Unoffical legal coinage?

GoldCoinLover

Hi folks!

Recently I was wondering about something. I was watching discovery on TV and I saw that there was this mint making LEGAL silver dollars, actually made out of nearly pure silver, and that were legal to spend.

I forget what they call them. They were liberty or something dollars.

I understand that money is worth something as someone accepts it. It is probably legit because it didn't interferere with the mints money.

But, if these 1$, 5$, 10$ coins are nearly pure silver (90 percent I'd assume?) and it cost real mint money to buy them, won't you be losing money?

For example, I'm not aware of the price of silver right now but I assume its around $8 an ounce. These $1 unoffical silver coins I believe are at least 1/2 oz, probably 1 oz for the 1 dollar coin. This is at least 4 bucks worth in silver. So would you need to spend 4 dollars in mint cash to buy a 1 dollar coin?

Why do people do this? They are losing money...actually they are losing 3 dollars out of every 4 they spend!

I saw this show like a month ago so I'm not sure exactly what they are called..

thanks for your help

dthigpen

The Federal Reserve is a private institution, there is nothing preventing other banks, organizations, or financial institutions from creating and distributing their own currency, so long as it doesn't claim to be backed by the FRB. Just like federal reserve notes, nobody is required to accept them in trade - Under current law, if the US Dollar took a nosedive and US-based vendors decided they would no longer accept the FRB-backed US Dollar but only Canadian Dollars (Or even these Liberty Dollars, for arguement's sake), there are no laws preventing them from doing so.

GoldCoinLover

<< <i>The Federal Reserve is a private institution, there is nothing preventing other banks from creating and distributing their own currency, so long as it doesn't claim to be back by the FRB. Just like federal reserve notes, nobody is required to accept them in trade. >>



I know that..but aren't you losing money when you buy these coins?

dthigpen

"Losing Money" is a relative term, have you looked at how the US Dollar has been doing lately?

dthigpen

Furthermore, the $1 Liberty Dollars aren't coins, they are paper currency. The $10 Coin is the only one that I am aware of as being .999 fine silver. They have a wide variety of paper currency denominations available. Remember, just because it is backed by silver does not means that the currency in circulation is silver itself.

GoldCoinLover

<< <i>Furthermore, the $1 Liberty Dollars aren't coins, they are paper currency. The $10 Coin is the only one that I am aware of as being .999 fine silver. They have a wide variety of paper currency denominations available. Remember, just because it is backed by silver does not means that the currency in circulation is silver itself. >>



I'm a bit confused..

You said those 10 dollar liberty coins were .999 silver? So they are backed by silver..yes. But then you said..does not means that the currency in circulation is silver itself. >>




So are they silver or are they not silver?

Sorry..

Also, I just really wanted to understand how much are these people selling these for? If they coins are really, indeed silver, and are "worth" 10 dollars, then it makes sense now because let's say if they were 1 oz each, and silver is at approx. 8 dollars per ounce, you (the buyer) are still losing 2 dollars per 10 dollar coin but that is alot better understanding they only make the 10 dollar silver ones..

dthigpen

You don't seem to understand the economic principles of currency and how it's 'insured', so it's pointless explaining this any further. If you look at the Liberty Dollar's web site (Google it), I'm sure they'll have an in-depth explanation for laypersons.

Conder101

What he is saying is that the only COIN is the silver 10 Liberty dollar piece. It does contain one oz of .999 fine silver. All of the other denominations that they talk about are actually paper currency that are BACKED by .999 fine silver at a rate of 10 Liberty dollars per oz.

As for losing $2 on each silver coin that you buy, you don't "lose" it if someone else will accept the coin in trade for goods at the $10 face value. As long as the coins or notes continue to circulate no one loses. You only lose if you accept $10 face value in currency and then redeem it for your one oz of silver.

The idea behind the Liberty dollars is that the currency is a stronger more stable currency because it is backed by silver rather and just the government promises. The problem is that few people are willing to accept these "better" dollars because they are not familiar with them.