Lively debate, moved back to top.
We’ve written about Liberty Dollars before. Essentially a bunch of militia-type nutjobs think the country should go back to gold backed dollar. So they took the first step and coined their own “dollars” and claim to back them with gold. (Why they didn’t just coin real gold is beyond me!) Well, the party is about over as the Feds are cracking down.
The International Libertarian – September 14, 2006:
In a stunning development in the private currency movement, the US Mint today announced that, along with clarifications about the private collectible medallions of other private mints not being US Mint issued, was the headline story that the Mint claims the Justice Department has declared that the National Organization for Repeal of the FEDeral Reserve Act (NORFED), its widely known Liberty Dollars, and anyone who uses Liberty Dollars in commercial transactions, is in violation of federal law.
This challenge by the Mint is obviously a threat to private minters. The Mint has recently taken up a campaign to “warn” the public about the fact that many privately minted medallions are not US Mint issue. This is rather obviously a ploy to drive down the collectible value of these private coins and drive up the value of official US Mint specie coins.
A possible second consideration may be that the Liberty Dollar is a talisman of the libertarian, anti-tax “Patriots”, anti-Federal Reserve, and other populist movements. That there are other private currencies in wide circulation in four states is not mentioned by the Mint.
That there are other private currencies in wide circulation in four states is not mentioned by the Mint.
And those 4 states would be: delusion, confusion, denial, and …?
This is completely senseless. These Liberty Dollars are not counterfeits, and they were not passed off by those involved as such. This is merely a case of the federal government involving itself in something which is essentially a trade of private property between two individuals, and, most importantly, was not harming anyone.
Sure, the Liberty Dollar movement wasn’t going to become a mainstream currency. Their goals, however, did make sense; ever since the US dollar was taken off the gold standard, inflation has provided for a constant decrease in purchasing power. The Liberty Dollar suppliers were essentially social activists who questioned the current Federal Reserve policies, and advocated returning to the gold standard, which they believe would decrease inflation. Calling them “Militia-type nutjobs” simply shows that you have little valid criticism of the Liberty Dollar movement, and that you’d rather resort to childish namecalling and an absurd comparison of social activists to paranoid extremists who are willing to violently oppose the federal government.
June, many of the people involved in the ‘private coinage’ movement (L0L!) are indeed folks who want to put an end to the U.S. government, either by secession or attack. The fact they do not have the means to do either does not mean that is not their goal.
Furthermore, consumers who get involved in stuff like this often end up in the (gasp!) U.S. legal system when they discover their currency, property, coronation, whatever, has no real world value. By issuing a warning, the Federal Reserve will alert some people who will stumble into the Liberty Dollar movement unaware of its lack of legitimacy. They can then make an informed decision.
Sorry to use your post as an example, juno660, but….
Juno660 made a reference to the editors with some negative comments. And that’s perfectly fine with me. I’m just noting it because my comment was edited and not his. My issue was on a religious post. This one is not.
I wonder if, in retaliation and to seem consistent, juno’s post will be edited, too, which would just prove my point even further.
I’m not trying to “stir up trouble” or anything for the sole purpose of making someone mad or make trouble. I’m just trying to understand why my post was edited when countless other ones written in similar fashion have not been edited.
I understand that people who are opposed to the federal government to a similar level as many militia groups may be contributing to the Liberty Dollar movement, but this isn’t enough to say that the entire organization would either desire to attack or secede from the US. Militia groups often have such extremism in the core of their ideologies, but the Liberty Dollar movement is an organization which is dedicated to the single issue of advocating a proposed replacement of the Federal Reserve System, and doing so by democratic means.
Issuing a warning and trying to make a simple trade of private property illegal are two very different things. The Mint does have the power to alert consumers when it suspects that such things are happening, and I never said that merely informing the public was wrong. I said that it was wrong to call someone a criminal merely for trading an item for private currency. How can the intentions of the Mint be to inform people so they can make a free decision, when they assert that even making the decision in question is a federal crime?
“Why they didn’t just coin real gold is beyond me!”
Well, for one thing, a one dollar gold coin would be absolutely miniscule. It would be useless for any kind of coin based transactions. When you consider that American Eagle one ounce gold coins are going for around $600, a one dollar gold coin would be a fraction of the size of your standard collar button.
What should be done is that the silver coin should be brought back. There is so much silver in the world that no one bank, not even the Federal Reserve Bank, can control it’s value. It’s value would be based solely on it’s silver content. Real gold is so scarce now that only the world’s central banks control it’s market value. These banks can change the market value of gold on a whim by releasing a fraction of their reserves into public circulation thereby flooding the market.
But, as you probably know, there are no U.S. gold, silver, or even copper coins anymore. Cut open a penny and you will see it is made of zinc. If they made any of these coins out of their original metal, their value would be many times greater than their face value.
The photo above is the US Mint’s dollar, not the coin in question.
See here: http://www.libertydollar.org/ (Thanks! SN)
Isn’t this the bartering system at work? The coins don’t seem to have any Mint trademarks on them other then the word “dollar”. Is the US Government afraid of its position of power?
Katrina was a good indication of how the governmental system can collapse on a small scale. Imagine if it were Washington DC instead of New Orleans.
I’m not saying we should overthrow the current government, but they have brought this lack of popularity upon itself. The terrorists of 9/11 have basically done their jobs. We are a nation in fear run by power-hungry, greedy men.
“Well, for one thing, a one dollar gold coin would be absolutely miniscule.”
Or would be big enough to be worth a lot of fricking money!
1 (Mike Voice): I’m certain of only one, the local currency used in Ithaca, New York. They’re called Ithaca Hours. See also The Wikipedia Article.
But, as you probably know, there are no U.S. gold, silver, or even copper coins anymore
Not excactly true. The one ounce American gold eagle is legal tender and has a face value of $50 and the one ounce silver coin $1 even though the value of thier metal is much more. True they are not used in everyday transactions, but they are real coins.
What good is a $600 gold coin in day to day commerce? Do you really want $599.50 in change from a coke machine?
That is why you have a one dollar coin that is “backed” by one dollar’s worth of gold. It may be made of $.001 worth of zinc but you can trade it in for $1 worth of real gold any time you like.
Today’s paper dollars say “Federal Reserve Note” and “This note is legal tender for all debts, public and private” (take heed to the word “debt”). The old silver certificate dollars of long ago said “five dollars in silver payable to bearer on demand”. Now that five dollar bill was always going to be worth $5.
What’s the difference? The later has real world value that does not change over time, unlike the Federal Reserve note which changes at the whim of the likes of Alan Greenspan. When he wants to lower the value of the dollar, he changes the prime lending rate. And your bank account drops in real world value immediately.
And make no mistake, the dollar, over time, never goes up in value. It may fluctuate against other currencies, but it always goes down in real terms at the same rate as the Fed’s prime lending rate. That is how the Federal Reserve makes money. And, yes, it is, in actuality, a privately owned bank that is run FOR PROFIT. It is not here to support commerce. It makes money by charging interest on worthless paper that it is legally authorized to print.
Oops, I stand corrected. The U.S. does make gold coins. But they sell them at 30 times their face value. They will sell you one for $600 but, legally, it is only worth $20. What a scam.
Oops, again. $50, not $20.
Correction: There are two types of Liberty Dollar currency: coin specie, which are silver and gold minted coins, in greater fineness and weight than US Mint issue (and better condition, so they are more collectible, all LD coins are issued in the best mint condition), then there are LD Warehouse Receipts, which are printed paper warehouse receipts for x amount of silver or gold, deliverable upon demand to the bearer (which is far better than the Federal Reserve Note, which isn’t backed by anything but US government debt, with over $9 trillion in FRNs in circulation, there is less than $11 billion in gold in Fed posession, at market prices).
Correction 2: Bernard von Not Haus, founder of NORFED, isn’t a “militia wacko”. He’s never belonged to a militia. He is the retired mintmaster of the Royal Hawaiian Mint.
– Mike Lorrey, Publisher, The International Libertarian
I like the old analogy about the value of a good suit. It has been said that a good suit from a clothier always cost one gold coin. It was true in 1776 and it is true today. A good suit in 1985 would cost you about $300. Today, it is closer to $600. That is the same as one ounce of gold at that point in time. That means that the gold held it’s value (one suit) and the dollar has plunged by 50% (from one suit to a pair of slacks). This is real reason for the desire to have currency backed by gold. That will stop inflation in its tracks.
Of course, then the Federal Reserve can’t charge interest and, hence, makes no profit.
Make no bones about it, the Federal Reserve has a monopoly on money in the United States and will do whatever it takes to protect that monopoly. It is analogous to Microsoft trying to destroy any company that threatens its monopoly on software. The Fed will use their power and influence to crush this “Liberty” dollar movement.
Again, I don’t believe the bartering system is illegal. There are many businesses on the Canadian border that will take US Currency as payment.
Maybe the NORFED coins should remove “USA” and “Dollar” from the surface and add “NORFED” and “Clams”. If a business accepting these coins do not pay the taxes on the transaction then thats the business’s fault, not the items used.
Will the Federal Reserve start banning the barter of chickens for fresh pies, something thats done often in the mid-west.
Shouldn’t politicians be taxed on favors bartered for votes?
“That is why you have a one dollar coin that is “backed” by one dollar’s worth of gold.”
Tell you what, Mr. T. Buy a sufficent quantity of Liberty Dollars and then ask them for your real gold. When they give it to you we’ll talk.
What is the tax on a “chicken for pie” trade? That’s part ot the problem. The state government wants to be able to track and tax all transactions, the federal government wants to tax all profit from “income”, and the Federal Reserve wants to skim profit off of every dollar printed. That is a triple whammy. Hence, barter and private coinage are BAD and must be eliminated. And it is every citizen’s patriotic duty to comply! Or go to jail, whichever you prefer.
16. “Maybe the NORFED coins should remove “USA” and “Dollar” from the surface and add “NORFED” and “Clams”. Hmm, how about “simoleons” instead? And “credits” sounds too sci-fi. Personally, I would like to see the historically significant “greenbacks”.
Sorry if I am longwinded on this subject but the Federal Reserve is my number one pet peeve. Microsoft is number two. Monopolies suck.
SN, don’t get me wrong, I want the U.S. government to go back to silver and gold. I have no inate trust of the Liberty coin founders. After all, the central banks started in this same way. They printed paper receipts for gold on deposit and then proceeded to print more receipts (read bills) than they actually had gold to deposit. Hence, the beginning of the “fractional reserve” banking system, i.e. more money in circulation than gold on deposit. The Federal Reserve has grown out of this 500 year practice.
“SN, don’t get me wrong,…”
I think we’re missing each other’s point. Let me explain a little better. To me merely “backing” dollars with gold is no different than backing dollars with nothing. In both systems all we have is the trust that the money is worth something. The only solution is to make the money out of gold. That way we know exactly what we’re getting.
On a side note, I’m also not entirely sure how backing money in gold is any different than backing it in anything of value. The “value” of gold goes up and down just like bananas, gravel, and water. So why pick gold? Why not anything?
I propose we back our money on either Beenie Babies, Motley Crue CDs, or Rubic’s Cubes. Heck, maybe even on shells!
The idea of making the coins out of gold just means that you are bartering with gold, regardless of what form its in or whats stamped into it.
Making the coin would be easy. Make the $20 coin a large ring of some cheap metal and have the center portion out of gold. Similar to the two-tone two-nie of our “Americans Without Guns” to the north.
Why doesn’t Montana or any other state just succeed from the union. Then they can do what they want. Maybe I’ll move there as long as their medical coverage is better then what the US has now.
SN – “The “value” of gold goes up and down just like bananas, gravel, and water. So why pick gold? Why not anything?”
I agree. Anything can be used as currency. Even sticks, as was done in medieval England (this is true, they used coded sticks of wood with duplicate backups at the treasury).
That is why I really would like to see silver because the mere volume of silver is beyond the scope of control of central banks. All the gold in the U.S. can be stored in one Fort Knox (BTW, it is up for debate what is actually stored there today) but there is so much silver it would would take fifty Fort Knoxes to hold the equivalent value. Silver is just too plentiful for any one group to monopolize. Hence, it has the monetary stability that gold cannot ever have. And it is mintable, unlike sticks or beenie babies or whatever.
And buying a coke with a silver coin is much more reasonable than doing so with a gold coin.
Anyway, it is all academic. The monopoly is in place and the money brokers like it the way it is. It will not change with our current system. However, I don’t see why individuals shouldn’t be allowed to do it. I give the Liberty Mint an “A” for effort but actual silver coinage seems like the the way to go.
“I don’t see why individuals shouldn’t be allowed to do it.”
The Feds/IRS hates bartering because it cannot be traced! You’re actually legally supposed to report bartering on your tax forms, although I’m not entirely sure how or where you’d do it. 😉
SN – “The Feds/IRS hates bartering because it cannot be traced!”
Bingo! Give that man a cigar!
Has anyone bought these coins and exchanged them for gold/silver?
I notice Amazon has them at 10% off face value in some cases. Could make a killing if you were willing to take a risk.
Sorry, but I use Liberty Dollars and I’m no militia type nutjob. I’m a 25 year old US Citizen who came here from communist (then) Czechoslovakia. My degree is in Computer Science and I work as a database analyst/developer for the leading health insurance company in my state. I work in downtown Boston and consider myself a city guy. I have no plans to violently overthrow the US government. So no, those of us who believe in using private currency are NOT all nutjobs. In fact, I’ve yet to meet anyone using this who would fit into the childishly used stereotype.
It’s too late at night for me to get into why I use this, but I wanted to post on the idiotic reference to the kinds of people who use private currency. If you really believe that we’re a free country, then what’s to stop Joe Blow from making his own Joe Blow dollars and people deciding whether to use them or not?
Look at, I think it was Brazil where in a microcosmic context this worked. In one small rural area there was a weekly market where people exchanged food and utility type items. The market started issuing it’s own “vouchers” which were in effect its own private currency. The national government eventually came down on them because it wasn’t able to track spending and therefor taxation. Sorry for this lax example, but I’m tired and just wanted to get this out there.
Thanks guys, gotta love this blog.
The government never likes competition. People might get the wrong impression that we can make choices that are better than the people who want to rule over our lives.
This reminds me of this artist some years ago that would go into restaurants and while he’s eating and being served would draw a $100 bill onto a piece of paper. Just using a pen he would perfectly (well, very very close) draw a $100 bill and at the end of the meal he would tell the manager that he has a work of art there and if they would be willing to say that this work of art was worth $100, would they trade that piece of artwork for the value of the meal?
They made a documentary of it and many people did trade the drawn money for goods. The feds were watching closely and say that he was walking a VERY fine line, but I can’t remember if he ever really got into trouble over it.
15 That will stop inflation in its tracks.
I disagree.
Your example has nothing to do with stopping inflation, it is just showing that gold inflates as fast as everything else – so it all cancels itself out, somehow…
15 A good suit in 1985 would cost you about $300. Today, it is closer to $600. That is the same as one ounce of gold at that point in time.
But when looking at something less than 30-years, I see a different picture.
http://www.finfacts.com/Private/curency/goldmarketprice.htm
and the 5-year graph at
http://www.galmarley.com/
The high price for gold in 2001 was $294.80
5 years later, the high price was $730.00
Stopping inflation means you would be giving the tailor one coin for the suit in 2001, and 1 coin for the same suit in 2006 – because the value of the coin wouldn’t have doubled.
Mark T.
I see your passion about the Federal Reserve. Unfortunately, your passion is a little confused. You have made several errors.
The Federal Reserve, is not a privately held company. It is a division of the Federal Government and is responsible for monetary policy. Congress is responsible for fiscal policy. Being a Federal Department, the Federal Reserve is not and by definition, can not be a monopoly. NOTE. We control the Federal Reserve through our elected representatives.
In order to have greater control over the government’s finances and national economy, the whole monetary system has been gradually changed until Nixon finally removed the paying in gold upon demand. Now all U. S. money is backed by the assets of the Federal government. And the Federal government is worth a lot more then all the gold, silver, diamonds, platinum, and limestone available in the entire world. Most government minted gold coins are sold at a profit and that profit is used to subsidize the printing and coinage of local currency.
The amount of gold in various government’s control is less then the amount held privately. The industrial uses for gold have about the same influence on the value of gold as does international happenings. Most gold mined today ends up being used for industrial purposes. Industrial uses include jewelry, electronics, and decorative.
Gold and silver are poor metals for mass circulation coinage. Both are soft metals and wear too easily. Both, and especially gold, is especially prone to clipping, or the removal of small amounts of metal from the edges which are saved and sold as base metal.
While it is not illegal to barter or use an agreed upon tangible item as value, it is wrong to hold out or even suggest the item is worth more or is something it isn’t. If the Liberty Dollar and the passer gives the recipient a suggestion that this is backed by the assets of the Federal government, then that becomes fraud. It is the government’s duty and interest to protect its citizenry from fraudulent activities. So the passer might not even need to say anything, if the coin resembles or suggests that it is government issue and the receiver accepts it as legal tender then a fraud is committed.
Your biggest error is the assumption that the government is an US vs THEM thing. We elect the government. If they do something against your philosophy, then tell your representative. If they don’t listen, then next election vote for someone else. And if none of them see the world through your eyes, then run yourself.