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Author Topic: Liberty Dollars
JWatts
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Feds seek $7M in privately made 'Liberty Dollars'

quote:
Federal prosecutors on Monday tried to take a hoard of silver "Liberty Dollars" worth about $7 million that authorities say was invented by an Indiana man to compete with U.S. currency.

Bernard von NotHaus, 67, was convicted last month in federal court in Statesville on conspiracy and counterfeiting charges for making and selling the currency, which he promoted as inflation-proof competition for the U.S. dollar.

His Charlotte-based lawyer, Aaron Michel, is appealing that verdict. He wrote in a motion filed Thursday that von NotHaus did nothing wrong because he didn't try to pass the Liberty Dollars off as U.S. dollars.

"The prosecutors successfully painted Mr. von NotHaus in a false light and now the U.S. Attorney responsible for the prosecution is painting the case in a false light, saying that it establishes that private voluntary barter currency is illegal," Michel wrote.

Link

It appears that the Fed will move aggressively against any attempts to start a private currency. It's blatant from the Liberty dollar advertisements that these weren't US dollars. This wasn't a counterfeiting operation. However, it was a currency that could compete with the US dollar. Is it illegal to accept foreign currencies in the US?

I'm further astonished by this:

quote:
The concerns raised by von NotHaus and his group are finding resonance among some state lawmakers, too. About a dozen states have legislation that would allow them to produce their own currency backed by gold or silver in the event of hyperinflation striking the U.S. dollar. North and South Carolina are among those states.

That's partly why von NotHaus' group has been followed for years by the Southern Poverty Law Center, a group that tracks political extremism. Long before the government began its investigation into von NotHaus, the group was raising concerns about the popularity of Liberty Dollars among fringe groups on the far right.

"He's playing on a core idea of the radical right, that evil bankers in the Federal Reserve are ripping you off by controlling the money supply," said Mark Potok, spokesman for the group. "He very much exists in the world of the anti-government patriot movement, whatever he may say. That's who his customers are."

Why was the Southern Poverty Law NGO tracking this? Why did they care?
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starLisa
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quote:
Originally posted by JWatts:
Feds seek $7M in privately made 'Liberty Dollars'

quote:
Federal prosecutors on Monday tried to take a hoard of silver "Liberty Dollars" worth about $7 million that authorities say was invented by an Indiana man to compete with U.S. currency.

Bernard von NotHaus, 67, was convicted last month in federal court in Statesville on conspiracy and counterfeiting charges for making and selling the currency, which he promoted as inflation-proof competition for the U.S. dollar.

His Charlotte-based lawyer, Aaron Michel, is appealing that verdict. He wrote in a motion filed Thursday that von NotHaus did nothing wrong because he didn't try to pass the Liberty Dollars off as U.S. dollars.

"The prosecutors successfully painted Mr. von NotHaus in a false light and now the U.S. Attorney responsible for the prosecution is painting the case in a false light, saying that it establishes that private voluntary barter currency is illegal," Michel wrote.

Link

It appears that the Fed will move aggressively against any attempts to start a private currency. It's blatant from the Liberty dollar advertisements that these weren't US dollars. This wasn't a counterfeiting operation. However, it was a currency that could compete with the US dollar. Is it illegal to accept foreign currencies in the US?

Not to accept them. But apparently, disgusting as it may be, the US government has made it illegal to create currency in the US.
quote:
§ 486. Uttering coins of gold, silver or other metal

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 [1] or imprisoned not more than five years, or both.

http://www.law.cornell.edu/uscode/18/486.html

I can't see any Constitutional justification for this law, but it's the law. Still, the makers of the Liberty Dollar claim that it isn't money. That it's no different than any commemorative medallion, and that while it can be used for barter, it isn't currency within the meaning of the law.

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The Drake
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quote:
"Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism," U.S. Attorney Anne Tompkins said in a statement after von NotHaus was convicted.
Do they have classes to teach officials how to wedge "terrorism" into every prosecution, or does it just come naturally to them?
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TommySama
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quote:
"He's playing on a core idea of the radical right, that evil bankers in the Federal Reserve are ripping you off by controlling the money supply," said Mark Potok, spokesman for the group. "He very much exists in the world of the anti-government patriot movement, whatever he may say. That's who his customers are."
What is the "Patriot movement?" I know people that buy things like this, and I would not* describe them as patriotic.

[ April 04, 2011, 09:21 PM: Message edited by: TommySama ]

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TomDavidson
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By "patriot," they mean "traitor."
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edgmatt
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Some state towns print their own money already.
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TomDavidson
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*nod* Actually, several very liberal towns promote the use of all sorts of alternative tender.
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edgmatt
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I had the impression they were more along the lines of tea-party mentality, no?
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starLisa
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quote:
Originally posted by TomDavidson:
*nod* Actually, several very liberal towns promote the use of all sorts of alternative tender.

And apparently, they're all in violation of the US penal code (not that the federal government is Constitutionally authorized to have a penal code, but whatever). But laws are enforced selectively. A "very liberal town" doesn't have to worry about that law being enforced.
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edgmatt
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Well, your quote from before Lisa talked about coins and metal. Does the same thing apply with paper money?
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Pyrtolin
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quote:
Originally posted by TomDavidson:
*nod* Actually, several very liberal towns promote the use of all sorts of alternative tender.

With a key difference that they present it as an extension of the dollar, not a replacement for it, and, if they're doing it right, fully track them for tax purposes. At that point it's no different than offering local coupons.
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edgmatt
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That's what I was going to ask: If we aren't allowed to print paper money, how do coupons and the like work?

As far as I understand, these towns are doing it perfectly legally. I really really like the idea too.

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JWatts
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You can not print anything that is advertised as and/or is printed with the phrase 'Legal Tender'. All of the alternate forms of currency can only be used if both parties agree to use them in a transaction and all appropriate taxes are paid.

So if party A wants to give party B an alternate currency to pay a debt in the US, party B can legally refuse to accept payment, since the currency is not 'legal tender'.

Furthermore, under the US Code dealing with Counterfeiting and Forgery there is a statue that prevents any kind of metal coinage.

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Pyrtolin
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quote:
Originally posted by edgmatt:
That's what I was going to ask: If we aren't allowed to print paper money, how do coupons and the like work?

As far as I understand, these towns are doing it perfectly legally. I really really like the idea too.

More should; it addresses our fundamental economic problem right at the root- too many people, not enough circulating money to go around.

The places that implement it even moderately well see solid performance from it.

Good characteristics seem to be:
- backed by local reserves of US currency
- depreciating value, except when used to pay local taxes (that mostly only affects trade-in for dollars value, making them full value for local taxes means that you can generally still buy stuff with them at full value because businesses want to use them instead of US currency for said taxes)
- supplied through public wages and nonprofits (who can buy them at a discount)

For bad implementations, see: California where appreciating values in particular set up extremely perverse incentives and make them completely uninteresting to businesses for tax purposes.

Between encouraging their cities and towns to do this and setting up State Banks, a la North Dakota, most local and state budget problems would disappear and we could leave Wall Street to fend for itself.

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ken_in_sc
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Merchants in Myrtle Beach SC have accepted Canadian dollars at par for years. I think loonies are actually at par now.
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DonaldD
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Loonies are worth far more than the greenback now... pretty soon most places here will stop accepting your funny money, holding out for a real currency instead [Smile]
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JWatts
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Currently the exchange rate is:

1 USD/0.96 CD

So about a 4% difference. I guess that might look like a lot to a Canuck. [Big Grin]

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TheRallanator
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quote:
Originally posted by JWatts:
Why was the Southern Poverty Law NGO tracking this? Why did they care?

The article tells you why: because this kinda "We can't trust the US Dollar" craziness tends to go hand in hand with various other much less harmless-sounding kinds of craziness. The main market for this kind of thing is the sovereign citizen movement and other fringe groups which believe (for various convoluted reasons that only make sense if you drink their brand of kool-aid) that the government is illegitimate. And if it's your job to track loony fringe movements then it makes sense to keep an eye on businesses which cater specifically to their paranoia.
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TommySama
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quote:
The main market for this kind of thing is the sovereign citizen movement and other fringe groups which believe (for various convoluted reasons that only make sense if you drink their brand of kool-aid) that the government is illegitimate.
I'm trying to imagine a situation that would cause Randians to commit collective suicide... [Big Grin]
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Pyrtolin
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quote:
Originally posted by TommySama:
quote:
The main market for this kind of thing is the sovereign citizen movement and other fringe groups which believe (for various convoluted reasons that only make sense if you drink their brand of kool-aid) that the government is illegitimate.
I'm trying to imagine a situation that would cause Randians to commit collective suicide... [Big Grin]
Letting them have their way would mostly do it. There'd just be a lot of collateral damage in the process.
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TheRallanator
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quote:
Originally posted by TommySama:
quote:
The main market for this kind of thing is the sovereign citizen movement and other fringe groups which believe (for various convoluted reasons that only make sense if you drink their brand of kool-aid) that the government is illegitimate.
I'm trying to imagine a situation that would cause Randians to commit collective suicide... [Big Grin]
Oh no, a lot of these folks make Randroids look sensible by comparison. Plenty of objectivists will tell you that the federal government in its current form is dumb and counterproductive, but it's not a tenet of their religion to claim that the entire government has been illegal since the gold standard was abandoned.
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RickyB
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"I can't see any Constitutional justification for this law, but it's the law. "

You mean other than the fact that a monopoly on the issuance of legal tender has been a hallmark of sovereignty throughout history?

"Still, the makers of the Liberty Dollar claim that it isn't money. That it's no different than any commemorative medallion, and that while it can be used for barter, it isn't currency within the meaning of the law."

If this is true then the makers have a case. Still, by calling them "dollars" they were asking for trouble.

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TheRallanator
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Trying to pass off what they were doing as just selling collectibles is gonna be tricky. What with the way they guaranteed the value of their dollars and certificates with precious metal, printed US dollar values on their product, and helped get the word out about businesses which were willing to use Liberty Dollars in their transactions.
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