Liberty Dollar
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| Liberty Dollar | |||||
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| ISO 4217 Code | None | ||||
|---|---|---|---|---|---|
| User(s) | Individuals and businesses primarily in the USA | ||||
| Symbol | $ | ||||
| Central bank | Liberty Services. For clarification, the currency is privately issued & Liberty Services is not a bank. | ||||
| Website | www.libertydollar.org | ||||
| Mint | Sunshine Mint | ||||
| Website | www.sunshinemint.com | ||||
The Liberty Dollar is a private currency embodied in minted metal pieces, gold & silver certificates, and electronic currency. It is distributed by Liberty Services (formerly NORFED), based in Evansville, Indiana. The company that mints and warehouses Liberty Dollars is Sunshine Mint in Coeur d'Alene, Idaho. The Liberty Dollar was created by Bernard von NotHaus, the former operator of the Royal Hawaiian Mint Company.[1]
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[edit] Inflation Compensation
From its debut on October 1, 1998 to November 23, 2005, NORFED exchanged one troy ounce silver Liberties valued at ten Liberty Dollars for US$10, but on November 24, 2005, raised the silver base to US$20, to offset the falling purchasing power of Federal Reserve Notes. Older rounds can be exchanged for a small fee. $10 paper certificates can be exchanged for the new $20 certificates at no cost. As of January 2007, Liberty Services has begun offering an exchange service to convert Liberty Dollars into U.S. dollars. Also, a partial list of merchants accepting Liberty Dollars can be found online [2].
[edit] Denominations
Year 2000, 1 oz .999 silver coin.
- $5 Silver Quarter Liberty (quarter troy oz. round, .999 fine silver)
- $10 Silver Half Liberty (half troy oz. round, .999 fine silver)
- $20 Silver Liberty (one troy oz. round, .999 fine silver)
- $1000 Gold Liberty (one troy oz. round, .9999 fine gold)
Certificates:
- $1 silver certificate (brown)
- $5 silver certificate (magenta)
- $10 silver certificate (blue)
- $20 silver certificate (red)
- $1000 gold certificate (gold and blue)
Since Thanksgiving Day, 2005, the old silver notes and $10 Silver Liberty are obsolete. There is a reminting fee to melt down old one-ounce $10 Silver Libertys and remint them into $20 Silver Libertys, but the paper certificates can be exchanged at no charge.
Like the euro but not the U.S. dollar, the certificates' size and color varies with the value. However, unlike the euro, only the long dimension varies, similar to Japanese Yen bills. The higher the value, the longer the certificate.
The gold and silver Liberty rounds have a similar design except for particulars such as mint date and value. Because gold is denser than silver, the Gold Liberty is smaller, with about 5/6 the diameter of the silver round. Both rounds have reeded edges, like on the U.S. quarter and dime, intended to discourage coin clipping.
Each piece of currency (whether certificates or medallions) bears, in addition to its specific weight and its denomination in Liberty Dollars, a toll-free US phone number (888-LIB-DOLLAR) and a web URL (www.libertydollar.org) intended to allow bearers to make contact with Liberty Services or a local Liberty Dollar representative. Liberty Dollar Regional Currency Officers and Liberty Dollar Associates are not required to exchange Liberty Dollars for U.S. dollars under their contract with Liberty Services after the customer or merchant originally agreed voluntarily to accept them. Liberty Dollar distributors are instructed never to refer to Liberty Dollars as legal tender or "coins", and if questioned are to claim that Liberty Dollar silver are silver pieces backed by silver and gold, and a private, non-government currency.
Limited-edition rounds in $10-base denominations of $1, $2, $5, $20, and $50 have been issued, but they are not intended to circulate and cost even more per ounce of specie than the regular denominations above.
[edit] Anti-counterfeiting features
The paper Liberty Dollars include security features such as holograms, microprinting, UV fluorescent ink trim, hot gold and silver foil stamping, and an invisible synthetic DNA security thread.
The outer edges of the certificates contain the following:
- Top - Preamble to the United States Constitution
- Bottom - United States Declaration of Independence
- Left side - Pledge of Allegiance
- Right side - First Amendment to the United States Constitution
They appear as dots to the naked eye, but are visible with a magnifying glass.
[edit] eLiberty Dollars
eLibertyDollars (or digital Liberty Dollar) are electronic money which are intended to be used for online transactions. These are identical to Liberty Dollars except the currency exists as online trading credits rather than as paper currency. They are purchased with US dollars but can only be redeemed for Liberty Dollar silver certificates or rounds.
[edit] Differences from other "alternative currencies"
A number of alternative currencies exist in the United States, including the Liberty Dollar, Phoenix Dollars, Ithaca Hours, and digital gold currency. Unlike most other alternative currencies, both Liberty Dollars and Phoenix Dollars are denominated by weight and backed by a commodity. Phoenix Dollars are backed exclusively by silver, while there are both gold and silver backed Liberty Dollars. Liberty Dollars differ from other alternative currencies in that they carry a suggested US dollar face value.
Previous attempts at establishing an alternative currency in the United States focused on time dollars: the value of the currency is tied to a specific unit of time; the most common being currency denominated in "Hours", 1 hour = $10 USD, so it depends on people in the future willing to swap their labor time, regardless of the amount of currency issued. Community currencies have run into trouble because there is nothing to stop the issuer from producing more currency.[3] This is the primary difference between the Liberty Dollar and Hours- Liberty Dollars are backed by an objective measure- a weight in metal.
Major differences exist between how the different currencies are intended to be used. Trust-backed currencies are naturally limited to small areas and are intended to function only as local currencies, to be used in a specific city or region, while commodity-backed currencies are intended for use on a much larger scale. Liberty Dollars are marketed as an alternative national currency in the United States. Phoenix Dollars are intended more for use as investments in silver than as an alternative currency, and are marketed for worldwide use.
eLiberty Dollars differ from digital gold currency in that online gold currency can be redeemed for dollars, euros or other national currencies through various online services at the actual spot price of the metal. eLiberty Dollars can be redeemed for silver Liberty rounds or for paper Liberty Dollars at par--currently one troy ounce silver Liberty round for twenty eLiberty Dollars.
[edit] Federal Government response
Numerous individuals within the US Government have been interviewed regarding the Liberty Dollar. One Secret Service agent stated "It's not counterfeit money" while remaining "skeptical" of NORFED. Another agent warned that the Liberty Dollar "appears to be in violation of Title 18, Section 514 of the United States Code."[4]
Claudia Dickens, spokeswoman for the U.S. Treasury Department's Bureau of Engraving and Printing, had previously said American Liberty Currency is legitimate. "There's nothing illegal about this," Dickens said after the Treasury Department's legal team reviewed the currency. "As long as it doesn't say 'legal tender' there's nothing wrong with it."[5]
In 2006 the U.S. Mint issued a press release stating that prosecutors at the Justice Department had determined that using Liberty Dollars as circulating money is a federal crime.[6][7] Using a currency as "circulating money" means treating and presenting it as legal tender.[citation needed] The Liberty Dollar organization responded to the Mint's press release by stating that "[t]he Liberty Dollar never has claimed to be, does not claim to be, is not, and does not purport to be, legal tender. The Liberty Dollar repeatedly has emphasized that it is not legal tender. Legal tender and barter are mutually exclusive. The Liberty Dollar is a numismatic piece or medallion which may be used voluntarily as barter."[original emphasis][8]
[edit] Lawsuit: von NotHaus vs The U.S. Mint
On March 20th, 2007, Liberty Dollar founder Bernard von NotHaus filed suit in the District Court for the Southern District of Indiana against the U.S. Mint's claims regarding the Liberty Dollar. Defendants include Henry M. Paulson, Secretary of the Treasury, Alberto R. Gonzales, Attorney General of the United States, and Edmond C. Moy, Director of the U.S. Mint. The suit seeks a declaratory judgment that circulating Liberty Dollars as a voluntary barter currency is not a federal crime and an injunction barring the Defendants from publicly or privately declaring the Liberty Dollar an illegal currency and to remove any such declarations from the U.S. Mint's website. [9]
[edit] Criticism
Due to inflation, Liberty Dollars cannot be bound to a specific valuation in United States dollars over time; Liberty Services maintains the parity of one Liberty Dollar to one US$1 by re-basing Liberty Dollars as the purchasing power of the US Dollar (Federal Reserve Note) falls, leading to the release of two different versions. [10] Liberty Services has plans for further re-basing as the dollar continues to fall. [11] Note that this only deals with newly-created Liberty Dollars; regardless of inflation, Liberty Dollars already in circulation are not re-based unless shipped back to Liberty Services for that purpose.
Liberty Dollars are intended to be spent for a premium over their intrinsic value;[12] while a US Silver Eagle can be bought for US$1-2 over the spot price of silver[13], Liberty Dollars are currently sold or exchanged for greater than US$7 over the price of silver (as of March 7, 2007). Distributors are given a large discount when exchanging US Dollars for Liberty Dollars, so they profit as well.[14]
Also, while Liberty Dollars are easy to purchase for US$1 Dollar each, conversion in the other direction is very difficult. [15]
Critics of Liberty Dollars include Carl Watner, who publishes the individualist anarchist newsletter The Voluntaryist,[1] and Las Vegas libertarian writer Vin Suprynowicz, who refers to Liberty Services as a multi-level marketing system.[2]
Some critics, including Watner, agree with the concept of hard money but disagree with Liberty Services' implementation, saying the "silver base" is extremely rigid compared to the spot price of silver, and recommend instead the use of generic silver rounds as currency. Furthermore, critics assert that stamping a dollar amount on the Silver Liberty defeats the purpose of measuring money in terms of weights of specie, and that the design of the piece may confuse some people into thinking that the Liberty Dollar is legal tender.[citation needed]
[edit] References
- ^ Watner, Carl. Fed up with the Federal Reserve. Retrieved on September 2, 2006.
- ^ Vin Suprynowicz (March 2003). Letters to the Editor. Retrieved on September 2, 2006.
[edit] See also
- Digital gold currency
- List of community currencies in the United States
- Silver standard
- Silver as an investment
[edit] External links
- Liberty Dollar website
- eLibertyDollar
- "Fed Up With the Federal Reserve" by Carl Watner
- "Liberty Dollar celebrates 6th anniversary, gaining in popularity across U.S." by Jayne Andrews, September 30, 2004, East Tennessee Business Journal
- The Indomitus Report
- "'Liberty Dollars' Can Buy Users A Prison Term, U.S. Mint Warns" Elizabeth Williamson, October 10, 2006, Washington Post
