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Creator of competing Liberty Dollar currency found guilty

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The creator of the popular Liberty Dollar currency has been found guilty and faces up to 15 years in prison. He will also be forced to give $7 million worth of minted coins and precious metals to the government, "weighing 16,000 pounds."

Here was the official website before it was taken down by court order.

Norfed.jpg

Edited by brian0918
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Reading about this angers me to no end. I get the feeling he was targeted at least in big part because his currency adhered to a gold standard of sorts. The government was correct in one thing: That it would undermine the U.S. dollar. Because any dollar on a gold standard would be superior.

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Yes, indeed.

What would happen if someone were to market money clearly denominated in troy ounces or grams, with no country name on it?

When the NorFed stuff came out I had to laugh at it, he wanted people to buy an ounce of silver from him at WAY over the current value (ten bucks vs. 3-5 bucks). It was a sucker bet. (I bought plenty of silver back then, just not from this guy.) I believe that later on he kept raising the face value of his silver so he was debasing it just as much as any government could/would. He should not have tried tying his currency to the dollar in any way.

(As a side trivia note, before 1965, the dime held 2.5 grams of 90% silver, the quarter 6.25 grams, and the half 12.5. In other words by specific intent since 1873 our silver money (other than the silver dollar which was heaver than 2 halves/4 quarters/ten dimes) was metric. Of course its face value was much greater than its silver content in (say) the 1920s and 1930s, it took quite a bit of inflation over decades to drive it to the point where the silver was worth more as such than it was in a coin marked "One Dime". So one could make new coins to these standards (but of different design, so you don't get a visit from the Secret Service) and leverage off a large existing base of real money already to that standard. Users of your product could substitute what's now known as "junk silver" (as long as it's not really worn) without any difficulty. Make the base unit 1/4 gram of 90 percent silver and you have the equivalent of the old cent.)

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I've linked a story about a federal case involving the minting of precious medals. Furthermore 70 businesses in a given area agreed to accept the money as payment. The federal Gov't has moved in and classified it as domestic terrorism. It appears that the main individual involved has been convicted and part of the basis is that this was not "legal tender" minted by the U.S. Which speaks directly to the conversation we were having last month. The fed is also pushing to seize 7 million in precious metals as well.

http://charlotte.fbi.gov/dojpressrel/pressrel11/ce031811.htm

http://www.citizen-times.com/article/20110319/NEWS01/110319006/1001/news/Liberty-Dollar-fake-currency-creator-convicted-federal-court?odyssey=nav%7Chead

Edited by logicalpath
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Why are such liberty dollars desirable? Wouldn't it be a lot easier to just use precious metals and I owe yous of precious metals for the same purpose? That way you avoid the risk of fraud charges, and the overhead of paying someone to mint the coins and generally run the whole business.

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Which speaks directly to the conversation we were having last month.

How so? This thread is about the legality of possessing gold, not turning it into coins privately, with the words "United States of America" and "Dollar" on them.

Private companies mint silver and gold rounds all the time. They get into trouble whenever they do something that makes it look like they are producing US money.

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How so? This thread is about the legality of possessing gold, not turning it into coins privately, with the words "United States of America" and "Dollar" on them.

Private companies mint silver and gold rounds all the time. They get into trouble whenever they do something that makes it look like they are producing US money.

While the original topic was whether or not you could legally possess gold, there was also some discussion about "legal tender" and whether or not private businesses could accept anything as "money".

Private companies do mint silver and gold within the U.S, however they must be explicit about it being "commemorative" or a collectible. Many even have U.S. on them or have something related to the U.S Military but they have to make sure that it is clear that it is not MONEY. This particular mint did pull together private businesses to accept their coins as money or to be held "In Trust" as certificates(as many as 70 private businesses). The Gov't seized the gold and silver regardless, even if Liberty Services was only holding(as storage) the precious metals for private citizens or businesses to back contracts.

The Federal Gov't has gone as far as to state that this is a matter of "domestic terrorism". They obviously know what would occur if businesses would begin to accept precious metals as payment for goods & services. In my opinion, if private businesses tried to accept or demand payment in precious metals on any serious scale, I could see the Gov't taking extreme actions. The threat is not where the coins are made or that the company made the coins "look like money". It is that the dollar cannot compete with gold or silver, which is why I don't believe that businesses could openly accept anything but dollars. Take this same case and let's say that Liberty Services would have been a foreign company. My opinion is that the private businesses that pulled together to accept gold and silver would have been targeted as well.

2009 statement in Congress which talks about the situation with Liberty Services

Edited by logicalpath
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Why are such liberty dollars desirable? Wouldn't it be a lot easier to just use precious metals and I owe yous of precious metals for the same purpose? That way you avoid the risk of fraud charges, and the overhead of paying someone to mint the coins and generally run the whole business.
Paper notes -- and even electronic transfers -- are definitely more convenient. One might still want to hold physical gold, in which case one would want to buy from a reliable, well-respected mint, which did not charge too high a premium over the price of bullion.

From what Steve says, the "Liberty dollar" guys were charging a premium that was way above market. From what I understand of the "Liberty Dollar" they were encouraging people to make a political statement more than to use a convenient option. It seems that these guys simply try to make a quick buck on the libertarian attitudes of others. In addition, some fraud and misrepresentation may be involved, but I can;t say for sure.

Nevertheless, outside of fraud, the government should allow people to buy things for ridiculously exorbitant prices, and should allow them to use a currency of their own as long as they do not try to make it look like some other currency.

Update: I looked back at the first post... seems like they did have a paper currency too.

Edited by softwareNerd
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I suspect the terrorism rationale has to do with the possibility this could be used to "money launder" (though that seems a thin rationale to me). I know businesses are generally free to take whatever they want in payment (including barter), so long as they don't evade taxes by doing so.

I suggest we move this discussion (I.e., the parts having to do with NotHaus's scheme) here: http://forum.objecti...=0 [Mod's note: moved. -sN]

Edited by softwareNerd
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  • 2 weeks later...

I read an article today regarding the seizure portion of this case and thought this quote points to some of the discussions we have had in this thread and the one regarding owning gold. If the prosecutor is trying to link the verdict in the case to make "private voluntary barter currency" illegal then the only choice individuals would have is legal tender.

"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.
This quote was from his attorney so whether or not the prosecutor actually used those words or made that case is something I have not been able to substantiate 100%.

Story Here

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I know businesses are generally free to take whatever they want in payment (including barter), so long as they don't evade taxes by doing so.

I'm curious to hear your thoughts on the information contained within the linked article? How do you think that development affects your previous statement about businesses being generally free to take whatever they want in payment?

According to the article the original indictment contained the following language:

Article 1, Section 8, Clause 5 of the United States Constitution delegates to Congress the power to coin money and to regulate the value thereof. This power was delegated to Congress in order to establish a uniform standard of value. Along with the power to coin money, Congress has the concurrent power to restrain the circulation of money not issued under its own authority, in order to protect and preserve the constitutional currency for the benefit of the nation. Thus, it is a violation of law for private coin systems to compete with the official coinage of the United States.

Full Article Here

I recognize that there may be individuals here that have spent significantly more time researching economics, money, etc than I have. However, as someone that has spent some time understanding it myself, I just don't believe that the U.S. Gov't would allow anyone to trade(on any sort of significant scale) with anything but U.S. Federal Reserve notes. That is to say, if a customer of mine would elect to pay me in 1oz. circular pieces of platinum it probably would go unnoticed. However, if several other businesses in Miami-Dade County began to trade in platinum(as a result becoming common-knowledge over time), I suspect the Federal Gov't would have something to say about it. As the platinum continues to trade among businesses it's circulation would expand by default beginning to compete with Fed notes.

*The information in the article is again going off of what the defendants attorney has indicated. That may or may not be a credible source.*

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I'm curious to hear your thoughts on the information contained within the linked article? How do you think that development affects your previous statement about businesses being generally free to take whatever they want in payment?

According to the article the original indictment contained the following language:

Full Article Here

I recognize that there may be individuals here that have spent significantly more time researching economics, money, etc than I have. However, as someone that has spent some time understanding it myself, I just don't believe that the U.S. Gov't would allow anyone to trade(on any sort of significant scale) with anything but U.S. Federal Reserve notes. That is to say, if a customer of mine would elect to pay me in 1oz. circular pieces of platinum it probably would go unnoticed. However, if several other businesses in Miami-Dade County began to trade in platinum(as a result becoming common-knowledge over time), I suspect the Federal Gov't would have something to say about it. As the platinum continues to trade among businesses it's circulation would expand by default beginning to compete with Fed notes.

*The information in the article is again going off of what the defendants attorney has indicated. That may or may not be a credible source.*

The laws of the United States aren't secret information. They are very much available for anyone to read, and decide for themselves whether they say trading in platinum is a legal or illegal action.

I have looked up some of the relevant laws in the past, and it is my conclusion, based on that, that trading in gold or platinum is in fact legal, in any amount. I would love to hear your argument against my position, but you should base that argument on a similar research into the facts of American laws, not on unsubstantiated claims by right wing blogs or defense attorneys.

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In any case the allegation is that NorFed attempted to create a competing monetary system (which is illegal, though it should not be), not set up a system of barter (in kind) exchange (which I was asserting to be legal), so the quote LogicalPath posted is not relevant to the point I was trying to make.

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I would love to hear your argument against my position, but you should base that argument on a similar research into the facts of American laws, not on unsubstantiated claims by right wing blogs or defense attorneys.

The legality is not the issue. The issue is whether or not you are liable to be arrested, prosecuted, and thrown in jail, regardless of the actual legality. So long as the government holds the monopoly on both force and legal tender, there is an inherent conflict of interest in that relationship. So you cannot assume you will get a fair trial, regardless of the legality of your actions.

Nevermind the fact that laws are often written in a vague and contradictory way to leave room for just such individuals who attempt to skirt the system. Talk to Irwin Schiff about the difference between what the law says versus what the legal system does.

Edited by brian0918
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  • 3 weeks later...

In any case the allegation is that NorFed attempted to create a competing monetary system (which is illegal, though it should not be), not set up a system of barter (in kind) exchange (which I was asserting to be legal), so the quote LogicalPath posted is not relevant to the point I was trying to make.

I believe the charge was counterfeiting(in so many words) but I understand your point.

A federal grand jury brought a criminal indictment against von NotHaus and three others in May 2009 in United States District Court in Statesville, North Carolina, and von NotHaus was arrested on June 6, 2009. Bernard von NotHaus is charged with one count of conspiracy to possess and sell coins in resemblance and similitude of coins of a denomination higher than five cents, and silver coins in resemblance of genuine coins of the United States in denominations of five dollars and greater, in violation of 18 U.S.C. § 485, 18 U.S.C. § 486, and 18 U.S.C. § 371; one count of mail fraud in violation of 18 U.S.C. § 1341 and 18 U.S.C. § 2; one count of selling, and possessing with intent to defraud, coins of resemblance and similitude of United States coins in denominations of five cents and higher, in violation of 18 U.S.C. § 485 and 18 U.S.C. § 2; and one count of uttering, passing, and attempting to utter and pass, silver coins in resemblance of genuine U.S. coins in denominations of five dollars or greater, in violation of 18 U.S.C. § 486 and 18 U.S.C. On July 28, 2009, von NotHaus entered a plea of not guilty. Although he was released on bail, later in July 2010 he was jailed again for violating terms of the Appearance Bond.
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Is it? Post the law.

Coinage Act of 1864 which makes it illegal for Private Mints to create coins to be used as "money".

As for your other post, there are some factual laws that make it extremely difficult/impossible to use gold & silver as a currency. U.S. Minted gold & silver coins are considered legal tender, however only if used at face value. That means that a 1oz gold coin would have to be used for a 50.00 purchase, who in their right mind would do that!? If you traded it for it's actual value(or for something in return) then you would have to pay a 28% capital gains tax(explained here). When you consider that gold & silvers current value is a direct reflection of the devaluation of the U.S. dollar it would seem that it is not only a losing proposition but Gov't trying to stop you from trading in this manner.

Edited by logicalpath
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