Feds confiscate Ron Paul coin

arbilad · Head Chef

Feds confiscate Ron Paul coin

salesortonscom · Wise and Revered Master

Since accepting the coin as payment is voluntary I don't see what the government's problem is. The coins have real value based on the metal they are made of. If I want to take milk and eggs in trade for my services should I be subject to a raid by the government. If the answer is no then why would I be subject to a raid for accepting precious metals such as gold, silver, or platinum. In California many items were purchased or paid for using gold dust at one time due to a lack of coinage in the mid to late 19th century. I think the government is on shaky ground with this raid.

Randy · Senior Member

I'm no lawyer, but it seems to me that Liberty Dollars would be on firmer ground had they not included "USA" on the coins.

salesortonscom · Wise and Revered Master

Is USA trademarked?

Randy · Senior Member

Trademarked. Good one.

Use of the name USA can be construed to imply that the coinage is official currency of the USA. I can see that argument sticking, and I for one would agree.

It's as if I signed a document with your name. Although your name probably isn't trademarked, I don't think I'd be allowed to suggest any obligation to you by signing your name. I would expect there to be a penalty were I to make the attempt.

Had the coin said "Canada" then I would expect the Canadian government to be taking whatever legal action is open to them.

I'd be agreeing with all of you who are up in arms over this had they not put "USA" on the coin. I don't know if that was the issue that led to the problem, though.

-- Edited by Randy at 18:53, 2007-11-17

Cat Herder · Understander of unimportant things

I read the article and what caught my eye was the part about it this company's product being designed to stay within the community of origin. To me, that sounds like a restriction of freedom. If one can't use it outside of the community, then they are in effect in servitude to the place that uses this as "legal" tender for debts and obligations. In other words, if they take it elsewhere, it won't be recognized and the people tendering it are out in the cold.

Sounds very much like a company owned town where folks end up having to buy all their groceries and stuff from the company store, rent their residence from the company, etc.

I bet you the company that made these coins certainly wasn't accepting their own coins as payment for their goods...

Anyway, kind of interesting reading the search and seizure warrants... money laundering? wire fraud? I think this guy and the company will have a hard time proving their innocence of that. I don't think there is a thing to the claim it was because of their creating an alternative form of monetary exchange to notes and coinage authorized by the U.S. Treasury. For this sort of charge to be made, and to stick, there has to be some pretty compelling evidence. I would be interested in seeing that evidence.

Perhaps it has something to do with the fact they seem to be short in fulfilling orders, but are able to still contact "customers" even though they claim all their records were seized... Perhaps it also has something to do with their "currency" can be redeemed from them for a precious metal unit that can then be used to purchase Federal Reserve notes, and as the cost of the precious metal increases, it means there is more federal currency that can be redeemed... which in turn could mean that they didn't really have the reserves they claimed to have because it had been converted to greenbacks and the holders of the LD now no longer had a "standard" to redeem from...

Don't know, but it will be interesting to see what is shown.

arbilad · Head Chef

Cat, it seems that you skimmed the article, because you made several factual errors in your post. First, they never talked about being short, or having financial difficulties (other than those caused by having all their assets seized). Second, they didn't contact their customers directly. They posted an open letter to a forum that many of their customers frequent. Third, they never made the claim of it being legal currency. They called it a method of barter for private transactions. That is something that takes place every day. I've bartered my services as a computer consultant in exchange for chiropractic services, for instance. People using these coins were bartering something of inherent value (gold and silver) for other services or goods. Fourth, this company has no products to sell other than the coins, or the electronic equivalent. Therefore, a "company store" such as you are bemoaning would not work. This company makes profit solely based off of sales of their precious metals. If you wanted to sell back a coin to them, they would be happy to buy it. But "keeping it in the community" bears no financial benefit for them. It's merely the way they suggest it should be used.
I suggest that you read the article in more depth.
Regarding whether they should have "USA" on their coins, I don't know. I know that there are many companies that use "USA" as part of their name. It is more thorny that a product sold to be useful in barter has those letters on it. But it doesn't have the words "legal tender", so I don't think it's quite as clear cut as Randy apparently feels it is.

Cat Herder · Understander of unimportant things

I actually read far more than just the article... I went to the place's website and read over a bunch of stuff there, including the warrants, warnings issued to the firm from well over a year ago, etc.

"Company store / town" scenario fits very well, because if the holders of the coins can not exchange these coins for the supposed actual value in precious metal anywhere else, the people are stuck. Whereas the company (just as the company that owns the store / town where the quasi-indentured servants are forced to buy from, live in, and work for) is free to use the Federal Reserve money they have in any manner they chose, as long as when it is audit time, it appears they have the base level of precious metal on hand to back up their currency.

Now, I'm sure what they claim is that their coins and script are based on an exact, unchangeable mass of precious metal. But, that would mean that for every $ worth of coin / script they sell, they have to get the exact same mass of precious metal. So, if $100 Liberty Dollars is the equivalent of say 1 ounce of silver, that means, for example, that if they had purchased that ounce at $100 5 years ago, they would have to pay $200 today for another ounce of silver to back up another $100 Liberty Dollars, and the silver would have to be added to the repository until such time as someone cashed in their $100 Liberty Dollars for an ounce of silver.

What I'm saying is that as the value of the precious metal goes up, the face value of the Liberty Dollar does not. Hence, the supposed buying... er bartering... power of the Liberty Dollar actually goes down as the precious metal increases. So, as long as it becomes hard (or disadvantageous) for people to redeem the Liberty Dollar for the precious metal supposedly backing it, thus disincenting many from redeeming them from the company, it becomes easier for the company to perhaps not incur the economic problems of paying more and more for the same mass of precious metal to back it's claims.

Bartering services for services is far different from bartering something that looks nice but has no guarantee it is actuallly made of precious metal (and even less guarantee that anyone will redeem it or accept it in exchange later) for goods or services. And then there is this whole thing about electronic equivalent. Why should a place like this be trying to do this? Isn't one of their complaints that the monetary system now is all fiat? Do they really have additional precious metal for "electronic" Liberty Dollars?

arbilad · Head Chef

Um, Cat, the coins are actual precious metals, so their value goes up or down as the price of the metal does. The non-metal equivalents are denominated by weight and have the actual amount of metal indicated in their vaults. So again, you don't lose value. Their coins are based on a "best value". When silver got too expensive, they repriced their one ounce silver coin from a "best value" of $10 to a best value of $20. The current price of silver is only $14 per troy ounce.
So no one has been losing money on this. The customers are happy. The only thing that is at issue is whether it is legal for them to offer this "barter currency"
Again, I encourage you to look into the facts of the matter.

-- Edited by arbilad at 16:45, 2007-11-19

Randy · Senior Member

Do any coins of any country's currency include the words "legal tender?" Certainly US coins don't. I don't think that invalidates the fact that they are. Guessing again, but perhaps the reason paper money has the words "legal tender" is that there was probably a time (and this is probably still true for some people) that paper money inspired less confidence than coins did.

While it's true that there are companies with USA in their name, no one would credibly infer that the name "USA Motors" represented a product of the federal government. However, if I found a coin that included the words "Canada," "Sri Lanka," or "Mexico," I don't think that I would be remiss to conclude that it was representing itself to be the official currency of those nations. So I would expect there to be a penalty for the unauthorized usage of those names on coins.

Cat Herder · Understander of unimportant things

Okay Arbi, maybe that is the whole jist of the charges against them... they are claiming these coins are made of a given amount of silver, and maybe experts have run tests on them and found them to not be. In that case, it would be fraud.

Just a thought...

arbilad · Head Chef

Cat, insinuations don't make truth. Don't make stuff up to support your assertions. There is absolutely no evidence of that in any source available to us.
Just the facts (can't say ma'am, because I'm pretty certain that Cat is male)

Cat Herder · Understander of unimportant things

Well, we don't have all the facts, do we? Only those things that have been publicized by the company. We'll have to wait until the legal preceedings become public record before we pass judgement as to whether there was just cause or if this was an illegal taking.