Competing Currency in the USA

Presidential candidate and Libertarian leader Ron Paul claims that Americans are held hostage to the unsound currency manipulations of the United States Federal Reserve. Essentially, Ron Paul is about as big an inflation hawk as you will find. He doesn't care for fiat money and believes that in the very least Americans should be able to choose the currency that they use. To this end he has proposed that Americans be allowed to use competing currencies. An American corporation, NORFED, has taken up the charge and is issuing notes backed by gold and silver and coins. This "currency" is more popularly known as the "LIberty Dollar." The problem is, this is apparently illegal. In November of 2007, federal agents raided NORFED and confiscated 2 tons of copper coins and 500 pounds of silver coins. According to the United States Mint:

Under 18 U.S.C. § 486, it is a Federal crime to pass, or attempt to pass, any coins of gold or silver intended for use as current money except as authorized by law. According to the NORFED website, "Liberty merchants" are encouraged to accept NORFED "Liberty Dollar" medallions and offer them as change in sales transactions of merchandise or services.

NORFED tells "Liberty associates" that they can earn money by obtaining NORFED "Liberty Dollar" medallions at a discount and then can "spend [them] into circulation."

NORFED’s "Liberty Dollar" medallions are specifically marketed to be used as current money in order to limit reliance on, and to compete with the circulating coinage of the United States. Consequently, prosecutors with the United States Department of Justice have concluded that the use of NORFED’s "Liberty Dollar" medallions violates 18 U.S.C. § 486, and is a crime.

3 comments:

Dean

March 1, 2008 at 4:32 PM

But, It's not illegal. The organization contacted everyone they needed to so that they could be sure it wasn't. The only thing that would make it illegal would be calling them "coins", but on their website they specifically ask people not to call them coins. The FBI raid was illegal and unwarranted. But this country has lost many of its freedoms, so the FBI can do anything it wants.

das Kapitalist

March 3, 2008 at 1:28 PM

Interesting comment. One thing that is clear is that NORFED was promoting the Liberty Dollar as currency. A second issue is that Ron Paul himself introduced a bill to make competing currencies legal, why do this if it is already legal?

dean

March 7, 2008 at 8:18 PM

"The Liberty Dollar is a warehouse receipt for a specific weight of pure .9999 fine gold or .999 fine silver that is stored in a warehouse in accordance with the Uniform Commercial Code (UCC). The warehouse receipt is your proof of ownership, which means if you hold the receipt, you own that gold and silver"
-http://www.libertydollar.org/ld/about/intro.htm
They do not claim to be currency.