Face Value

The AOCS Face Value provides both an incentive to trade and a stable value for AOCS Approved Currencies.

Incentive: Overturning Gresham’s Law

Quite possibly the most important facet of the Standard, the AOCS Face Value, is also the most misunderstood. Many intelligent people argue that “an ounce of metal is an ounce of metal” and that its value exists independent of any arbitrary numbering system. Others claim that the value of metal can be easily determined on publicly-accessible indexes, and therefore no other value matters.

While both of these arguments are reasonable, neither address the problem of “Gresham’s Law“. When fiat currencies began appearing and circulating in recent history, skeptical traders were more likely to spend the “bad money” (also known as fiat money or paper money), and save the “good money”, the traditional gold, silver and copper tokens common as currency for thousands of years. After a few centuries, traditional money (gold, silver and copper) was pushed out of circulation by the more convenient and intrinsically worthless paper currency.

Today, there is a call for a return to a valuable currency. In fact, thorough research of fiat debt currency (and its counter-part, fractional reserve banking) ultimately leads to an explanation of many of society’s injustices. Unfortunately, Gresham’s Law makes it difficult (read:impossible) to once again use metals as “money”. In the marketplace, valuable currency will only become commonly circulated when the burden to implement is adopted by either the consumer or the producer, and neither is likely to undertake this challenge without an incentive to do so.

The key to action is incentive and enthusiasm.

Money’s 3 Values

The first key to understanding how to reverse Gresham’s Law is to gain an understanding of money’s three values:

  • Currency “face” Value – what money gets you in the marketplace
  • Collectable “rare” Value – rare or unique forms of money are often worth more than the currency value
  • Commodity “intrinsic” Value – if the marketplace went away, what would money really be worth?

Every form of money, whether it knows it or not, is accountable for each of these values. Fiat money, however, fails to qualify as “money” because it lacks a Commodity or intrinsic value. Because fiat money is intrinsically worthless, it relies on the will of the marketplace for continued acceptance and circulation. The US Dollar, for example, is valuable merely because merchants are willing to accept it as payment for goods and services. Unfortunately, that time is coming to an end, as has happened in numerous other nations across the world.

A Return to Value

In the marketplace, a return to value can be initiated easily by the producer – a merchant simply can require customers to render payment in a form of money deemed valuable to the producer. If a business owner demands metal and a buyer wishes to trade with this owner, the buyer must do so on the owner’s terms. Since there is no natural law (or even statute) that requires the owner to accept “cash”, this solution is valid, though the owner will probably wait quite a while for customers.

On the opposite end of the transaction, a return to value can also be initiated by the consumer – a consumer can offer whatever they desire as payment in private trade. However, thanks to Gresham’s Law, it is equally unlikely that a consumer will prefer to render payment in gold, silver or copper, since they are intrinsically more valuable than the paper money.

However, if the consumer is offered a premium to trade the metal instead of the paper money, possibly in the form of increased buying power, it may provide the necessary incentive to overcome Gresham’s Law. The premium must be great enough to offset the costs associated with the acquisition of the metal currency: minting, transportation, storage and insurance are just a few of metals’ costs not factored in to the commodity’s “spot” index price. Not only does the AOCS Face Value offset these expenses, it also creates the required incentive to encourage consumers to spend “good money”.

Real Money: Consistent Value

For hundreds of years, gold and silver in the USA had a stable value. In fact, for nearly 150 years, an ounce of gold was valued at $20 per ounce and an ounce of silver was worth $1. In modern times, however, metal prices fluctuate moment to moment, often quite violently in small amounts of time (minutes!). Swings in the listed market price can be credited to metals’ historically recent industrial demand or market manipulation, or both. Regardless of the cause, anything used as money must have a stable value.

Like Gresham’s Law, the instability of copper, silver and gold price indexes is another reason the market is unlikely to adopt metal as money. For example, let’s suppose a trade takes place on Monday with an ounce of silver, valuing both the ounce of silver and the goods received in trade at $30. By Thursday of the same week, the recipient of that ounce of silver is ready to trade it to the next party, and the market price of silver drops to $27 per ounce. Although nothing has changed in the local marketplace, that very same ounce of silver now buys 10% less than when it was acquired only 4 days earlier. Certainly, the numbers can move in the opposite direction: the same ounce of silver could possibly buy 10% more than it did days earlier. Regardless, the unpredictability of money’s value based solely on external forces makes trading copper, silver and gold too risky for most traders.

Fortunately, the AOCS Face Value negates this risk by establishing a stable value that remains constant over long periods of time. While the moment-to-moment price of metal may fluctuate (in an external and unrelated market), the currency value of AOCS Approved Currencies stays the same to eliminate the risk of circulating a valuable, commodity-based currency.

Then, at regularly scheduled and published intervals, the value of AOCS Currencies increases based on a re-index with the corresponding commodity market. This, in our language, is called a “Move-Up”, and is accompanied by the issuance of new medallions and an instant surge of consumer demand, since the marketplace’s money is now more valuable!

AOCS Face Value Formula

As the Move Up point is so important, the AOCS uses an independent, third party source for its silver price. Further, instead of relying only on the volatile daily market price of the metals, AOCS instead uses the 30 day moving average price index. With the 30-day MA, short-term volatile swings in the metals index are average out over long periods of time, thus preventing the AOCS Face Value from fluctuating before a solid foundation is established at the new price levels. The 30-day MA is definitive information and readily available, totally transparent and easily verified by everyone. The 30-day MA is one of the econometric stability-inducing features that protect the AOCS from the erratic actions of free market metals. You can check the 30-day MA by simply going to ScotiaMocotta, which is a division of the Bank of Nova Scotia, a Canadian Bank. The 30-day DMA is listed at the bottom of page 2.

Silver Face Value Formula

Series “A” Series “B” Series “C” Series “D” Series “E”
Face Value (Retired) (Retired 3/23/08) (Current) (Move-up @ $41.50) (Move-up @ $84.00)
1 1/10oz N/A N/A N/A N/A
5 1/2oz 1/4oz 1/10oz N/A N/A
10 1oz 1/2oz 1/5oz 1/10oz N/A
20 N/A 1oz 2/5oz 1/5oz 1/10oz
50 N/A N/A 1oz 1/2oz 1/4oz
100 N/A N/A N/A 1oz 1/2oz
200 N/A N/A N/A N/A 1oz
DMA Period - 30 Days 45 Days 60 Days 75 Days

* silver move-up prices are per troy ounce

Copper Face Value Formula

Series “A” Series “B” Series “C” Series “D”
Face Value (Current) (Move-Up @ $1.60) (Move-Up @ $4.15) (Move-up @ $8.40)
1 1/2oz 1/5oz 1/10oz N/A
2 1oz 2/5oz 1/5oz 1/10oz
5 2 1/2oz 1oz 1/2oz 1/4oz
10 5oz 2oz 1oz 1/2oz
20 10oz 4oz 2oz 1oz
DMA Period - 30 Days 45 Days 60 Days

* copper move-up prices are per av ounce

Gold Face Value Formula

Series “A” Series “B” Series “C” Series “D”
Face Value (Retired) (Retired 11/01/11) (Current) (Move-up @ $4150)
500 1/2oz 1/4oz 1/10oz N/A
1000 1oz 1/2oz 1/5oz 1/10oz
2000 2oz 1oz 2/5oz 1/5oz
2500 N/A N/A 1/2oz 1/4oz
5000 5oz 2 1/2oz 1oz 1/2oz
10000 N/A 5oz 2oz 1oz
20000 N/A N/A N/A 2oz
DMA Period - 30 Days 45 Days 60 Days

* gold move-up prices are per troy ounce

AOCS: A Voluntary System

The AOCS Face Value has been used in circulation for more than a dozen years, and the marketplace continually finds it a critical component of success. Even with the face value incentive, though difficult to believe, consumers still find it hard to overcome Gresham’s Law and trade silver, copper and gold instead of using paper money and coupons, Groupons, and other “cash-only” special offers.

However, we urge participants to remember that the Face Value is provided only as a suggested rate of exchange. It is always the responsibility of both the merchant and the consumer to negotiate a fair and equitable rate of exchange for a successful trade. Trading AOCS Currencies will always be voluntary and conducted at the exclusive discretion of the parties involved in the trade.


  1. Where is the Copper moving average found?

    • Bob – Great question! Since there is no index for Copper DMA, we keep track of it over here at AOCS HQ. Fortunately, the copper index is based on the AV Ounce, and we’re WAY far away from the next move-up point ($1.60 per ounce), which means we won’t have to pay attention to the move-up point until copper gets up around $20/lb.

  2. Simon Paine says:

    the face value makes a lot of sense to me until I see the move up , how do i distinguish if i have older series or newer series face values , many of the rounds have no date, for gold as an example if I read it correctly there are now three weights of coins all showing same face value , this means consumers have to go by weight anyway , negating the benefit of the face value , – or did i miss something

    • Elfin Slade says:

      I think “series” in this context refers to era. So whatever is the current era, that’s the suggested currency value of metal.

  3. When a move up occurs, do the existing medallions have to be exchanged? For example, do existing 1 oz medallions stay at 50 units or do they “become” 100 units?

    • Max – No need to exchange. The “retired” medallions can be saved as collectibles or circulated with the new value. Or, they can be exchanged, melted, and returned new at the minting cost ONLY.

  4. Bim Bryght says:

    I have, in the last 90 days, amassed over 12 pounds in fractional and 1oz copper rounds. I’m following the market price daily…

  5. I think you are misunderstanding Gresham’s law. The law is really that money with a face value below its market value will not circulate. A silver dime with a $3 metal value will not circulate at the face value of 10 cents. Good money would drive out bad if the market was ALLOWED to choose.

    If the government would stop aggressively attacking market attempts to establish alternate currencies like e-gold, goldmoney, and the liberty dollar, the market would have moved to another standard long ago. The problem is political.

    No special numbering system is necessary on the coins, only weights and purity.

    • Wags – Gresham’s Law started creating problems for circulating currency before there was a difference between “face value” and “market value”. For thousands of years, these two numbers were the same. Only in recent history (the last hundred years or so) did that change.

      While I agree that a large part of the problem is political, convenience and value are still major factors in determining what currency the marketplace wants to circulate.

      • Gregory Romeu says:

        As unstable as all the markets have become, I rarely see any mention of, or factoring in of supply-and-demand in determing value of anything these days.

        With our open borders policies, allowing tens of thousands of people to just walk into the country and thereby inflating the DEMAND for goods and services while depleting our SUPPLY much quicker, it appears that we are all losing out on greater values of our precious metals being that the current administration refuses to produce the actual results tied to the rate of inflation… Or do I need to be getting more sleep?

  6. I think it would be useful for voluntary currency to ditch the “dollar” face value for something that doesn’t need to move up or down. How about a face value in “vollars”? Or something that sounds less like “dollar”. An ounce of minted copper could be one “vollar”, and other coins could be valued in multiples of that. Or, if an ounce of silver is used as the vollar, you could have fractional values for smaller coins and copper. Then, somewhere, there could be a published exchange rate between vollars and dollars.

  7. William E. Baer says:

    Curious and a little concerned as I read in the news of trade being conducted instead of in American dollars but such as gold. copper, euros, yen, etc…But I never in several such reportings see SILVERas one of the options to dollars. Any particular reason or just an oversight by the reporter?

  8. rich3800 says:

    Rob, I have been looking for vending machines that will accept the AOCS coins and ways to retrofit other vending machines. Any ideas?

    • rich3800 says:

      I’m also looking for vending machines that will accept US currency and credit cards and vend AOCS coins.

  9. rich3800 says:

    If I hire a student to work for me and I use tokens to pay him/her, is it considered “paid” work?

    • NOTE: I am not an accountant or a lawyer. Answer: Yes. If you give somebody any “money or thing or value” in exchange for a product or labor, it is payment. The value of that payment is the fair market value of whatever you paid. I don’t know if that would be spot or AOCS face value (consult a tax attorney on this one).

    • Dustin Meier says:

      If your “employee” or “worker” signs a contract to accept whatever form of payment you are willing to pay before the worker begins the work, then I would think for sure that the answer would be most definitely, “Yes!” If someone contracts to work for trade of goods/products, then it is all legal. Now as far as paying taxes or submitting the 1099′s to the IRS, I haven’t a clue… you may not have to, because the IRS system is based on Federal Reserve Notes (Check with an attorney or CPA on the tax side of things). I have exchanged my labor for everything from vehicles, hay, feed, someone else’s labor, and yes, even for rocks/stones (e.g. I will provide the labor to remove those stones over there from your property if you agree that I can keep them)… see how it works?

      Even though these metals express a “face value,” you would still be trading/exchanging goods for services. But instead of giving your worker a pile of rocks as payment, you would be giving your worker ounces of gold/silver/copper at a predetermined rate that you and your worker agree on prior to commencing the actual labor for goods exchange.

      • I’m also not an attorney or accountant, and I realize this site concerns the AOCS.

        I read about a precedent being set in which a company in Nevada paid workers with pre 1965 US coins. Because they have a fiat legal tender value associated with them, that was the value of what could be taxed.

        In doing this, special attention must be paid to the minimum wage. ie 7.25 is the federal minimum wage. What’s to stop me from paying you 7.50, with 7 pieces of paper and one pre-65 half dollar?

  10. Anonymous says:

    I have the gold silver copper formulation that ties back to the biggest coin of any relevant country converted to purely copper composition(instead of multi based metal, for ease of understanding) to get the supposedly fair face value in term of the country coin with the gold silver copper ratio. Just want to get your opinion? Sorry to be anonymous and for any inconvenience.

  11. Stuart Thompson says:

    This is only legal if the person agrees to accept that form of payment at the time the contract is negotiated.

  12. Hello, my question is in regards to The American Silver Dirham. I was very much interested in purchasing coins directly from the source but I am stumped at its actual value. Each coin sales for $6. each coin consist of 2.975 gm of .999 silver. Im taking that this measurement of gm is refering to a gram equaling .032 troy ozt. so 2.975 gm * .032 8 the current market value of 28.65 equals 2.72748.Why would or should spend $6.00 plus shipping fees for a coin that is currently valued at under $3?

    If I am missing something please clarify.


    • CECI – Please remember to factor in all the other costs not included in the silver “melt” value – minting, shipping, insurance and retail profit to name a few. One reason the AOCS Face Value exists is directly related to the fact that silver medallions are worth significantly more than the “melt” value. However, it is for each person individually to determine what each medallions is actually “worth”.

  13. Rob,

    I heard about your project on the Survival Podcast. I have a question about face values. What were the spot prices used in previous series, series a, b, and c? Will series continue to move up by multiples of 2 so that series F will be at $168 and so on? Why have you set eh ratio of Silver to Gold at 100 when at todays spot prices they are more like 52? I think this means that gold as a commodity has 52 times more buying power per ounce than silver. But in the AOCS system gold has 100 times more buying power. If I understood series a, b , and c price points it might make more sense.

    I have been thinking about how dollars are simply a relative and instable symbol. I was thinking of doing my accounting in terms of an absolute “purchasing power unit.” As silver prices go up (denominated in USD) the same quantity of silver aught to have nearly the same number of “purchasing power units.” For accounting purposes, I start out with a given quantity of purchasing power, lets say 10PPU. If dollar symbols are devalued so that they lose purchasing power and I have somehow maintained a real stable value in terms of purchasing power, then I will still have 10PPU, even if these Purchasing Units are now valued at 20USD. If you did the accounting in USD then you would have come into additional wealth in the ammount of 10USD, but if you do the accounting in PPU then you have not come into possesion of any additional income.

    Would your face value symbols represent this kind of absolute purchasing power units?

    It doesn’t seem that they are since the same number of AOCS face values purchases less and less silver as time goes on. How are old series rounds incorperated into the system after a move up? Do people have to realize that series a 10 = series b 20 = series c 50 = series d 100 = series e 200?



  14. try this for complicated. i trade anywhere from 3Hrs to 15 min. for an ounce or dollar in silver.

    i mow a lawn, 3hrs (big machine) and i trade the guy 3 one ounce silver dollars for a hundred fiat notes, so he pays me three silver dollars for the service. i pay income taxes on 3 dollars.

    you dont have to file a tax return if your yearly ‘earnings’ are under $25,000 dollars.

  15. Why is the face value of gold 100x the face value of silver?

  16. Clash Titan says:

    There may be those who will say “no s$%t Sherlock” when I say this but it bears restating: Gresham’s Law functions only WHEN governments “legally” FIX the exchange RATE between the items being exchanged. In the 1800s fixing the exchange rate / ratio between gold & silver was ecomomically “dumb” but politically expedient because it benefited the “right” segment of society.

  17. I notice that the AOCS silver rounds tend to be marked with “FIFTY” on the reverse, indicating that the current “value” is 50 AOCS units (or whatever). Won’t this lead to confusion when move-up time comes? Seems like it would make more sense to simply ensure that the purity, weight and “AOCS approved” are included on the round but to leave the fluctuating “value” out of the design.

    Some suggestions given in response to almost this same question included saving “old” rounds as collectibles and re-minting them for a fee. Neither of these seems to be very practical with respect to a viable medium of exchange. The other suggestion was continuing to circulate the rounds at the new value, but this just seems to introduce confusion. I can easily imagine an argument in which one party says, “It says “FIFTY” right on the round” while the other party says, “Yes, but we passed the move-up so it’s now worth 100″.

    Thoughts anyone?

    • The final value of the trade regardless of denomination written on the coin is up to the person purchasing said goods or services, and the person offering those goods or services. Numeric denomination on the coin is inconsequential.

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