Silver as Money back in Circulation

Sierra Times ^

[american spirit]

Good info....talking about ratios, I can remember when gold sold around $35.00 and ounce back in the 70's (?) so if gold is now in the vicinity of $350/oz could we say the FRN's have been devalued to around 1/10th of their value from 25-30 years ago? When we look at the exhorbitant amount of inflation from then to now it kinda makes sense doesn't it?

[Willie Green]

I'm holding a $10 NORFED Silver Liberty in my hand right now, and it's one troy ounce of .999 fine silver.

Well, Spot Silver (Bid) is at $4.52 as I post.

So you still just have a promotional token whose bullion value is less than half of face value.

[Ben Bolt]

Norfed.org bump !

[BlackJack]

Its a solid silver coin. Did you read the article?

[BlackJack]

Thanks for helping out. Some people post before they read.

[Willie Green]

Some people post before they read.

Did you get to #42 yet?

[BlackJack]

Whats the spot price right now of paper?

[silver_patriot2000]

The spot price of paper is nil. What people need to understand (either before or after they loose their life-savings by speculating in the almighty dollar) is that paper, quite literally, grows on trees. Metals, on the other hand, require actual labor to produce.

[Chewbacca]

What is the value of a $100 paper fed note?
What is the difference between that and a $50 fed note?

They are the same size piece of paper. They just changed the number printed on them.

Why can't the Treasury just make a couple $1,000,000,000,000 notes and pay the US deficit off?

[mvpel]

The "bullion" value of a Sacagawea dollar coin is 1.2 cents, so is that a promotional token whose bullion value is less than 2% of its face value?

It's not the intrinsic value of the silver that is the main issue here, it's usefulness as currency.

If the intrinsic value of a given commodity is higher than its face value, then it is not useful as circulating currency. This is why the face value of the Silver Liberty is $10.00, instead of a daily-fluctuating value that happened to be $4.52 earlier today, and why you don't get $1 Silver Eagles in change at McDonald's.

That's why the US Mint switched from pure copper to copper-plated zinc for the penny. It was getting too close to the point where you could change a dollar for 100 pennies, then melt them down and sell the resulting slug of copper for $1.20.

And a consistent fixed value also reduces the transaction friction making it easier for silver to circulate in concert with Federal Reserve Notes. The vendor can simply enter $10.00 in their register, rather than having to go look up the current market price of a 5,000 ounce bar of silver in New York, which is what the spot price represents.

Alder Gold, which has the best prices online I've seen for metals, has $5.35 an ounce for a 100-ounce ingot.

And at least the vendor is getting $5.00 in intrinsic value in the transaction, which has the potential to increase in value over time, as opposed to $10 worth of monetized government debt as with a Federal Reserve Note, on which we owe interest to the Federal Reserve Bank that issued it.

[redhead]

"When I was a kid, I can remember that sometimes local merchant groups or Chambers of Commerce would issue tokens (wooden nickels or perhaps some kind of metal coin) that could be used as "money" among participating merchants. Basicly, it's a marketing gimmick."

In our little town, they use "Monty Bucks." These are checks on the bank, and spend just like money. They are used as prizes and premiums. When we first moved in, we got 25 of them.

[redhead]

"When we first moved in, we got 25 of them."

Oops. We got 25 of them as a gift from the "Welcome Wagon."

[mvpel]

The basic point here is that if you want to buy and hold silver bullion as an investment, you should write a check to Alder Gold for $535 plus shipping and insurance. If you want to use silver as circulating currency, then you can use the Silver Liberty.

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[Willie Green]

Whats the spot price right now of paper?

If you're asking which I'd rather hide under the mattress for 30 years in case of emergency, paper or silver, the answer is silver of course.

But you gotta admit, these tokens are only worth their bullion value, NOT whatever denomination is stamped into their surface.

[mpoulin]

Why can't the Treasury just make a couple $1,000,000,000,000 notes and pay the US deficit off?

Because a note is a promise to pay. You can't eliminate debt by issuing more debt.

[SCARED]

check out monex.

[Chewbacca]

Exactly.

That's my point.

Fed Notes are borrowed into existance and a promise to pay. Basically a debt to the issuing bank.

Gold and silver have intrinsic value and hold their value as true money.

Paper money has no intrinsic value except people are forced to use it because of legal tender laws.

Paper money cannot pay off a debt, otherwise the US deficit would be paid off.

Of course, if the US Treasury department issued greenbacks interest free we wouldn't have to owe a bank anything.

[BlackJack]

Willie, the coin is worth $10 when you shop at a participating retailer. The coin will buy something that costs $10.

IF-say- the federal guv collapsed because a nuke went off in Wash DC- I'd rather have a pocket full of silver coins than a pocket full of paper notes.

Its like a $10 bill made out of 1 ounce .999 silver instead of a paper note.

[Poohbah]

If the federal government collapsed that badly...

You'd be FAR better off investing in copper-jacketed lead.