Didn't the Gold Bullion Act of 1985 bring back the "Legal Tender" gold coins?

[jstmike]

I see so many posts saying that there needs to be a competting gold legal tender money.

Didn't the Gold Bullion Act of 1985 bring back the "legal tender" gold coins? See:

http://www.coinlink.com/Resources/coinage-acts-by-congress/gold-bullion-coin-act-of-1985/

See:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=browse_usc&docid=Cite:+31USC5103


Sec. 5103. Legal tender

United States coins and currency (including Federal reserve notes
and circulating notes of Federal reserve banks and national banks) are
legal tender for all debts, public charges, taxes, and dues. Foreign
gold or silver coins are not legal tender for debts.


http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=browse_usc&docid=Cite:+31USC5112


Sec. 5112. Denominations, specifications, and design of coins

(a) The Secretary of the Treasury may mint and issue only the
following coins:
(1) a dollar coin that is 1.043 inches in diameter.
(2) a half dollar coin that is 1.205 inches in diameter and
weighs 11.34 grams.
(3) a quarter dollar coin that is 0.955 inch in diameter and
weighs 5.67 grams.
(4) a dime coin that is 0.705 inch in diameter and weighs 2.268
grams.
(5) a 5-cent coin that is 0.835 inch in diameter and weighs 5
grams.
(6) except as provided under subsection (c) of this section, a
one-cent coin that is 0.75 inch in diameter and weighs 3.11 grams.
(7) A fifty dollar gold coin that is 32.7 millimeters in
diameter, weighs 33.931 grams, and contains one troy ounce of fine
gold.
(8) A twenty-five dollar gold coin that is 27.0 millimeters in
diameter, weighs 16.966 grams, and contains one-half troy ounce of
fine gold.
(9) A ten dollar gold coin that is 22.0 millimeters in diameter,
weighs 8.483 grams, and contains one-fourth troy ounce of fine gold.
(10) A five dollar gold coin that is 16.5 millimeters in
diameter, weighs 3.393 grams, and contains one-tenth troy ounce of
fine gold.


Here's the coin from the US Mint:

http://www.usmint.gov/mint_programs/american_eagles/index.cfm?flash=yes&Action=american_eagle_gold


Authorized by the Bullion Coin Act of 1985, American Eagle Gold Bullion Coins quickly became one of the world's leading gold bullion investment coins. Produced from gold mined in the United States, American Eagles are imprinted with their gold content and legal tender "face" value.

Look what happened when a company used them to pay their employees:

http://www.wethepeoplefoundation.org/UPDATE/Update2007-09-30.htm

So I think congress did authorize a gold coin that is legal tender. Now if you want to spend $850 in FRN's to get a $50 coin you can take to the bank and get $50 in FRN's is the question. But on the market they are worth their gold value +.

Right now the penny and the nickel are worth more melted than their face value, just like the gold coin. But if you melt them down it is illegal. See:

http://www.coinflation.com/nickel_coin_metal_value_reaches_all_time_high.html

An interesting read: "What is a Dollar?" See: http://www.silverbearcafe.com/private/beatsme.html

I also saw a post saying that the US Mint is no longer making these coins and I called a broker: http://www.nwtmintbullion.com/gold_americaneagle.php and they said that maybe it was a misunderstanding in that the US Mint stops production in October to setup for the next year release but there are plenty of the previous year coins available and they expect the 08's to be out in January.

So I guess we could buy these "legal tender" gold coins and if you want to buy these in say $5 denominations you could give them as payment for service in your mind is worth $85 in FRN's.

I'm I missing something here?

[Spirit of '76]

Go to google news and search for "Liberty Dollar", then come back and tell us what you found. :)

[Spirit of '76]

So I guess we could buy these "legal tender" gold coins and if you want to buy these in say $5 denominations you could give them as payment for service in your mind is worth $85 in FRN's.

I'm I missing something here?

If you want to use those as "legal tender", then the face value applies.

Say you buy $5 worth of gas, and all you have is a $5 gold eagle in your pocket. You go into the store and hand it to the guy in exchange for the gas.

Don't expect him to give you $83 in change.

[jstmike]

Go to google news and search for "Liberty Dollar", then come back and tell us what you found. :)

Yes I know that the GOV closed them down. I'm going to get flack from some for saying this but I see their point in that they made their coins look like the US Mint coins calling them Liberty Dollars with a value of $20 for example and the Constitution says that only congress has the right to coin legal tender money.

See the US Mint postion under NORFED’s "Liberty Dollars"

http://www.usmint.gov/consumer/index.cfm?action=HotItems


Here some of what they said:

First, the advertisements refer to the product as "real money" and "currency." These medallions might look like real money because they—

Bear the inscriptions, "Liberty," "Dollars," "Trust in God" (similar to "In God We Trust"), and "USA" (similar to "United States of America"), and an inscription purporting to denote the year of production; and


Depict images that are similar to United States coins, such as the torch on the reverses of the current dime coin, 1986 Statute of Liberty commemorative silver dollar and 1993 Bill of Rights commemorative half-dollar, and the Liberty Head designs on the obverses of United States gold coins from the mid-1800s to the early 1900s.
However, despite their misleading appearance, NORFED "Liberty Dollar" medallions are not genuine United States Mint coins and they are not legal tender.

Second, the advertisements confusingly refer to NORFED "Liberty Dollar" medallions as "legal" and "constitutional." However, under the Constitution ( Article I, section 8, clause 5 ), Congress has the exclusive power to coin money of the United States and to regulate its value. By statute ( 31 U.S.C. § 5112(a) ), Congress specifies the coins that the Secretary of the Treasury is authorized to mint and issue and requires the Secretary to carry out these duties at the United States Mint (31 U.S.C. § 5131). Accordingly, the United States Mint is the only entity in the United States with the lawful authority to mint and issue legal tender United States coins.

Under 18 U.S.C. § 486, it is a Federal crime to utter or pass, or attempt to utter or pass, any coins of gold or silver intended for use as current money except as authorized by law. According to the NORFED website, "Liberty merchants" are encouraged to accept NORFED "Liberty Dollar" medallions and offer them as change in sales transactions of merchandise or services. Further, NORFED tells "Liberty associates" that they can earn money by obtaining NORFED "Liberty Dollar" medallions at a discount and then can "spend [them] into circulation." Therefore, NORFED’s "Liberty Dollar" medallions are specifically intended to be used as current money in order to limit reliance on, and to compete with the circulating coinage of the United States. Consequently, prosecutors with the United States Department of Justice have concluded that the use of NORFED’s "Liberty Dollar" medallions violates 18 U.S.C. § 486.

[jstmike]

If you want to use those as "legal tender", then the face value applies.

Say you buy $5 worth of gas, and all you have is a $5 gold eagle in your pocket. You go into the store and hand it to the guy in exchange for the gas.

Don't expect him to give you $83 in change.

Wasn't the market value of the $20 Liberty Dollar $1000 FRN's? http://en.wikipedia.org/wiki/Liberty_Dollar#Liberty_Dollar_Base_Values.2C_.22Mo veUps.22.2C_and_the_.22Discount.22_.26_.22Commissi on.22

I don't see the difference. The $20 US Mint gold eagle is about $850 FRN's and the value is based on the gold value + just like the "Liberty Dollar".

If I can convince a store to take a $20 "liberty dollar" in exchange for $1000 in FRN services isn't that the same to convince a store to take a $5 US Mint Gold Eagle for $85 in FRN services?

Maybe I'm missing something here? I've just been learning about all this in the last couple of months.

[fsk]

The $20 liberty dollar coin was 1 ounce of silver, not 1 ounce of gold. The 1 ounce gold coin had a face amount of $1000. Both $20 and $1000 are higher than the spot price of gold (but not for long).

[jstmike]

The $20 liberty dollar coin was 1 ounce of silver, not 1 ounce of gold. The 1 ounce gold coin had a face amount of $1000. Both $20 and $1000 are higher than the spot price of gold (but not for long).

Oh I see. Now that makes more sense. The $20 gold had a face value of $1000 FRN's. I found this: http://www.libertydollar.org/ld/get-liberty-dollars/gold.htm

But still I can see where they got in trouble based on the law.

[Brent H]

http://www.gold-eagle.com/editorials_02/sanders042002.html

THE ENEMY IN THE MIRROR

By Franklin Sanders
The Moneychanger

On 4/11/02 LeMetropole Cafe published an article by David B. Upham, "Will Gold Be Confiscated Again?" With all due respect to Mr. Upham, he erred when he wrote, "Gold's legalisation has not restored it as money. Government legal tender laws continue to force the use of so-called federal reserve notes. The use of gold as money remains forbidden. The absolute governmental monopoly of fiat money continues to be protected by law against competition from gold."

USING GOLD AS MONEY IS NOT FORBIDDEN

Effective October 27, 1977 (twenty-five years ago) gold clauses once again became enforceable in US courts. On June 5, 1933 House Joint Resolution No. 192 went into effect, which declared that it was against public policy to discharge debts by paying gold. That is, HJR 192 effectively made "gold clauses" (contractual agreements specifying payment in gold) unenforceable in court. They were not "forbidden" in the sense that you could go to jail for contracting in gold, you just could not avail yourself of the courts to enforce a gold clause in case of default.

The so-called "legalisation of gold" at the end of 1974 actually repealed the provisions of the Gold Reserve Act of 1934 that forbade private ownership of gold. However, gold clause contracts were still in legal limbo, so the law "legalising" gold clause contracts was passed in 1977, and is codified at Title 31, United States Code, Sections 5118(a)(1) and (d)(2). The enforceability of these new gold clauses was tested and upheld in Fay Corp. v. Frederick & Nelson Seattle, Inc., 896 F2d 1227 (9th Cir.).

THE US GOVERNMENT MINTS BOTH GOLD AND SILVER MONEY

Pursuant to 31 United States Code since 1986 the United States mint has minted gold coins in (crazy) denominations of $50 (one troy ounce), $25 (one-half troy ounce), $10 [sic] (one quarter troy ounce), and $5 (one-tenth troy ounce). The US mint also makes a .999 troy ounce (not one full troy ounce) pure silver coin called the Silver Liberty, but popularly known as the "Silver American Eagle."

These coins are all legal tender per 31 USC 5103, "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts."

How this could be plainer, I cannot imagine.

SO WHO HAS THE MONOPOLY?
Mr. Upham states, "The absolute governmental monopoly of fiat money continues to be protected by law against competition from gold." Let's unravel that claim.

First, the government doesn't issue the fiat money, the Federal Reserve banks do. The federal government tenders bonds to the Federal Reserve system, which in turn either issues Federal Reserve notes or issues bank deposit credit in favour of the government. The Federal Reserve also issues bank notes or bank deposit credits to pay for purchases of securities from private banks.

Therefore, Mr. Upham has inaccurately accused the federal government of exercising a monopoly of creating money out of thin air. No, in 1913 the federal government gave this monopoly to a private cartel, the Federal Reserve system. See 31 USC 5103, cited in full above, which grants legal tender status to Federal Reserve notes. In Title 12, USC Section 412 Federal Reserve notes are further described as "obligations" of the United States government. Further, all private banks in this country create money out of thin air whenever they loan money.

WHO CREATES WHAT?

So who creates the fiat money? Technically, the Federal Reserve system and the banks do the deed, not the US government. The US government's brand of fiat money is called US notes (pursuant to the Greenback Act of 1863, as amended), and the Federal Reserve has pulled all of those out of effective circulation.

So while a monopoly indeed does create fiat money in the US, it is the privately owned Federal Reserve system and privately-owned banks that do it, not the federal government directly. On the question of whether the Fed is a private entity or not, see Lewis vs. United States, 680 Fed. 2nd 1239 (9th cir., 1982). As the old joke goes, the Federal Reserve is not federal and has no reserves. That's right, the Fed is not a government entity, and never mind the window dressing.

Secondly, if the United States government itself issues gold and silver coins, and these are freely available in the market place (along with many foreign minted coins), no one could reasonably conclude that the government is protecting the monopoly "by law against competition from gold." One may reasonably argue that the government has corruptly bestowed a monopoly on creating fiat money to a private cartel (the Fed and the banks), but that is another matter.

Thirdly, even the monopoly competes with itself. People use many forms of money in the US: Federal Reserve note currency, checks, and most of all, credit cards. Credit card issuers, too, create money out of thin air.

THE ENEMY IN THE MIRROR

There is no law that prohibits Mr. Upham or anyone else in the US from using gold and silver money, and all the gold and silver coins ever minted by the US government are still "legal tender." But that just makes the riddle deeper. If that's so, why do we all use paper money, bank deposit money, and credit card money?

Because fiat money is easier to use than gold or silver. So rather than make a fuss or cause trouble, we do what is easy.

If you want to see the real enemy of sound gold and silver money, look in the mirror. They exploit us because we want to be exploited.

Below you will find a short article article that explains the whole hilarious US monetary system.


BEATS ME! WHAT IS A DOLLAR?

Pose this question to a federal government or Federal Reserve official and he will run you around the bush for months, mumbling blather like, "The value of the dollar depends on the productive capacity of the U.S. Economy" or "Dollar currency is backed by the full faith and credit of the United States Government." They may even read to you from a dollar bill, "This note is legal tender for all debts, public and private" -- perhaps adding to the mystification by citing some public law of such and such date.

Ask this question in a state court (say, when a judge assesses a fine) and you will most likely land in jail. "Judge, I want to pay all my debts, not just discharge them but the law makes conflicting Statements about what a dollar is. Can you tell me what this state has declared a dollar to be, pursuant to the U.S. Constitution at Article 1, Section 10? Then I can be sure I have paid the fine in dollars."

You will set off on a hilarious, rollicking journey through numerous damp penal institutions as the judge and every other state official from Governor to Second Assistant Tire Checker ducks, dodges, and weaves to avoid answering your question. They all know that every state violates Article 1, Section 10, enforcing payment in "dollars" of bank credit or Federal Reserve [bank]notes, but they surely won't be the ones to admit it. The emperor has no clothes, but I don't want to be the one to tell him

Congress shall have power . . .

Under the common law, which is still our right, nothing but gold and silver was money The United States Constitution at Article 1, Section 8 granted congress power to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and 'measures."

No State shall . . .

The Constitution at Article I, Section 10 withdrew from the states power to declare anything other than gold, or silver a tender in payment of debts. "No State shall *** emit Bills of Credit [legal tender paper money]; make any Thing but gold and silver Coin a Tender in Payment of Debts."

THE STANDARD DOLLAR & DOLLAR STANDARD

Pursuant to the Constitution, congress later enacted the Coinage Act of April 2, 1792 1 which forever set and immutably fixed the standard dollar as a weight of silver equal to 371.25 grains (0.7734 troy ounce or 24.0565 grams or 1.292929 dollars of silver to the ounce. The same act provided for gold coins valued but not denominated in dollars ($10 eagles, $5 half-eagles, and $2.50 quarter eagles). Once a standard has been set, it cannot be changed, any more than congress could declare that the present "foot" measure should comprise ten inches rather than twelve. The only constitutional standard money of the United States is the 371.25 grain dollar of silver.

At first dimes, quarters, and halves were simply the tenth, fourth, or half weight of a silver dollar. However, the Act to Devalue the Subsidiary Silver Coinage of February 21, 1853 2 reduced the weights of the dime, quarter, and half dollar to 173.61 grains (0.3617 troy ounce), 86.805 grains (0.1808 troy ounce), and 34.722 grains (0.07234 troy ounce), respectively, and made them legal tender for $10.00 only.

ADJUSTING THE GOLD COINS

Because Congress set the silver price of gold too low in the Coinage Act of 1792 (at 15:1), gold fled the U.S. to other world markets where it bought more silver. Thus in 1834 congress finally had to adjust the weight of the gold coins to reflect their market value in silver. The Coinage Act of 1834 3 reduced the gold coins' weight slightly. The Coinage Act of 1837 4 minutely reduced the weight of gold valued at one dollar to 23.22 grains of fine gold (0.04375 troy ounce or 1.5046 grams), 20.6718 dollars to the ounce.

A GOLD STANDARD?

The Gold Standard Act of March 14, 1900 5 defined a dollar of gold as a weight of fine gold (24 karat) of 23.22 grains (0.04375 troy ounce or 1.5046 grams), 20.6718 dollars to the ounce, no different from the Coinage Act of 1837.

WHAT ARE FEDERAL RESERVE NOTES?

Federal Reserve notes are not "dollars,' but they are "legal tender." Whenever a contract payable in "dollars" fails to specify payment in a certain form of "dollars," the payee must accept whatever sort of "dollars" are defined in the law as "legal tender." The law states, "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts. Foreign gold or silver coins are not legal tender for debts." 6

The law defines Federal reserve notes as "obligations of the United States *** receivable for all taxes, customs, and other public dues." 7

ANOTHER GOLD STANDARD?

The Gold Bullion Coin Act of 1985 8 provided for the American Eagle gold coins containing one troy ounce (denominated "$50"), one-half troy ounce (denominated "$25"), one-fourth troy ounce (denominated "$10" [sic]), and one-tenth troy ounce (denominated "$5").

ANOTHER SILVER STANDARD?

The Liberty Coin Act of 1985 9 provided for 0.999 troy ounce (not 1.0000 troy ounce.) silver coins denominated "one dollar" and "one Oz. Fine Silver." Although their official name is "Liberty [silver] coins," they are commonly but erroneously called "silver American Eagles.'

MULTIPLE LEGAL TENDERS

Since 1985 congress has provided the United States with a complex multiple legal tender monetary system composed of many sorts of "dollars": irredeemable United States notes 10, irredeemable Federal Reserve note 'dollars," 11 base metal token coins and debased silver coins 12, 1792-standard dollars of silver 13, 1900-standard "dollars" of gold 14, American Eagle gold "dollars" and silver Liberty 0.999 troy ounce "dollars" 15. All are denominated in "dollars" although markets value these various "dollars' at vastly different rates.

NOT SINCE THE WAR OF NORTHERN AGGRESSION

The last time this situation prevailed was after the War Between the States when United States notes, national bank currency, U.S. silver coins, and U.S. gold coins were all legal tender denominated in "dollars" and all valued at differing rates. In 1878 the United States Supreme Court construed these contradictory laws as meaning that "a dollar is a dollar is a dollar" for legal tender purposes. 16

One owing a debt may pay it in gold coin or legal-tender notes of the United States, as he chooses, unless there is something to the contrary in the obligation out of which the debt arises. A coin dollar is worth no more for the purposes of tender in payment of an ordinary debt than a note dollar. The law has not made the note a standard of value any more than coin. It is true that in the market, as an article of merchandise, one is of greater value than the other; but as money, that is to say, as a medium of exchange, the law knows no difference between them. 17"

WHAT IS A DOLLAR?

The implications, especially in accounting for revenue and paying taxes, are staggering but untried and unproven in court. In personal business you are unquestionably free to write contracts specifying payment in legal tender gold18 or silver coin and thus contract out of the paper money system. But one point is clear: the only thing that gives the government and the Federal Reserve power over our economic system is our own willingness to use their irredeemable paper notes in our daily lives. If you are a slave of the paper money system, you are forging your own chains.

Franklin Sanders
The Moneychanger
Email: moneychanger@compuserve.com

Franklin Sanders has been writing and publishing The Moneychanger newsletter since 1980. He also deals in gold and silver coin (outside of Tennessee). Visit his website at www.the-moneychanger.com.

April 20, 2002

[jstmike]

Great acticle. Especially this part:


MULTIPLE LEGAL TENDERS

Since 1985 congress has provided the United States with a complex multiple legal tender monetary system composed of many sorts of "dollars": irredeemable United States notes, irredeemable Federal Reserve note 'dollars," base metal token coins and debased silver coins, 1792-standard dollars of silver, 1900-standard "dollars" of gold, American Eagle gold "dollars" and silver Liberty 0.999 troy ounce "dollars". All are denominated in "dollars" although markets value these various "dollars' at vastly different rates.

NOT SINCE THE WAR OF NORTHERN AGGRESSION

The last time this situation prevailed was after the War Between the States when United States notes, national bank currency, U.S. silver coins, and U.S. gold coins were all legal tender denominated in "dollars" and all valued at differing rates. In 1878 the United States Supreme Court construed these contradictory laws as meaning that "a dollar is a dollar is a dollar" for legal tender purposes.

One owing a debt may pay it in gold coin or legal-tender notes of the United States, as he chooses, unless there is something to the contrary in the obligation out of which the debt arises. A coin dollar is worth no more for the purposes of tender in payment of an ordinary debt than a note dollar. The law has not made the note a standard of value any more than coin. It is true that in the market, as an article of merchandise, one is of greater value than the other; but as money, that is to say, as a medium of exchange, the law knows no difference between them."

WHAT IS A DOLLAR?

The implications, especially in accounting for revenue and paying taxes, are staggering but untried and unproven in court. In personal business you are unquestionably free to write contracts specifying payment in legal tender gold or silver coin and thus contract out of the paper money system. But one point is clear: the only thing that gives the government and the Federal Reserve power over our economic system is our own willingness to use their irredeemable paper notes in our daily lives. If you are a slave of the paper money system, you are forging your own chains.


What would be fun is go into a Bank and withdraw $50 and when asked how would you like your $50 to say "I'll take one Gold Eagle $50 coin please." I'm sure if I took in a $50 gold coin they would give me $50 in FRN's.

So I guess what the Fed is saying is that the price of Gold should be under $50 per oz.

This is all so confusing.

[jstmike]

I was reading this section talking about a Gold clause:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=browse_usc&docid=Cite:+31USC5118


Sec. 5118. Gold clauses and consent to sue

(a) In this section--
(1) ``gold clause'' means a provision in or related to an
obligation alleging to give the obligee a right to require payment
in--
(A) gold;
(B) a particular United States coin or currency; or
(C) United States money measured in gold or a particular
United States coin or currency.

(2) ``public debt obligation'' means a domestic obligation
issued or guaranteed by the United States Government to repay money
or interest.

(b) The United States Government may not pay out any gold coin. A
person lawfully holding United States coins and currency may present the
coins and currency to the Secretary of the Treasury for exchange (dollar
for dollar) for other United States coins and currency (other than gold
and silver coins) that may be lawfully held. The Secretary shall make
the exchange under regulations prescribed by the Secretary.
(c)(1) The Government withdraws its consent given to anyone to
assert against the Government, its agencies, or its officers, employees,
or agents, a claim--
(A) on a gold clause public debt obligation or interest on the
obligation;
(B) for United States coins or currency; or
(C) arising out of the surrender, requisition, seizure, or
acquisition of United States coins or currency, gold, or silver
involving the effect or validity of a change in the metallic content
of the dollar or in a regulation about the value of money.

(2) Paragraph (1) of this subsection does not apply to a proceeding
in which no claim is made for payment or credit in an amount greater
than the face or nominal value in dollars of public debt obligations or
United States coins or currency involved in the proceeding.
(3) Except when consent is not withdrawn under this subsection, an
amount appropriated for payment on public debt obligations and for
United States coins and currency may be expended only dollar for dollar.
(d)(1) In this subsection, ``obligation'' means any obligation
(except United States currency) payable in United States money.
(2) An obligation issued containing a gold clause or governed by a
gold clause is discharged on payment (dollar for dollar) in United
States coin or currency that is legal tender at the time of payment.
This paragraph does not apply to an obligation issued after October 27,
1977.



Please forgive me, I was taught in our government schools. Can someone explain what they are saying here? To me it sounds like they're protecting themselves from people demanding being paid in gold coins as a dollar for dollar exchange. But does that mean we can write up a sales contract for a house as an example that states the house is selling for $7500 payable only as 150 $50 "legal tender" gold coins? Now wouldn't that make your house look cheaper?

[Spirit of '76]

Wasn't the market value of the $20 Liberty Dollar $1000 FRN's? http://en.wikipedia.org/wiki/Liberty_Dollar#Liberty_Dollar_Base_Values.2C_.22Mo veUps.22.2C_and_the_.22Discount.22_.26_.22Commissi on.22

I don't see the difference. The $20 US Mint gold eagle is about $850 FRN's and the value is based on the gold value + just like the "Liberty Dollar".

If I can convince a store to take a $20 "liberty dollar" in exchange for $1000 in FRN services isn't that the same to convince a store to take a $5 US Mint Gold Eagle for $85 in FRN services?

Maybe I'm missing something here? I've just been learning about all this in the last couple of months.

The difference is that no one is required to accept the Liberty Dollar as legal tender for all debts, public and private. And anyone who does accept it is going to be aware of its true value, regardless of face value, and adjust the "dollar" value of goods and services accordingly.

On the other hand, you are required by law to accept federal reserve notes as payment for debt, and they will always trade at their face value.

[fsk]

A "gold clause" means that the price in the contract is adjusted as the price of gold goes up or down.

Suppose you borrow $100,000 for a year at 5% interest. In a year, you owe $105,000.

Suppose you borrow $100,000 for a year at 1% interest WITH A GOLD CLAUSE. In a year, the price of gold has gone up 15%. Instead of owing $101,000, you owe $116,000. The amount of the loan was increased because the price of gold went up.

When Roosevelt defaulted on the dollar in 1933, he declared gold clauses illegal. When private citizens were allowed to own gold again, gold clauses became legal again.

However, gold clauses are not commonplace. Try asking your boss at work for a gold clause in your employment contract!