Since barter is still legal (last I heard) in the US, what's to stop Americans from bartering for goods and services with gold and silver?
It's relatively easy to find someone who'll accept gold and silver as payment.
The problem is the other half of the buy-sell equation: It's illegal NOT to accept US dollars as payment, thanks to legal tender laws.
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No business can accept gold or silver, at least at their bullion value. Either way, Gresham's law still holds.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
lostinwilderness:Since barter is still legal (last I heard) in the US, what's to stop Americans from bartering for goods and services with gold and silver?
Good luck creating a market with individuals willing to use only bartering.
Abstract liberty, like other mere abstractions, is not to be found.
- Edmund Burke
Why can't businesses barter in gold, silver or popsicles? Off to research Gresham's law.
lostinwilderness:Why can't businesses barter in gold, silver or popsicles?
Legal tender laws. They can accept American gold/silver coins, but only at their face value, not at their bullion value. So the gold eagle, which is worth $908 will exchange for $50 (I think, can't remember face value).
I understand that coins can only be accepted at face value because of legal tender laws, but I'm talking about bulk trading. Is there a law preventing me from bartering a fraction of a raw ounce of gold for an iPod? Are gold and silver singled out by law so they can't be bartered in bulk?
lostinwilderness:I understand that coins can only be accepted at face value because of legal tender laws, but I'm talking about bulk trading. Is there a law preventing me from bartering a fraction of a raw ounce of gold for an iPod? Are gold and silver singled out by law so they can't be bartered in bulk?
Yeah, you can't buy an Ipod in a store with your gold coins at bullion value. If your friend has an ipod, and accepts 1/4th and ounce of gold, then go ahead.
I actually don't know the answer to this particular one. But two problems come to mind:
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Esuric:Yeah, you can't buy an Ipod in a store with your gold coins at bullion value. If your friend has an ipod, and accepts 1/4th and ounce of gold, then go ahead.
But is the difference between coins and bulk or the store and my friend? For example, If I own a department store, and I think that I'm going to have to raise my prices by 10 in a year and by another 10 percent the year after, can I just decide to except gold as barter instead? Can I run ads saying "Barter for iPods in gold and silver? No coins accepted." If I owned a store right now, I might well rather collect bulk gold (or canned soup, but that's not my question) than dollars.
lostinwilderness:But is the difference between coins and bulk or the store and my friend?
Store and friend, I think.
of course the very reason that we use currency is its liquidability. the fact that it is accepted everywhere, easy to carry / transport, and valuable (for the above reasons not its inherent value) makes it the most suitable means of physical transaction.
You know, there are over 26,000 merchants across the USA who accept silver and gold as barter items for payment.
I recommend you visit http://www.silverbarter.com to learn more about this.
AJ: It's relatively easy to find someone who'll accept gold and silver as payment. The problem is the other half of the buy-sell equation: It's illegal NOT to accept US dollars as payment, thanks to legal tender laws.
http://www.ustreas.gov/education/faq/currency/legal-tender.shtml
"There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise."
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Gold was worth $908 when I first replied to this question...