Liberty Dollars seized in gov raid -- MERGED THREADS

[Len Budney]

Ah, Ludwig von Mises...

Diminishing marginal utility is common to all modern schools of economics, not just the Austrian school. Sneering at one of them in a knowing tone of voice isn't a substitute for actually knowing what you're talking about.

--Len.

[Brad Johnson]

Diminishing marginal utility is common to all modern schools of economics

Common, yes.  Useful, maybe, but only as a discussion point.  It became outdated when economic modeling went from static to dynamic.  There is a more updated model.  It's called Economy of Scale.

Brad

[K Frame]

Simmer down, people.

My festive holiday mood is quickly evaporating.

[CAnnoneer]

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.

That is not the only way an economy grows; it is not even the predominant way. Besides, it is a bad example, because the price for a computer is about the same, regardless of tech level. In 1998 I bought a Dell, which was one notch under the best available at the time. An equivalent system today (second best level) would be purchased for almost exactly the same dollar amount. The particular new computer is roughly ten times better than the 1998 one, but in all other respects it is a simple replacement economy: one new computer instead of one old computer, both at roughly the same price as new, when inflation is factored in. That is not surprising because the computer business had its largest growth in the 1990s, and now is much tighter. Try to apply your logic, say from 1987 to 1998, and you will arrive at nonsense.

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

Convince us.

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.

I did not say we have had no bubbles. I said they were not as bad due to better regulation. You seem to agree that regulation helped, yet you still call me wrong. 

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.

Are you for regulation or not? Do you believe in the function of the federal reserve or not? Do you think gov should control money supply or not? Make up your mind, then let us know.

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.

It would be stealing only if the gov promises not to inflate the money supply, then you store your dollar, then they reneg and inflate. Then and only then can you try to make the case for robbery. As far as I know, gov has not promised so. In fact, it would largely cripple the federal reserve and the fed gov if they did make such a promise at any time and stuck with it.

Your line of reasoning in this case reminds of people who think that by owning common stock they somehow are entitled to a piece of brick and mortar of the respective company. Then the company goes bust, the creditors seize the remaining assets, and the wiped out common-holders scratch their heads and whine:"How did this happen to me?" Well, that is what you bought, a piece of paper which grants privileges (e.g. dividends) but can also become worthless. Federal specie is not much different in that there are risks involved. No point to whine about it - nobody put a gun to your head demanding that you buy and hold the stock or the specie. It is that simple.

[Len Budney]

Diminishing marginal utility is common to all modern schools of economics

Common, yes.  Useful, maybe, but only as a discussion point.  It became outdated when economic modeling went from static to dynamic.  There is a more updated model.  It's called Economy of Scale.

Sigh. You're pulling stuff from your belly button. Read a book or two on economics. Until then, there's just no point.

--Len.

[Len Budney]

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.

That is not the only way an economy grows; it is not even the predominant way.

Of course there are other factors. But artificial inflation is not one of them. It saps the economy.

Besides, it is a bad example, because the price for a computer is about the same, regardless of tech level. In 1998 I bought a Dell, which was one notch under the best available at the time. An equivalent system today (second best level) would be purchased for almost exactly the same dollar amount.

A price or $2,000 in today's dollars is only about $1,600 in 1998 dollars. So comparing everything in 1998 dollars, a decent system is about $400 less than it was back then. But however you want to measure it, prices have steadily declined over the last forty years. A TRS-80 back in 1979 would have cost $3K. That's $8,956.69 in today's dollars. My pentium-based Linux system was $3,000 in 1995. That's $3,935.29 in today's dollars. And my Macbook pro was $2,500 last year. That's about $2,585 in today's dollars.

Normalizing for inflation, the price has steadily declined. In nominal terms, the price of a comparably-ranked system has declined very slightly--but the power of that system has grown exponentially over that time according to Moore's law. So pricing storage in dollars/GB, RAM in dollars/MB, CPU in dollars/megaflop, the price has declined steeply over the years despite inflation.

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.

I did not say we have had no bubbles. I said they were not as bad due to better regulation.

Post hoc ergo propter hoc.

You seem to agree that regulation helped...

Absolutely not. One can delay the correction by pumping liquidity, but not forever. The effect is to make the correction worse in the end.

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.

Are you for regulation or not? Do you believe in the function of the federal reserve or not?

Do you have to ask? There should be a free market in currency as in anything else. And in particular, we need a sound money precisely so the thieves in DC can't steal it by inflating the dollar, all the while pretending that inflation is some sort of act of God.

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.

It would be stealing only if the gov promises not to inflate the money supply...

Unless I promise not to take your lunch money, it's not stealing. 

Your line of reasoning in this case reminds of people who think that by owning common stock they somehow are entitled to a piece of brick and mortar of the respective company. Then the company goes bust, the creditors seize the remaining assets, and the wiped out common-holders scratch their heads and whine:"How did this happen to me?"

You appear not to have it quite straight. Stockholders are in fact entitled to their share of the firm's assets. However, other obligations have seniority. Bond-holders, for example, are paid first. It simply happens that when a company enters receivership, the senior obligations usually exceed the firm's assets, so junior obligations such as common stock end up with nothing.

In any case, the analogy is meaningless. Government has no right to seize the fruit of my labor (though they do so anyway), and forcing me at gunpoint (through legal tender laws) to use their scrip, which they then inflate out from under me, is simple robbery. It's indirect robbery, which is why they like it so much: it fools most of the people most of the time. The thieving SOB can even throw around slogans like "Whip Inflation Now!" as if inflation were a hurricane that blew in off the gulf.

--Len.

[CAnnoneer]

A price or $2,000 in today's dollars is only about $1,600 in 1998 dollars. So comparing everything in 1998 dollars, a decent system is about $400 less than it was back then. But however you want to measure it, prices have steadily declined over the last forty years. A TRS-80 back in 1979 would have cost $3K. That's $8,956.69 in today's dollars. My pentium-based Linux system was $3,000 in 1995. That's $3,935.29 in today's dollars. And my Macbook pro was $2,500 last year. That's about $2,585 in today's dollars.

Normalizing for inflation, the price has steadily declined. In nominal terms, the price of a comparably-ranked system has declined very slightly--but the power of that system has grown exponentially over that time according to Moore's law. So pricing storage in dollars/GB, RAM in dollars/MB, CPU in dollars/megaflop, the price has declined steeply over the years despite inflation.

You missed the central point - most of expansion in the 1990s happened by NUMBER of computers, not unit price. Zeroing inflation would work fine and dandy if the economy is essentially stagnant and the only difference is the tech level of each computer, while the total number of computers in operation remains the same. But the whole point of the argument we are having is that if the economy expands, as measured if imperfectly by the number of computers sold per year, you have to expand the money supply to match the increase in total wealth.

Post hoc ergo propter hoc.

Woo, latin, you must be smart then.  Hehehe.

Fine, we cannot turn the clock, do an experiment, and see what will happen. Even if we could, people would be crazy to let us try. But, just explain to us what exactly you think would happen if there is no federal reserve, no adjustment to money supply or interest rates. Just totally free market. Will it result in more stability or less? Will it lead to 1929s or not?

Unless I promise not to take your lunch money, it's not stealing. 

Bad analogy. Nobody puts a gun to your head to keep the specie. If you believe the gov is a tuna-sandwich bully that can and will take your tuna sandwich, then get the egg salad. You'd still be wrong, but at least perfectly safe.

You appear not to have it quite straight. Stockholders are in fact entitled to their share of the firm's assets. However, other obligations have seniority. Bond-holders, for example, are paid first. It simply happens that when a company enters receivership, the senior obligations usually exceed the firm's assets, so junior obligations such as common stock end up with nothing.

Actually, it is a perfect analogy - the instrument people hold in both cases is a bit more complex, conditional, and risky, than they choose to believe. Common shareholders choose to believe they will get something after the creditors and privileged stock sharks are done with the carcass of the company. People that sleep on paper mattresses choose to believe that their paper will not depreciate badly. They are both deluding themselves and taking risks, whether they acknowledge it or not.

In any case, the analogy is meaningless. Government has no right to seize the fruit of my labor (though they do so anyway), and forcing me at gunpoint (through legal tender laws) to use their scrip, which they then inflate out from under me, is simple robbery.

Nobody forces you to keep US scrip. You can have all your savings in euros, drahmas, pounds, marks, roubles, or whatever else you want. If you don't like money, you can invest in precious metals, diamonds, guns, commemorative plates, even baseball cards and collectibles. Nobody puts a gun to your head telling you to keep greenbacks in a bucket under your bed. I sure don't, and neither should you, if you know what's good for you. Yeah, I use them to buy stuff, and will keep using them so long as gov recognizes them and people take them.

It's indirect robbery, which is why they like it so much: it fools most of the people most of the time.

The average US family's savings account is less than 5,000 dollars. Most people don't save enough to be affected by inflation to their savings in any meaningful way. Meanwhile the retirement accounts are growing at least as quickly as money-markets, and therefore generally keep up with the inflation. Those who do have larger savings, generally are also savvy enough to invest in equity, real estate, their own businesses, etc. Thus, your complaint simply does not correspond to the objective reality. You are proposing a dangerous destabilizing solution to a non-existent problem.

[Euclidean]

So what if it has the dollar sign on it?  Does the US government have exclusive rights to the dollar sign?

YES, IN FACT, THEY DO.

Will you people PLEASE read the goddamned laws, instead of just babbling that they don't exist, because you never read them?

In fact, early in the 20th century, this guy would have been already locked up for life for counterfeiting. Earlier than that, past century, he might have been already dropped on a rope. The laws are that old!

Educate yourself before opening your mouth! Jesus christ! 

I love your rants that are so explosive and don't address the issue at hand because I wasn't referring to any law at all, but rather the reality that no, the US government does not have exclusive use of the $ sign in the written English language.  The US Mint has no monopoly on the "$" symbol in the common vernacular.  Why is that important?  Because a reasonable person would most likely realize that just because something is called a "dollar" or is labeled as a "dollar" doesn't mean it's a FRN. 

There are plenty of non FRN dollars in existence.  For instance dollars in circulation are minted by:  Australia, the Bahamas, Barbados, Canada, Jamaica, Liberia, Singapore, and New Zealand.  I'm sure there's tons more I'm forgetting.  The board game Monopoly uses.  They are all referred to with the "$" sign, it is not reserved for the FRN.

Putting "$20" on their coin is quite accurate as they are in fact dollars, just not government generated ones.  It's the same as Monopoly money.  No reasonable person should assume that a dollar sign is a claim it's an American dollar.

In fact, I don't recall seeing an actual dollar sign on any FRNs lately.  If anything actually putting it on their coin makes it look more fake.

You also seem to think I'm sympathetic to the company in the matter.  I'm not, they are making toy money that serves no useful purpose I can see.  However I do not see this clear cut criminal case you claim to have at all.

I will clarify that some of the people who use these things think they're doing something good.  I admire them for sticking their neck out and sticking to their beliefs they're doing something good even though I don't think what they're doing will ever work.  I'm content to leave them well enough alone, and not get my jollies by vicariously egging on some prosecutor at an attempt to lash out at people who look at things differently than I do.

There's also a huge difference between the likelihood that someone somewhere was fooled by a Liberty Dollar, and a deliberate attempt on the company's part to deceive people being provable in court.  The latter is held to a much more strict standard, or at least it should be, to the point where it's frustrating to those who would prosecute them.  That's not because NORFED is special, but because we should all be treated that way.

On a more philosophical level I always ask myself "Where is the direct harm against another inherent in this action?"  Producing that coin as shown is inherently benign.  No one gets robbed or hurt.  If it's not causing direct harm I balk at my tax dollars being spent to prosecute it when there's plenty of killers, thieves, and rapists to be had.  Our system doesn't have infinite resources, we must prioritize.  Go after the pedos and leave the people who make silly money alone.

Now if NORFED's practices really have defrauded people, I say there should be a class action lawsuit instead.  In a court where the standard goes by "more likely than not" vs. "beyond a reasonable doubt", NORFED would probably lose.  Just because I don't see a clear evidence of a crime here doesn't mean I think NORFED should be left unmolested or unpunished if people have been fooled by their products.

Besides, that remedy wouldn't make martyrs out of them, it would just send the company into bankruptcy and damage their reputation to make them look like cheats.  But apparently some people are happy to give them what they want and let them play the role of underdog.

[LAK]

Brad Johnson

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.

Barter amounts to an agreement of exchange between two parties. Any product, item, service, etc has a value, or is worth, what anyone is willing to pay or exchange for it.

That is basically how barter works, and that is only "free trade" afterall

[LAK]

HankB

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?

Exactly.

[Len Budney]

But the whole point of the argument we are having is that if the economy expands, as measured if imperfectly by the number of computers sold per year, you have to expand the money supply to match the increase in total wealth.

No, you don't "have to expand the money supply."

Nobody forces you to keep US scrip.

Legal tender laws. One can't live in this country without using FRNs.

It's indirect robbery, which is why they like it so much: it fools most of the people most of the time.

The average US family's savings account is less than 5,000 dollars. Most people don't save enough to be affected by inflation to their savings in any meaningful way...

That's nonsense, but it's immoral nonsense. You're suggesting that stealing a little from everyone isn't crime "in any meaningful way."

--Len.

[CAnnoneer]

Putting "$20" on their coin is quite accurate as they are in fact dollars, just not government generated ones.  It's the same as Monopoly money.  No reasonable person should assume that a dollar sign is a claim it's an American dollar.

Pictures of the coins have already been posted. The "USA" in large letters on one of the sides, together with "liberty" and the dollar sign will confuse anyone who does not know who Ron Paul is or whose vision is not good enough. This is especially true since the issuance of a plethora of new one-dollars and state quarters more recently. How would one know? A reasonable jury will find that these guys are counterfeiters. On the other hand, they would likely be acquitted if they had "Disney World", Uncle Scrooge's mug, a non-dollar sign, "Neverland" etc. on their coin.

I would imagine that if somebody prints a fake driver's license with your name on it then gets a credit line against your name, you'd be pissed. It is called identity theft and is illegal. When that guy is dragged to court, will anybody buy his defense that "I have the right to print and use whatever I want; if anybody confuses it for a genuine article, well, that's their own damn fault!"

[Len Budney]

Pictures of the coins have already been posted. The "USA" in large letters on one of the sides, together with "liberty" and the dollar sign will confuse anyone who does not know who Ron Paul is or whose vision is not good enough.

I also think that the resemblance was intended to fool people, while being different enough to defend in court. The slogan "Trust in God" stamped on the rounds particularly speaks to that. It's different enough that they can argue people should know the difference, but similar enough that someone ignorant or not paying attention will mistake it for a coin. Similarly, the little pitch they're supposed to use technically does make it clear that the coin isn't legal tender, but any inattention or ignorance from the listener, or any mistake by the speaker, will leave the impression that the LDs are US currency.

Since the jury will experience all those same confusions, I'm afraid NORFED is toast. They should have (1) distinguished their barter tokens much better, (2) not denominated them in dollars, and (3) not charged such obscene seigniorage.

--Len.

[WeedWhacker]

Regarding the charge of counterfeiting:

Under 18 U.S.C. ? 486, it is a Federal crime to utter or pass, or attempt to utter or pass, any coins of gold or silver intended for use as current money except as authorized by law.

"Current money" is a synonym for "legal tender". By the makers' own words, the LD has never claimed to be nor was intended for use as "legal tender". The law does not address so-called non-legal tender, aka bartering.


Side note: inflation is theft.