Wednesday, March 23, 2011

Last Night's Dream, National Nightmare

Oh, I dreamed. My temperature was 101.6 when I woke up, so I had high-definition dreams all night in between bouts of hacking and snorting.

I dreamed up an alternate medium of exchange in which the monetary theories of the unfortunate Bernard von NotHaus. Unlike his approach, in which you could hold either instruments of intrinsic value (gold and silver discs of known purity and bearing attractive markings that I never thought resembled FedGov base-metal trash, they weren't even the same size) or "warehouse receipts" for same that could be used as a paper medium of exchange,* in my system, the "instrument of intrinsic value" was high-level radioactive waste.

Not coined -- my dreaming self retained that much sense -- but traded on paper, with tokens similar to the Liberty Dollar's "warehouse receipts." The problem was, users didn't trust the system and tended to try to amass the stuff themselves or sneak into the warehouse and rake up their own pile, sometimes in more than one sense of the word "pile."

That one fell apart with users and founders being hauled off for medical treatment. Back in the real world, the somewhat eccentric Mr. von NotHaus has been convicted of counterfeiting and described as a "domestic terrorist." For producing coin-like objects worth more than the Federal tokens they might have supplanted, "coins" of entirely different dimensions.

And meanwhile, the Franklin Mint is producing "FINE GOLD-clad PROOFS," thinly plated base metal U.S. Mint-type coins with some selective polishing, selling them for well over face value and it's hunky-dammit-dory. Hunh?

Everybody in this stupid gavotte knows who Sir Thomas Gresham was and what his Law says about economic behavior and I don't think they don't care. The FedGov -- and The Fed -- have a built-in antipathy to instruments of intrinsic value, despite the original Constitional proscription of satisfying public debt by any other means.

There is a big crash coming, a "readjustment." I don't know how, when or by how much but if any of your plans are counting on a recovery from the current dep- recession minor downturn the President and Congress will spend us out of any day now, you might want to look 'em over. Things may get better before they get worse but they are most certainly going to get worse.

Care for a bucket of radioactive sand? Or a bucket of the Mint's funny-smelling fake-gold "dollars?" It'll come to just about the same thing, by and by.
* And if you could confuse those with Federal "money," you'd be colorblind, illiterate and/or lack the ability to discern physical proportions of flat objects. I never trusted the paper version completely -- if I have silver or gold rounds, I can know where they are; if some other guy has them, they're only as safe as his safe -- and his inventory skills.


Anonymous said...

Just don't mark your sand buckets with $ signs and then go around telling people that they are U.S. currency.

Shootin' Buddy

Blackwing1 said...

I suppose radioactive currency would have some benefits:
- Money would circulate fast (who'd want a whole bunch of it?)
- It would prevent currency hoarding (put too much in one spot, it goes critical and melts down)

There'd be downsides, too:
- The price of lead would go up (everybody'd be lininig their pockets...with lead), driving the price of ammunition up with it

Anonymous said...

I'd never heard of this von NotHaus fellow, so I did a quick check on Wiki. This naturally led to the "Liberty Dollar", which article had THIS absolute howler:

Community currencies may present problems for users because there is little to stop the issuer from producing more currency.

So... Is there room in von NotHaus's cell for Tax Cheat Timmy and Helicopter Ben?

Hope you feel better.

Anonymous said...

With the Golfer in Chief now stashed in an unstable South American enclave, there's a chance to do some financial good 'round here, if we act fast in his absence.

Roberta X said...

Shootin' Buddy: You mean like the Franklin Mint does?

Von NotHaus is a a bit eccentric but he certainly appears to have tried to stay within the law. Even the price on his "medallions" was only an MSRP, not a denomination.

Few if any even included the $ symbol.

Unusual, yes. Illegal? The jury thought so. And there it is.

Anonymous said...

God bless both Grandmothers. They left me their coin collections. Having lived through Mr. Roosevelt's Depression they made sure I knew the value of pre-1964 coinage. Said coins now reside with my investments of blue steel and walnut.

Dwight Brown said...

Not that I think you stole this idea (more of a case of great minds thinking alike) but Larry Niven wrote an essay ("Yet Another Modest Proposal", which can be found in Limits) advocating exactly the same thing (and making the same points Blackwing1 did, as well).

Anonymous said...

"Von NotHaus is a a bit eccentric but he certainly appears to have tried to stay within the law. "

Fraud (telling merchants that it is a U.S. coin) is not an attempt to stay withing the law.

"Few if any even included the $ symbol."

The Liberty Dollar (whoooo *Wookie call*), the coin at issue, had a $ emblazoned on it.

"You mean like the Franklin Mint does?"

The Franklin Mint doesn't go around telling people to accept them as currency.

How many L. Neil Smith novels does one have to memorize before this becomes a good idea. Counterfeiting was one of the first crimes Congress made a hanging offense and one of the few crimes mentioned in the Constitution.

Maybe a coin with Chewbacca on one side and a Hovercar from The Probability Broach.

Shootin' Buddy

Standard Mischief said...

I've had this on a tab for awhile, you beat me to it.

>Just don't mark your sand buckets with $ signs and then go around telling people that they are U.S. currency.

I've seen some coins, and they do say dollars or have "$" symbols, but so do grocery store coupons. So do Cayman island dollar bills. So does this "oversize proof" from the Franklin Mint

I'm pretty sure he didn't go around telling people that his coins were U.S. currency, and there's ample proof he said otherwise.

I think what we need to take away from this is that if you try to introduce a alternative barter item and you are not a country (example: Canadian dollars accepted in Niagara Falls, NY), or a big corporate entity (Casino chips used as cash in Las Vegas), the government will come after your ass regardless of whether or not you carefully comply with the law.

Anonymous said...

"I'm pretty sure he didn't go around telling people that his coins were U.S. currency, and there's ample proof he said otherwise."

Umm, yeah, except the Wookie-friendly Reason magazine reported that he did:

"U.S. Assistant Prosecutor Craig Morenao, in opening statements, said the government would set out to prove that von NotHaus deliberately told people to give Liberty Dollars as change for Federal Reserve notes, in direct violation of laws that specifically prohibit the use of passing originally designed coins as current money."

The AUSA was not just muttering about uttering, he was showing the multilevel marketing scheme in all its glory (the convictions were for Fraud and Counterfeiting).

Shootin' Buddy

Roberta X said...

I dunno -- they promoted people to ask for their change in Liberty Dollars, bu does that constitute fraud?

...Seriously, SB, from what I can find, the conviction turned on on some highly debatable interpretations of some acts or statements rather than any integrate scheme to deceive. Certainly everything I saw from him & his was careful to describe it as NOT being money or legal tender and emphasized the voluntary nature of using them in barter. (This is why I never got into them much; heck, gold dust is fungible and of intrinsic value, too....but most Wal-Marts balk at accepting it).

If I'd bought a $10 (MSRP) Liberty Dollar piece when they first came out, I'd have more than $10.00 worth of silver now. Hard to see the fraud in that.

Roberta X said...

Dwight: I'm sure the Niven notion was in memory; but my dreaming self rarely acknowledges sources. And the problem in my dream only showed up when people made a run on the waste dump, er, bank, anyhow.

NotClauswitz said...

Wife is home with the flu, you have my sympathies, I'll make the soup.