Silver Dollars are US money – Congress says so. In previous articles, we’ve discussed how to incorporate them into everyday commerce, allowing you to buy (POS) and sell (Invoicing) things, pay salaries (Payroll), and handle most ordinary transactions (Bill Pay) using Silver Dollars.
We’ve seen how you can use an Account to safeguard your Silver Dollars, while allowing you to deposit more and to make withdrawals. Today, we’ll look at how you can make investments denominated in Silver Dollars.
Suppose that you wanted to buy 100 shares of IBM. You could open an account at a brokerage house, deposit sufficient funds in Paper Dollars, and then instruct them – as your agent – to buy the shares for you.
They would handle the transaction, billing your Paper Dollar account, and keep your shares in their name for you. But, if you want the purchase, and/or later sale, transacted and accounted for in Silver Dollars, they cant help you. They just are not set up to work with Silver Dollars.
Now, Cambi is not a stock broker – just as we are not a bank. But, what we can do is order an item you desire, purchase it ourselves, and then resell it to you. We would add on a small profit, rather than the commission that a broker would charge. This is just as any merchant would do for any item that you would care to special order.
So far in this series, we’ve seen how to put Liberty Eagle Silver Dollars in the hands of both businesses and individuals, utilizing an Exchange mechanism. We’ve used variations on procedures already available and in use elsewhere in our Economy right now.
Today, we’ll start to see how these Silver Dollars can be spent.
Suppose you have a credit card bill due or some other amount which calls for payment in Paper Dollars. One way to pay the amount would be to go to your account on your bank’s web page, and use their Bill Pay service. You enter the amount, who to pay, and where to send the check. They make the payment for you, and they charge our account.
The Cambi Bill Pay would work in similar fashion. You advise us of the payment information, and Cambi would pay the bill for you, using Paper Dollars. For this service, Cambi would bill your Silver Dollar account based on the current exchange rate.
Using Liberty Eagle Silver Dollars in everyday commerce carries several advantages. In Part 1, I detailed an Exchange mechanism, as well as a way to store the Silver Dollars for later use. In Part 2 of this series, we began to see the advantages as they related to a business’ sales and taxable profits.
Today, I’d like to show how employees may be paid in a mix of Paper and Silver Dollars in a way that benefits both the employee and the employer. (The pay needs to be a mix of Paper and Plastic because of the Minimum Wage. Most states have a higher Minimum than the federal rate of $7.50 per hour – in my home state of MA, the rate is $9.00.)
Here’s how it would work. Suppose you had an employee working 40 hours at $25 an hour, or $1000 for the week. As an existing employee, he may be offered perhaps a 5% premium – an incentive add-on encouraging him to participate, bringing his weekly all-paper pay to $1050. (You may or may not choose to offer an incentive to new employees.)
You would tell my company (let’s call it Cambi Money Services) the person’s name, etc, that the hours worked was 40, the incentive rate, and the pay amount. Cambi would calculate how much that comes to after tax, and that amount would be the target purchasing power. Cambi then would use the hours and the state Minimum Wage to calculate the total Paper plus Silver Dollars (eg. 40 x $9 = $360), and the after tax amount.
Using the two after tax amounts, and the Exchange mechanism, we would tell you to use your regular payroll provider, with $360 as the amount, and a Direct Deposit amount to Cambi (in Paper) which would go into a Silver account with us.
Cambi would bill you for the Paper Dollars needed to change the Direct Deposit amount into Silver. Cambi would act as both a Payroll Advisory and as a Depository. Let’s look at an example for a married worker with 4 exemptions and an Exchange Rate of 20:1.
Nominal Pay $1000
Pre-Tax Total $1050
After-Tax Target $858.48
State Minimum $9.00
Pre-Tax Total $360
After-Tax Amount $325.66
Paper Difference $532.82
Direct Deposit $ 28.04
Silver Deposited $ 28.0432
Exchange Rate 20:1
P.P. Of Silver $560.86
Paper Pay Amount$297.62
P.P. Received $858.48
P.P. Make Up $532.82
Exchange Fee-2% $ 10.66 (on amount exchanged)
Payroll Fee-0.5% $ 5.25 (on pre-tax total)
Total Bill $548.73
Employee Pay $360.00
Cambi Bill $548.73
FICA Match $ 27.54
Total Cost $936.27
Previous Pay $1000
FICA Match $ 76.50
Amount Saved $ 140.23
Percent Saved 13.0%
The fee charged by Cambi to you is for the advice on the payroll amount ($360) and on the Direct Deposit amount, and for the Account handling, so that the Dollar amount of the Direct Deposit is made as a Silver Dollar deposit. Cambi’s charge is not pay for the employee, but just a fee for services rendered to you.
So, how much profit value can an employer add to the bottom line by using the Payroll Services? Let’s assume a $10 Million sales business in MA, with $1 Million gross profit and $1 Million payroll averaging as in the example above.
The profit becomes around $600,000 after tax. The 13% you saved comes to about $130,000, or a profit bump over 21½%. How much growth can your business achieve with this much more in bottom line profit? How many more jobs can you create?
Your business benefits. Your current, and future, employees benefit. What’s not to like?
Liberty Eagle Silver Dollars are Dollars. They are US Legal Tender Money – Congress says so. But, Americans don’t use them as money because, until now, there has been no mechanism to facilitate it.
I previously wrote detailing a simple Exchange facility along with Accounts where individuals and businesses could store and use these Silver Dollars. Today, I’d like to explain my suggestion which would allow businesses to Invoice their sales using Liberty Eagle Silver Dollars.
First, a little background. Manufacturers sell their products in several ways, including selling to a wholesaler, to a retailer, or to the ultimate consumer. Many will sell only through one method, while others will use multiple chains of distribution.
In one interesting way, a company may use a direct sales staff to market its products, will take orders and arrange delivery from its own warehouses, but has all the billing and payments handled by a number of separate distributors/wholesalers. These frequently are smaller companies selling a product with a technological edge. The business needs a technical staff to make the sales, but it doesn’t want to use up its resources handling a lot of billing, so it in effect hires wholesalers to do this.
The company actually sells its products to the wholesaler, who then sells them to the consumer. To the consumer, this chain of activity is all but invisible, as the invoice merely tells the consumer who to pay and where to send the check. The wholesaler doesn’t physically touch the product, but once it’s shipped, the wholesaler owns it until they are paid by the consumer.
This system is in use today for Paper Dollars. Let’s see how this can be adapted to facilitate the use of Silver Dollars.
There are two money transactions going on here. First, the ultimate customer is billed and pays the wholesaler. Then the wholesaler aggregates its sales for the manufacturer and pays for the products.
The two transactions may both be denominated in Paper Dollars, as in the current all Paper Dollar system, but that’s not required. It’s also possible for the consumer to be billed and pay in Paper Dollars, while the wholesaler is billed and pays in Silver Dollars.
As an example, Company A, the manufacturer, markets and takes an order from a Customer. The order includes an invoice from Company B, the wholesaler, in Paper Dollars – $1000. The consumer pays Company B, which alerts Company A of the payment receipt. Company A then issues an invoice to Company B, denominated in Silver Dollars using the Exchange mechanism.
Assuming the Exchange Rate is $1 Silver for $20 Paper, Company B deposits/transfers the Silver Dollar amount ($1000 / 20 = $50) into Company A’s Account.
So, why would a business choose to use Silver Dollars rather than Paper Dollars? The answer lies in the favorable tax treatment which Silver Dollars receive from the IRS.
Remember, Congress says that both Paper Dollars and Silver Dollars are Dollars, even though Paper and Silver Dollars have different purchasing powers.
Consider a manufacturer with $10 Million in sales. The current sale, if it all were in Paper Dollars, would be $1000, but in Silver Dollars, it is only $50, reducing the annual sales to $9,999,050.
If the cost of doing business comes to $9 Million, the company would pay taxes on $1 Million in the all Paper world, but would pay taxes on $999, 050 in the Silver world.
Sales $10 Million $9,999,050
Costs $ 9 Million $ 9 Million
Profit $ 1 Million $ 999,050
Taxes $ 250,000 $ 249,762.50
(eg 25% Tax Rate)
Though the purchasing powers of the sales are the same, there was $237.50 (Paper) more kept by the business using Silver Dollars for this sale. With sales using this method on $1 Million ($50,000 Silver), almost all the tax liability would be removed, raising the Bottom Line Profit Value by about 25%.
This business would have more capital available to expand its business, hire more workers, and improve its product. The three Natural Constituencies of all businesses benefit:
We’ll see in later articles how businesses (and individuals) can use the Silver Dollars for everyday commerce (Bill Pay). And, we’ll discuss other Cambi Money Services modules including: Payroll, Point of Sale, Investments, and Money Management.