Freedomain Radio

"The Free Lakota Bank is the world's first non-reserve, non-fractional bank that issues, accepts for deposit, and circulates REAL money...silver and gold. All of our deposits are liquid, meaning they can be withdrawn at any time in minted rounds."

http://press.freelakotabank.com/index.php

Your thoughts? Their chances of success (non-closure etc)?

Fin

I think this is great, and I think the fact that there is a market for this is a great sign that people are starting to understand that there is something terribly wrong in the world. I don't know if the government would shut it down, but I certainly wouldn't put it past them. Thanks for this!

Is it just me or this dodgy? I hope I'm just making a fool of myself, because it does seem like a wonderful initiative.

Well you are right to be sceptical. I'm still trying to find out more about this company and their motivations, business direction and central philosophy, if any. Time will tell I suppose. I am concerned as to how long they can last, if they are legit and start to gain popularity etc. The Feds and Banksters must be aware of them already. We all know what happened to e-gold and Liberty Dollar et al.

I love what they've done, however, I don't agree with them denominating their rounds with a face value. It would have been sweet if they had left it denominated by "weight only" such as in ounces.

it's way more practical to do it by weight, for sure.

Confed just did a good video:

http://youtube.com/watch?v=1tL6ke3drWs

So what's the difference between this and goldmoney.com or egold.com or any of the other digital coin entities?

Also the biggest downside to any of these "we'll hold the gold for you and here's the paper that says you own the gold" outfits is that, when push comes to shove, they can  (and have in the past) abscounded with the loot leaving the "holders" nothing.  In other words, if they build a cache of say, 200 million dollars of metal and then sell it into the market and then just disappear one day, you are left with nothing.  It all relies on trust, something that seems to be a very rare commodity in today's markets.

Good ideas here.  I will only address a few of them.  Here goes:

RE: I don't get the point of this. You can't get paid or pay employees in metal coins.

Recent case in Los Vegas got aquital or hung jury on all counts of an employeer paying his employees with gold American Eagles (that under US Law are Legal Tender stamped at 50 bucks for the one ounce coins).   IRS was pissed because this guy recorded the pay at 50 bucks for each coin when each coin brought 500 to 1000 bucks in the open market.   This allowed the employees to avoid having to file income taxes returns because their pay did not exceed the minimum amount required (somewhere around 7000 bucks of income).

RE:  Also you have to pay capital gains when you sell gold coins for a profit. That makes them horrible as investments from every conceivable standpoint.

Only if you convert them to federal reserve notes.  You can use the coins in barter and pay no tax.  And, if you're really into record keeping, record the transaction as the amount of dollars stamped on the coin.

RE: I think it's pretty safe to predict that a government will still exist even if the currency collapses, and that they will issue a new currency that will most likely not be based on any commodity.

I think it's a pretty safe bet that if the government looses it's ability to have it's currency accepted, it collapses and the market creates the new standard of "what is money?"

RE:  The transition to the stateless society is philosophical, not material.

Just my opinon, but I think the transition to a stateless society is inevitable not philosophical.

RE:  I don't even think that a free market currency company would use commodities as a backing. Commodities are so... volatile in terms of price, and not to mention heavy. I think an electronic currency is much more likely.

I disagree with the first part here, but your electronic currency solution, with some organization that has great trust, auditing and transparency, is probably  the way to go.  A great example of how this might work (OK a state government was the issuer here) was in the book Molan Labe.

JC Hewitt:

I don't get the point of this. You can't get paid or pay employees in metal coins. You also can't pay taxes with coins. You can't get tax deductions for buying metal coins - which makes spending your excess money on coins just an effective way to hand over more money to the government. No fun.

Also you have to pay capital gains when you sell gold coins for a profit. That makes them horrible as investments from every conceivable standpoint.

I think it's pretty safe to predict that a government will still exist even if the currency collapses, and that they will issue a new currency that will most likely not be based on any commodity.

The transition to the stateless society is philosophical, not material.

I don't even think that a free market currency company would use commodities as a backing. Commodities are so... volatile in terms of price, and not to mention heavy. I think an electronic currency is much more likely.

Also, a hyperinflation screws things up because of the RATE of depreciation of the currency. Once the currency stops being printed, then it can function effectively as a currency again. I think that even from a doomsday hyperinflationary collapse scenario, people would continue using a collapsed dollar again as soon as it stabilized. For example, after the American invasion of Iraq, Iraqis continued using the "dead" Dinar for a long period of time even though it was no longer being printed.

I think as an intermediary, companies would almost certainly start to issue their own scrip-like currencies. For example, Wal-Mart, K-Mart and Sears might start paying their suppliers in a common scrip, which they would use to pay their employees and so on. Maybe gold would be used in some transactions, but it's just too unwieldly to be used to run a modern economy in any way.

Yes, I totally agree.  I think things like this and Liberty Dollar are putting the cart before the horse, so to speak...

JC Hewitt:

I don't even think that a free market currency company would use commodities as a backing. Commodities are so... volatile in terms of price, and not to mention heavy. I think an electronic currency is much more likely.

So what would the electronic currencies be backed by?

No I totally understand, I'm just trying to get my head around how a private fiat currency would work backed only by the companies' reputations. Like, how would they control the amount of their currency entering the supply if it's not backed by tangible 'stuff'. I always thought that what might happen is something similar, certainly pervasive and digital, but backed by a huge mix of metals like copper, tungsten, gold, silver, platinum, palladium, etc. This perhaps would help to control market fluctuations and price manipulation.

The bank appears to exist as a part of the Repulic of Dakota nation. www.republicoflakota.com

It's a separatist movement in the upper mid-west lead by Russell Means and the Lakota nation. They base their claim to an independent nation from within the power of the Fort Laramie treaty of the 19th century they say the current government violated. As far as they are concerned they are an independent nation, but the U.S. still dosen't recognize them and undoubtably is just waiting for the "Republic" to infringe on some law so they can send the "gun in the room" in to put a stop to them.

I would actually be willing to bet the coin is being used in the area of the Lakota Republic. It's most likely their steps towards an independant economy from the U.S.'s and might I say if it is a truly competetivie currency it would perform interestingly in the wake of a fiat based bebacle--much like the current one. The enemy of hyper-inflation is a stable competitive alternative currency or means of trade. I would doubt you even pay taxes on these deposits.....alas I doubt the movement is going to be long lasting.