Competing currency being
accepted across Mid-Michigan
Posted: 07.12.2010 at 8:13 PM
New types of money are popping up across Mid-Michigan and supporters say, it's not counterfeit, but rather a competing currency.
Right now, you can buy a meal or visit a chiropractor without using actual U.S. legal tender.
They sound like real money and look like real money. But you can't take them to the bank because they're not made at a government mint. They're made at private mints.
"I sell three or four every single day and then I get one or two back a week," said Dave Gillie, owner of Gillies Coney Island Restaurant in Genesee Township.
Gillie also accepts silver, gold, copper and other precious metals to pay for food.
He says, if he wanted to, he could accept marbles.
"Do people have to accept dollars or money? No, they don't," Gillie said. "They can accept anything they want or they can refuse to accept anything."
He's absolutely right.
The U.S. Treasury Department says the Coinage Act of 1965 says "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."
That allows gas stations to say they don't accept 50- or $100 bills after a certain time of day in hopes of not getting robbed.
A chiropractic office in Lapeer County's Deerfield Township allows creativity when it comes to payment.
"This establishment accepts any form of silver, gold, chicken, apple pie, if someone works it out with me," said Jeff Kotchounian of Deerfield Chiropractic. "I've taken many things."
Jeff Kotchounian says he's used this Ron Paul half troy ounce of silver to get $25 worth of gas from a local station.
While the government and banks don't accept them, many others do.
So why is there interest in these competing currencies?
Is it just novelty or is there something deeper?
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.