Badnarik Promoting Liberty Currency
It seems that 2004 Libertarian Presidential candidate Michael Badnarik is promoting an alternative currency, backed by silver, on his blog. The currency is called “The Liberty Dollar” and appears to proliferate through a complicated system of referrals and “Regional Currency Offices” (people).
I would love to see the Libertarian Party start to avoid associating itself with crazy stuff like this. Much like refusing to get a drivers license, these academic protests of popular institutions are a waste of time. In fact, this one is actually worse than just pointless… it also appears to be a Multi-Level Marketing scheme. Check it out for yourself and let me know what you think. Particularly about the “business plan” for Regional Currency Offices which can be started for a mere $2,500.
June 17th, 2005 at 4:58 am
At worst, it sounds like a scam…at best, it sounds like those stupid Cyber Bucks things or whatever that flopped a few years ago. It reminds me a little of those people who buy gold thinking that it’s “inflation-proof”...hoarding up actual gold…ahh.
A word to the stupid: The power of money is all leveraged upon the perception by those who use it that the currency has value. In reality, both gold and dollars have no more value than mud. However, people perceive that they have value, and thus they do. In the case of a massive financial meltdown, gold may lose its traditional value, as it is only “worth” what someone thinks they can get for it. If the economy is uncertain, people become less certain that they can actually “cash in” their gold for something. Gold is currently very valuable because people know they can directly trade it for currency.
Hoarding up gold won’t save you from an apocalyptic world financial crisis…this Liberty Dollar crap won’t work…the Libertarian Party needs to stop associating itself with nuts.
June 18th, 2005 at 12:40 am
To say that gold may not be worth anything in a crash is just stupid. The reason people hold gold and other precious metals so highly is because it has intrinsic value. It may not always be super valuable but it can never be completely worthless, like paper fiat money. At the very least, precious metals can be melted down and used for other purposes. In an “apocalyptic world financial crisis”, you would be a hell of a lot better off with gold and silver than green pieces of paper.
June 18th, 2005 at 1:14 am
By that reasoning, propane should be worth more than gold. Or chicken noodle soup… but that’s not a viable currency option, either.
June 18th, 2005 at 2:17 am
Hey dumbass,
First off we were talking about an “apocalyptic world financial crisis”. In that situation, propane probably WOULD be more than gold, and I sure as hell wouldn’t mind having a couple thousand cans of chicken noodle soup.
If you want to argue that gold is not a viable currency option for today’s society we can have a go at that as well. I understand the points against gold. A gold/silver standard creates a rockier economy. You’ll have peaks and you’ll have recessions. That’s classical economics.
Paper fiat money is keneysian economics and it works absolutely great on paper, as most anything does. The idea of keneyesian economics is that you can regulate the money supply accordingly to try and avoid the peaks and recessions that exist in classical economics. Its a straighter line, its more secure, and because of that a lot of people favor it. The problem with operating on a fiat paper currency under keneysian economics is that it relys on the government to not fuck everything up. Fucking everything up is what the government does best!
If you regulate the money supply, that means you need to balance the budget. So if you cut taxes, you’ve gotta cut spending. If you inflate the economy you can only do it until spending increases, and then deflate it again. Here’s the problem: governments will NEVER stop spending. Yet they’ll cut taxes, they’ll inflate the economy, and sometimes they’ll misjudge and deflate at the wrong time or over-inflate. The perfect “on paper” system of kenyesian economics stands even less of a chance of working in a system where there is an election for a new leader every four years. One person cuts taxes, then four years later some other asshole increases spending without raising them. The budget will NEVER be balanced, and it’s only a matter of time until that perfect straight line plummets into a crash that is completely impossible to recover from. Pieces of paper CAN be absolutely worthless.
So yeah, classical economics is a bit rockier. But it is inevitable that while keneyesian economics is safer for the time being it will eventually fall completely to shit. Why wouldn’t it? It involves the government. It’s always better to leave things alone than it is to get the government involved, ESPECIALLY when it comes to economics. When you have a commodity based currency you have a free market currency owned by the people, free from the government. In my humble opinion, that alone makes it better than paper money.
June 18th, 2005 at 2:27 am
Also forgot to mention that the reason why propane would not be used as a currency over gold is that you can’t easily exchange it. However gold can be. Silver/gold is limited, but there is enough of it to go around. This is why it is a viable currency and really is less prone to inflation.
June 18th, 2005 at 2:57 am
Don’t call me a dumbass.
First off, from a practical standpoint… no one cares.
Also, when a group of people go around screaming about a coming apocalypse… no one pays any attention to them.
Third… this “Liberty Dollar” nonsense is a multi-level marketing scam, plain and simple. Anything with tiers and referrals and such like this is not workable.
As far as what would happen in some imagined melt-down of society… planning for some eventual “Mad Max” situation is an insane way to run a modern economy. The government accepts paper currency for payment of taxes. Therefore, as long as the government remains in power and has the means to collect taxes… paper currency will have value. Should the government collapse… well, we’re all screwed. If it starts to look likely, I’ll fill up my basement with chicken soup and gunpowder purchased with worthless paper dollars and then after the collapse of civilization I can be the chicken soup warlord who lives in the nicest cave in town.
In all seriousness, seeing a Libertarian presidential candidate promoting his referral ID for an MLM program makes me think that I’ll never see the party advance beyond 0.50% of the vote. And maybe, until they clean the nuts out of the barn, that’s not such a bad thing.
June 18th, 2005 at 2:51 pm
I won’t argue with you that the Liberty Dollar has some major flaws and could very well be a multi-level-marketing scheme. In fact I’m the one that raised the question of it being an MLM scheme on his blog. However, I will argue with you over gold/silver standard being better than paper money even without the whole concept of an apocalyptic world. With paper money, gov’ts can indirectly steal from you by decreasing your buying power with inflation.
June 18th, 2005 at 9:02 pm
Hey,
Sorry if I was a little flippant up there calling people who believe in gold “stupid”...that wasn’t meant to be derogatory, I was just screwing around.
The problem I see with gold currency is this. In older societies, gold was highly prized because it was pretty, could be easily made into stuff, and was rare. Thus, it was used as currency, and the whole “gold is valuable” bit was pounded into people’s heads.
Today, we still believe gold is valuable…because it’s worth $X dollars or Y pounds or whatever. However, we measure the value of gold in terms of our paper currency.
Outside of this perception, gold really has no huge useful value. It’s good in circuits, but so are aluminum and silver. If the paper currency system crashed, then initially the value of gold would be fixed at some universal rate…but over a few years, so much divergence, counterfeiting, and other factors would occur in relatively close regions that no one would really know what the value of gold was. So, if people lost faith in the gold system, it could crash just like any other. Gold isn’t the silver bullet to our inflation problems.
Here’s another problem…if gov’t shouldn’t in the business of regulating currency, who should? Who’s going to make sure that that gold isn’t counterfeit, or that gold in Jacksonville is worth the same as gold in Atlanta? How would we determine how much gold is given in a transaction? By scales? That would be interesting. How would you ever pay for something with a credit card, write a check or send money to your friend across the country in a few minutes? How would you get paid…would your employer just hand you a bag of gold?
The biggest problem…there’s just not enough to go around for ~300 million people. Even if there were, what would we do once we burst the ceiling?
June 19th, 2005 at 1:03 am
When I say the “government” is the one regulating money that’s actually not true. It’s really the Federal Reserve that does it, and the Federal Reserve functions independently of the government. That is part the problem. Private bankers are the ones deciding how much money is circulating and what the interest rates are. They are also the ones that loan money to the government at interest, which we then pay off through income taxes.
So you are in fact right, it would be better if Congress were the ones in charge of the money, as specified by Article I Section 8 of the Constiution. When I say “government fucked it up”, its because government is what created the Federal Reserve and gave away its responsibility.
As far as gold being the “silver bullet to inflation”, it really is the closest thing to it that we will ever find. As of right now, the value of gold is associated with paper money. The fact that gold is worth x amount of dollars today and tommorow will be worth y doesn’t mean that the pieces of paper are worth anything. In fact, the more gold becomes worth relative to the dollar, the more it illustrates that paper money is becoming worth less. Gold isn’t becoming worth more.
The reason paper money inflates is because more of it is created. For example, if there are only ten pencils in existance and there are only ten dollars in existance, every pencil is worth one dollar. However, if the Federal Reserve decided to print ten more bills tommorow (which is likely since they profit every time they do) there are now twenty dollars and still only ten pencils. Now, every pencil is worth two dollars. And such is called inflation.
This is much less likely with gold. Unless someone suddenly finds huge stockpiles of gold, major inflation isn’t likely. Sure, what it is valued at can fluctuate but the difference that makes is extremely minute compared to the printing of new bills.
If bankers are honest, silver and gold certificates can be printed, but only if there is actual gold or silver behind it. This makes transactions much easier. The actual metal is stored in warehouses and the paper or even electronic figures of it can exchange hands. This way actual ownership of the silver or gold is exchanged with out the physical metal ever moving. There most definetely is enough silver and gold to go around. In fact a limited amount, yet still enough, is the best solution possible. It keeps prices low and your currency retains its buying power.
If the endless supply of paper money became a reality, money would have absolutely no value. I predict this will ultimately happen, but for other reasons.
June 19th, 2005 at 2:31 am
Basically, you’re saying that we should go back to the way that things were before we went from using an all gold-backed dollar. While I don’t agree with that necessarily, I do think it would be a good idea to gradually phase out the current debt-backed system. Basing our currency on debt is a little dangerous, and it increases the incentive to rack up all sorts of bills that we can’t possibly pay.
Again, gold does have value now…but in a “Mad Max” scenario, lines of cross-communication would be cut. The value of gold would be unknown and it wouldn’t matter if you were trading gold or chicken soup, there would probably be a lot of confusion over prices (more with gold however, since you can’t eat it).
June 19th, 2005 at 2:57 am
I agree, the debt based system is the problem and it is why I prefer gold. If you disagree with a gold/silver standard but agree that we should phase out the current system, what do you propose as an alternative?
Also, we don’t need to wait for a “Mad Max” scenario to institute a gold standard. I don’t really see how it would be a problem to determine the value of gold. Once again, gold is used as a currency over things like chicken soup because it is a medium of exchange.
The real value will always be what you purchase with it, not the gold itself. Gold is valuable b/c its limited and can be used as a medium of exchange for the truly valuable items, like food.
June 26th, 2005 at 11:22 pm
It sounds like many of you haven’t read much of the Liberty Dollar web page listed above (http://www.libertydollar.org/html/rcofaq.asp). Read for yourself:
“1. The Liberty Dollar is distributed in a simple two-tier system. This empowers the RCO to grow his distribution within his region, make more money, and thereby achieving the goal of returning America to a value backed currency. It is not a multi-level market plan (MLM).”
It is NOT a pyramid scheme. Take some time to read about it and you might figure out the truth. The referral system is quite simple: you refer somebody and you get part of that person’s sign up fee. That’s it. Where is the MLM?
None of this discussion about the “best money” matters unless you’re trying to decide for everybody. I don’t care much for this type of talk because I’d much rather ALLOW each person to decide for herself. If a person wants to do something so daring as try an alternative currency what does it matter to you? As long as you are free to decline its acceptance you are no worse. I truly believe the best money is the money you choose to use and if you choose not to use money at all, well, that’s your own perogative.
June 26th, 2005 at 11:26 pm
The issue is how it reflects on the Libertarian Party to have their Presidential candidate promoting something as fringey as this.
October 22nd, 2005 at 6:10 am
I would hardly consider the Liberty Dollar any more fringey than any other independent currency out there, some of which have grown and become respectable, although mostly in local communities. The point here isn’t the the liberty dollar is a perfect currency, it most certainly is not. However, it takes regulation of money out of the hands of the government, and returns property rights to the people who own money. Inflation is nothing more than a system of theft by the government, or a more common word for theft when “government” appears in the same sentence, a “tax”. I for one put much more faith in a limited supply currency than I do in an unlimited supply currency. It could be a type of rock, chemical element, or anything else that has a virtually fixed amount, and it would be better than our current system. The arguments against gold are entirely valid…if you’re arguing in favor of a barter system instead. The fractional reserve system of the first half of this century caused the Great Depression, and the fiat currency system that it has evolved into will eventually cause the total collapse of our currency and economy, just as happened in post-WWI Germany.
As for MLM accusations, I think NORFED’s website explains these away quite fine, and at very worst, they are a much more minor instance of an MLM scheme than the Federal Reserve.
Main point here: The liberty dollar is the best proposed alternative currency that has both characteristics of a commodity-backed currency and a system that will help make conversion easier. Yes, that system does detract from the integrity of the commodity based system. However, judging from how slow the conversion rate is even with that system in place, it is necessary to keep these flaws in place, simply because without this, we’re left with nothing to use as money besides the Federal Reserve Notes, one of the worst possible ideas ever (well, unless you’re referring to the bankers who created it…it got them filthy rich, so i guess it was a good idea).
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