Please help me with sound money debate!

[GunnyFreedom]

From the N&O article (distorted):

http://www.newsobserver.com/2011/03/17/1059132/legislator-says-the-state-needs.html

I am arguing in the comments, and getting a little overwhelmed with the volume. I'm preparing a second reply to "DrCarolina" on 1925 home values, the vaqlue of gold in 1925, the CPI and a whole host of other issues.

Look at the thread, and either weigh in directly or identify someone that needs responding and help fashion the argument.

This article made the front page of the newspaper, and the online comments are exploding.

Thanks!

[GunnyFreedom]

Truth be told I am getting pummeled right now, not on subject matter expertise, but in the sheer volume of responses to handle. Anybody with a Disqus, Facebook, or Twitter account should be able to participate.

[Sola_Fide]

I'm impressed Glen! Stay strong brother. At first, all it takes is a person to plant a seed of liberty in the minds of the people.

[fisharmor]

Is "molecular gold and silver" a thing?
Gold and silver are elements, and if they are alloyed, then it's still not a molecule, it's an alloy.
Silver Nitrate is a molecule, but we ain't talkin' photography here.
Just sayin', seems like it would be a sticking point.

[matt0611]

I'm hesitant on a state issuing its own currency. Don't think the constitution allows this.

The state should just use gold and silver eagles.

[GunnyFreedom]

I'm hesitant on a state issuing its own currency. Don't think the constitution allows this.

The state should just use gold and silver eagles.

Me too, which is why I don't suggest that the State issue it's own currency. (note the portion in brackets...)

[GunnyFreedom]

Is "molecular gold and silver" a thing?
Gold and silver are elements, and if they are alloyed, then it's still not a molecule, it's an alloy.
Silver Nitrate is a molecule, but we ain't talkin' photography here.
Just sayin', seems like it would be a sticking point.

Hmm, that wasn't my understanding of physics and chemistry -- an atomically pure mass still has molecules. For instance, O2 or oxygen, has two atoms of oxygen per molecule of oxygen.

Likewise, a molecule of 1 atom is still a molecule -- it is the smallest portion of "substance A" that is still "substance A."

If there is a better way of specifying the actual material such that any Joe could melt 22k gold into a coin of some sort and it would thus be recognized as tender, I am more than open to it.

[Deborah K]

Glenn it won't let me log in on any of my accounts. Ask Carolina when the gold market ever collapsed. He/she seems to think it has or will. Also, check out this local currency: http://www.berkshares.org/

I see nothing wrong with local communities/states working out their own alternative currencies should the dollar collapse. Does this numbskull think that the gold market can collapse but the dollar can't????

[Kotin]

bump

[hazek]

Why don't you just send them over to http://mises.org/media.aspx?action=search&q=gold if they really want to learn why gold and silver would be a good idea?

[AZKing]

I'm hesitant on a state issuing its own currency. Don't think the constitution allows this.

The Constitution doesn't allow the Federal Reserve to issue currency, either. That hasn't stopped them.


I see nothing wrong with local communities/states working out their own alternative currencies should the dollar collapse. Does this numbskull think that the gold market can collapse but the dollar can't????

DrCarolina's argument is rather humorous to me. It's based on the assumption that the inflation rate is actually 1.6%.

[matt0611]

The Constitution doesn't allow the Federal Reserve to issue currency, either. That hasn't stopped them.



DrCarolina's argument is rather humorous to me. It's based on the assumption that the inflation rate is actually 1.6%.

Its true that they have.
But I don't think we should fight unconstitutionality with more unconstitutionality.

[mnewcomb]

I find it useful to always ask people why they think counterfeiting is bad... I then help them get really pissed at counterfeiters... then I talk about what the Federal Reserve does...

[GunnyFreedom]

Its true that they have.
But I don't think we should fight unconstitutionality with more unconstitutionality.

I agree. Do understand that the original article was in and of itself a gross distortion of my position.

[GunnyFreedom]

it's getting ugly over there...

[Southron]

Gunny, I'm more worried about how the N&O is trying to paint you. They quote an economics professor in NC. Do you know of any Austrians in NC universities to help lend credibility to you, and that you can cite in your quotes for articles like this?

I don't know of any economics professors in NC, but I know of John Parnell from UNC-Pembroke. He leans heavily towards the Austrian school and I have heard him on talk radio. He is part of the Business department at UNC-Pembroke. Might not hurt to see if he could offer quotes IMO.

His site.

http://battle4liberty.com/

[Sentient Void]

As far as I know, the constitution says that only congress may issue currency, and that that currency must be gold and silver if they do.

It doesn't say anything about legal tender laws, or that no one else may offer their own currency to compete - whether it be a private company or a bank, etc. We should repeal legal tender laws and allow a competition of currencies and letthe consumer and the market decide what people want to use.

Though I would double check on it.

Ultimately, Competing currencies is the best solution IMO.

[GunnyFreedom]

Gunny, I'm more worried about how the N&O is trying to paint you. They quote an economics professor in NC. Do you know of any Austrians in NC universities to help lend credibility to you, and that you can cite in your quotes for articles like this?

I don't know of any economics professors in NC, but I know of John Parnell from UNC-Pembroke. He leans heavily towards the Austrian school and I have heard him on talk radio. He is part of the Business department at UNC-Pembroke. Might not hurt to see if he could offer quotes IMO.

His site.

http://battle4liberty.com/

Thanks for the link. There is also this guy:

http://tillmanspeaks.blogspot.com/2011/03/gold-currency-for-north-carolina.html

who stepped in to write a supporting article.

I don't personally know any local Austrian Economists, but I am certain that getting to know these two will help.

Nevertheless, I don't know that 'dueling doctors' will get us very far, as the progressive left will clearly have 10-fold more 'doctors' than we do, of the Keynesian diploma-mill sort. And I consider a Keynesian to be "diploma-mill" even if the diploma is from Harvard.

[GunnyFreedom]

I am still in some kind of shock at how big this blew up. During a recent search I just saw reference articles on this in....India! :eek:

The Google returns just literally exploded, and my Google Alert stopped trying to keep up lol.

[AZKing]

I am still in some kind of shock at how big this blew up. During a recent search I just saw reference articles on this in....India! :eek:

The Google returns just literally exploded, and my Google Alert stopped trying to keep up lol.

http://twenty-somethingtravel.com/wp-content/uploads/2010/08/haters_gonna_hate.gif

[fisharmor]

Hmm, that wasn't my understanding of physics and chemistry -- an atomically pure mass still has molecules. For instance, O2 or oxygen, has two atoms of oxygen per molecule of oxygen.

FWIW the wikipedia definition of molecule says they have covalent bonds.
Metals are held together by metallic bonds.
I'll check with my chemist brother tonight to be sure. I could see this being something that fed-apologist chemist would be able to nail you on - eg, "You don't even know what you're talking about when you talk about gold, so why should you be making decisions about economics".

What is the underlying point behind referring to it as molecular gold? Is it that you want to distinguish it from gold certificates or shares?

[Teaser Rate]

I find it useful to always ask people why they think counterfeiting is bad... I then help them get really pissed at counterfeiters... then I talk about what the Federal Reserve does...

If the Fed is a counterfeiter, then the IRS is a thief and the police is a mob.

[silverhandorder]

How is it relevant how metal atoms are bonded together?

[GunnyFreedom]

FWIW the wikipedia definition of molecule says they have covalent bonds.
Metals are held together by metallic bonds.
I'll check with my chemist brother tonight to be sure. I could see this being something that fed-apologist chemist would be able to nail you on - eg, "You don't even know what you're talking about when you talk about gold, so why should you be making decisions about economics".

What is the underlying point behind referring to it as molecular gold? Is it that you want to distinguish it from gold certificates or shares?


How is it relevant how metal atoms are bonded together?

The idea is I want it possible for some random guy to refine 22k gold in his basement (or melt down a necklace etc), strike his own bar or round, and be able to use it as tender. The issue i keep running into is what id someone strikes his own tender at 0.9 oz and marks it "one ounce" hmmm...

[GunnyFreedom]

I have a radio interview on WPTF 680 AM starting at 2:15 Eastern (Web Stream top right on home page here (http://www.wptf.com/)) to discuss this article, the issue, and other subjects such as the Firearms Freedom Act.

[fisharmor]

How is it relevant how metal atoms are bonded together?

Well I'll put it more bluntly - if he refers to molecular gold and silver, to a trained chemist he might sound like a complete retard, and then
a) the focus will shift even further away from what the bill is about (as if that's possible at this point) and go to how he's using improper terms, and
b) people will doubt his ability to speak to economic problems. If he's perceived as ignorant in one area, he's got nothing but an uphill battle in the other area.


The idea is I want it possible for some random guy to refine 22k gold in his basement (or melt down a necklace etc), strike his own bar or round, and be able to use it as tender. The issue i keep running into is what id someone strikes his own tender at 0.9 oz and marks it "one ounce" hmmm...

Well then I'll give my best man, who is a jeweler, a call too, since I think you're looking more in that direction.
I'm pretty sure that fineness is what you want.
http://en.wikipedia.org/wiki/Fine_gold
It's an industry term, not just an adjective, which has supplanted the carat system.
I'm pretty sure it's what gets stamped on bars.

On a side note on the weight, there are a couple things come to mind.
First, that there are already free-market entities stamping bars and coins of gold and silver in known weights and fineness.
Second, that those bars and coins are already in the market and known to collectors, and are the natural candidate for being used as money.
So it seems to me that the natural progression would be to rely on the existing entities as opposed to melting stuff down and striking your own. The market would by nature value such a thing less than it does the product of a reputable company: maybe even less than its actual value.
Sure, basement ops should be legal, but I don't see that being the direction people would go.

[Deborah K]

I am still in some kind of shock at how big this blew up. During a recent search I just saw reference articles on this in....India! :eek:

The Google returns just literally exploded, and my Google Alert stopped trying to keep up lol.

Glen, just remember that Ron and Rand have been through much much worse than this. You are proposing solutions that are ahead of their time, which is common among leaders who are mavericks. It's the price you'll have to pay, but you will weather the storm because you are on the side of right. Just keep on keepin' on. Think of this as an opportunity to hone your debating skills. You are doing great!

[Deborah K]

FWIW the wikipedia definition of molecule says they have covalent bonds.
Metals are held together by metallic bonds.
I'll check with my chemist brother tonight to be sure. I could see this being something that fed-apologist chemist would be able to nail you on - eg, "You don't even know what you're talking about when you talk about gold, so why should you be making decisions about economics".

What is the underlying point behind referring to it as molecular gold? Is it that you want to distinguish it from gold certificates or shares?

He can always reply that he misspoke and correct the terminology.

[Southron]

Radio interview preempted by Obama.

[GunnyFreedom]

Radio interview preempted by Obama.

bumped to 3:10

[TexanRudeBoy]

You need to point that Dr.Carolina guy over to shadowstats.com. He's all to accepting of government numbers.

[AZKing]

You need to point that Dr.Carolina guy over to shadowstats.com. He's all to accepting of government numbers.

Yeah, I tried to explain to him/her some of the reasons that the CPI is flawed, especially with geometric weighting and hedonics.

For someone who is "formally educated in monetary policy", they sure have an awful lot of trust in the CPI/PPI. Why anyone would believe any government provided economic statistic is beyond me.

[PermanentSleep]

After spending some time reading the comments to the article, I'm quite certain that you are getting swarmed by those hordes of government fake social media profiles. I swear to God in heaven that while reading through DrCarolina's posts I thought my head was going to explode from the utter bullshit spewing from his keyboard.

[Southron]

The host was very favorable towards your bills.

[GunnyFreedom]

The host was very favorable towards your bills.

Bll LuMaye is very friendly to our way of thinking in any case - he wasn't so sure about what the N&O credited me with, but when I set the record straight it changed pretty much everything. :D

[fisharmor]

Ok, so since I did some of the follow-up... this is how the conversation with my chemist brother went.

Me: Without any extra info, if someone was referring to "molecular gold", what would you think about the person using that term?
< clarification conversation omitted, but he doesn't know it's about money yet >
Him: I would think that he is either working from a very limited set of knowledge, or a very specialized set of knowledge.
Me: How specialized?
Him: Technically there is such a thing as gold "molecules" when you're dealing with really specific things like vapor deposition.
Me: (ignoring specifics about gold molecules in vapor deposition) So, wikipedia says that a molecule has to have a covalent bond, but gold uses a metallic bond.
Him: That's an oversimplification that probably comes from the way things have been taught in the past. < chemist technobabble about molecular bonds >
Me: But, since the context isn't chemistry but money, does your initial assessment stand?
Him: Yes.


(Sorry if it seems like I'm hung up on this: I'm mainly doing the research for my own benefit so that I know better how to talk about gold and silver, and sharing it in case any one else cares.)

[GunnyFreedom]

Ok, so since I did some of the follow-up... this is how the conversation with my chemist brother went.

Me: Without any extra info, if someone was referring to "molecular gold", what would you think about the person using that term?
< clarification conversation omitted, but he doesn't know it's about money yet >
Him: I would think that he is either working from a very limited set of knowledge, or a very specialized set of knowledge.
Me: How specialized?
Him: Technically there is such a thing as gold "molecules" when you're dealing with really specific things like vapor deposition.
Me: (ignoring specifics about gold molecules in vapor deposition) So, wikipedia says that a molecule has to have a covalent bond, but gold uses a metallic bond.
Him: That's an oversimplification that probably comes from the way things have been taught in the past. < chemist technobabble about molecular bonds >
Me: But, since the context isn't chemistry but money, does your initial assessment stand?
Him: Yes.


(Sorry if it seems like I'm hung up on this: I'm mainly doing the research for my own benefit so that I know better how to talk about gold and silver, and sharing it in case any one else cares.)

Thanks for the update and the clarification. It turns out that the actual draft is calling it "elemental" gold and not molecular.

I do really want better language, but I want to get away from the recognition of registered specie only.

So, as a result of the media foo-fer-aw behind the Constitutional Tender issue, I decided I wanted this bill to be brutally simple, so a child could understand it. Therefore I cut out a lot of the ancillary and corollary items, to leave the following (which will still require some minute tweaking):

--------------------------->>>

A BILL TO BE ENTITLED AN ACT TO PROVIDE THAT THE STATE OF NORTH CAROLINA DECLARES UNDER SECTION 10 OF ARTICLE I OF THE UNITED STATES CONSTITUTION ITS AUTHORITY RECOGNIZING ELEMENTAL GOLD AND ELEMENTAL GOLD AND ELEMENTAL SILVER AS VALID TENDER IN THE STATE OF NORTH CAROLINA.

Whereas, Article I, Section 10 of the Constitution provides that states may make "...gold and silver coin a tender in payment of debts..."; Now, therefore, The General Assembly of North Carolina enacts:

SECTION 1. This act may be known and cited as the North Carolina Constitutional Hard Tender Act.

SECTION 2. Definitions. As used in this act the following definitions apply:

(1) Gold Tender – All exchangeable struck commodity gold in 22k and 24k by
elemental mass of gold.

(2) Silver Tender – All exchangeable struck commodity silver from 90% and up
by elemental mass of silver.

(3) State Money – Any Gold Tender, Silver Tender, or Registered Specie.

(4) Federal Money – Federal legal tender as defined in Section 31 U.S.C. 5103. SECTION 3. Use As Tender. State Money shall be legal tender within the State of North Carolina. The purchase or exchange of State Money shall not be taxed.
SECTION 3. Use As Tender. State Money shall be legal tender within the State of
North Carolina. The purchase or exchange of State Money shall not be taxed.

SECTION 4. Exchange with Federal Money.

(a) Exchanging State Money for Federal Money.

(1) State Money may be exchanged to State Treasury for Federal Money at the defined exchange rate.

(2) State Money may be exchanged for Federal Money by a private enterprise that will provide the service at the exchange rate agreed upon by both parties of the exchange with the following provisions:

a. Assessing of handling fees is allowed for private exchanges.

b. The State Treasury may assess handling fees at the exchange equal to the operational costs of the exchange.
(b) Exchanging Federal Money For State Money.

(1) The State Treasury will to its best ability and supply exchange State Money for Federal Money at the defined exchange rate.

(2) Federal Money may be exchanged for State Money to a private enterprise that will provide the service at the exchange rate agreed upon by both parties of the exchange.
(c) Vendor Exchanges. Federal Money may be rendered at both parties agreed upon exchange rate in change for purchases made in State Money by sellers if agreed to by both the buyer and the seller.

(d) Vendor Acceptance.

(1) This act shall not compel any seller to accept Registered Specie or State Money, except as agreed to beforehand by contract.

(2) Vendors may elect to only accept Registered Specie in lieu of State Money or Federal Money.
SECTION 5. Exchange rate is the Current Median of 168- by 24-hour Moving
Average Spot Price.

SECTION 6. This act is effective when it becomes law.

[newbitech]

linked on drudge now.

[GunnyFreedom]

linked on drudge now.

LOL geeze :rolleyes:

[GunnyFreedom]

Well, looking on the bright side, the dollar is going to be in a LOT more trouble in November of 2012 than it is now. Chances are even this distortion of my position won't look nearly so 'kooky' come the end of 2012, much less my actual position on this.

[fisharmor]

Thanks for the update and the clarification. It turns out that the actual draft is calling it "elemental" gold and not molecular.
Glad to be of some help. I have an amateur interest in metallurgy which doesn't stray into precious metals too often, so I'm glad to do some homework.


I do really want better language, but I want to get away from the recognition of registered specie only.Well, I talked to my best man today, who is a jeweler. Not some guy who resizes rings at Zales. He works for one of the places that supplies Tiffany & Co. The place where he works has 5-axis mills and engineers in it, as well as artists.

I was right in my hunch that recognizing things other than registered specie is going to be a problem. When I mentioned "gold bars" to him, he wasn't thinking in terms of 1-oz bars - his mind went immediately to the multi-pound bars used for bank transfers.
What he said about those is that there is a very controlled assay process behind them. It's done at creation, and he was pretty sure it's federally controlled. He said that both karat and fineness are used, and that the generic adjective that describes both is quality.
He also said that the small bars and coin are not assayed as strictly, which would make sense. However we both agreed that the reputation of the manufacturing house had something to do with assurance of quality.

Another point he made was that there is definitely effort that goes into the manufacture of gold and silver coin, and that the coin always sell for more than their metal value for that reason. So when you mention "spot price", you need to be aware that a coin or bar is always going to be valued higher than its spot price. Spot is only going to tell you what the metal is worth, without the value of labor added, and without considering the backing that any serial numbers or other market-based assurances are going to give the bearer.

Also, he had trouble divorcing the collectibility value of the small coin from their metal value. I think that was probably because he's spending every day thinking in terms beyond just the base cost of the metal, being a jeweler and all. We didn't get too far into it, but IMO a SHTF scenario is going to throw collectibility out the window.


SECTION 2. Definitions. As used in this act the following definitions apply: (1) Gold Tender – All exchangeable struck commodity gold in 22k and 24k by elemental mass of gold.There are a couple interesting questions here.
Seems like you're limiting it to struck items, and I can't see why.
I'm pretty sure the big bars are only cast. And if you're truly looking to free up basement operations, I can tell you from experience that there are a whole lot of people casting metal in their back yards (raises hand), because you can get started with a good home-made setup for $100.
http://www.backyardmetalcasting.com
On the other hand, the kind of equipment you need to strike coin isn't on the same continent as Harry Homeowner.

Also, I'm not sure if it's an issue but my jeweler buddy also brought up the interesting point that the casting shot his employer uses is a cut above the rest of the industry as far as fineness. The reason for this has little to do with value of the metal and everything to do with the fact that stuff like gallium fundamentally changes the working properties of gold, and that matters when you're making stuff out of it.
However, other metals he said sometimes creep into precious metals in trace amounts include mercury and lead. I'm pretty sure that in alloy they are perfectly harmless, but before you advocate everyone doing whatever they want, it might be worth a follow-up. I'll see what I can find out.
The main point to be made there, though, is that the casting shot is not controlled by the state. That is straight market right there. It's either right, or there's a pissed off customer.

So, it seems to me that we've never operated outside of a state mandated commodity metal standard, and if we did it would open up a whole lot of questions, not just about who is doing it but how it's going to be done. As a pretty convinced ancap I'm 100% confident the market would figure something out, but it seems like this bill may be perceived as taking a swan dive into the deep end of the anarchy pool, by some at least.
One of the books that's on my reading list is Good Money which has a historical example from England of the free market providing coin. It's expensive but I think I'm going to bump it up in priority so I can find out what happened.


The purchase or exchange of State Money shall not be taxed.Man, if you could get it passed with this in there unqualified, that would rock. Does this presume a 10th amendment showdown at some point in the future? This bill would lead directly to someone setting up a NC-only brokerage, wouldn't it? (It would if I could put it together, anyway!)


5. Exchange rate is the Current Median of 168- by 24-hour Moving Average Spot Price.I was about to argue this but it makes sense to use spot as the exchange between federal and state money.
The problem is going to come about when you take quality into consideration - if a federal coin is known to be quality X and state quality is only 89% of X, what then?
The quality of a coin to be used as currency is AFAIK always going to be comparatively low. If coins are going to be banged around in a bag or pocket, they need to be much harder than the hardness of unalloyed gold or silver. Adding in stuff like copper increases hardness, but by necessity decreases quality.
So if it's a given that the manufacturers are mixing stuff in, it opens up a whole other set of questions.

Anyway hope this stuff helps.

[tpreitzel]

Glen,

You're doing a fine job in NC. Just use your opposition's words against them. The state treasurer's jokes need to framed into a callous disregard for the plight of the people of NC, i.e. the strong inflation (including prices for oil and food) due to the deficit spending and weakening dollar, and her remarks are symptomatic of uncaring and leftist politicians. While she debates whose face will be on a new bullion coin, you're concerned about the financial well-being of the people of NC. You'll get better. Just keep your wits, never get bitter, and reveal the real extremists, e.g. Janet, for what they are, i.e. uncaring Keynesians.

[fisharmor]

Oh, I forgot to mention the most interesting part of my conversation.
It was related to assaying, and how individual coins and small bars would be assayed for quality.
His eventual response was "well eventually someone's going to figure out an IPhone app that does it".
He's not particularly libertarian, so it was an interesting admission!