Bernard von NotHaus, Awaiting Sentencing for Competing with the Federal Reserve with a Hard Money "Liberty Dollar"

Bernard von NotHaus, maker, seller, and advocate of metal rounds under the name "Liberty Dollar" for them that might want to own metal rounds, continues to be persecuted by the U.S. government, and his tale makes the New York Times today. Excerpts with commentary:

Bernard von NotHaus...is a professed “monetary architect” and a maker of custom coins found guilty last spring of counterfeiting charges for minting and distributing a form of private money called the Liberty Dollar.

Described by some as “the Rosa Parks of the constitutional currency movement,” Mr. von NotHaus managed over the last decade to get more than 60 million real dollars’ worth of his precious metal-backed currency into circulation across the country — so much, and with such deep penetration, that the prosecutor overseeing his case accused him of “domestic terrorism” for using them to undermine the government.

if you ask him...he will give a different account of what occurred.

“This is the United States government,” he said in an interview last week. “It’s got all the guns, all the surveillance, all the tanks, it has nuclear weapons, and it’s worried about some ex-surfer guy making his own money? Give me a break!”....

At 68, Mr. von NotHaus faces more than 20 years in prison for his crimes, and this decisive chapter of his tale has come, coincidentally, at a moment when his obsessions of 40 years — monetary policy, dollar depreciation and the Federal Reserve Bank — have finally found their place in the national discourse.

Indeed they have, thanks to Rep. Ron Paul (R-Texas) who understands as von NotHaus does that metals have a better track record at maintaining longterm value than government fiat paper. (See my book Ron Paul's Revolution.)

I'm surprised the Times's reporter apparently got von NotHaus to use the word "coins" since whether or not these were meant to emulate U.S. coins was such a sticking point in his legal travails. He would always insist to me when we spoke that his Liberty Dollars were to be called "rounds," and were a “voluntary private barter currency,” a phrase that appeared on the rounds in later mintings.

Details on how vonNotHaus ended up in legal trouble, which shows that it was having anti-government attitudes and "links," not his alleged "crime," behind the prosecution/persecution:

Mr. von NotHaus placed a toll-free number and a URL address on the currency he produced. If people mistakenly got hold of it, they could mail it back to Evansville and receive its equivalent in actual dollar bills.

Now jump ahead to 2004. A detective in Asheville, N.C., learned one day that a client of a credit union had to tried to pass a “fake coin” at one its local branches. An investigation determined that some business acquaintances of Mr. von NotHaus were, court papers say, allied with the sovereign citizens’ movement, an antigovernment group.

Federal agents infiltrated the Liberty Dollar outfit as well as its educational arm, Liberty Dollar University.

In 2006, with millions of the coins in circulation in more than 80 cities, the United States Mint sent Mr. von NotHaus a letter advising that the use of his currency “as circulating money” was a federal crime.

He ignored this advice,and in 2007, federal agents raided the offices in Evansville, seizing, among other things, copper dollars embossed with the image of Mr. [Ron] Paul.

Two years later, Mr. von NotHaus was arrested on fraud and counterfeiting charges, accused of having used the Liberty Dollar’s parent corporation — Norfed, the National Organization for Repeal of the Federal Reserve — to mount a conspiracy against the United States.

Von NotHaus, still free awaiting sentencing, has a warning:

“The thing that fires me up the most,” he will say, “is this is what happens: When money goes bad, people go crazy. Do you know why? Because they can’t exist without value. Value is intrinsic in man.”

When the initial raid on von NotHaus' operations happened, in mid-November 2007, an ounce of silver was worth around $14.50 in "real" U.S. currency. Today, $32.14. Gold was worth around $790; today, $1711.90.

The dollar of 2007, meanwhile, according to this inflation calculator, is worth just 93 cents now. Just sayin', as the kids just say.

I have written previously here at Reason about von Nothaus' doings and travails, including the initial raid and his conviction,

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  • tagtann||

    Wow that jsut makes a ll kinds of sense dude.

    www.Anon-Days.tk

  • EDG reppin' LBC||

    Proof that Anonbot is not sentient. If it were sentient, it would have "firsted". Back to the ol' Turing drawing board, eh Anonbot?

  • Pro Libertate||

    That's illogical. Its firstness is self-evident and stating it would be illogically redundant and wasteful.

    Pride of place is a human characteristic, not a computer overlord one.

  • Tulpa (LAOL-PA)||

    It's hard to see how he could be accused of counterfeiting when the coins he produced are worth more than the stated dollar value. Same thing with fraud.

    What hole did they find the 12 people who would vote to convict in.

  • robc||

    And why hasnt everyone in Ithaca been arrested?

  • Pro Libertate||

    That's not how it works there. Odysseus just kills people who break the law. His law.

  • R C Dean||

    The statutory definition of "counterfeiting" is incredibly broad when it comes to coinage, and basically bans anyone from making any kind of precious metal coin unless they are licensed.

  • R C Dean||

    As a law and order type, I would think you would be applauding this strict application of the statute. What gives?

  • Tulpa (LAOL-PA)||

    Show me the statutue.

  • R C Dean||

    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://codes.lp.findlaw.com/uscode/18/I/25/486

  • Dr. Frankenstein||

    It's not a coin it's a medallion. Or so I would claim. So what you're saying is that it's illegal to engrave a precious metal without a license.

  • Death Rock and Skull||

    Define "precious metal". Those knock off "non monetary" infomercial coins advertise gold plating. Lead, zinc, copper, and aluminum could also be called precious- even the noble feds use some of those metals in their glorious coins.

  • 0x90||

    You are assuming that to be counterfeit, a thing must be of lesser value than that which it mimics. But what if I mint such a coin for traditional purposes of counterfeiting, and that coin subsequently passes through the hands of a famous person and becomes a collector's item? This false coin is now worth more than a true one, but does that change the fact that I counterfeited and committed fraud? Does my motive in producing it matter?

    Or in a case like this one, where I had no intent to defraud directly, and indeed produced a coin of superior intrinsic value, could a reasonable person find it likely and foreseeable that a secondary fraud might later occur as a result of my action, meaning that in a secondary transaction, a participant was left with my false coin, which, though of higher metallic value, does not carry with it the intangible value of the "full faith and credit" of the US? If so, you must conclude that it was only I who caused this fraud to occur.

    Not that I would buy a bit of this, but I expect these would be the types of arguments a jury would've heard from prosecution, and also to some extent, in judge's instructions.

  • Tulpa (LAOL-PA)||

    But what if I mint such a coin for traditional purposes of counterfeiting, and that coin subsequently passes through the hands of a famous person and becomes a collector's item? This false coin is now worth more than a true one, but does that change the fact that I counterfeited and committed fraud? Does my motive in producing it matter?

    Inapposite analogy. When you produced the coin it was not worth more than the currency it resembled. Plus, of course, there is very little similarity to US coinage in Liberty Dollar coins.

  • Death Rock and Skull||

    Worthless ordinary shit doesn't appreciate just because a famous person owned it.

    Forgeries don't become collectors items either, when forgeries are exposed they immediately lose all value and reputable brokers want nothing to do with them.

  • BarryD||

    Christ, are they going to raid joke shops for selling packs of $3 bills?

  • robc||

    Silver: $14.50-$32.14 122% increase
    Gold: $790-$1711.90 117%
    Dollar: $1-$0.93 7% decrease

    Yeah, I think someone is lying.

  • Paul.||

    Serious question. Is the value of gold going up or the value of the dollar going down while gold stays the same?

  • seguin||

    Cant it be both?

  • Pinky||

    The dollar is valued against everything that is not gold, then the gold is valued against the dollar.

  • Paul.||

    Good point. So I guess the question becomes, putting the dollar out of the picture, how many pairs of pants can you get pressed with an ounce of gold?

  • Tulpa (LAOL-PA)||

    Pants-pressing is not a constant-value commodity either.

  • Death Rock and Skull||

    That would depend on the quality and concentration of the starch.

  • Paul.||

    Why do you hate pants?

  • Pinky||

    That's right! So now, can you tell us what the dollar is worth?

  • R C Dean||

    Paulperiod, that is indeed the existential question. There's no right answer to it, really. The choice of which to use as the baseline, or as the Y axis against which to plot the moves of the other, is up to you.

    The right question, I think, is "which is a better store of value?" Put another way "Will my gold buy as much stuff in the future as it does now? Will my cash?"

    Over a long(ish) time frame, gold is a pretty proven store of value compared to any fiat currency, although after the recent runup in its (dollar) price, opinions differ as to whether it will now drop in price, keep going up, or plateau (although, oddly, nobody seems to think gold will stabilize at around $1700/oz).

  • robc||

    Ive long argued that we never left the gold standard. Gold, roughly, with big swings, stays constant in purchasing power.

    So we are still on the gold standard, but the dollar has been allowed to devalue vs it.

  • R C Dean||

    I think it comes down, ultimately, to what kind of time frame you want to use.

    If you want to use a long (and I mean multi-decade, minimum) time frame, gold is the default.

    For shorter time frames, the fiat probably makes more sense.

  • robc||

    Im not Keynes, so I think long term.

  • Tulpa (LAOL-PA)||

    Gold, roughly, with big swings, stays constant in purchasing power.

    Define purchasing power. Most things in life are cheaper now in gold ounces than they ever have been.

  • Sam Grove||

    Value is subjective.
    The dollar is a floating reference.

  • buybuydandavis||

    Prosecuted for the "crime" of selling engraved round pieces of metal. What next? Raiding Home Depot because they sell nuts and washers?

    Jury nullification.

  • OldMexican||

    Re: buybuydandavis,

    Raiding Home Depot because they sell nuts and washers?

    The very moment people start to trade goods for nuts and washers, it will be the day the Federal Government arrests the CEO of Home Depot for "counterfeiting"

  • Adam330||

    So the issue is what people do with your product? Is the government going to prosecute Phillip Morris for making cigarettes that prisoners use as money?

  • Death Rock and Skull||

    The round metal "planchets" are technically struck. The striking dies are engraved.

    Those round electrical conduit junction box punch-outs used to work decently as slugs in washing machines.

  • Paul.||

    “This is the United States government,” he said in an interview last week. “It’s got all the guns, all the surveillance, all the tanks, it has nuclear weapons, and it’s worried about some ex-surfer guy making his own money? Give me a break!”....

    Bad tactic. Make your case. Don't tell them that just because you're an ex-surfer that you mustn't be breaking any laws worthy of a federal prosecution...

    Federal agents infiltrated the Liberty Dollar outfit as well as its educational arm, Liberty Dollar University.

    By doing what? Showing up?

  • Pinky||

    I'm surprised the Times's reporter apparently got von NotHaus to use the word "coins"

    Would you be surprised if the reported truly hadn't gotten Von NonHaus to use the word "coins". Do reporters ever get the words wrong?

  • Brian Doherty||

    I wouldn't really be that surprised to find that the reporter misquoted him, no.

  • R C Dean||

    He's been convicted, so why not start using the magic word "coins"? The only reason to not use it is to try to stay clear of the counterfeiting statute.

  • Pinky||

    He might consider avoiding the word coin if he wanted to challenge his conviction in a higher court.

  • dehaul||

    The rise in silver and gold commodity prices can be explained by all these folks buying them up as an investment.

    I really don't understand why gold and silver are such hot things to buy when really it is just buying "real" property that has utility, especially in times of crisis, seem like a better deal.

    Buy assault rifles and ammo!!! You can always sell them later - usually for more money than you paid. And if chaos ensues, they'd sure come in handy.

  • R C Dean||

    The rise in silver and gold commodity prices can be explained by all these folks buying them up as an investment.

    Actually, not. Retail purchases of PMs are still pathetically small.

    The big buyers have been central banks. They buy by the ton, and they have been buying pretty hard. Can't imagine why.

  • OldMexican||

    Re: R C Dean,

    Actually, not. Retail purchases of PMs are still pathetically small.


    WHO ARE YOU CALLING "PATHETIC"?!?

    [I say loudly while embracing my mound of gold coins.]

  • LilDebbie||

    While you are absolutely correct that assault rifles and ammunition take priority, consider that you may be forced to carry your wealth with you.

    And while you certainly will be able to sell your ammunition later, you won't want to.

  • Alan Vanneman||

    "When the initial raid on von NotHaus' operations happened, in mid-November 2007, an ounce of silver was worth around $14.50 in "real" U.S. currency. Today, $32.14. Gold was worth around $790; today, $1711.90.

    The dollar of 2007, meanwhile, according to this inflation calculator, is worth just 93 cents now. Just sayin', as the kids just say."

    So, everyone who thinks it's smart to invest their dollars in silver and gold, please go ahead. I'll stick with the stock market.

  • robc||

    If you got 120% ROR on stocks between 2007 and today, you are a far better investor than I am.

  • Tulpa (LAOL-PA)||

    You just know AV walked away after that comment smirking about the beatdown he just laid on them libertarians.

  • OldMexican||

    Re: Alan Vanneman,

    So, everyone who thinks it's smart to invest their dollars in silver and gold, please go ahead.


    Thank you for the words of encouragement. I bought when gold was at $800 and was able to use part of my profits to fix my car. Anybody else had to hock his shirt.

    I'll stick with the stock market.


    Yes, you do that.

  • Brian Doherty||

    DJIA close on Nov 15, 2007: 13,110.05
    DJIA close today: 13,103.68
    Holding steady!

  • R C Dean||

    Since 2007, I've lost around 15%, maybe a little more, all told, in my paper investments.

    My PM investments, though, are up around 40%.

  • robc||

    Im up in that time frame, but thats primarily due to being overweighted in Phillip Morris (PMI and MO).

  • Pro Libertate||

    My precious.

  • ||

    If I was this guy I would be taking advantage of my current freedom to make my way to a less corrupt country, like Mexico.

  • fish||

    What..... deny the governments attempt to rehabilitate him. Sir, I accuse you of Inciting Social Disharmony!

  • The Derider||

    "Indeed they have, thanks to Rep. Ron Paul (R-Texas) who understands as von NotHaus does that metals have a better track record at maintaining longterm value than government fiat paper."
    ...
    "When the initial raid on von NotHaus' operations happened, in mid-November 2007, an ounce of silver was worth around $14.50 in "real" U.S. currency. Today, $32.14. Gold was worth around $790; today, $1711.90.

    The dollar of 2007, meanwhile, according to this inflation calculator, is worth just 93 cents now. Just sayin', as the kids just say."

    Note that currency dramatically rising in value over a few years is not necessarily a good thing for an economy, and certainly isn't "maintaining value". Just Sayin'

  • OldMexican||

    Re: The Derider,

    Note that currency dramatically rising in value over a few years is not necessarily a good thing for an economy,


    Thus spake the economics ignoramus.

    Go back to your embroidery, honey, and leave us, the men, to talk about the important things.

  • Tulpa (LAOL-PA)||

    If you believe the dollar has depreciated only 7% since 2007 I've got some $5/lb ground beef to sell you.

  • Paul.||

    Ive got $4 a gallon gas to...oh never mind.

  • Concerned Citizen||

    Only congress has the authority to coin money and regulate the value thereof. Not that congress cares, it's too busy doing everything it isn't authorized to do.

  • JeremyR||

    "who understands as von NotHaus does that metals have a better track record at maintaining longterm value than government fiat paper"

    I don't think that is in question. The government wants inflation. They consider it desirable to decrease the value of money for a variety of reasons, even though in practice it ends up screwing over the poor and middle class.

  • JeremyR||

    And between this guy and Wesley Snipes, can Reason shut up about Pussy Riot? Focus on political prisoners here in the US, rather than meddle in other countries' internal problems.

  • Tulpa (LAOL-PA)||

    Talking about Pussy Rot is meddling?

  • Paul.||

    I see what you did there.

  • Enjoy Every Sandwich||

    Mr. von NotHaus managed over the last decade to get more than 60 million real dollars’ worth of his precious metal-backed currency into circulation across the country — so much, and with such deep penetration, that the prosecutor overseeing his case accused him of “domestic terrorism” for using them to undermine the government.

    Heh. So telling the truth about the government "undermines" it, and is thus "domestic terrorism"? These folks are easily terrified! And beyond parody.

  • Tulpa (LAOL-PA)||

    She does have a point. The truth about our nation's finances is so terrifying that telling it could be considered terrorism.

  • OldMexican||

    Mr. von NotHaus managed over the last decade to get more than 60 million real dollars’ worth of his precious metal-backed currency into circulation across the country — so much, and with such deep penetration, that the prosecutor overseeing his case accused him of "domestic terrorism"for using them to undermine the government.


    So much for the idea that "we" are the government. How can "we" be underminded by people trading outside the dollar system?

    However, truth be said, the whole business that NotHaus was managing was more a multi-level marketing scheme than a real money-minting business. He pegged his rounds to a fixed amount of dollars, which created arbitrages
    against buyers trading with the rounds every time the price of silver went up, and aganst sellers accepting the rounds every time the price of silver went down. It was for all users more an ideological thing than a true real-money system.

  • IceTrey||

    What's the big deal about calling it a coin? A coin is just "a piece of stamped metal". So it's definitely a coin. The real question is, is it money? Only Congress can "coin Money" (notice it doesn't say print). They also have the power to punish counterfeiting. Now a counterfeit is "to make a copy with the intent to defraud". They aren't copies so I bet he gets off eventually, after the government has destroyed his life.

  • Tulpa (LAOL-PA)||

    Counterfeiting doesn't require an intent to defraud. A sufficiently well-made counterfeit $20 bill is worth just as much in trade as a genuine one.

  • Robert||

    I'm told the silver Unions that I hear advertised on the radio were struck from the silver confiscated in this case.

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