A possible very interesting collecting opportunity...

I found a link about the NOFRED Silver Liberty dollar. On doing some reading it seems that there are several "community currencies" in the US and I am sure abroad. I was wondering if anyone here collected these and if so, what do you collect?

 

Log in or Sign up to hide this ad.

I would stay as far away from these as possible. As soon as this guy defaults on one of his "liberty bills" they are worth the paper they are printed on. Or in other words, start collecting them when this guy defaults on a payment--there will be millions of bills to be purchased at discounted price.

BTW, this guy needs some economic lessons--mainly a brushing up on the concept of a fiat monetary system and yield curve analysis.

 

If you are buying a silver coin, make sure you pay reasonably close to the bullion value. If you are buying paper, well, don't.

 

I agree but when the US issued coins/paper backed by precious metals the government fixed the price of gold/silver to the $. If a citizen wanted to collect the gold/silver and sell it in the open market b/c the values had diverged then they could. However, this guy is selling coins with $ amount on the face (e.g. $10) backed by silver. If silver prices get halved, the owner of the coin just paid $10 for $5 worth of silver. I am not sure how the buyer's purchasing power is preserved in this scenario. Coin collector or not, this is not a good purchase.

If you want invest in silver buy US government issued coins. Or any other government issued bullion coins. If nothing else you own a put at the face value of the coin.

 

I'm not overly concerned about the price of silver dropping below $1, so purchasing a one ounce ASE or a NORFED one ounce silver round isn't much different. The ASE probably would command a small premium because it is a US mint coin. You are correct that the $10 on the face of the coin is useless. The best deal in silver is the Canadian one ounce maple leaf silver coin. It has a reasonably high face value of $5 [canadian]. So essentially you are buying an ounce of silver with a put option attached, and have also diversified away from the US dollar.

 

GDJMSP,

I can't say for certain whether you are right or wrong about this because I've never actually tried to spend one in Canada. It would be an interesting, if slightly costly, experiment. However, Scotia Bank sells them at their Canadian branches and advertises that they are legal tender and the face value on the coin is the minimum value guaranteed by the issuer, presumably the government, or Mint, or central bank of Canada. So I would think Scotia Bank is promising to take them back for $5 Canadian regardless of the spot price of silver.

Maybe someone from Canada can clarify the situation.

 

This has me curious, so I've sent an email to Scotiabank customer service and asked them the question. I'll let you know how (if) they respond. I'm not sure how they could refuse to honor something they advertise, but you never know.

 

What good is Legal Tender if it is not Legal TENDER!

geez - you wonder why the Canadian economy needs some help despite on site cheap energy...

Ruben

 

OK

i had an old beat up ASE that I brought for 5 dollars. The bank manager made the teller take it as legal tender

(that was chase)

Ruben

 

Actually, that made me wonder if they would take the 1/10th ounce AGE, but you have to draw a line somewhere in pursuit of science.

The real trick isn't if they take it. It is if they give it out to someone!

Ruben

 

I have no idea but it would put his job in jeopardy if he did.

Ruben

 

Yeah, that's against banking rules. Your not allowed to ever put your hand in the till except for an authorized transaction. Banks also consider valuable currency as assets, so this is also technically theft.

Ruben

 

I've found very few bankers who know this (or practice it, anyway).

 

I guess this could be technically theft, but it's done all around the country and fairly regualarly. If the manager didn't end up with it, the teller would have.(Sorry about that Rachel).:kewl:

 

I received a reply from Scotiabank on this issue. They said to ask the local bank branch manager because it is up to him/her. It is a little surprising that there is no set bank policy on this. Apparently, legal tender laws in Canada don't mean anything and the bank's own advertising is misleading.

So for now I'll consider the $5 imprinted on the silver Maple Leaf coins to be meaningless decoration.

It's good to check these things out.