DOJ clamps down on silver-based trade medium.

ASHEVILLE — Spending stamped pieces of silver making the rounds in Western North Carolina could get you up to five years in prison.

That’s what prosecutors with the U.S. Justice Department are saying about “Liberty Dollars,” an alternative currency whose distribution is motivated by politics and profit.

But those promoting the private currency said they never called the dollars official U.S. tender and questioned whether the Justice Department’s assertion would hold up in court.

[...]

On Thursday, the U.S. Mint sent out an alert saying the dollars were illegal.

“The prosecutors have determined that using gold or silver medallions as circulating money is a federal crime,” mint spokeswoman Becky Bailey said. “By producing and promoting these as circulating money they are abetting a crime.”

In 2004, officials with the local Better Business Bureau and the U.S. Bureau of Engraving and Printing said they saw nothing wrong with the currency since individuals are free to barter for goods or services.

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As an associate of the Liberty Dollar company, Innes gets the dollars at a discounted price and can give them to businesses at a discount. He said he explains that the dollars are not official currency and maintains a Web site of participating businesses.

The point of the currency, he said is to have a “real” thing such as silver to exchange for goods and services, instead of Federal Reserve notes, such as dollar bills, that are based on U.S. debt. Unlike notes, silver is not subject to dramatic inflationary changes, he said. He questioned whether a judge would rule in the Justice Department’s favor and why prosecutors had taken an interest.

“Who knows what their motivation is,” Innes said. “It might just be the competition.”

I can trade an hours worth of work for a chicken, then trade the chicken for a sixpack of beer. Why can't a substitute a silver token for the chicken?

What if instead of a silver token, it was a piece of paper marked "Camel Cash" or "Marlboro Miles"?