Friday, November 16, 2007

Counterfeit or Liberty?

I just read this breaking story about how a group that was printing Liberty dollars had their mints raided by the Federal government. Admittedly, the Feds had no reason to raid such a place because there is no law, either in the Constitution or passed as a Bill, that makes it illegal. These coins are not considered legal tender and no such phrase is printed on them. This makes them just something to exchange for goods and services like the typical "legal tender." But the Federal government, in all its wisdom, glory, honer, and power, thought it would "protect us" from these upstarts whose only crime was wasting resources to print currency.

Sure, these Liberty dollars could be considered counterfeit, but that isn't the case here. The whole of counterfeiting is intentionally defraud a business or individual by accepting what is believed to be legal tender. If I were to scan a 20 dollar bill and print it out and then use it to buy food, I have just committed fraud. In this case, the Liberty dollar is clearly being used as a currency only when it is accepted by businesses. Otherwise, such a thing would not be widely used or accepted.

The origin of currency comes from the origin of banks. Back in the day when gold was considered valuable, goldsmiths kept it in vaults to protect it from thieves. When those people who had gold decided to store their own gold there as well, the goldsmiths were happy to oblige and issued out paper as a form of documented ownership. When the owners then went out and bought something of their own, they would then exchange these notes for goods or services they were procuring. And thus, the modern banking system was born.

It is the banking system that determines what our dollar is worth these days. Government does have the power to print money in our country, but nowhere in the Constitution does it say that private organizations cannot print their own form of money. If other businesses accept it and banks accept it as currency, then I'm OK with. And there is no reason for government to object, especially since President George W. Bush has been planning a North American currency called the Amero.

One thing I lament about being missed in the U.S. Constitution is the fact that the founders didn't think to write in limitations on how much money the government is allowed to print and keep in circulation. While they may not have had much understanding of economics at the time, it is high time that we as U.S. Citizens stand up and ask for an amendment that limits government's power over printing money.

Personally, I wouldn't use this Liberty dollar, unless my banks accepted it as currency. But even then, it would probably be sparingly, unless it really took off.