Alternative to Greenbacks Gives the Feds a Run for Their Money

[Dissipate]

Originally posted by: dirtboy
Diss,

Don't get me wrong, I am no fan of the Fed system. I wish we would have never gone on it and the gold standard to begin with. Everything was fine when our government (in its infancy) was printing money without any backing. People accpeted it and it worked. When they needed more money they just printed it instead of borrowing. Now we have the Fed and other nations have something similar. It clearly isn't the best, but it seems that we are stuck with it for better or worse.

Yep, unfortunately we are until people actually figure out the scam. Won't happen anytime soon. It may require a crash of some sort, for instance once the interest on the national debt consumes the national budget. Once that happens the government will only have one option and that is to issue a new debt free currency to pay the debt just as Lincoln issued debt free Greenbacks to pay for the Civil War.

 

[dirtboy]

Originally posted by: Dissipate
Once that happens the government will only have one option and that is to issue a new debt free currency to pay the debt just as Lincoln issued debt free Greenbacks to pay for the Civil War.

Uncertain times those were, but it was the right move and luckily the citizens embraced the currency for who knows what might have happened.

Maybe we will see those days again, if there is ever a world currency or something new that will replace our current system. There is just too many investments tied to the Fed system to get rid of it now.

 

[b0mbrman]

Originally posted by: Dissipate

Originally posted by: dirtboy

Originally posted by: Dissipate

Originally posted by: dirtboy

Originally posted by: Dissipate
Inflation is caused by the federal reserve creating money out of nothing everyday.

If that is true and what this is true, "It went from $1/2 million to $1 million to $2 million and now $3 million in circulation" then where was this money created from? Thin air? Hello, is that inflation knocking at the door of this currency...hmmm

Markus is right. If you read the article or went to the web site norfed.org you would realize that no ALDs are created out of "thin air". They are all paid for on a 1-1 basis with FRNs. Therefore the inflation of the ALD cannot be any greater than the FRN, in fact the inflation of the ALD is tied to the FRN except for the exchange deal the company has.

I went to the link after posting that. So you're essentially buying silver. Big whoop. I don't know why anyone would get excited about this. I can barter for things. I can trade things of value for service.

Oddly enough you can only buy this currency with other currency. Seems pretty lame to me.

No, its not essentially buying silver. You would be a fool to exchange ALDs for silver since their face value is greater than the silver you get for them. Or in the case of the silver liberty dollars if you melt it down and sell the silver you aren't going to get $10 for it.

In any case its not a matter of getting excited. I'm not excited, but I am interested in these facts:

A. In just 5 years there are now $3 million worth of ALDs in circulation.
B. 30,000 people are using them.
C. We are in times of low to average inflation.
D. The amount of ALDs in circulation is growing.

The relevance of facts A, B and D are obvious. You may wonder why fact C is relevant. Well, if you read the article you would know that alternative currencies are usually only considered/used in times of great inflation. For instance in the '70s when the country suffered horrendous inflation alternative currencies were talked about and used somewhat. But here we are in a time where inflation isn't out of control and yet a small yet signficant number of people have turned to an alternative currency. This may be an indicator that people are catching on to the operations of the Federal Reserve and the bad effects of fractional reserve banking.

People buy into expectations as well as current values. For example, if you thought the price of a stock was going to go up in a month's time, you would probably buy into it.

The same is true for inflation. As stated in one of my previous posts, all of the warning signs that inflation is just over the horizon are starting to pop up. As a result, people are battening down the hatches and making all the preparations for it--to include buying silver.

And that's why C doesn't surprise me.

btw, this metals-based currency is inflation proof but is it also deflation proof? That is, will it still hold its value if the price of gold and silver drop relative to the dollar?

 

[Dissipate]

Originally posted by: b0mbrman

Originally posted by: Dissipate

Originally posted by: dirtboy

Originally posted by: Dissipate

Originally posted by: dirtboy

Originally posted by: Dissipate
Inflation is caused by the federal reserve creating money out of nothing everyday.

If that is true and what this is true, "It went from $1/2 million to $1 million to $2 million and now $3 million in circulation" then where was this money created from? Thin air? Hello, is that inflation knocking at the door of this currency...hmmm

Markus is right. If you read the article or went to the web site norfed.org you would realize that no ALDs are created out of "thin air". They are all paid for on a 1-1 basis with FRNs. Therefore the inflation of the ALD cannot be any greater than the FRN, in fact the inflation of the ALD is tied to the FRN except for the exchange deal the company has.

I went to the link after posting that. So you're essentially buying silver. Big whoop. I don't know why anyone would get excited about this. I can barter for things. I can trade things of value for service.

Oddly enough you can only buy this currency with other currency. Seems pretty lame to me.

No, its not essentially buying silver. You would be a fool to exchange ALDs for silver since their face value is greater than the silver you get for them. Or in the case of the silver liberty dollars if you melt it down and sell the silver you aren't going to get $10 for it.

In any case its not a matter of getting excited. I'm not excited, but I am interested in these facts:

A. In just 5 years there are now $3 million worth of ALDs in circulation.
B. 30,000 people are using them.
C. We are in times of low to average inflation.
D. The amount of ALDs in circulation is growing.

The relevance of facts A, B and D are obvious. You may wonder why fact C is relevant. Well, if you read the article you would know that alternative currencies are usually only considered/used in times of great inflation. For instance in the '70s when the country suffered horrendous inflation alternative currencies were talked about and used somewhat. But here we are in a time where inflation isn't out of control and yet a small yet signficant number of people have turned to an alternative currency. This may be an indicator that people are catching on to the operations of the Federal Reserve and the bad effects of fractional reserve banking.

People buy into expectations as well as current values. For example, if you thought the price of a stock was going to go up in a month's time, you would probably buy into it.

The same is true for inflation. As stated in one of my previous posts, all of the warning signs that inflation is just over the horizon are starting to pop up. As a result, people are battening down the hatches and making all the preparations for it--to include buying silver.

And that's why C doesn't surprise me.

btw, this metals-based currency is inflation proof but is it also deflation proof? That is, will it still hold its value if the price of gold and silver drop relative to the dollar?

I can't argue with that. Your theory could be correct about why these people are using ALDs. I don't think ALDs are deflation proof, they can't be. If the price of gold and silver drops the company is still only obligated to give you 1/10 ounce of silver per 1 ALD.

However, deflation is not going to happen. If it does it will only be a short term effect. The reason why is that every year the Federal Reserve increases the money supply at a rate that is greater than the growth of the economy. This paper explains it better than I can. It is written by a professor who is a consultant for the Fed. He explains that long term inflation is only caused by increases in the money supply, while short term inflation/deflation can be caused by market forces.

 

[b0mbrman]

Woah...how did I let this one disappear?

Deflation doesn't need to happen...just slow inflation.

For example, the price of metals was off for three whole years in the 90s when the economy was relatively strong...How happy would merchants have been to accept a currency tied to metals during those times?