September 18th, 2006

The FED goes after the Liberty Dollar

Liberty Dollar

The USA Today ran a story last week about the Federal Reserve going after the Liberty Dollar, not wanting consumers to be “fooled”. The John Birch Society has a great article about the issue which I wholeheartedly agree with. I plan to buy some myself.

The Federal Government has warned merchants that they should not be fooled into accepting the “Liberty Dollar,” privately minted gold or silver coins or storage receipts redeemable in specified quantities of precious metal — and is preparing to prosecute those who circulate them.

The “Liberty Dollar” is produced by an Evansville, Indiana based group called the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code (NORFED), which claims that there is a total of $20 million in Liberty Dollars presently in circulation. The group has struck coins made of pure silver or gold, and also issues very attractive notes — essentially storage receipts entirely backed by gold or silver, payable on demand. The coins have been accepted by many merchants nation-wide, and the metal-backed notes are accepted by a network of merchants who advertise their willingness to treat them as negotiable currency.

No law prohibits the use of Liberty Dollars as a medium of exchange, whether they take the form of coins or notes. The valueless fiat currency called the dollar is “legal tender” only because we are compelled to accept it by force of “law.” Granted, accepting the paper Liberty Dollars entails some risks, but the same is true of any private investment enterprise. In this, as in so much else, fraud is a real potential danger. The Federal Reserve Note (FRN), by way of contrast, is nothing but a fraud, one that is backed by the force of government.

The U.S. Constitution specifies that Congress has the power to “coin” money, and to punish counterfeiting; it also specifies that no state can “make anything but gold and silver coin a tender in payment of debts” — a prohibition that applies, in principle, to Congress as well, since nothing in the Constitution authorizes the creation of paper money, let alone fiat currency backed by nothing but force and fraud on the part of the government.

By strict constitutional standards, the gaudily decorated pieces of rag paper and embossed slugs devoid of precious metal that the U.S. Government calls “money” are fraudulent.

Yet the Feds are preparing to crack down on the Liberty Dollar, which consists of either minted precious metal coins or storage receipts for the same, on the pretext that they are not “real” money.

“We don’t want consumers to be fooled,” insists U.S. Mint spokeswoman Becky Bailey. “The United States Mint is the only entity that can produce coins.”

This isn’t true, of course, since many companies produce beautiful gold, silver, platinum, and palladium coins. What Ms. Bailey apparently meant to say was that none of these companies has the government’s permission to circulate those coins as money. But government’s permission is not required, where the transaction takes place between fully informed parties — sellers willing to accept privately produced coins or storage notes for precious metal, and buyers with sufficient specie to pay the asking price.

Here’s the Federal position on this question, briefly stated:

“Real” money acceptable to the government has no real money (precious metal) in it. Real money, as defined by the Constitution, isn’t “real,” because it consists entirely of precious metal, without the missing ingredients necessary to make “real money”: Force (the government compels people to use FRNs as legal currency) and fraud ( the term “dollar,” per a 1792 law, refers to a specific quantity — 371.25 grams — of pure silver).

If this makes sense to you, congratulations: You’re good enough for government work.

Related to this topic is this excellent article written by Scott Bradley. I recommend reading it to brush up on the topic.

12 Responses to “The FED goes after the Liberty Dollar”

  1. John
    September 18, 2006 at 10:52 am #

    I think the Fed should track down and stop anyone trying to sell something labled as “Dollars”.

  2. Connor
    September 18, 2006 at 11:02 am #

    From the wikipedia page:

    On September 14, 2006, the United States Treasury Department issued a press release stating that “the use of these gold and silver NORFED ‘Liberty Dollar’ medallions as circulating money is a Federal crime” under 18 U.S.C. § 486.

    Liberty Dollar responded immediately September 14th with a press release from Director Michael Johnson reasserting the legality of Liberty Dollar silver pieces, and pointing out numerous errors in the Treasury Department’s release, including the Department’s misquotation of the relevant U.S. Constitutional passages and misapplication of Federal laws. Liberty Dollar Regional Currency Officers and Liberty Dollar Associates across the country, communicating through blogs and online discussion groups, insisted that every one of the legal issues raised by the Treasury have already been thoroughly researched and do not apply to Liberty Dollars, which are not marketed as “legal tender”, are not “coins”, and are not “current money” as defined by law, contrary to what the U.S. Mint and Treasury Dept. had accused.

    As per going after them for labeling the currency as Liberty “Dollars”, there are many other community currencies that do the same. The official name of the nation’s currency is “United States Dollar”. I see nothing wrong with calling them Liberty Dollars. As noted above, they are not being marked or sold as legal tender.

  3. Mike Brown
    September 22, 2006 at 1:35 am #

    I think the US may soon be bankrupt, and the hyper-inflation I saw in Brazil could be a part of our futures. If so, we’ll all have fine Monopoly money.

    I just bought $1500 in silver last month. I think it is minted by the US (Silver Eagles). Somewhat irrelevant to me who mints it. Nice if the US does – maybe it will mean more if we ever face a major depression. Anyway, not to get too caught up in dooms day – smile, be happy, and take someone special out for a night at the dollar movies while you can – but rare metals will have value in good times and bad. It’s not a bad part of a wise emergency preparedness program.

  4. Dustin Davis
    September 22, 2006 at 10:08 am #

    It certainly won’t be part of my emergency preparedness plan!

    I think you could say that the economy essentially collapsed in New Orleans last year. Do you think some silver dollars would have gotten you anything? I’d rather have a large supply of bottled water and toilet paper in such events. I think my bargaining power would be greater than silver dollars.

  5. Ravenwood
    October 10, 2006 at 12:27 pm #

    If the US Dollar is so bad, why are they trying to seperate me from mine? They have all these liberty dollars, why do they want to sell them to us for crappy old greenbacks?

  6. October 12, 2006 at 7:19 am #

    The US filed Bankruptcy in 1933.

    The Coinage Act of 1792 requires United States Dollars to be either gold or silver. Same thing in that gd piece of paper. Good thing we don’t teach about it anymore!

    Federal Reserve Notes are redemable in no thing.

    The government is worried that the sheeple might find out.

    Why does the mint’s gold and silver cost much more than the face value? They actually admit the Federal Reserve Notes are worth less!

  7. Connor
    November 15, 2007 at 11:00 am #

    In a bold move, the Fed now has confiscated all of the Liberty Dollar assets and specie. Read more here.

  8. November 15, 2007 at 9:32 pm #

    In a bold move, the Fed now has confiscated all of the Liberty Dollar assets and specie.

    Of course they did. The Fed can’t let people go around, implying that the dollar is untenable……which it is, or it will be soon

  9. November 16, 2007 at 1:41 pm #

    I don’t normally do this, but I’m going to post an excerpt from my personal journal (which I keep daily . . .)

    “Today, a massive gold heist was committed against “The Liberty Dollar” that was raided by the FBI and the Secret Service. Approximately $2 million worth of gold, silver and platinum were seized. They have done nothing illegal. They have only been providing an alternative to the fiat currency system that we have, offering inflation-proof currency to people who choose to deal in precious metals. The government has confirmed the legality of “The Liberty Dollar”, but to heck with laws and rights, if our Gestapo-style regime under King Bush doesn’t like it, it’s not okay to do in this country.

    I lament over our “limited government” Republican fascist empire that we have. Is this what our country voted for? The biggest federal budget ever? The biggest federal bureaucracy ever? The biggest American government failure ever? What a malicious band of marauding power-hungry kooks. And America is gearing up for more of the same in Giuliani, McCain or Romney. We’ll get what we deserve. Perhaps, God will have mercy on us and give us someone less offensive like Clinton or Obama. I will take that any day over another Republican desecration of the Whitehouse.”

    I distribute my journal to all of my immediate family who, for the most part, are dye-in-the-wool, hardcore Republicans and think that Bush is doing a great job. I will have to run for cover when I go up to see them in Utah, again . . . :O)

    Jay

  10. Connor
    November 16, 2007 at 1:56 pm #

    William Grigg, always scathing, did a post on this issue. Best part:

    Those assigned to peddle lies on behalf of the Regime regarding the Liberty Dollar robbery – FBI Agent Wendy Osborne of the Bureau’s Indianapolis Office, and Suellen Pierce of the US Attorney’s Office for the Western District of North Carolina – aren’t answering questions. This, too, is to be expected: Spokes-drones for a totalitarian collective can’t speak until they are programmed with the appropriate talking points.

    Oh so true.

  11. November 16, 2007 at 8:55 pm #

    I’m so mad about this. This is just insane! There can be no doubt we live in a police state.

    I had an order for some liberty dollars, $573 with shipping. I wonder if I will ever see it.

  12. April 2, 2008 at 8:22 am #

    Title 18 of the U.S.C., section 486 is actually in Chapter 25…titled “Counterfeiting and Forgery”. You can easily see this in
    http://www.access.gpo.gov/uscode/title18/parti_chapter25_.html

    So, the Federal government misapplied a law that was actually meant to fight counterfeiting and forgery! Ah the stupidity of it all!

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