Saturday, December 15, 2012

Alan Feuer — Prison May Be the Next Stop on a Gold Currency Journey

His name is Bernard von NotHaus, and he is a professed “monetary architect” and a maker of custom coins found guilty last spring of counterfeiting charges for minting and distributing a form of private money called the Liberty Dollar.
Described by some as “the Rosa Parks of the constitutional currency movement,” Mr. von NotHaus managed over the last decade to get more than 60 million real dollars’ worth of his precious metal-backed currency into circulation across the country — so much, and with such deep penetration, that the prosecutor overseeing his case accused him of “domestic terrorism” for using them to undermine the government.
Of course, if you ask him what caused him to be living here in exile, waiting with the rabbits for his sentence to be rendered, he will give a different account of what occurred.
“This is the United States government,” he said in an interview last week. “It’s got all the guns, all the surveillance, all the tanks, it has nuclear weapons, and it’s worried about some ex-surfer guy making his own money? Give me a break!”
The New York Times
Prison May Be the Next Stop on a Gold Currency Journey
Alan Feuer
(Michael Bauwens via Twitter)

11 comments:

frlbane said...

There is no legitimate need to suppress private monies for the payment of private debts ONLY. Caesar's taxes are to be paid ONLY with Caesar's money (Matthew 22:16-22). How can a private money compete against that enormous advantage UNLESS the government is mismanaging its fiat by, say, bailing out what should be purely private banks?

That said, ALL potential private money forms should be allowed to compete equally for the payment of private debts, not just silly precious metal based ones. Common stock, for example, is an ideal private money form that "shares" wealth and power rather than concentrate them. Nor does common stock as money require usury or fractional reserves. It is also democratic, at least per share.

y said...

frlbane

people can exchange things in payment today if they want to, such as gold or common stock.

But they have to pay taxes on those transactions in state currency. Plus those things are not recognised as legal tender, and banks don't accept them in payment.

Trying to pay for things with notes or coins that you claim are "real money" and that look a bit like official notes is deemed to be a form of fraud or counterfeiting, I think.

frlbane said...

But they have to pay taxes on those transactions in state currency. y

Sales and income taxes are not a problem for private currencies since every private currency of consequence would have a free market exchange rate with fiat. But the capital gains tax is a problem because the "capital gain" is measured in fiat and might simply register a decrease in the real value of fiat rather than a real capital gain.

y said...

"the capital gains tax is a problem"

That's what I was thinking.

For 'private monies' to have any chance of 'working', such taxes would have to be removed, at the very least.

Tom Hickey said...

Trying to pay for things with notes or coins that you claim are "real money" and that look a bit like official notes is deemed to be a form of fraud or counterfeiting, I think.

Right, the govt is fine with barter exchange and casino tokens, but calling something "a dollar" in the US that is not a USD is asking for it.

But tokens and even outright barter is taxable.

Tom Hickey said...

Sales and income taxes are not a problem for private currencies since every private currency of consequence would have a free market exchange rate with fiat. But the capital gains tax is a problem because the "capital gain" is measured in fiat and might simply register a decrease in the real value of fiat rather than a real capital gain.

TAxes are based on nominal rather than real. In something like a straight barter exchange one has to estimate the value at the market rate and the IRS checks on this. It they disagree with the estimate they they send you but bill that you can dispute if you think you can prove they are wrong and you are right. What will probably happen if you have a good tax attorney is a settlement in which you pay more but not the amount the IRS first assessed.

y said...

You could say the dollar has "hyperinflated" against gold.

But you don't see people buying stuff with gold. It's an investment, on which you do have to pay tax.

Try and buy something with a lump of gold... people don't want the trouble, and anyway, what's really in it for them? The price of gold changes every minute. If they want gold they can always buy some online.

Tom Hickey said...

The basic issue seems to boil down to whether one believes that gold is money, in fact the only "real money," or thinks that is it just a commodity among other commodities.

For instance, most of the ZH folks think that gold is money, and all the thinking from there on out reflects this belief. So if gold is money and the Fed keeps printing paper that is not really money, hyperinflation will ensue.

y said...

Hayek:

"it is an erroneous belief that the value of gold or any metallic basis determines directly the value of the money"

http://mises.org/daily/3204

y said...

What the ZH folks really mean, if they only knew it, is that "money" (in their conception of it), is only "real" if it is strictly limited in supply.

What they really hate is an open-ended supply of money.

Tom Hickey said...

What the ZH folks really mean, if they only knew it, is that "money" (in their conception of it), is only "real" if it is strictly limited in supply.

What they really hate is an open-ended supply of money.


That, too, I suppose, but the feeling I get is that its mostly a fetish.