The E-Sylum:  Volume 8, Number 52, December 11, 2005, Article 20

IN DEFENSE OF THE LIBERTY DOLLAR

Regarding last week's query about The Liberty Dollar,
Gar Travis writes: "Did you see the disclaimer page?"

[The page notes: "I hope by this time that everybody knows
the Gold and Silver Libertys are not "legal tender".
Nor are they "coins", as a "coin" is something issued
by a government and we are not they, nor do we ever
want to be. The fact that the "Libertys" cannot be
described in these terms has been enshrined in the
United States Code, so it is not just numismatic, it
is the law. And as the government also defines "money"
and "current money", the Gold and Silver Libertys are
neither of these.

Full Story"
-Editor]

Will Robins writes: "Just wanted to respond to the little
article about the "Liberty Dollar" in the December 4th
issue. This is not the first time I have heard of them.
I remember a year or two ago, watching a coin documentary
on the history channel, when the "Liberty Dollar" was
talked about. Apparently it is a legitimate organization
which has been going on for a good deal of time. As I
recall, "Liberty Dollar" production is legal because the
basic unit is not the standard American "dollar," but
"Liberty Dollar." Anyone can create their own type of
money, as long as the primary denomination is not "dollar,"
because then it would be counterfeiting. Whether a store
accepts it is up to the cashier or manager."

Bob Leonard writes: "I agree with Andrew W. Pollock III
that the silver Liberty money by a few businesses, like
the Lesher dollar was, and--since I collect Lesher dollars
--I ordered one from his web site last year for my
collection.  Bernard von NotHaus is a hard money man who
doesn't trust the Federal Reserve, while Lesher was a
"crank" on the silver question, as a Secret Service
operative once referred to him.  He's been doing this
for years, so I think he is steering clear of the monetary
laws (as Lesher finally did), though he needs to be careful
about ordinary civil fraud.

But even von NotHaus is not above market forces: when I
bought my Liberty Dollar, silver was about $6 an ounce
(the quote from their website gives only $5.10), and the
face value and selling price (one troy ounce, proof) was
$10; now that silver has broken $8, I see that the face
value of a 2005 Liberty Dollar has doubled to $20.  For
an "inflation-proof" currency this is not how it's supposed
to work!  Anyway, if anyone wants to collect these I
recommend buying only the silver and gold "coins,"
hard-money admirer that I am, not the paper certificates
he sells below "face value."

[The paper notes as well as the metal items would make
for an interesting collection.  Numismatists of today
(and museum curators in particular) should take the
opportunity to assemble collections of these items while
they are readily accessible.  In years to come the creators
of these currencies will be long gone and the items could
well become rare, if not valuable.  Experience tells me
that it will be the high-valued paper items that will be
the hardest to find.  For the very reason Bob cites,
today's high relative cost discourages their collecting.
-Editor]

Another reader writes: "Bernard von NotHaus might sound
pretty loopy but he actually has more legitimacy and
standing than people might expect. I can tell you that
his is not a fly-by-night operation and that over $3-million
in Liberty dollars are in circulation as an alternative
form of currency. And there really is a warehouse, subject
to quarterly audits, that contains gold and silver ingots
owned by thousands of people.

Bernard issues silver and gold certificates, which are
basically receipts, verifying the holder owns x-amount
of silver, physically located and accessible in a warehouse
controlled by Sunshine Smelting. The silver certificates
can be spent with merchants who will accept them (several
thousand now, all over America). This is coinage at it most
basic. That some of the survivalists and nutcases happen
to use and endorse Liberty Dollars both helps and hurts
Bernard.

Bernard raises a lot of interesting questions about the
Federal Reserve, economics, supply and demand, etc. He
charges $9 for a silver "Liberty Dollar", that is good
for $10 in trade to whoever will take it as such. He
asks how this is different than a US Eagle bullion coin,
stamped $10, and carrying the exact same amount of silver.
These are available for about $9 as well. He says there
is no difference, that circulating bullion based coinage
can be an alternative to the Federal Reserve system.

Also, his association with the Royal Hawaiian Mint is
well-attested. See the latest Unusual World Coins by Colin
Bruce, which has over 20 pages of RHM material which
Bernard designed and struck. Bruce also lists the Liberty
Dollar in his catalog!

Bernard is well-known in the numismatic world. He is
provocative, thoughtful, and somewhat out there. Everyone
has an opinion about his theories, but I would bet he knows
more about history and economic theory than most numismatists,
including me.

Readers interested in more information can go to Wikipedia
and review a rather lengthy treatment of the Liberty Dollar
concept."

[I guess I was one of the uninformed numismatists, but
that's what I love about The E-Sylum - there's something
new to learn each week.  Bullion depository receipts are
the earliest form of paper currency, so this is nothing
new under the sun.  I would agree that NotHaus and his
users have every right to set up an independent currency;
that's done by businesses every day - bank-issued credit
and debit cards are only the most prominent example.
Boggs bills and community-based currencies are another
example - if a person willingly accepts them in payment,
that's an issue between the two parties and no one else.

Here's the link to the Wikipedia entry on the Liberty
Dollar: Full Story

Timothy Grat, Mint Master of The Gallery Mint writes:
"I was somewhat surprised to see Bernard VonNothaus'
project to come up as new. The Liberty Dollar is indeed
for real and has been in production for many years. I
must say I do know Bernard personally, as we have had
much interaction with him at the Gallery Mint.

Many of your readers will be familiar with the small,
black screw press that was on display and used by the
ANA Money Museum. Or is that the Ed Rochette Money
Museum? I am still not sure... but I digress. The screw
press belongs to Mr VonNothaus. The small press was
manufactured by Ron Landis and the late Joe Rust.

Previously Mr VonNothaus produced many beautiful coins
under the Royal Hawaiian Mint. Point being, Bernard is
a serious numismatist and a strong supporter of the
hobby.

Does this mean there is no marketing involved in his
product? Of course not, there is plenty, but he is serious
about his stance and the value of his product, as are his
numerous supporters.

By coincidence, Eureka Springs, AR (the location of Gallery
Mint) is about 12 miles from the county seat of Berryville,
AR. Berryville is one of the Liberty Dollar's largest
markets and the Dollars are accepted all over town. The
NORFED sticker appears in many store front windows. Many
people have even had their Liberty Dollars accepted at
the Wal-Mart!

The Liberty Dollar is also now listed in the new Unusual
Money catalogue. Bernard has also edited and had published
a book entitled "The Liberty Dollar Solution to the Federal
Reserve" With contributions from economists (Alan Greenspan),
statesmen (Congressman Ron Paul), and many others. There
is some marketing in these pages but still makes for an
interesting read for anyone curious about the economic
opinions expressed.

This is not an endorsement! While many of us are still
secure about the spending power of our Fed notes (myself
included), the Liberty Dollar customers are not. While
many find it easy to marginalize a seemingly extreme
point of view, this does not mean the Liberty Dollar
is not for real and not accepted by the Feds. If I am
not mistaken, a transaction with the Liberty Dollar is
viewed as a barter. It is legitimate. And in my own
opinion, the coins display a rather attractive
representation of Liberty, a device long gone from
our coinage."

Russ Rulau writes: "The E-Sylum reader who thinks the
Liberty Dollar scheme is some sort of scam and that
the Feds will close it down because it impinges on the
Federal Reserve's paper money rights, really doesn't
have a clue to what's involved here.

I wrote an article in Numismatic News Oct. 25 issue,
pages 25 and 28 entitled "Will 2005 be Repeat of 1978
for Gold Prices?" in which I illustrated the silver
dollar note and the $500 gold note of Bernard VonNothaus'
issue. His idea is to issue paper receipts for gold and
silver stored in Idaho at a third-party vault.

As a writer on gold and gold coins for some 44 years,
I don't believe the scheme can work, as the U.S. debt
now has passed the $8 trillion mark. In a full century
we could not repay our indebtedness. But a return to any
gold-silver standard is ludicrous because there isn't
enough of both above or below ground to make a dent in
the U.S. debt, much less the world debt.

Our Federal Reserve notes are simply monetized debt,
backed by nothing but our reputation as a nation for
honesty. I have no agenda either way vis-a-vis Liberty
Dollars, except one thing -- the notes are beautifully
designed. VonNothaus has had some "left field" ideas
over the years, but dishonesty is not among them, and
he's a very skilled engraver. His Hawaiian silver and
gold fantasy coins of the 1980's are magnificent,
portraying King Kalakaua and Queen Liliuokalani, and
may now be found in the current catalog "Unusual World
Coins" by Colin Bruce (KP) priced  very high."

  Wayne Homren, Editor

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