I came across an interesting article this morning about a man arrested for devising a bartering program which used real silver as a method of exchange. According to the article (Asheville man charged in alleged Liberty Dollar fraud scheme), over 70 local businesses agreed to take part.
There's just one problem with this; it is illegal for precious metals (silver, gold, etc.) to be used as a medium of currency, and even though the program was using the coins as “barter” and not “legal tender”, some toes were getting stepped on.
The best quote from the article:
“People understand that there is only one legal currency in the United States,” said Owen Harris, special agent in charge of the Charlotte office of the FBI. “When groups try to replace the U.S. dollar with coins and bills that don't hold the same value, it affects the economy.
“Consumers were using their hard-earned money to buy goods and services, then getting fake change in return.”
There are three things that jump out to me in that quote. The first is the phrase stating that 1 ounce silver coins “don't hold the same value” as Federal Reserve Notes. It’s a very true statement, because they don’t hold the same value; silver is actually worth something (and always will be).
Secondly is the statement that “it affects the economy”. It certainly does; it puts real money in the hands of real people. Real money that won’t lose value and cannot be manipulated by untouchable, unaccountable entities (i.e., the Federal Reserve, corporate entities, banks, etc.).
Third is the statement that customers were “getting fake change in return”. You just have to laugh at this one. Silver, a precious metal that cannot be created out of thin air is “fake”; a piece of paper that is worth nothing and can be created in any quantity on a whim is “real”.
I won’t give you my conclusions as to why gold & silver can’t be used as currency; if you have any amount of concern & curiosity you can easily figure it out for yourself. And if you're more concerned with who will be kicked off American Idol this week, what would be the point of telling you at all?
What’s interesting to me about this incident is what precedent it sets for “bartering” in the future. We know that we can’t use silver and gold as currency. With this incident we now know that we can’t use silver and gold for “barter”. How far down does the line get drawn?
I raise chickens. You have a milk cow. I need milk. You need eggs. Can I still trade 2 dozen of my eggs for a gallon of your milk?
Maybe for now. I mean, seriously, how could anyone stop us from doing that?
Depending on what happens with the National Animal Identification System (NAIS) in the years to come, the answer may be that you & I simply don’t have any chickens or cows to barter with at all.
We’d both have to buy our milk & eggs. With legal currency, of course.
That may sound a little extreme, but then again, I’m sure there was a time when people would have laughed at you if you’d told them that there would come a day when gold & silver couldn’t be used as money.