Bimetallism and Trimetallism

Copper demand grows as merchants look to facilitate increased demand for trade.

The basis of the American Open Currency Standard is pure .999 fine Silver. In fact, one of the few things the AOCS actually does is define the relationship between Currency Trade Units and ounces of fine silver. In a nutshell, it’s the main reason we exist. According to the Standard and present live market price of silver, a single ounce of AOCS Silver represents fifty trade units. If a one-to-one comparison is made between AOCS trade units and the US Dollar, one could argue that the silver-to-face value ratio of a medallion is roughly 40%; simply stated, an AOCS trade unit is, at the present moment, 40% guaranteed by fine silver. It takes a bit to a) get the hang of the numbers and b) understand why AOCS Currencies are actually more valuable than ANY other national currency, but with a little effort and objective research, most folks eventually come around.

But how is this all affected when you add something like gold or copper to the equation? According to the same set of principles, an ounce of .9999 fine gold circulates at a trade value of two thousand units. Agreed, there aren’t many traders swapping ounces of AOCS Gold for products or services in the MarketPlace, but the opportunity does exist. But why would one trade a gold medallion with nearly a 60% ratio of metal to trade value. For AOCS Copper medallions, the same is true from the other end of the spectrum: an AV ounce of .999 fine copper has only a 13% intrinsic value. Will Gresham’s Law rear its ugly head and cause Copper to push out the Silver and Gold?

In terms of Federal Reserve Notes, few seem to care that the same amount of paper is used to create a one-dollar Federal Reserve Note as is required to print a one-hundred Dollar Note. And yet, I can’t imagine a business owner preferring payment in single dollar bills. One reason for this, regardless of the paper’s intrinsic value, is the equality of acquisition costs for the Notes. There is no discount offered for customers to pay with the greatest number of Notes.

In the AOCS model, this possible issue is addressed two ways: first, as all AOCS Currencies are complementary and their acceptance is voluntary, Merchants are welcome to choose for themselves which medallions, if any, they are to accept. Merchants requiring payment in AOCS Gold will yield the lowest gap between face and intrinsic values, though they may wait quite some time for customers to appear. AOCS Silver is a balance between Gold and Copper, both of which complement the Silver Standard well for large and small trades.

Second, and more importantly, as the value of AOCS Currency continues to increase, the cost in Dollars of acquisition will proportionately increase along with it. As less Currency is acquired in Dollars at a discount and more in exchange for production or effort, the “intrinsic” value decreases in importance compared to the Currency value. AOCS Currency becomes increasingly more valuable by the day, not just because the metals’ worthless Dollar value increases, but instead because the quality and selection of value in the MarketPlace grows greater by the moment.