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.