Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

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November 16, 2007

The Liberty Dollar Seizure

by Brad Warbiany

The big news for those interested in libertarianism and monetary systems over the last day has been the fed’s seizure of materials and metals related to the sale, production, marketing, and other business activities of the Liberty Dollar. Last night co-contributor tarran posted a very interesting piece related to the government’s tactics and rationale for going after the Liberty Dollar. I am not a lawyer, and cannot speak to that aspect (although I understand Doug is working on it), but there are some very interesting things when you look into it.

Is the Liberty Dollar (ALD) a competing currency? Or is it a scam designed to fill its creators’ pockets while suckering us into buying silver at inflated prices? The best place to understand what is happening is the full seizure warrant.

Looking over the full document, I can see where there might be some standing for a case against the Liberty Dollar*. I’ve never understood the difference between the “face value” of their currency and the US Dollar. For example, they suggest buying the Liberty Dollar $20 piece at a discount and “spending” it as if it is worth $20, when the silver inside is not worth $20. The feds refer to it as a MLM scheme, and through reading their case, I can see where they may have a point there.

As a second point, it does appear that in many ways the Liberty Dollar folks are violating the law against coining your own currency in metal. I consider it to be an improper law, and I don’t begrudge them for breaking it, but it does appear to be illegal.

Of course, none of this in any way should be understood as me being a supporter of the Fed’s system**. I believe strongly in competing market-created currencies.

It does seem, though, that the Liberty Dollar was created to secure profit for its creators from the US Dollar, instead of being a true alternate currency. The “convertability” and desire that merchants give Liberty Dollars as change, as well as the “move-up” process described in the Fed’s case belie a desire by the Liberty Dollar folks to sell silver in exchange for FRN’s at a consistent profit compared with the market price, cloaked in the language of undermining the current system.

For the Liberty Dollar to be a true competing currency, it should not be assumed as a “stand-in” for FRN’s at the same face value, which is what the Liberty Dollar proponents are suggesting. If anything, the cost of converting from FRN’s to ALD’s should be set by a market-based exchange rate, not by NORFED. It is here that I believe the fraud may be found.

As an example of a competing “currency”, my father is a self-employed architect and a member of a bartering group in the Chicago area. The bartering group acts more as a network of producers than anything else, but instead of bartering services directly, they have a system of trade “credits” tracked by the barter service itself. Thus, he can design a home addition in exchange for “trade dollars”, and then use those “trade dollars” at another business within the network.

This differs from the ALD in that trade dollars are expected to only be accepted by businesses who are members of the trade exchange, and are not interchangeable with FRN’s. Thus, much like competing national currencies, a business can accept FRN’s and also accept trade dollars, but their prices for a good or service might be substantially different based on the currency used. If a member of the exchange wanted to divest of their trade dollar holdings by selling them, the exchange rate would be determined by buyer and seller, establishing a market price, rather than a rate demanded by the trade group itself (which is what the ALD attempts to do).

A competing currency must not be interchangeable with FRN’s, which is the fiction that the Liberty Dollar creators try to uphold. Thus, the ALD becomes a method for them to sell silver at a profit while their associates or merchants work to defraud businesses by offering silver worth less (in FRN terms) for goods that are priced in FRN terms. At each level, it appears to have a cut of profit, as all multi-level marketing schemes do, and at the bottom of the scale, those who receive ALD’s as a “face value” equivalent to FRN’s are being shafted.

The Liberty Dollar does not seem to live up to what is bills itself as. If it were a true competing currency, merchants would price goods in ALD terms higher than in FRN terms, in order to receive identical value for their wares. If it were a true competing currency, the “exchange rate” between ALD’s and FRN’s would float, rather than be defined by the Liberty Dollar creators. I previously have written favorably about the Liberty Dollar, but given new information, I have changed my mind. It does not fit the bill of an alternative currency; it is a scam.

* PS – Please note, that by “standing for a case” I cannot speak as to whether the specific charges the government is leveling are proper, a question tarran brought up. My specific point is the question of whether what the Liberty Dollar creators are acting unethically or fraudulently, and I believe that by offering the currency as a face-value to face-value replacement for the FRN, they are acting to scam us.

** PS#2 – I refer to the Liberty Dollar as a scam. However, the Federal Reserve is also a scam, on which is propped up by the use of government force. I have at many times on this blog explained the many ways that I hate the Federal Reserve and our nation’s fiat money. I have further explained that I believe it is leading America to financial ruin. My criticism of the ALD should not be taken in any way as an endorsement of the current system, which is an even worse scam than the ALD.

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84 Comments

  1. Brad,

    It does seem, though, that the Liberty Dollar was created to secure profit for its creators from the US Dollar, instead of being a true alternate currency. The “convertability” and desire that merchants give Liberty Dollars as change, as well as the “move-up” process described in the Fed’s case belie a desire by the Liberty Dollar folks to sell silver in exchange for FRN’s at a consistent profit compared with the market price, cloaked in the language of undermining the current system.

    That’s certainly how it seems after reading through the affidavit, doesn’t it ?

    The thing that stands out for me is the fact that they’re selling a one-ounce Silver Coin for $ 20 (in FRN’s) even though the spot-market price of one ounce of silver is below $ 20.00 — and then purport to put the LD on par value with a FRN.

    That, along with the multi-level marketing profit structure that the affidavit describes and the fact that they were operating something called the “Royal Hawaiian Mint” in Evansville Indiana, smacks of fraud to me.

    The currency violations could be the least of the problems these guys are facing.

    Comment by Doug Mataconis — November 16, 2007 @ 10:38 am
  2. Have you ever been to a coin shop and bought hard gold/silver? There is always a mark up for the service.

    Have you ever been to the airport and changed currency? It’s marked up there too for profit.

    Are you saying they should also be shut down?

    Comment by Jim — November 16, 2007 @ 10:38 am
  3. The worth of the medallions are negotiable. A 1 oz. medallion stamped with $20 is a guideline, not a declared mandatory value.

    The reason the medallions cost more than spot price is due to the cost of production and distribution.

    Also keep in mind that the Liberty Dollar is not the only one out there. There are many companies out there stamping silver/gold/platinum into medallions and selling them above spot price.

    If one does not believe the $20 price for 1 oz. of silver is fair, well don’t buy them! Personally I have no faith in a fiat money based system controlled by a private bank run by unelected secret group of ultra-rich loons!

    Comment by Jeff — November 16, 2007 @ 11:10 am
  4. Jim and Jeff are absolutely correct – it’s VOLUNTARY! Most people involved are quite aware of things like “collector value” and “novelty coin”. Any use of the LD to obtain products or services is strictly a barter by the parties involved. Any misuse or misrepresentation of the LD by individuals entering in an exhange is not the responsibility of NORFED or the “Royal Hawaiian Mint”.

    I should say, where trust is involved, I side Mr. Von Nothaus. We’ve had a hundred years of deceit and fraud from the Department of Treasury, the Federal Reserve and the IRS (the DOJ, the FBI, etc…, I’m willing to give the Liberty Dollar people the benefit of the doubt. They are on our side! -Dixon Cannon

    Comment by Dixon Cannon — November 16, 2007 @ 11:30 am
  5. Money should be produced by the market, like any other good or service. Centralized economic planning doesn’t work. The government is trying to enforce a monopoly on money any way they can. This raid will be good for the Paul campaign, because competing currencies is what he’s been advocating. Hopefully the media will start calling him up for interviews to comment on this.

    Comment by Drena — November 16, 2007 @ 11:32 am
  6. Drena,

    You may be right, but that’s not the current state of the law.

    Rather than violating as the LD’ers seem to have done and then crying when they got caught, they should’ve lobbied for change.

    Comment by Doug Mataconis — November 16, 2007 @ 11:38 am
  7. Jeff,

    Again, I’m not begrudging them for charging production costs. With every currency, a denomination of value is what it is, and that value may fluctuate over time WRT other currencies. The USD may have a “$20 note”, but as we all know, that doesn’t mean that it is backed by anything or that the value won’t decrease over time. In fact, one thing that I like about the Liberty Dollar is that with the rising price of silver, it is gaining ground against the USD.

    What I’m saying is that their marketing structure tells their associates “buy this at a discount and spend it at a profit“, and tells their participating merchants “buy this at a discount and give it as change at a profit“. Either way, they are advocating that their associates give the $20 ALD to a store as if it is equivalent to $20 USD. That is what I find fraudulent.

    They are clearly suggesting that people should take something that is not worth $20 USD and give it to people as if it is worth $20 USD. Do you not see the distinction, or not see why I would consider that fraudulent?

    Comment by Brad Warbiany — November 16, 2007 @ 11:38 am
  8. Doug, I disagree. Civil disobedience to an unjust law is the right thing to do. The government will lose this case.

    Comment by Drena — November 16, 2007 @ 11:40 am
  9. Drena,

    Yes, but the people who have engaged in civil disobedience (i.e., Dr. King, the abolotionists, the suffragettes) were always willing to go to jail for what they were doing.

    Comment by Doug Mataconis — November 16, 2007 @ 11:44 am
  10. Drena,

    And one more thing, if they’re able to prove that these guys were passing off a coin that was only worth, say 15 bucks, as something else, then I would bet that the government’s case is alot stronger than you might think.

    And anyone who thinks that this case is going to turn into a test case for the legality of the Federal Reserve System should stop kidding themselves because that’s not gonna happen.

    Comment by Doug Mataconis — November 16, 2007 @ 11:46 am
  11. Thanks, Brad, for this post – I was beginning to think *I* was the one who couldn’t see the forest for the trees here, LOL.

    Comment by Kay — November 16, 2007 @ 11:49 am
  12. But Brad,

    Isn’t that just seignorage? Of course coins minted out of bullion trade at a value above the cost of the bullion.

    Additionally, who’s to say that they aren’t more valuable? A person accepting Liberty dollars could be hedging agaisnt inflation, because they expect that in the near future the 20 ALN will be worth more than 20 FRN’s.

    Their big beef seems to be that von NotHaus is jackign up the exchange rate and thus without expanding the money stock making all holders of ALN’s richer. However, this seems more the fault of the Federal Reserve’s inflationary policies.

    I haven’t finished reading the affidavit yet, but so far I haven’t seen anything that strikes me as fraudulent. I think that ALN’s are priced too high in terms of Federal Reserve notes, but I also think Elvis memorabilia is priced too high. That does not mean that someone selling Elvis memorabilia for millions of dollars is defrauding his wiling customers. It’s merely my opinion.

    Comment by tarran — November 16, 2007 @ 11:49 am
  13. Brad, you note:

    They are clearly suggesting that people should take something that is not worth $20 USD and give it to people as if it is worth $20 USD. Do you not see the distinction, or not see why I would consider that fraudulent?

    I see the distinction you are making; however, how is it relevant? It matters not that the ALD encourages people to treat 20 ALD as 20 USD: they have no enforcement powers. If one exchanges a 20 ALD coin for merchandise worth 20 USD, both parties must reach consent to the exchange. How is that not the bottom line?

    Aren’t we forgetting the flip side of the coin? The U.S. Mint puts out Gold Eagles and Buffalos that are legal tender for 50 USD. This means that the government could forcefully take your gold eagle (that is worth > $800) and pay you a $50 FRN. The difference between ALD And these U.S. Mint legal tender coins is that the Mint actually has the force of the government behind them to make the exchange happen way below market. This contrasts drastically to the voluntary ALD system.

    Finally, had the ALD been stamped not with a set amount of dollars but rather with nothing but a weight (I.e. 1 oz silver), would that satisfy you? Is your hang-up merely the ALD use of “dollar”?

    Comment by Justin Owings — November 16, 2007 @ 11:57 am
  14. tarran and Justin Owings are correct on all counts. Furthermore, the fact that the “medallions” say dollars is meaningless. “Dollar” is a corruption of the German word Thaler, which in turn was shorthand for Joachimsthaler–the principle currency of Joachimsthal in the fifteenth century. When Canadians spend their Loonies in the US, is it fraud if a clerk accepts them? Perhaps a few years ago some would have made the claim that passing a Canadian dollar was fraud, but today, it’s foolish. The same will happen for ALD.

    Comment by GinSlinger — November 16, 2007 @ 12:06 pm
  15. Doug, von Nostrom, or whatever his name is IS willing to go to jail for what he’s doing. He wants to be arrested so that this can be taken to court. He’s stated that he’s looking forward to it.

    This is all great publicity for Ron Paul and his fundraising. Americans will rally behind the right to choose whatever one wants to use for money. Hopefully Paul will get some MSM interviews out of this.

    Besides, Doug, where is the law that says it’s illegal to use other money than Federal Reserve notes?

    Comment by Drena — November 16, 2007 @ 12:18 pm
  16. Doug,

    You’re just assuming a law was broken.

    Comment by Drena — November 16, 2007 @ 12:18 pm
  17. Doug Mataconia says: “You may be right, but that’s not the current state of the law. Rather than violating as the LD’ers seem to have done and then crying when they got caught, they should’ve lobbied for change.”

    What law?

    Comment by Drena — November 16, 2007 @ 12:23 pm
  18. Drena,

    What laws ?

    The ones against mail fraud, wire fraud, consumer fraud, and coining your own currency in metal.

    If the allegations that have come out so far are proven to be true, and for much the same reasons that Brad reaches his conclusions, then it would seem that this Liberty Dollars thing was a big scam.

    Comment by Doug Mataconis — November 16, 2007 @ 12:44 pm
  19. While currently a $20 Liberty dollar piece is not worth $20 FRNs worth of silver..the opposite is also true. I currently hold some of the old $10 Libertys…they are now worth what… $15+ in FRNS? And the old $10 silver certificates..though they have a face value of $10…they are redeemable for 150% of their face value in silver.. Unlike the $10 FRNs..the Liberty Dollars have INCREASED in value…. I’m sure the FED doesn’t like that!

    Comment by Nathan Hickson — November 16, 2007 @ 12:47 pm
  20. Doug,

    You’re assuming that laws have been broken. No one has even been charged with a crime. Liberty dollar could find now law against what they were doing, yet you say they should have “lobbied” to change the law. What law? There is no law that says one is not allowed to coin their own currency in metal. Where is this law?

    Comment by Drena — November 16, 2007 @ 12:48 pm
  21. Drena,

    In every comment I’ve made I’ve said “assuming the allegations are true” Obviously if they’re not, then they’re not. But if they are, then, legally, these guys are in trouble.

    I’m just commenting on what I’ve read and, so far, nobody has really rebutted the crux of Brad’s argument above.

    Comment by Doug Mataconis — November 16, 2007 @ 12:53 pm
  22. Doug, nope. I quote you: “Drena,

    “You may be right, but that’s not the current state of the law. Rather than violating as the LD’ers seem to have done and then crying when they got caught, they should’ve lobbied for change.”

    You asserted that there is a law against creating your own money. And you explicity said there is a law against “coining your own currency in metal.”

    Where is this law?

    Comment by Drena — November 16, 2007 @ 12:59 pm
  23. tarran,

    Nobody is suggesting that you should go to a store and spend Elvis memorabilia “just like US dollars”. And people buying ALN’s to hedge against inflation are pretty dumb, because they could buy the silver itself at much lower cost.

    Justin,

    My biggest concern is nothing more than the fact that I think the WAY they’re selling is fraudulent. As pointed out, they’re selling these as if you can spend them “at a profit”, essentially the only way to do so would be to defraud someone into thinking the coins are worth more than they are.

    If they were denominating them as 0.999 troy ounce of fine silver, that would be fine with me. Hell, if they simply weren’t advertising it as equivalent value to FRN’s, that would be fine with me.

    Comment by Brad Warbiany — November 16, 2007 @ 1:01 pm
  24. Nathan:

    While currently a $20 Liberty dollar piece is not worth $20 FRNs worth of silver..the opposite is also true. I currently hold some of the old $10 Libertys…they are now worth what… $15+ in FRNS? And the old $10 silver certificates..though they have a face value of $10…they are redeemable for 150% of their face value in silver.. Unlike the $10 FRNs..the Liberty Dollars have INCREASED in value…. I’m sure the FED doesn’t like that!

    Actually, if the Liberty hadn’t been revalued (if they had kept 1 troy ounce of silver = $10 ALD), it would be doing a lot more to help their cause than it would otherwise.

    Yes, you’d have to spend $20 USD to buy a $10 ALD coin. The rate at which the value has changed would do more to show the scam that is FRN’s than constantly rebasing your currency to follow FRN’s.

    But that makes selling ALD’s much more difficult. They’re selling them under the guise that you can spend them “just like FRN’s”, and then selling them at a discount to FRN costs. Essentially, they’re offering something for nothing by trying to foist a dollar equivalent instead of a dollar alternative.

    Think about that for a second. Let’s say they kept the base rate as 1 troy ounce = $10 ALD (it’s currently = $20 ALD). Now, with 1 troy ounce of silver = $15 USD, it’s obvious that you have to spend more USD to buy ALD, just like you have to spend more USD to buy British Pounds.

    But nobody would go into a store with a $10 ALD to buy the goods that cost $10 USD. The money would be a true alternative currency, because you would only trade it with people who were willing to accept the currency AS IT IS, rather than for its dollar equivalence.

    Alternative currencies can’t be spent “just like Federal Reserve Notes”, because they are differently valued. Trying to create a currency valued lower than FRN’s and then selling the as if they’re equivalent to FRN’s is fraud.

    Comment by Brad Warbiany — November 16, 2007 @ 1:09 pm
  25. Brad,
    Yes you can go to a coin shop and buy silver bars/coins but you will pay above spot for it. Last time I did that it was over $18 for oz bar when silver was around $14.

    Comment by Jim — November 16, 2007 @ 1:16 pm
  26. Drena,

    18 USC 486:

    Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.

    Comment by Doug Mataconis — November 16, 2007 @ 1:19 pm
  27. Doug,

    That is not a law against creating your own money. That says “in the resemblance of coins of the United States…” In other words, it’s illegal to counterfiet. This is obviously not counterfeit money.

    So, I’m still asking, where is the law that says it’s illegal to create your own money?

    Comment by Drena — November 16, 2007 @ 1:26 pm
  28. Drena,

    Did you read it?

    “whether in the resemblance of coins of the United States or of foreign countries, or of original design,”

    And you can’t really get away with saying it’s not “current money”, when they specifically ask you to spend it “just like FRN’s”. As I pointed out above, they specifically revalued their currency when the price of silver increased in order to keep the face value similar to the face value of USD.

    Comment by Brad Warbiany — November 16, 2007 @ 1:30 pm
  29. Doug,

    And, how is “money” defined?

    Comment by Drena — November 16, 2007 @ 1:31 pm
  30. The “…or of original design,” phrase seems to make what LD did illegal.

    Comment by Bob — November 16, 2007 @ 1:34 pm
  31. Drena,

    That is not a law against creating your own money. That says “in the resemblance of coins of the United States…” In other words, it’s illegal to counterfiet. This is obviously not counterfeit money.

    So, I’m still asking, where is the law that says it’s illegal to create your own money?

    whether in the resemblance of coins of the United States or of foreign countries, or of original design,

    Unless you’re going to parse the statute to read something other than what it actually says, it’s pretty clear that creating your own coinage and calling it money is illegal.

    You can argue that the law is unjust, but that’s what the law is and, like I said before, the way to change things isn’t to go violate it and get yourself arrested.

    Do you really think this case is going to advance the cause of monetary reform as a serious issue ? Frankly, I don’t.

    Comment by Doug Mataconis — November 16, 2007 @ 1:35 pm
  32. And how is “money” defined?

    Comment by Drena — November 16, 2007 @ 1:37 pm
  33. Drena,

    Are you serious?

    “Money” is a very loose definition, and would certainly be something they’ve violated. “Current money” is likely a more stringent definition, but since they are trying to circulate their coinage, I think it would cover them as well.

    Comment by Brad Warbiany — November 16, 2007 @ 1:48 pm
  34. Sorry, but current money=lawful money and is not what LD are. ALD are simply tender as they do not have the status of legal tender. Well, they are if the courts decided to adhere to all previous (read ninteenth century) court decisions.

    http://intlib.blogspot.com/2006/09/us-mint-v-norfed-legal-case.html

    Comment by GinSlinger — November 16, 2007 @ 1:50 pm
  35. No, “money” is strictly defined in the law.

    Comment by Drena — November 16, 2007 @ 1:51 pm
  36. Drena,

    Please point to the citation for the US Code definition of “money” upon which you rely.

    Comment by Doug Mataconis — November 16, 2007 @ 1:57 pm
  37. Doug,

    I don’t have the citation. You’re the one claiming that there is a law against making your own coins. So, how is “money” defined in the law?

    Comment by Drena — November 16, 2007 @ 2:06 pm
  38. Drena,

    Do you believe the law requires you to pay income tax? Just curious.

    Comment by Brad Warbiany — November 16, 2007 @ 2:10 pm
  39. Brad,

    I don’t know. I’m not a lawyer.

    Comment by Drena — November 16, 2007 @ 2:11 pm
  40. Hey Doug, I see the GOP has just sicced the ADL on Ron Paul. Are you proud of these efforts?

    Comment by GeneG — November 16, 2007 @ 2:13 pm
  41. Drena,

    Brad gave you the definition.

    And you don’t need to be a lawyer to answer the question on income tax.

    Or, you could just test it and not file and see what happens.

    Comment by Doug Mataconis — November 16, 2007 @ 2:22 pm
  42. GeneG,

    Thanks for making a completely off-topic comment.

    As for the ADL thing, this wouldn’t be happening if the candidate had just told Stormfront and David Duke to go to Hades where they belong months ago.

    Comment by Doug Mataconis — November 16, 2007 @ 2:24 pm
  43. I think the attempt to index to FRN was flawed. A few years back, they re-stamped all the old LD with twice the stamp value. That’s inflation! All of sudden the there were twice as many LDs.

    What the company should have done is float the LD against the FRN. The rising valuation would have shown what the LD wanted to show – that it was a hedge against inflation. Having to pay 2 FRNs for a single liberty dollar would be nice and prestigious. Floating will also allow the company to adapt to changing prices for silver more quickly.

    BTW, how is the LD an MLM, and why are they illegal? I can understand ponzi schemes being illegal, but the LD sale process looks like it’s wholesale price/retail price structure. It’s marking up the price along the way to give the intermediates a profit. I think their profit margins are huge though. It’s too big.

    PS: The fix exchange rate for gold and silver is completely flawed. They should have learned something from the old gold standard.

    Comment by TanGeng — November 16, 2007 @ 2:42 pm
  44. Doug,

    About the ADL and Stormfront, personally I think the Truthers are more of a problem than Stormfront and the campaign accepted tons of donations (probably) from Truthers. I would think if RP weathered the Truther connection, he’d have to weather the Stormfront connection or he’d revive that problem.

    Yeah, he’ll eventually have to field questions about Anti-Semitic views, but it’s better than the re-opening the old can of worms. In the short run, not returning the donation is going to be really painful.

    Comment by TanGeng — November 16, 2007 @ 2:55 pm
  45. Damn this is confusing.

    It appears that von NotHaus did break a law as Doug puts it, because this was promoted as currency, not collectors items or pure commodities…however, I do agree with tarran, Jim, Jeff and Justin that alothough the money was advertised to make a profit, in theory if US currency inflated enough, this tender backed by gold/silver/copper content COULD be worth more in dollars in the future and therefore it can’t be considered a scam. atleast if I reading the comments correctly.

    Additionally, the only comment of possible reason that the FBI raided the money was that it was involved it “money laundering”, which is something completely else they have to prove, not related to any of the above comments.

    If anything, maybe this trial (and this primary) could shed more light on how money is really valued, because right now, I couldn’t tell you what economics are behind the dollar, I simply know that it inflates do to oversupply and deflates due to undersupply, but there appears to be alot more to the theory of fiat vs. commodity back currency than I have even an inkling about.

    Comment by Lost_In_Translation — November 16, 2007 @ 3:12 pm
  46. I appear to be out of date with the latest charges.

    The charges according to what I’ve read on Reason are money laundering, mail and wire fraud and minting an alternative currency.

    The last one could be considered a slam dunk unless some judge decides the constitution prohibits the government from regulating any and all means of currency exchange. The money laundering and mail and wire fraud are far from settled from what I’ve read.

    Comment by Lost_In_Translation — November 16, 2007 @ 3:38 pm
  47. Sigh… First off, the US mint sells the butt-ugly Silver Eagle for $22 as of today, so I don’t see $20 for “$15 in silver” to be a big ripoff– and also remember that $15 price is for a 1000 ounce bar of raw material, not a refined, guaranteed purity, minted multiple strike piece and not including the costs of delivery, etc.

    Secondly there is no law against making your own silver pieces or “money”… there is only a law against claiming that your money is government money… which the liberty dollar has never done…. it has always been explicit that it is not government money, in fact, it not being government money is its primary selling and marketing point.

    Finally, how much silver is backing your paper dollars? You’d prefer to use them than silver rounds with an ounce of silver in them? Interesting.

    I’m selling out of libertys– for some reason it seems that the government stealing $3.5 million in silver and gold has caused people to start bidding them up to $50-$200 on ebay. but I’ve still got inventory at the “overpriced price” of $20… http://LibertyDollarUSA.com. For the time being I have inventory, that is.

    Finally, and here’s what I think is amazing– everything mentioned in the affidavit, other than the car people drive or the info about thier bank accounts– is listed on the libertydollar.org website. This “consipiracy” did not try to hide what it was doing– because it was not breaking any laws.

    Its astounding that it took 2 years of investigation and “under cover infromants” to discover what anyone reading the website could see, plain as day.

    And its also astounding that the Federal Reserve, the Secret Service and multiple government agencies said the liberty dollar was legal– as it obviously is– until the US mint, which makes a competing product (it sells for $22) deciced to unilaterally declare it illegal in a press release.

    Amazing what this country has come to. If you’re libertarian, you should be saying:

    This aggression will not stand, man!

    Comment by LibertyDollarUSA — November 16, 2007 @ 4:09 pm
  48. Whoops, the website is http://LibertyDollarUSA.com

    Had an extra period at the end.

    Comment by LibertyDollarUSA — November 16, 2007 @ 4:11 pm
  49. The lesson here is simple… don’t fuck with the mob and their money… just ask Saddam about that…

    Comment by js290 — November 16, 2007 @ 5:59 pm
  50. Ironic, Doug Mataconis saying something “smacks of fraud.”

    Comment by Buckwheat — November 16, 2007 @ 6:11 pm
  51. This is silly.

    I sure as hell wouldn’t buy a Liberty Dollar to tender it for goods and services. At least, not at the fixed rates of ALD participating merchants.

    Same goes for silver eagles.

    There’s no compulsion to tender either for goods or services. Only a moron would use either as currency in anything but a floating market based on bullion value (certainly there will always be some minting premium, but I’m sure its a lot less than $5).

    I agree the above-spot Liberty Dollar face value is shady and self-defeating, but I can’t see how it breaks any law. It just parts some fools with their money.

    Comment by Aaron krowne — November 16, 2007 @ 6:22 pm
  52. The formula for Liberty Dollar valuation is tied to the market price of silver. It’s not valued arbitrarily by Liberty Dollar. It’s a free market currency, in that it’s not issued by a government, yet is tied to a traded commodity price. The face value in relation to dollars, changes based on a formula tied to the 30-day moving average price of silver. One can make a bigger profit in relation to federal reserve notes just after a move up, say when silver was $11 and the face value was $20. Little or no profit just before a move up in the face value, silver at $8, face value at $10. I think the theory behind it is sound, and it’s not a scam. It still holds true, that what you can buy with 1 ounce of silver or gold has not changed in hundreds of years. The LD is tied to silver, not the US Dollar. The face value is tied to the US Dollar, because it was conceived as a protest against the Fed Bank.

    On the legal side, our government is just bizarre. Why did the Secret Service respond in the affirmative to a deliberate inquiry from von NotHaus regarding Liberty Dollar legality, just a few years ago?

    The Bork hearing, about starry decises keeps coming back to mind. How do the people restore Constitutional government without violence? How sound money, without collapse?

    Comment by Linus — November 16, 2007 @ 8:19 pm
  53. Perhaps, I should be clearer. A floating hard money currency against a fiat currency is nice. The currency can follow the price of spot silver up and down. That’s free market at work. No funny business.

    A revaluation like what happened to the LD a few years ago, where all of a sudden all LDs increase in value by a factor of 2, is not free market at work. Everyone that has contracts in LDs would have to account for such a mechanism taking effect. Revaluing by changing the stamp value also seems like it would be very expensive.

    Meanwhile, the LD still suffers from inflation since it follows the FRNs down the tube for short periods of time. Then suddenly it gets revalued and the LD recovers all the inflation losses. That’s not stability at all.

    Comment by TanGeng — November 16, 2007 @ 9:55 pm
  54. That’s not stability at all.

    Why does a “free market” have to be stable? If you’re concerned about fluctuations, buy contracts and futures, i.e. insurance.

    Stability seems to be the results of government regulation which ends up only benefiting those who are well connected… again, Cui bono…

    Comment by js290 — November 16, 2007 @ 10:01 pm
  55. Buckwheat,

    The trees whistling in the wind outside my window make more sense than you do.

    Comment by Doug Mataconis — November 17, 2007 @ 3:43 am
  56. Aaron krowne says: “(certainly there will always be some minting premium, but I’m sure its a lot less than $5).”

    Lot’s of luck to anyone getting a 1 ounce round struck by investing with .999 fine silver + $5 USD or $20 USD alone that competes with LD.

    On the legal matter – if two consenting people want to exchange a pile of dog crap for a product, service, or FRN’s there is nothing in US law I have found that prohibits such activity. The idea of using government force to protect people from scams is kind of silly in a free market. There are many people out there peddling snake oil, should we go seize all their property when foolish people make bad purchasing decisions? I’m not saying LD is a scam, the idea of people relying on government to retroactively fix a bad decision in great part has fueled the nanny state.

    What we have here is someone has created a medium (Liberty’s) of exchange that exposes the inflation tax created by FRN’s or any fiat currency for that matter. Most American’s don’t understand the history of “good” and “bad” money i.e Gresham’s Law and have a hard time grasping the idea of trading with anything other than fiat currency. The idea behind FRN’s is that this fiat currency can be issued and extracted by a small group of so called monetary experts under the guise of economic stability. This has provided our Congress since 1913 and other government leaders the ability to deficit spend with little accountability. Not to mention given the international “Money Changers” as Madison termed, carte blanche over the worlds governments and economies. Thus future generations have and will continue to pay for our lawmakers financial irresponsibility through more taxes, higher prices, etc.

    For those who have not been educated:

    http://www.themoneymasters.com

    Comment by Kenny — November 17, 2007 @ 5:25 am
  57. Kenny,

    If they were really trying to show the inflation tax, why revalue the currency when the spot price of silver rose?

    A hard currency doesn’t need to be revalued like that. The fact that they did so shows their desire to “spend it at a profit” by lying to store clerks about its worth.

    I’m not sure enough of the law to determine exactly what should happen legally. But the more I think about this, the more I believe the ALD is unethical and designed to be a scam.

    Comment by Brad Warbiany — November 17, 2007 @ 7:19 am
  58. There are other alternative currencies out there: the Ithaca Hour and the Phoenix Dollar. They aren’t being harassed by the feds…why single out the Liberty Dollar? Perhaps because it’s been so successful?? Perhaps because Bernard von NotHaus and Liberty Services sued the federal government??

    Most damning of all for the government is that the US Mint and the Secret Service had already stated that the Liberty dollar was legitimate and that it is not “counterfeit”

    Comment by Nathan Hickson — November 17, 2007 @ 9:22 am
  59. As I was going through the comments here, I would suggest everyone take a step back from the argument for just a second.

    Have you noticed something here which usually isn’t seen? A mostly rational debate on a real topic! Both sides of this argument are presenting their feelings, ideas and positions on this issue without resorting to name-calling. Kudos to you all.

    I digress though. Back to arguing :)

    I think a lot of the hang-up here is that folks are assuming the LD’s are considered money, or currency. This is not true. The reason for discounting the cost of the medallions to distributors and merchants is to increase circulation. Get more folks on the bandwagon. Not to fleece them or rip them off. We are talking about a barter currency, not a ‘coin’ which is trying to pass itself off as valid US currency.

    So when NotHaus sends a batch of coins at a discount to his distributors, he’s taking a hit. Many of you feel that he should not be out to make a profit in the creation and distribution of these medallions. Unfortunately it costs a lot to create, distribute, audit, and maintain the LD. There are 3rd party auditors (which require payment) which audit all his records yearly, quarterly, and various spot checks.

    Also think about the flip side of the ‘profit scam’. The federal reserve prints money out of thin air, and charges INTEREST ON THIS! That’s a profit scam like no other. If I loan you money I print on my HP bubble jet, tell you I will need 10% more than what I just printed back from you. Which you will have to work for! How the hell is that fair?

    Also keep in mind that there are no hidden costs with the LD. When I bought mine, I knew I was paying over the spot price of silver. I also knew the amount over spot was going to help NotHaus maintain the LD, spread the word and get more circulation.

    Bottom line is that the LD was NEVER passed off as legal US currency, not a replacement to FRN’s. Its a negotiable barter unit. Not money. A chunk of silver stamped into a pretty medallion, with a suggested value.

    Comment by Jeff — November 17, 2007 @ 9:26 am
  60. I just had to sneak this in, related to paying income tax:

    “Or, you could just test it and not file and see what happens.”

    I love this comment. This assumes that whatever the gov’t does to you for not paying illegal income tax IS legal, simply because the gov’t did it.

    Those who truly and wholeheartedly believe tax honesty folks are ‘kooks’ are in a world ruled by circular logic and half-truths. I don’t say that to degrade you in any way. I wish there was a way to help you understand the big picture. The income tax is in direct violation of the Constitution, period. I know, I know ‘the sixteenth amendment!!’, ALL SOURCES DERIVED… Well this is legalese, SOURCES is not what you think. The is a legal document, basic words with a commonly understood definition are redefined, a.k.a. ‘legalese’. Sources means corporate profit or money earned overseas by a US citizen. A direct, un-apportioned tax on your labor is truly nothing less than slavery.

    Comment by Jeff — November 17, 2007 @ 9:42 am
  61. The idea that the LD should not have increased its nominal base value from $10 to $20 along with the dollar price of silver is absurd.

    For a commodity-based barter unit to actually be used in barter, it must have a nominal value which exceeds its commodity value.

    Every paper FRN has a higher exchange value than its commodity value, since almost no-one values it for anything except its exchange value.

    OTOH, when the mint produces and sells a $50 gold ounce for hundreds of dollars, no rational person would spend it like a $50 bill or expect anyone else to either.

    Since the LD organization was interested in producing a visible trading unit, not a dust-collecting collectible, the increase in base dollar price was not only inevitable, but specified years in advance.

    Regards, Don

    Comment by Don Lloyd — November 17, 2007 @ 10:09 am
  62. Personally, I Accept Liberty Dollars at a buck or two above spot. Although, sadly, these days I guess I’ll have to limit myself to the coins … the paper is no better than fiat money, until the legal mess is straightened out.

    Comment by Rich Paul — November 17, 2007 @ 10:16 am
  63. One further thought…the Liberty Dollar has been around for 10 years. Certainly if von NotHaus was guilty of the charges it wouldn’t have taken so long to build a case against him. No..they waited until after HE sued the government to ravage Liberty Services and steal our money.

    Comment by Nathan Hickson — November 17, 2007 @ 10:33 am
  64. Liberty Dollar is a unique attempt to create a political/economic change, using free enterprise as the vehicle. I’ve looked at it pretty carefully. It took me a long time to understand it, and to understand how US currency is debased. I don’t think it’s a scam.

    I think our government has behaved very badly. They responded to Liberty Dollar clearly and deliberately, that what they were doing was legal. Why the turn around by the Mint? And why does the FBI raid come AFTER Liberty Dollar sues the Mint, in their 10th year of doing business?

    Comment by Linus — November 17, 2007 @ 1:05 pm
  65. Don: The idea that the LD should not have increased its nominal base value from $10 to $20 along with the dollar price of silver is absurd.

    For a commodity-based barter unit to actually be used in barter, it must have a nominal value which exceeds its commodity value.

    It’s only absurd if you’re trying to spend ALD’s as if they are equivalent to USD’s. They’re not equivalent, and going into a store and trying to pay $20 ALD for an item listed at $20 USD is disingenuous.

    Regarding “nominal value” and “commodity value”, what’s your point? For the Liberty Dollar, they started with the base value of “1 oz of silver = $10 ALD”. That does not *EVER* have to change, regardless of what the price of silver is in USD.

    It would, if they kept the same base rate, mean that $1 ALD is MORE valuable than $1 USD, instead of the current state, where $1 ALD is LESS valuable than $1 USD.

    The problem isn’t the base value, it’s that the currency is designed to always be less valuable than an equivalent denomination of USD, yet it is intended to be spent as an equivalent to USD.

    Don, I’ve known you in the blogosphere for quite some time. With all due respect, I believe you’re wrong in this case. However, I know you are a lot more knowledgeable about economics than I am. Can you explain your above position in greater detail, so that I can see where you’re coming from?

    Comment by Brad Warbiany — November 17, 2007 @ 4:30 pm
  66. So people think that sine they were making momey making the coins that’s illegal. Wow, lock up the Fed then!

    Comment by Jeremy — November 17, 2007 @ 5:40 pm
  67. ***Regarding “nominal value” and “commodity value”, what’s your point? For the Liberty Dollar, they started with the base value of “1 oz of silver = $10 ALD”. That does not *EVER* have to change, regardless of what the price of silver is in USD.***
    Because there is a difference between face value and intrinsic value. They DO have to change the face value to keep the face value on par with the USD face value. The difference is you keep the same amount of silver, so your intrinsic holdings never change, the way the founders intended.

    ***It would, if they kept the same base rate, mean that $1 ALD is MORE valuable than $1 USD, instead of the current state, where $1 ALD is LESS valuable than $1 USD.***

    With your method every merchant would have to list two prices i.e. $10USD/$5ALD. That would be too confusing and impractical. As far as using the intrinsic value for face value. Well then all our Fed notes should have a face value of $0. It’s just dirty paper you can’t even use to write on. ALD’s are worth something no matter what. In fact, the raid made the $20 RP dollar go up to the equivalent of 330 FRNs.

    ***The problem isn’t the base value, it’s that the currency is designed to always be less valuable than an equivalent denomination of USD, yet it is intended to be spent as an equivalent to USD.***
    Let me make this point again since so many don’t understand it. ALDs werre never intended to be bullion. If silver is $14.50/oz that means you can buy BULLION for that price, but you can’t walk into the grocery store and give them a brick o silver. ALDs are worth more that the silver they are printed on because you are also paying for the cost of printing, marketing, and making it a tradeable item. You don’t buy anything at it’s intrinsic value because there are always associated cost. When you buy bananas, you are paying more than the banana is worth when it is first picked, but you are paying for the cost to ship it to you and to the grocery store you are buying it at. Think like wholesale and retail.

    Finally, I can print my own money called duck-bills and people can elect to accept them if they want. But if all I did was print them on my computer(kinda like the Fed does), then why would you want them? ALDs were taken by everyone I offered them to because people know real money when they see it, and gold and silver are REAL money. In fact, Black’s Law dictionary defines money as (you guessed it) GOLD AND SILVER!

    Comment by Jeremy — November 17, 2007 @ 5:53 pm
  68. The only thing I can imagine as a possible issue is the printing of the term $20 on the coin itself. Everyone who buys or trades real gold and silver coins knows that the coin-price is marked up compared to the cost of the silver and gold itself (even U.S. silver and gold coins, and actually Liberty Dollar was offering gold coins at as little as 5% markup over spot-price, which is lower than u.s.-govt gold coins can be bought for normally), so it doesn’t seem different to me than any other business that sells silver and gold coins. If they didn’t say $20 on them (the silver ounce pieces for example), I don’t imagine there would’ve been any reason for the problems w/ the govt attacking the business. Actually they will be worth more than $20 due to silver probably going above $20/ounce in the next few years (due to fall of the U.S. dollar). In a free country, people should be allowed to do anything they want, and accept any coinage they want as payment (so if this was a free country, even the printing of $20 on it shouldn’t matter, since people can decide for themselves if they want to accept an ounce of silver as payment for something that costs $20, since the coin also says 1 ounce silver on it – not attempting to falsify the actual metal-content). Or maybe the U.S. govt is just trying to protect the stupid people out there that don’t understand anything about real silver and gold coins.

    Comment by Jenny — November 17, 2007 @ 6:58 pm
  69. Doug,

    What is wrong with you? Why are you making so many outrageous assumptions–the worst of which is that it’s somehow illegal for people to create their own (non-counterfeit) money?

    IT’S NOT. You need to look into the history of money in the U.S., especially how people made it through the Great Depression. A book called “Money: Understanding and Creating Alternatives to Legal Tender” would be a great starting point. But since I have doubts that you’ll actually do any research, let me ask:

    Is it illegal for companies to mint their own silver rounds? One would hope you’d answer this with a “no”.

    Is it then illegal to simply stamp “$20″ onto one? If you think so, then about when do you think this law was passed, and what do you imagine the limitations are? That it’s OK to stamp “20″, but not “$20″? That it’s only illegal to do it to gold or silver or copper, but not wood, or plastic or tin?

    You have no substantive understanding of this topic at all. You do not understand the differences between “current money”, “legal tender”, “currency”, and these other legal terms. You do not understand what has been done by individuals regarding private money throughout the history of the U.S. You do not even understand what money is, what forms it takes, and the amount of various alternative monies MILLIONS of Americans use daily.

    All you have is some fuzzy, irrational, emotionally-driven view that “it’s a scam!” And a lack of desire to go beyond that and do some real investigation of your own.

    I recommend you leave the discussion to people who actually know what they’re talking about.

    Comment by Wayne — November 17, 2007 @ 7:37 pm
  70. Ummm… ALL specie coins are sold at prices ABOVE the spot value of the metal in the coin.

    Duh, it’s not a scam, it’s called “Seigniorage” (see here: http://en.wikipedia.org/wiki/Seigniorage ).

    The US Mint does it on a regular basis — normally ridiculously so. (Oh, and the minted “dollar designation” on the coins from the US mint are FAR MORE deceptive and fraudulent than anything from the Liberty Dollar folks.)

    Personally, I think they should NOT have put a “dollar value” on the damn things at all — but instead should have just BOLDLY stated the specie value of the coin itself, i.e. ONE OUNCE PURE GOLD, etc. (obviously with the 99.999% purity disclaimer value in fine print, etc.)

    Comment by JKHutz — November 17, 2007 @ 11:44 pm
  71. In defense of the Liberty Dollar and those who “profit” by it, you need to understand how the profit is intended to be made.

    Currently, with the price of Silver, 1 Liberty Dollar = .86 Cents

    The Liberty Dollars are purchased by associtates at a discount, currently the discount is 4.7%, so a 1$ liberty can be bought by an associate right now for 95.7 cents. (Not a huge profit)

    But merchants who accept liberty dollars profit by giving liberty dollars as change– They profit because not every merchant in town will accept liberty dollars, so if a customer voluntarily agrees to accept the liberties as change, they will most likely come back and use the liberties in the future for more purchases, making a repeat customer. More sales means more profits. The more people who use liberty dollars in a community will bring business to those merchants who accept the liberty dollars. That is how they profit.

    It is not a multi-level marketing scheme, however, you can call it a single-tier sponsorship program, much like amazon.com or paypal use. For every associate you personally sponsor, you get 100 liberty dollars. No multi-level marketing. It’s designed to encourage more people to use the voluntary currency.

    Comment by OGC — November 18, 2007 @ 1:46 am
  72. small correction to above entry- A liberty can be bought for 95.3 cents by an associate, not 95.7– sorry for the mathematical error.

    Comment by OGC — November 18, 2007 @ 1:58 am
  73. I find this to be the most important debate in modern American times.

    My name may be familiar to some from my position and demands for deeply honest answers (regardless the pain) toward understanding 9/11 and the wars based upon its arguable myth. Yet, I’d sooner trade the importance I see in THAT issue, behind the importance of coming to grips with the nature and mechanisms fraudulently underwriting the U.S. Dollar.

    We will have plenty of time to investigate and apprehend the crafty players behind 9/11, if only we can survive the turmoil afoot in unraveling the most massive and deleterious “money” scam the world has ever seen; the U.S. Dollar unconstitutionally created out of thin air through the con of Federal Reserve Notes.

    Hold tight dear friends of liberty, freedom, peace and prosperity… our world is going to be rocked hard even further than we may have ever imagined.

    Could it possibly be, that the occupiers of high office in U.S. governance are so completely ignorant of the details in this case… OR, that influential movers and shakers KNOW exactly what they are doing, traitorously cognizant that what they do imperils America to her core? “A plan” of hellishly devious greed and power of the few seeking control over the many?

    The truth will out, for she is unstoppable.

    Erin S. Myers

    Comment by Erin S. Myers — November 18, 2007 @ 8:34 am
  74. Brad,

    “It would, if they kept the same base rate, mean that $1 ALD is MORE valuable than $1 USD, instead of the current state, where $1 ALD is LESS valuable than $1 USD.”

    The problem is that the USD continuously falls in value as the money supply is inflated.

    This causes a problem for both NORFED and the government.

    NORFED tries to solve it by step adjustments in the value of the silver ounce ALD so that it alternately jumps above and then decays back towards parity, tracking the USD price of silver, over the long term.

    Yhe government tries to solve the problem by first shifting from precious metals to ever cheaper base metals, and when even that can’t keep up with unrelenting money supply inflation, it declares that it is illegal to melt down pennies to recover their copper value.

    And the government makes no attempt to otherwise deal with previously minted coins that price themselves out of circulation.

    Regards, Don

    Comment by Don Lloyd — November 18, 2007 @ 8:50 am
  75. ONE DAY WONDER, HERE!

    Why should it be incumbant upon the consumer & small business owner to constantly
    re-calculate the amount of silver they want to trade for a consumer good or servive,
    when a perfectly good index exists: prices denominated in Federal Reserve Notes.

    The companies/industries involved have made an in depth study of their selling prices, even
    going as far as hedging input costs & foreign currency exposure.

    In a regime of silver money the consumer & businessman could make adjustments
    in the amount of silver traded for a good or service since there would be more information
    on the relationship of silver to goods/services(comparable to FRN price information now).

    At this date constant inflation makes on going re-calculations of prices denominated in ounces of silver impractical.

    Interst in the ALD comes from the FRNs failure as a store of value and not as a medium of exchange.

    Denominating the ALD in FRNs is essentially is it’s own “Suggested Retail Price” to trade for consumer goods
    & services denominated in FRNs.

    The value added components of the ALD over silver bullion.

    (1.)SUGGESTED CURRENT 1:1 RELATIONSHIP TO FEDERAL RESERVE NOTES.

    (2.)ALD HAS POTENTIAL AS A STORE OF VALUE/HEDGE AGAINST FRNs.

    (3.)NOVELTY VALUE: TRANSACTING IN ALDs CAN BE VIEWED AS A POLITICAL STATEMENT/VOTE AGAINST FRNs.

    On the wholesale level(original ALD purchaser): if the attributes and potential for use of the ALD is viewed to be worth less
    than its cost in FRNs, limited transactions will occur.

    On the retail level: if the retail price realizable in ALDs is viewed to have less utility than the retail price in FRNs,
    Gresham’s Law suggests limited transactions will take place.

    Comment by recordman — November 18, 2007 @ 11:03 am
  76. ONE DAY WONDER, HERE!(EDITED & REVISED)

    Why should it be incumbent upon the consumer & small business owner to constantly
    re-calculate the amount of silver they want to trade for a consumer good or service,
    when a perfectly good index exists: prices denominated in Federal Reserve Notes.

    The companies/industries involved have made an in depth study of their selling prices, even
    going as far as hedging input costs & foreign currency exposure.

    In a regime of silver money the consumer & businessman could make adjustments
    in the amount of silver traded for a good or service since there would be more information
    on the relationship of silver to goods/services(comparable to FRN price information now).

    At this date constant inflation makes on going re-calculations of prices denominated in ounces of silver impractical.

    Interst in the ALD comes from the FRNs failure as a store of value and not as a medium of exchange.

    Denominating the ALD in FRNs is essentially is it’s own “Suggested Retail Price” to trade for consumer goods
    & services denominated in FRNs.

    The value added components of the ALD over silver bullion.

    (1.)SUGGESTED CURRENT 1:1 RELATIONSHIP TO FEDERAL RESERVE NOTES.

    (2.)LIMITED ACCEPTANCE AS A CURRENT & FUTURE MEDIUM OF EXCHANGE(UNTIL THE BUST?), COUPLED WITH POTENTIAL AS A STORE OF
    VALUE/HEDGE AGAINST FRNs.

    (3.)NOVELTY VALUE: TRANSACTING IN ALDs CAN BE VIEWED AS A POLITICAL STATEMENT/VOTE AGAINST FRNs.

    On the wholesale level(original ALD purchaser): if the attributes and potential for use of the ALD is viewed to be worth
    less than its cost in FRNs, limited transactions will occur.

    On the retail level: if the retail price realizable in ALDs is viewed to have less utility than the retail price in FRNs,
    Gresham’s Law suggests limited transactions will take place.

    Comment by recordman — November 18, 2007 @ 11:38 am
  77. Respectfully I must comment, that in review of this situation, this case is quite significant. I am very familiar with commerce law and legal tender case law and the government is skating on very thin ice in this matter. It would not surprise me if the Liberty Dollar folks win this matter in court, and rather quickly. If the silver and gold rounds are not an exact copy of US Treasury products, than there is no counterfeit subject matter in the case. And indeed the US Mint has admitted this. And as far as spending them, one is not obliged to accept legal tender any more than one is required to accept a credit card. The term “current money” actually means “legal tender”, and all legal tender means is it is acceptable for payment of government taxes. The Liberty Organization appears to have always been quite clear that their product is not legal tender any more than Disney Dollars are, as old brochures and website disclaimers dating back to 1998 declare this. The comments about it MLM are a smoke screen, and it is obviously not MLM as there is only one level, a referral fee to another associate. Additionally no one was forced to accept them, how could they be? It is voluntary to accept the green money, so how could one be forced to accept anything they do not explicity choose to accept. If a vendor did not like it, they would give it back and ask for something else. There are close to 90 different circulating currencies in the US and we have our own in my town as well, this is just one that was precious metal based and albeit, the only one I would have been inclined to accept too. And that is what the US Gov is mandated to produce, but is not. So it is a thorn in the government’s side as it not following its own mandate, but the private sector fulfilled the mandate and obviously the peoples will judged by the 20 million in circulation. I have 3 myself. The dollar peg and other comments about it are all a smokescreen being put forth by the government and you are buying into it. Its a sad comment that you would not accept something that has real intrinsic value over a promise. It appears the government is taking advantage of peoples ignorance of these legal terms such as “current money” and “legal tender” and yourself included has the same misunderstandings. I wish Liberty Dollar luck in their suit and I would be honored to be on their legal team.

    Comment by T. Samuels — November 18, 2007 @ 11:52 am
  78. Correct me if I’m wrong, but when the LD folks changed the base value from $10 to $20 you could turn your $10 pieces in and have them exchanged for $20? Wouldn’t that mean that you made $10 just for holding on to the Liberties? That’s not a scam, that’s ten bucks in profit just for holding on to your Liberty Dollar until the spot price rose to a certain level.

    The Fed could do the same, only they’d have to take your $20 bill and give you back a $10 bill to accurately reflect it’s loss in purchasing power. With the silver round the LD folks are re-stamping it to reflect it’s increase in value. The holder of the Liberty Dollar is the winner here. Having it re-stamped is visual confirmation of this. I am not sure if they charge a substantial fee for the re-stamping or what the postage cost is, but I think it is marvelous that I could have a currency that doubled in value each time the prices of silver, gold, or copper hit a certain price benchmark.

    What kind of a “scam” is this where your money doubles in value every few years? I want to be “suckered” by that kind of scam!

    Comment by Christopher Burch — November 18, 2007 @ 1:05 pm
  79. It absolutely amazes me the amount of ignorance there is in our society about such matters.

    Money in this country used to be a measurement of weight. The dollar represented a certain number of grains of gold or silver, and it was a definable quantity. When something was stamped $20, that meant it had 20 times the specified number of grains of gold or silver in it.

    There is a rule of law, and there is a basis of inherent rights in the United States of America. We have certain abilities as citizens in this land, but only if we stand up and hold on to those rights. The moment we sit down and say “okay” when they step forward and take away that which we are endowed with by our creator, then that is the moment we voluntarily hand over power and authority to something which otherwise would not have had it.

    There have been three attempts in this country to introduce a central bank. The first two occurred in the early 1800s and were shut down quickly. Andrew Jackson wrote that the second bank of the the United States was “a brood of vipers, and I intend to route you out!” It’s actually a significant matter of historical irony that he appears on our most common denomination today in the Federal Reserve Notes (FRNs).

    We do not have money in this nation. Find an old Black’s Law dictionary from before the 1920s. You’ll find a definition for the dollar as a specific weight of gold or silver. Find one after that time, and it’s a circular relationship tied to cents. A dollar is 100 cents. A cent is 1/100th of a dollar. There is no longer a finite, tangible correlation to anything.

    The Federal Reserve Banking Sysem is not federal, it’s a group of private bankers. And they are stealing everything from this nation through their illegal system of credit. The only reason we think we have to abide by their criminal system is because they have set everything in our society up to make it seem that way. And, if it’s been that way forever… it must be right.

    Look at the value of the “U.S. dollar” since 1913, when the Glass-Owen Act was passed which created the Federal Reserve. It has decreased 25x!!! What used to cost 4 cents, now costs one dollar. That decline is unprecedented in our nation’s history because the dollar used to be a measurement of weight referring to gold or silver. And that value didn’t change significantly over time.

    From 1635 until 1913, the “U.S. Dollar” was fairly consistent, at around 25 times what it is worth today. That’s 275 years it maintained its value. Since I’ve been alive, 1960s, the value of the dollar has decreased 5 times. What used to cost 20 cents, now cost a dollar.

    We (the U.S. citizens) are being taken advantage of by a criminal group of gangsters who seem legitimate because they are tied to the government. We need to self-educate, learn the difference between rights and privileges, and then stand upon the rule of law and take back our nation.

    Patriots like Ron Paul who recognize the difference, who are educated, and who believe in controlling government, are the only candidates that should ever be considered. They are the one who will keep this nation “the land of the free, the home of the brave.” It is not that way today under either Democrat or Republican rule. They are both playing for the same side. If you could envision it this way, there’s one puppet master, the Federal Reserve Banking System, and its global partners, and there are two puppets on each hand. But, they’re controlled by the same entity.

    Education is key. Educate yourself about righs. About the fundamental principles of the rule of law. And then stand up for yourself, and your neighbor in so doing.

    Read what George Washington wrote about government. Google “George Washington government force”.

    God bless!

    Comment by Rick C. Hodgin — November 18, 2007 @ 9:39 pm
  80. Christopher: “Correct me if I’m wrong, but when the LD folks changed the base value from $10 to $20 you could turn your $10 pieces in and have them exchanged for $20? Wouldn’t that mean that you made $10 just for holding on to the Liberties? That’s not a scam, that’s ten bucks in profit just for holding on to your Liberty Dollar until the spot price rose to a certain level.”

    Well, actually your currency increased from about $7 USD to about $15 USD over the last several years, regardless of what’s stamped on the round. Your holdings increased in value [relative to the USD] because silver grew in value [relative to the USD], NOT because they re-stamped it at $20 instead of $10. Plus, you “made” $8 USD, not $10 USD, but if you sucker some store clerk into accepting that $20 ALD as if it were $20 USD, then you can say you “made” $10, but I wouldn’t call it ethical.

    Comment by Brad Warbiany — November 19, 2007 @ 8:10 am
  81. Don:

    “The problem is that the USD continuously falls in value as the money supply is inflated.

    This causes a problem for both NORFED and the government.”

    It only causes a problem for NORFED if they are trying to achieve parity with the USD, i.e. if they are trying to create the [false] assumption in Liberty Associates, Merchants, and store clerks that $20 ALD can and should be spent at the same value as $20 USD. The currencies are different, thus it is only a problem for NORFED if they choose to make it a problem.

    It is, of course, a major problem for government (and any of us that use FRN’s).

    “NORFED tries to solve it by step adjustments in the value of the silver ounce ALD so that it alternately jumps above and then decays back towards parity, tracking the USD price of silver, over the long term.”

    Again, if they try to “price” their currency relatively close to the USD, then does it not seem to you like they’re trying to have it used 1:1 for transactions denominated in USD? But that’s fundamentally fraudulent, as it is not 1:1 equivalent. It is always priced such that it is redeemable for less in USD than an equivalent denomination in USD. Thus if you try to spend it as a 1:1 equivalent you’re screwing the merchant, not “using an alternative currency”.

    An alternative currency doesn’t have to track the USD. The proper answer would be to float the currency. After all, wouldn’t it be nice for the Liberty Dollar folks to walk into a store with a $10 ALD (old base) piece and be able to tell a store clerk that 5 years ago, it was worth $6 USD, and now it’s worth $15 USD, because the USD has fallen so badly? Perhaps the holder of that piece can convince a store owner to accept a $10 ALD (old based) piece for an item that is priced at $15 USD (which is ethical) instead of trying to get a store owner to sell him a $20 USD item for $20 ALD (new base, which is closer to $15 USD).

    “Yhe government tries to solve the problem by first shifting from precious metals to ever cheaper base metals, and when even that can’t keep up with unrelenting money supply inflation, it declares that it is illegal to melt down pennies to recover their copper value.”

    Again, there is absolutely NO argument with you on this point. I have my concerns with the Liberty Dollar, but what they’re doing is small potatoes. The actions of our Federal Reserve are capable (and potentially likely) of destabilizing the entire world economy when (if?) it collapses. They’ve built a house of sand, and it seems like the tide is coming in.

    Comment by Brad Warbiany — November 19, 2007 @ 8:23 am
  82. To Brad Warbiany: You conclude the ALD is a scam (albeit less than the Fed scam) because it is initially sold at a premium over the value of the gold or silver content. That is done strictly for practical reasons: The issuers (including the U.S. Government)have always done so so as to not lose money when issuing it. You know, or should know, that gold and silver coin has always had a face value a little above spot value as the real value is constantly changing, even when artificially frozen by the government. Those who claim to descend from a venerable saint like Patrick Henry should be held to a higher standard. I conclude that you’re just an establishment kind of guy without the courage to measure truth by correct standards, as set by We the People (it’s called Rule of Law – ultimately God’s law if we are wise enough to implement His correct eternal principles here on earth where he has made us sovereigns under Him by giving unalienable rights – Tho. Jefferson), rather than what the current politicians in power are trying to enforce (it’s called Rule of Man). Your forefather stood for Rule of Law. You (and all of us) should learn and promulgate it if we ever hope to be in his league.

    Comment by Tom Draschil — November 20, 2007 @ 10:07 am
  83. Tom,

    All references to the founding fathers aside, I believe you’re completely missing my point.

    My issue is NOT that it is sold at a premium. I am not against profit in any way, and I understand that as businessmen offering an alternative currency, they have every right to make as much profit as the market will bear. Since they’ve created a currency that actually holds value (unlike FRN’s), I think it perfectly reasonable that people would be willing to pay above the spot price in USD to hold that currency.

    My issue is that all the public marketing of the currency, and the fact that they are trying to “price” it near but below that of the USD dollar, indicates that they are trying to pass it as an equivalent to the US dollar, not an alternative. They could have left it stamped at $10 ALD and still sold it for $18 USD, because there should be no relationship between what the number stamped on their currency and the number printed on US FRN’s. But they didn’t do that, and the marketing material they offer indicates that the reason they didn’t do so may not be as wholesome as you ascribe.

    The problem, as I see it, is that they’re offering a currency that’s fairly valued at about $15-16 USD, and yet people are trying to buy $20 USD items with it. I wouldn’t even call that a scam (as they can’t control what those buyers try to do with the currency), except that their own marketing is clearly designed to encourage that when they suggest that it should be bought “at a discount” and spent “at a profit”. It’s clear that they want to create the impression that $20 ALD should be used to purchase $20 USD worth of goods, a fundamentally flawed impression.

    I have no problem with them making profit on the currency. I really don’t care what they stamp on it. They could just as easily have made $1 ALD = 1 oz of silver or $100 ALD = 1 oz of silver. Where I think the scam occurs is in constantly trying to re-price the currency near (but below) parity with the USD in order for it to be spent “at a profit” when purchasing goods priced in USD.

    Comment by Brad Warbiany — November 20, 2007 @ 4:17 pm
  84. Liberty Dollar was attempting to create a negotiable item. In order to do that they had to give it a face value.

    Liberty dollars could not be a negotiable instrument it it required all retailers to keep track of the hourly value of silver or gold.

    Comment by Nathan Hickson — November 20, 2007 @ 8:53 pm

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