By Bob Shapiro
Liberty Eagle Silver Dollars are money. They are US Legal Tender – Congress says so. But, as far as I know, nobody uses them in money transactions. Nobody uses them for everyday commerce.
I’d like to change that!
Since last summer, I’ve been working on software and manual systems to allow everyone to use Silver to do all the things we take for granted today with paper or plastic. I’m almost done – and almost ready to start looking for customers – and I thought I’d share some of the basics with you, in a series of posts explaining both the benefits and the mechanics of how it would work.
While official money in the US includes Federal Reserve Notes and coins of various denominations and compositions, Americans are an innovative people. Unofficial money substitutes abound, including:
- Personal & Business Checks
- Bank Checks & Cashiers’ Checks
- Travelers Checks
- Credit, Debit, and Gift Cards
- One-Pass and other Transponder Systems
- Manufacturers & Store Coupons
- Berkshire (MA) Bucks, Subway Tokens, & California Scrip
While nobody is required to accept any of these (or other) money substitutes, most are accepted somewhere. The Market Values and fees charged for each depend on the Free Market.
Many gas stations have one price for paper and a different price for plastic. Manufacturers Coupons return a premium from the manufacturer to the merchant when they are redeemed. At one time, Travelers Checks traded on FOREX markets for more than the equivalent paper Dollar rate.
Some businesses, notably Coin-Star, even have built a business model around charging a fee to exchange official US coins for US paper money! And, speaking of machines, vending machines have been making change for bills – with or without a purchase – for years.
So, under existing law, there is no reason why Liberty Eagle Silver Dollars cannot be used in everyday commerce. Until now, the only thing standing in the way has been the lack of a system for handling it. Such a system would need to facilitate purchases, sales, and several other types of transactions. I am building the following modules into my software/manual system:
- Asset Depository
- Bill Pay
- Point of Sale
- Wealth Management
I will go through the list during this series of posts, explaining both how each would work and why you would bother using Silver Dollars.
Today, you can’t get a Silver Dollar directly from the US Mint, and certainly not in exchange for a $1 paper Dollar. The authorizing law was worded to allow the government to treat the newly minted Silver Dollars as numismatic coins (USC 5103,5111,&5132), so that Uncle Sam can sell them to Official Dealers for the cost of the Silver content, plus a markup/profit.
The Official Dealers sell them to individuals/coin dealers, and the Silver Dollars then are freely available for purchase or sale in the secondary market. The Buy and Sell prices, and the spreads between them vary widely from dealer to dealer. (See www.comparesilverprices.com.) These dealers are businesses trying to make a profit – I wish them good luck. However, the disarray in the Market hinders regular exchange of Silver Dollars.
My Exchange Module will set a “Base Rate” around which I will Exchange (I’m not a coin dealer!) Paper Dollars and Silver Dollars for a fee (I plan on 2%). Plastic Dollars also may be used, but the fee would be higher to cover the Credit Card charge.
The Base Rate would be freely available and would fluctuate during the day as the Market dictates. Initially, the Exchange will take place within other Modules of my system, but eventually, I expect to have numerous local public outlets.
You can keep your Paper Dollars in a Bank. They take your money and lend it out hoping to make a profit. While Banks generally don’t go bankrupt, it does happen – every year. In some years, like during and after the 2008 credit crisis, Bank failures ran rampant.
Recent changes in the law have endangered depositors. Your money no longer is your money. Instead, you now are considered to have lent the Bank your money – unsecured. If the Bank goes belly up, you’re last in the line of creditors to be paid! And, the law now says that to “save” the Bank, your money can be taken outright to recapitalize the Bank. That’s what the term Bail-In refers to.
Still, most people are comfortable keeping money in the Bank (yes, even I have a checking account). And, for now, on average, they’re fine for keeping Paper Dollars. But, suppose you wanted to have them hold your Silver Dollars in an account for safe-keeping? I expect that many Banks would accept your $1.00 Silver Dollar deposit and would credit your account with $1.00. Of course, if you later wanted to withdraw the money, you’d get a Paper Dollar back.
But, if you came to me, I would accept your Silver Dollar for deposit and would return a Silver Dollar to you if you wanted it. Now, I’m not a Bank – and I don’t want to be. But, I will keep your Silver Dollar safe (for a nominal fee) in an account from which you could pay for things. You won’t get interest, but then again, I won’t be lending your money out and putting it at risk.
As I said at the beginning, I’m almost ready to Beta Test my system, and then start looking for customers. As you read these explanations during this series, if you have any interest in becoming a customer or franchising my system for your local area, please let me know at Bob@US-Issues.com . (The business web site still is to come.)