Competing Currencies: Part Two
Tue, 13 Jul 2010 18:26:23 GMT —
In part one of NBC25's special series "Competing Currencies," NBC25's Dan Armstrong showed how the government says any private business can accept or refuse any kind of payment.
In part two, Dan goes deeper, discovering why certain businesses say it's better to have private currency than actual U.S. legal tender.
There was a time in America when you could buy four gallons of gas for a dollar.
That dollar came in the form of a coin, around one ounce, made mostly of silver.
In today's market, that same coin is worth about 10 times its face value because of the silver.
Therefore, that same coin in theory, could still buy around four gallons of gas.
Dave Gillie, owner of Gillie's Coney Island Restaurant in Genesee County's Genesee Township, says "silver has always pretty much worth the same thing. Even if you go back thousands of years, the amount of products you could buy with an ounce of silver or gold has always been pretty standard."
That can't be said of the U.S. dollar bill or U.S. coins made after 1964 that are no longer made with silver.
According to the U.S. Department of Labor, since 1913 until 2001, the U.S. dollar has lost 96% of its purchasing power.
However, supporters of alternative currency say silver remains strong.
Jeff Kotchounian, from Deerfield Chiropractic in Lapeer County, says "The metal, because it's a commodity, it's a precious metal. It's retained and/or increased the value to today's dollar, which has deflated."
Gillie says, "It protects you from inflation that paper money gives you."
The government says the bills themselves are worthless. The U.S. Treasury website says, "The notes have no value for themselves, but for what they will buy."
Supporters of competing currency say they'd like to see the government go back to a gold and silver-backed currency rather than simply printing more money.
Kotchounian says, "If we did that, we could maintain the value of the dollar and we could protect. We wouldn't be in the economic collapse that we are in."
Supporters say, there are 150 alternative currencies in the U.S.
Federal agents raided one of the most popular alternative currency companies in 2007, Liberty Dollar.
A lawsuit is still pending about the company's future and possibility of making more currency.