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Buying Silver At $100 And The Rebirth Of Counterfeiting
TMO ^ | 1-20-13 | Dr Jeff Lewis

Posted on 01/20/2013 6:30:10 AM PST by blam

Buying Silver At $100 And The Rebirth Of Counterfeiting

Commodities / Gold and Silver 2013
January 19,2013
By: Dr Jeff Lewis

The debate about buying silver rounds, “junk silver” or silver Eagles goes on and on.

Although better prices may be available on silver rounds, investors continue to worry about the “China scare” and rumors of counterfeit silver coins.

Also, the confiscation* of fiat money purchasing power via inflation will happen long before counterfeit makes an impact, so getting more metal for the money makes the most sense at this time.

*(Confiscation of actual metal is separate issue we cover elsewhere).

Silver Eagles Gain Popularity

As a result, more investors seem to leaning towards buying silver Eagles and old, pre 1965, circulated or “junk” silver coins.

While nothing is wrong with silver Eagles, it does take longer and longer to realize the intended return on investment. Furthermore, you do not necessarily get the premium back if and when you decided to trade or sell your coin(s).

Sadly, one of the more bullish reasons for increased investment demand is the growing lack of confidence in the U.S. Dollar, which could actually taint the image of U.S. Dollar denominated silver Eagles.

When it comes to money and wealth, people tend to figure it out, especially when scarcity becomes an issue.

The Recognition Factor

Fears of counterfeit coins are not completely unfounded, but fakes are not that common.

It is also very difficult and expensive to pull fakes off with 0.999 percent silver, and even harder with old circulated silver coins. Even with gold, it is very rare to discover good fake coins, and both of these metals are rare to begin with.

While it may not be that big a threat in the silver market now, when silver tops $100 per ounce, many investors are concerned that generic rounds may become less accepted due to the higher counterfeit risk.

The Counterfeit Trigger

So, what price could trigger a wave of counterfeit coins? The $100 level will probably not be enough of a tipping point to make sufficient money from counterfeiting to justify the expense and risk.

Although based on the way silver has moved in this bull market, the $100 level could be a test and the market could easily see a deep, 50 percent correction from that point before retesting it.

Maybe double or triple that price would prompt further silver coin counterfeiting, but even then, it is not an easy process. Besides, insufficient time to ramp up production would be a limiting factor, whether the silver is melt, mined or counterfeit.

This scenario is like a big earthquake that could hit at any minute. The situation where you have one commercial trader holding a massive percentage of the net short position in a commodity is so bizarre.

It will probably depend on who shows up on the short side as the market moves higher — even beyond the $50 level. If the large silver shorts eventually cover in a panic, the price could easily overshoot considerably.

At least the debate is not about the silver ETF.


TOPICS: News/Current Events
KEYWORDS: coins; counterfeiting; currency; siklver
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1 posted on 01/20/2013 6:30:23 AM PST by blam
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To: blam

If Americans were permitted to print their own money it would be worth as much as that being regurgitated by edict of the FED.


2 posted on 01/20/2013 6:34:30 AM PST by IbJensen (Liberals are like Slinkies, good for nothing, but you smile as you push them down the stairs.)
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To: blam
Gold...Buy The Dips

"Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated two months ago that he plans to “sell federal debt and purchase more gold and silver.”

3 posted on 01/20/2013 6:44:28 AM PST by blam
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To: IbJensen
If Americans were permitted to print their own money it would be worth as much as that being regurgitated by edict of the FED.

A point often missed.

The difference between you and me is that if we print counterfeit money we go to jail. When the Fed does it, nobody goes to jail. The economic consequences, however, are identical.

4 posted on 01/20/2013 6:45:40 AM PST by InterceptPoint
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To: blam

silver typically trades 40-60 : 1 on gold (currently 53:1)

if silver were to trade at $100/oz... that would put gold around $4000-6000/oz (let’s say $5,300/oz at today’s ratio)

this would be about a 215% jump in gold price... which would mean:

* gas would move from $3.40/gal to $10.71/gal
* bread would move from about $2.99/loaf to $9.42/loaf
* deli roast beef would go from $8.99/lb to $28.31/lb

pretty much exactly what 0bama and the commies on the left have been pushing for over the passed few decades.


5 posted on 01/20/2013 6:51:00 AM PST by sten (fighting tyranny never goes out of style)
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To: blam

“While nothing is wrong with silver Eagles, it does take longer and longer to realize the intended return on investment. Furthermore, you do not necessarily get the premium back if and when you decided to trade or sell your coin(s).”

I buy Morgans not as an investment but as a means of having something easily converted into dollars and as a means of a hedge against the inflated Fed notes.


6 posted on 01/20/2013 6:51:51 AM PST by count-your-change (you don't have to be brilliant, not being stupid is enough)
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To: InterceptPoint

Walter Williams said that if a person is arrested for printing money, he should claim he was merely engaging in monetary policy.

https://www.youtube.com/watch?v=EoS52fVtVQM


7 posted on 01/20/2013 6:53:33 AM PST by Pining_4_TX (All those who were appointed to eternal life believed. Acts 13:48)
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To: blam

If counterfeiting of coins is a problem and if there is a premium that is not redeamable on selling, why not just buy silver?

Silver can be purchased fine .9999 or sterling .925 from lots of places. The Navajo silver smiths literally stand in line to purchase small quantities of various thickness, widths and lengths of silver sheet in the Gallop New Mexico supply houses. These suppliers also sell casting grain, BB size pellets that can be weighed out in very small quantities.

The same shops also purchase silver. The scrap left over after fabricating is saved and returned. It is graded depending on if it is pure or contains solder or other such impurities.

The trade in silver is very active in the southwest


8 posted on 01/20/2013 7:05:14 AM PST by bert ((K.E. N.P. N.C. +12 .....The fairest Deduction to be reduced is the Standard Deduction)
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To: count-your-change
Going in a few minutes to look at these:

Bulk Silver SALE - $26 (Summerdale)


9 posted on 01/20/2013 7:05:34 AM PST by blam
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I’m not buying silver as an “investment” to hopefully be converted back into more worthless paper dollars than I paid for it. I’m buying it as insurance so that when I need to buy a chicken at some point in the future I’ll have something of value to trade!


10 posted on 01/20/2013 7:05:34 AM PST by 762X51
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To: 762X51
"I’m buying it as insurance so that when I need to buy a chicken at some point in the future I’ll have something of value to trade!"

I like scrap silver coins because everyone recognizes them without suspicion, etc.

Insurance, insurance...not investing.

11 posted on 01/20/2013 7:10:50 AM PST by blam
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To: blam
Why Buy Silver, I am saving up for some Platinum, if I can make the coin right I will be richer than bill Gates after I make a Treelion Dollar Platinum coin!

One, Treee-Lee-Ion Dollars, Mwahahahah!!!

12 posted on 01/20/2013 7:30:21 AM PST by GraceG
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To: blam
“precious” metals are where we find them. I've made good money from gathering up old lawn furniture and t.v. antennas to be sold for the scrap aluminum in them.
13 posted on 01/20/2013 7:33:49 AM PST by count-your-change (you don't have to be brilliant, not being stupid is enough)
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To: InterceptPoint
The difference between you and me is that if we print counterfeit money we go to jail. When the Fed does it, nobody goes to jail.

The difference is the Fed doesn't print counterfeit money

14 posted on 01/20/2013 7:37:46 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: blam

$6.50 for one silver quarter? 26 times the value. The cost of a 15K house in 1964 should cost $ 390,000 today. No wonder economist say housing is cheap.

Or price of silver is a bubble. My guess would be silver is priced right.


15 posted on 01/20/2013 7:43:34 AM PST by Orange1998 (DO NOT PRESS CTRL W)
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To: blam

Sigh: I still remember when silver was REAL MONEY! In Utah my dad got paid in REAL SILVER DOLLARS!

Even the paper money had the words...”Pay to the bearer on demand, in SILVER,.....”

Anyone remember when GOLD was real money?

Anyone remember when the SUPREME COURT OF THE UNITED STATES declared GOLD and SILVER the ONLY legal tender in the US?


16 posted on 01/20/2013 7:47:47 AM PST by Ruy Dias de Bivar (Click my name! See new paintings!)
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To: 762X51

I’m buying it as insurance <<<<<

BINGO!...We have a winner!!!


17 posted on 01/20/2013 7:51:53 AM PST by M-cubed
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To: blam

FYI, silver coins are not pure silver. IIRC, a quarter has about .18oz, not .25, so that’s not $26 an oz, more like 33. Still, ot a bad deal though.


18 posted on 01/20/2013 8:23:52 AM PST by Hugin ("Most times a man'll tell you his bad intentions, if you listen and let yourself hear."---Open Range)
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To: blam

How did you arrrive at 6.50?

http://www.coininfo.com/

Shows about 5.75 as current price


19 posted on 01/20/2013 8:28:05 AM PST by Manta (Obama to issue executive order repealing laws of physics)
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To: Ruy Dias de Bivar
Dear "El Cid?" - Your post caused me to go back to read that most famous campaign speech of William Jennings Bryan, his "Cross of Gold" given at the Democrat Convention in 1896. While this appeal to the then burning issue of 'bimetallism' (silver AND gold as reserve metals), this bit earlier in this speech reminds us that the appeal to class warfare and 'fairness' has a very long history in the Democrat Party;

Upon the side of the idle holders of idle capital, or upon the side of the struggling masses? That is the question that the party must answer first; and then it must be answered by each individual hereafter. The sympathies of the Democratic Party, as described by the platform, are on the side of the struggling masses, who have ever been the foundation of the Democratic Party.

20 posted on 01/20/2013 8:32:38 AM PST by SES1066 (Government is NOT the reason for my existence but it is the road to our ruin!)
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To: blam

13 % premium to silver spot. Ok I got it. a $1000 bag face value which is standard unit have become very scarce in the past month

90% Silver Coins $500 Face Value Bag
Product details
USD $ 11,829.68 ea.


21 posted on 01/20/2013 8:37:01 AM PST by Manta (Obama to issue executive order repealing laws of physics)
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To: Orange1998
$6.50 for one silver quarter? 26 times the value. The cost of a 15K house in 1964 should cost $ 390,000 today.

They are even higher than that in some locations. But I think it's hard to compare housing to a true commodity that is more liquid and portable.
22 posted on 01/20/2013 10:28:29 AM PST by Trod Upon (Civilian disarmament is the precursor to democide.)
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To: Hugin; Manta
Easy to check values by looking here.

I bought 50 dimes today at $2.30 each.

BTW, my friend bought all the silver coins that the guy in post #6 was selling today...About $2,800.00 worth.

23 posted on 01/20/2013 11:10:11 AM PST by blam
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To: blam

If you buy bullion bars and coins at one troy ounce or less, the chances of counterfeit is rare because the cost even at 100 dollars is too low for the risk. The only one ounce coin or bar is the collectible ones based on historical and rarity value that usually sells several folds above its silver value. Example Morgan Silver dollars can sell depending on its condition and year/historical rarity/collector demand 200 thru 300 dollars. These coins usually come in a plastic slab with assayed documentation/bar code on it. The assay tells the buyer what the silver purity is and the condition grade. The higher the condition grade the more the coin/bar is worth. As the price of silver rises these collectible coin/bar values also escalate. Counterfeiter will jump in with real silver fakes in assay plastic slabs. The problem with the assay slabs is for the owner to detect fake they must break it to access the coin. Sellers will not allow that. If the coin turns out not to be a fake, the owner must spend money to have it assayed for its grade and resealed in a slab. This costs money.
To avoid this problem, buy coins and bars based on silver content (bullion) in one ounce or smaller sizes. Larger bars are valued sufficiently that counterfeiting can occur. Usually lead is used to fill inside of the bar, but that can be detected by a magnet. A magnet is usually one of the basic tools a buyer should have on hand to test any silver coin or bar. If the magnet sticks, the bar and coin has lead content.
Stay away from ETF except PSLV or CEF. Many ETF sells paper shares with claim to silver, but the paper shares outnumber the actual silver in the fund by ratios as high as 90 to 1. If everyone wanted to sell their shares for silver in lieu of dollars, the ETF will collapse. Many of these funds are owned by Wall Street banks and hedge funds who are involve with each other in swaps and interlocking loans, where the silver in their managed funds can be used as collateral for these deals.
PSLV and CEF is one of the few that the number of shares reflect the silver held by the ETF managers. No fractional banking model (more paper then actual metal). Like any ETF including the ones I referenced as good are still third party risks. Nothing beats physical ownership of the metals.


24 posted on 01/20/2013 11:12:51 AM PST by Fee
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To: jiggyboy; PA Engineer; blam; TigerLikesRooster; Cheap_Hessian; CJinVA; Jet Jaguar; ...

Goldbug ping.


25 posted on 01/20/2013 11:23:38 AM PST by Jet Jaguar
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To: blam
I have purchased a number of junk silver quarters, but I have a difference of opinion in regards to junk dimes. One of the issues of junk dimes is the wear over the years. Silver weight will become and issue as the appearance of value increases.

One of the junk silver coins that has not suffered circulation wear nearly as bad as the dimes is wartime nickels. Todays melt value is $1.8 USD.

One of criticisms of war nickels is their recognizability. I would counter that these will become the most recognizable and identifiable coins during an inflationary period. First, the mint mark above Monticello makes them easy to identify. The mint mark was prominently displayed so the US Treasury could pull the coins after the war. My theory was this backfired. Many who were burned by the gold confiscation had the same idea.

The second reason is more anticipatory. The value of the nickel is low enough to prevent counterfeit minting, while at the same time providing a means of making change in an inflationary economy. I think this is already happening as demand for war nickels is now outstripping supply.

An example would involve filling up with 10 gallons of gasoline at $3.60 per gallon (todays dollars). The silver melt value of silver quarters (todays value) would require 6.24 quarters. We can't split the quarters, but we can provide change in nickels and combinations of copper or we can pay in 6 quarters and one war nickel. Better yet, we can fill up a tank of gas (10 gallons) with $1.00 USD (20 silver nickels).

I believe there will be demand for the silver nickels in the coming years as the unit basis for a precious metal economic system. This is no different than the dollar as the unit basis for the current fiat currency system.

JMHO. YMMV.


26 posted on 01/20/2013 12:04:33 PM PST by PA Engineer (Liberate America from the Occupation Media.)
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To: Toddsterpatriot

Do you have anything useful to add to the discussion?


27 posted on 01/20/2013 12:30:35 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: Fee
If the magnet sticks, the bar and coin has lead content.

Since when does a magnet attract lead?

28 posted on 01/20/2013 12:32:34 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: Fee

Are there any gold ETFs that are of ethe same model as PSLV or CEF? thanks


29 posted on 01/20/2013 12:58:30 PM PST by STJPII
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To: blam

There are Morgan copies readily available on the market apparently they were used in casino’s after the actual coin supply dried up they have a tiny “copy” on the reverse of the coin. I bought a few to leave around my house lightly concealed for the thief that knows I have silver around.


30 posted on 01/20/2013 2:10:50 PM PST by scottteng (Tax government employees til they quit and find something useful to do)
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To: DuncanWaring

Pointing out that error wasn’t useful?


31 posted on 01/20/2013 4:42:48 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Toddsterpatriot

Nope.

What the Benbernank is doing was at one time a capital offense in this country.


32 posted on 01/20/2013 4:47:49 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: STJPII

PHYS


33 posted on 01/20/2013 5:03:58 PM PST by Fee
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To: DuncanWaring

The Fed is authorized by Congress, no counterfeiting involved.


34 posted on 01/20/2013 5:36:11 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Toddsterpatriot

Play all the silly word games you want; the Fed is fabricating, by their own admission, a trillion dollars a year out of thin air.

As the supply of something rises towards infinity, the value of each individual one of that thing approaches zero.


35 posted on 01/20/2013 5:45:04 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: DuncanWaring
the Fed is fabricating, by their own admission, a trillion dollars a year out of thin air.

The Fed balance sheet was less than $900 billion on 9/11/2008. A year later, 9/10/2009, a bit over $2 trillion.

On 9/8/2010, a bit less than $2.3 trillion. 9/7/2011, a bit over $2.8 trillion. 9/13/2012, $34 billion less than a year earlier.

The first year, in the midst of the crisis, they "fabricated" a bit less than $1.2 trillion.

The second year, less than $300 billion.

The third, about $550 billion.

The fourth, they reduced their balance sheet by $34 billion.

Less than $500 billion a year, on average.

As the supply of something rises towards infinity

33% a year for 4 years is hardly infinity.

the value of each individual one of that thing approaches zero.

Especially if you ignore increased demand for that thing.

36 posted on 01/20/2013 6:08:53 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: blam

I found this at your link...

Each Washington quarter contains 0.1808 troy ounces of silver and is valued at $5.78 when silver is at $31.94 / ounce.”

How about that, I recalled something correctly.


37 posted on 01/20/2013 9:08:09 PM PST by Hugin ("Most times a man'll tell you his bad intentions, if you listen and let yourself hear."---Open Range)
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To: Hugin
"How about that, I recalled something correctly."

The mind is a beautiful thing.

38 posted on 01/20/2013 10:02:17 PM PST by blam
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To: Toddsterpatriot

By their own admission, they’re buying debt at the rate of $85 billion per month, for the indefinite future.

Where are they getting $85 billion per month.

I don’t believe their “balance sheet” any more than I believe BLS claims of “falling unemployment”.

“Lies, damned lies, and statistics” comes to mind.


39 posted on 01/21/2013 2:57:53 AM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: DuncanWaring
Where are they getting $85 billion per month.

They don't have to "get" it anywhere. Central banks can create money out of thin air.

I don’t believe their “balance sheet”

Good for you.

40 posted on 01/21/2013 9:12:29 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Toddsterpatriot
Central banks can create money out of thin air.

Obviously.

Just because they "can" doesn't mean they "should".

41 posted on 01/21/2013 9:28:29 AM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: DuncanWaring
And when they do, it isn't counterfeiting.

Glad we cleared that up.

42 posted on 01/21/2013 10:00:02 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Toddsterpatriot

By your logic, the Zimbabwean government didn’t counterfeit, either.

I’m sure you know how that worked out.


43 posted on 01/21/2013 11:44:03 AM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: blam

https://www.google.com/finance?q=NYSEAMEX%3ASAND&sq=sandstorm%20gold&sp=1&ei=DZr9UPiePJi2lgOLRQ

The new SLW ....for gold. Same business model as SLW


44 posted on 01/21/2013 11:50:51 AM PST by dennisw (The first principle is to find out who you are then you can achieve anything -- Buddhist monk)
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To: DuncanWaring
Definition of COUNTERFEIT

1 : made in imitation of something else with intent to deceive : forged

45 posted on 01/21/2013 11:51:31 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Toddsterpatriot

Again - tell me now Zimbabwe’s adventure in non-counterfeiting worked out.


46 posted on 01/21/2013 12:08:57 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: blam
http://oi50.tinypic.com/28j8uug.jpg
47 posted on 01/21/2013 12:11:12 PM PST by dennisw (The first principle is to find out who you are then you can achieve anything -- Buddhist monk)
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To: DuncanWaring

Who claimed it did?
Calling authorized creation of money counterfeiting is silly.


48 posted on 01/21/2013 12:43:01 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Toddsterpatriot

Like I said before, play all the silly word games you want.

Conjuring up “value” out of nothing didn’t end well for Zimbabwe, and it won’t end well for us.


49 posted on 01/21/2013 1:14:18 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: DuncanWaring

The only word game I see here involves the word counterfeit.


50 posted on 01/21/2013 1:18:22 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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