half your previous purchasing power, and I have whatever I bought with my counterfeit money. I have robbed you. It's really quite simple. Calling it "the real world" doesn't justify anything.

--Len.

[Brad Johnson]

Sigh. It's clear you've never studied economics. But where did you get the idea that arguing on in profound ignorance of the subject would be a good idea? You just plain don't have any idea what you're talking about. Here: read yourself rich.

--Len.

Ah, Ludwig von Mises, foundation and inspiration for Libertarian monetary policy.  Nice guy, insightful, and a very astute observer, but more monetary philosopher than economist.  He tried to dissect economics strangely esoteric ways, seemingly never wanting to admit that basic Supply and Demand pretty much had things covered.

As for marginal utility?  Sounds great but it's one-sided, heaping the lion's share of what we now refer to as economy-of-scale on the supply side.  It also presumes saturation based on static supply and static demand, neither of which happen in reality.

Brad