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To: mvpel
I'm holding a $10 NORFED Silver Liberty in my hand right now, and it's one troy ounce of .999 fine silver.

Well, Spot Silver (Bid) is at $4.52 as I post.

So you still just have a promotional token whose bullion value is less than half of face value.

42 posted on 02/13/2003 4:01:45 PM PST by Willie Green (Go Pat Go!!!)
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To: Willie Green
Whats the spot price right now of paper?

47 posted on 02/13/2003 5:35:32 PM PST by BlackJack
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To: Willie Green
What is the value of a $100 paper fed note?
What is the difference between that and a $50 fed note?

They are the same size piece of paper. They just changed the number printed on them.

Why can't the Treasury just make a couple $1,000,000,000,000 notes and pay the US deficit off?

49 posted on 02/13/2003 6:14:50 PM PST by Chewbacca
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To: Willie Green
The "bullion" value of a Sacagawea dollar coin is 1.2 cents, so is that a promotional token whose bullion value is less than 2% of its face value?

It's not the intrinsic value of the silver that is the main issue here, it's usefulness as currency.

If the intrinsic value of a given commodity is higher than its face value, then it is not useful as circulating currency. This is why the face value of the Silver Liberty is $10.00, instead of a daily-fluctuating value that happened to be $4.52 earlier today, and why you don't get $1 Silver Eagles in change at McDonald's.

That's why the US Mint switched from pure copper to copper-plated zinc for the penny. It was getting too close to the point where you could change a dollar for 100 pennies, then melt them down and sell the resulting slug of copper for $1.20.

And a consistent fixed value also reduces the transaction friction making it easier for silver to circulate in concert with Federal Reserve Notes. The vendor can simply enter $10.00 in their register, rather than having to go look up the current market price of a 5,000 ounce bar of silver in New York, which is what the spot price represents.

Alder Gold, which has the best prices online I've seen for metals, has $5.35 an ounce for a 100-ounce ingot.

And at least the vendor is getting $5.00 in intrinsic value in the transaction, which has the potential to increase in value over time, as opposed to $10 worth of monetized government debt as with a Federal Reserve Note, on which we owe interest to the Federal Reserve Bank that issued it.

50 posted on 02/13/2003 6:17:43 PM PST by mvpel (Michael Pelletier)
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To: Willie Green
The basic point here is that if you want to buy and hold silver bullion as an investment, you should write a check to Alder Gold for $535 plus shipping and insurance. If you want to use silver as circulating currency, then you can use the Silver Liberty.
53 posted on 02/13/2003 6:20:26 PM PST by mvpel (Michael Pelletier)
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