The Liberty Dollar is not a fraud

There has been a bit of drama on the Yahoo list recently. I will include the original post for reference:

This appears to be a massive scam...
Posted by: "lostitall888"
Sat Apr 21, 2007 9:49 pm (PST)

First off.. just take a look at the current exchange rate:

DAILY DISCOUNT RATE
Silver Spot $13.95
Updated: 04/20/07 20:01 EDT
Associate Rate USD to ALD $0.924
Merchant Rate USD to ALD $0.924
Exchange Rate ALD to USD $0.805

There's a bid-ask spread of 15%! This is the widest market that I've
ever seen, not to mention that if you buy it from "ALD" at face value,
you lose 19.5% right away.

If you want to buy silver or gold, buy silver or gold, not overpay for
the silver or gold by around 40% (spot is 13.95, if you pay $20.00,
you overpay by 43%, if you pay the discount rate of $18.48, you pay
about 32% too much).

How does ALD justify this? ESPECIALLY the extremely wide bid-ask
spread for the "currency." They try to explain it as a "small profit
needed to operate", but a 15% spread? Rediculous.

As one poster pointed out, this happens about once a month. Someone discovers the Liberty Dollar, and posts something like this to the list, accusing the group of mass fraud.

As LD enthusiasts are quick (one might say eager) to point out, the LD is a medium of barter exchange. It provides buyers and sellers a common measuring stick by which to gauge the relative value of their goods or services. It is not an investment, and if you ask almost any LD user for investment advice, they will probably tell you to buy gold or silver (government-issued) coins or bars.

As to the 'justification' for the high overhead, I have already pointed out that the LD comes much closer to matching face value and intrinsic value than does the Federal Reserve. The only reason that people are willing to say that a Federal Reserve Note is worth more than the paper it's printed on is because bureaucrats wielding police powers say "do it, or else."

There's no fraud going on here, only a quite forgivable ignorance among the general population as to the true nature of money. Fortunately, this ignorance is curable, and that is one reason the Liberty Dollar was created in the first place.