[mandalisj]

Originally Posted by ThomPaine

Continuing on with that example, if I wished to acquire a new BMW from that same buddy and we agreed on a price of $42,220.20, several things could happen.

I could trade him something worth that amount, I could bring him a check drawn on my bank for that amount, I could borrow the funds from a lender or I could bring him that amount in FRNs.

Or you could theoretically give him the gold eagles for face value. But why would you when you can get Federal Reserve notes for so much cheaper than the eagles? Do you think there is a coin dealer that will sell $50 eagles for $50? What makes it confusing is that the eagle is a little more than an ounce of gold and thus has a fifty dollar face value instead of 42.2222, however it is because the eagle weighs 1.0909 ounces of 0.91670 fine gold so $50 / 1.0909 X 0.91670 = ~42 ... this is why the face value of the coin is $50 and not $42.2222 ....

I am not sure that I understand the 1000 ounces of gold thing, as that would mean that I owed him some 800,000 'dollars' for the car. (if I were to go purchase 1000 ounces of gold using FRNs.)

essentially yes, which is why using Federal Reserve notes is a better deal if he is willing to accept them when you owe him the VALUE of one thousand ounces of gold ... however, when you accept Federal Reserve notes (particularly from your bank) you are getting ripped off ...

What if I didnt participate in the system by having a bank account, a regular job, a house, insurance, etc. and just kept tons FRNs stashed away? Am I still participating in the credit system by using these FRNs? Most would say yes, so what if I exchanged them for gold or US Notes and used that to purchase the car, food, etc.??

George Mercier argues in Invisible Contracts that the use of a single Federal Reserve note attaches admiralty jurisdiction ... I don't necessarily agree, however you are only really getting ripped off when you accept Federal Reserve notes and not when you pawn them off on someone else ... (if someone accepts them in lieu of lawful gold money then they are getting ripped off since Federal Reserve notes are not worth their golden par value)

If I go to a coin dealer and purchase a silver dollar, it will cost me something around $15 in FRNs. SO, then is that silver dollar worth a dollar or is it worth $15 bc it contains an ounce of silver? Same thing would apply with gold.

silver makes this very confusing since it is also lawful money, however the unit of money is based on gold and not silver since the Coinage Act of 1873 ...
http://coinschool.blogspot.com/

for the purposes of the United States monetary system since 1873, silver is like a base metal which the government must accept instead of gold ... if you owe tariffs and taxes of $50, you have several choices ... you can pay with one $50 gold eagle with a value of one ounce of pure gold, fifty $1 silver eagles with a value of one ounce of pure gold, or fifty dollars worth of Federal Reserve credits with a value of one ounce of pure gold ... now while all three of these things have the same VALUE but what about PRICE? The fifty dollar gold eagle with a contract exchange par VALUE of one ounce of pure gold currently has a PRICE OF $800, the fifty $1 silver eagles with a contract exchange par VALUE of one ounce of pure gold currently has a market PRICE of $750, and the fifty dollars worth of Federal Reserve credits with a contract exchange VALUE of one ounce of pure gold currently has a market PRICE of $50 ... clearly, if you had all three of these things you would use the paper despite their legal value all being equal ...

Along these lines, I must also consider the recent insanity that has consumed the real estate market in many cities. Examples of houses being bought and then in a very short time, sometimes less than a year, selling them for 2-3 times the purchase price. Nothing changed about the house, so is it worth more bc someone is willing to pay that amount or does value come from something else. The purchasing power of the dollar didnt go down that fast, so why would I pay $500,000 FRNs for a house that sold for $250,000 FRNs only 6 months ago?

Thom

people are free to contract ... if they want to pretend that their real estate (ray-al, royal) estate is worth a certain amount of gold than the are free to do so ... the purchasing power of the dollar is defined by how much you can buy with it ... the reason why you should pay $500K for a house that went for $250 six months ago is because the dollar PRICE is getting weaker (while the dollar value stays fixed at the par value of $42.2222 per ounce of gold) ... the dollar did loose fifty percent of it's purchasing power ... don't pay attention to any of the Consumer Price Index or any other nonsense that the Federal Reserve puts out to confuse the muggles by boring them ... the real price of a dollar is determined by how much stuff it will buy and not by economic statistics based on subjective data ... if a $250K house sells for $500K then the gold VALUE will have doubled, however if the gold price went from $400 per ounce to $800 per ounce than the gold PRICE of the real estate stayed the same ...