Health Supreme by Sepp Hasslberger

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November 17, 2007

FBI Raids Liberty Dollar: Why Neocons Hate Complementary Currencies

On 15 November at eight in the morning, a dozen FBI and Secret Service Agents descended on the Liberty Dollar office in Evansville, Indiana. The agents sequestered all the gold, silver and platinum in the office, including some two tons of Ron Paul Dollars that had just arrived from the mint some days ago. They also took all records, files and computers and froze the bank accounts.


Liberty_Dollar.jpeg

American Liberty Dollars - Image source: Wikipedia.


Liberty Dollars are a private or complementary currency, backed by the value of precious metals and expressed through coins, paper certificates and electronic digits for easy transfer.

Bernard von NotHaus, the man behind the currency, says in a note to currency holders and supporters:

We have no money. We have no products. We have no records to even know what was ordered or what you are owed. We have nothing but the will to push forward and overcome this massive assault on our liberty and our right to have real money as defined by the US Constitution. We should not to be defrauded by the fake government money.

But to make matters worse, all the gold and silver that backs up the paper certificates and digital currency held in the vault at Sunshine Mint has also been confiscated. Even the dies for mint the Gold and Silver Libertys have been taken.

This in spite of the fact that Edmond C. Moy, the Director of the Mint, acknowledged in a letter to a US Senator that the paper certificates did not violate Section 486 and were not illegal. But the FBI and Services took all the paper currency too.

The possibility of such action was the reason the Liberty Dollar was designed so that the vast majority of the money was in specie form and in the people's hands. Of the $20 million Liberty Dollars, only about a million is in paper or digital form.

I regret that if you are due an order. It may be some time until it will be filled... if ever... it now all depends on our actions.

Everyone who has an unfulfilled order or has digital or paper currency should band together for a class action suit and demand redemption. We cannot allow the government to steal our money! Please don't let this happen!!! Many of you read the articles quoting the government and Federal Reserve officials that the Liberty Dollar was legal. You did nothing wrong. You are legally entitled to your property. Let us use this terrible act to band together and further our goal – to return America to a value based currency.


A legal defense fund should be established soon.

Anyone holding Liberty Dollar paper certificates or having claim to some bits of the electronic currency can sign up to join the legal action to recover their property. Even if you do not own any Liberty Dollars but want to join in the fun, there is no problem. According to von NotHaus:

There is still $20 million Liberty Dollars in circulation. Simply get some paper Liberty Dollars and sign up for the Class Action Lawsuit.


- - -

The action does not come completely out of the blue. After a similar raid on e-gold in December 2005, the company running that currency wascharged with money laundering in April this year. Then in September 2007, came a stern government warning urging consumers and businesses to stay away from Liberty Dollars. Becky Bailey, spokeswoman of the U.S. Mint, said that "the United States Mint is the only entity that can produce coins".

Von NotHaus and other proponents of alternative currencies do not agree. Citizens, they argue, have the right to arrange their economic and contractual relations, which includes the establishment and distribution of symbols that signify value to facilitate economic exchange.

Why squash this currency?

For one, alternative currencies such as the Liberty Dollar are an attractive way for many to say no to what is perceived a disastrous economic policy. The dollar has been falling from grace internationally and is losing its status as the exclusive reserve currency and the mediator of international trade.

Inflation and a general decline of the US currency are often blamed on the fact that in 1971, then president Nixon abandoned the gold standard and opened the door to the creation of dollars as "fiat money", currency that is not backed by precious metals but issued by government decree. So gold backed money such as the Liberty Dollar is a way of repudiating what is perceived as a step in the wrong direction.

War economy

The capacity of the US government to borrow by simply having the Fed print more dollars and by allowing banks to create the electronic bits is an important pre-condition for its capability to maintain a large military presence in numerous countries around the world and to fight wars abroad. Some time ago I asked in an article: "Will Oil End The War Economy?". The move to the Euro as a trading currency for oil was only beginning then. Iraq was the first country to make the change, but now other countries are following suit.

The significance of a move away from the dollar to other currencies as a medium for international trade is first and foremost a loss of value of the dollar on the international market. As a consequence, military action will come more and more costly for the US economy.

And now there is a presidential candidate who has clearly stated that he would bring America's troops home and instead of aggression on foreign countries he would prefer diplomacy and trade. Ron Paul would also, he says, put the dollar back on some kind of a gold standard. And remember, two tons of Ron Paul Liberty Dollars were taken by government agents in the raid in Evansville.

Store of value vs. Circulation

Currencies in general are suffering from a problem that is not immediately obvious. We expect them to fulfill two functions. One is in conflict with the other.

On the one hand, we expect a currency to provide a way to store value 'for a rainy day'. We tend to save money and put it away, expecting to use it when we need to. Metal-based currencies are ideal for this as the material itself that the currency is made of has commercial value, so once you have a coin of gold it practically can never get cheaper.

On the other hand, the more immediate expectation we have of a currency: it must circulate with ease and stay in circulation, because that is what allows us to use money for the daily exchange of goods and services. Unfortunately, a gold-based currency won't be easily available for use as a mediator of our daily buying and selling. In part because metal is heavy and gets somewhat unwieldy once you deal in larger sums, and a bit because we tend to hang on to the beautiful shine of it, so we tend to spend it reluctantly.

So while a metal-based currency, such as the Liberty Dollar is an excellent hedge against inflation, it isn't ideal for that other use - the daily buying and selling, the economy of exchange. Yet we generally expect one currency to be good for both functions.

Inflation vs. Deflation

Inflation is the loss of relative value of a currency. Since the value of anything is based on a balance of supply and demand, a currency tends to inflate when there is too much of it in circulation in relation to the value of goods and services the currency is used to trade.

One argument of those who would prefer a precious-metal based currency is that money based on gold and silver tends resist inflation. That is true. Indeed metal-based money tends to deflate, meaning its value goes up. However deflation may be just as disruptive to the economy or even more so than inflation. Deflation leads to economic stagnation and eventually recession. Factories closing, people going hungry, not enough money to go around. Misery.

Balance

What we need in monetary matters, as in everything else, is balance. Balance is a matter of supply and demand. It means adjusting the total available monetary mass to match the total available value of goods and services to be traded. And for that, a paper based currency or a digital currency is vastly preferable to a metal-based one. The supply of money can be adjusted with ease. A paper based and even better a bit-based currency can be kept free of inflation if only the balance of supply and demand is respected.

Free Market

Perhaps the future will bring a variety of currencies, some that we rather invest in to keep for the long term, and some we use for everyday exchange. Why should we be bound to use only one - the one imposed by a state-enforced banking monopoly?

So while I think that gold and silver currencies like the Liberty Dollar are not ideal, they should be allowed to exist, as should be paper and internet-based currencies that merely exchange electronic bits. In a truly free market, we should be able to choose our currencies freely. After all, it's only fair.


More recent coverage:

Unfair seizure of coins (link no longer active)
The company has been in business for 10 years and they have not been targeted by the U.S. government until now. In fact, both the United States Mint and the Federal Reserve have admitted that what the company was doing was perfectly legal. What is the reason for the raid by the FBI if the company had been operating lawfully for nearly 10 years?

Earlier this year the company began minting two new coins, the 2008 "Peace Dollar" with the words "STOP THE WAR" on the reverse side and the 2008 coin commemorating the presidential campaign of Ron Paul. The Feds just have to stop Representative Ron Paul somehow, since he is the only presidential candidate who is pro-liberty.

June 2008: US Government Is Sued Over Seizure of Liberty Dollars
A dozen people around the country filed suit in U.S. District Court in Idaho this week demanding the return of all the copper, silver, gold, and platinum coins more than seven tons of metal in all that the FBI and Secret Service seized in November during raids of a mint in Idaho and a strip mall storefront in Indiana.

The Justice Department had decided that the coins, many of which bear the familiar symbol of Lady Liberty and the phrase "TRUST IN GOD," were being illegally marketed as government-sanctioned currency...

 


posted by Sepp Hasslberger on Saturday November 17 2007
updated on Friday October 15 2010

URL of this article:
http://www.newmediaexplorer.org/sepp/2007/11/17/fbi_raids_liberty_dollar_why_neocons_hate_complementary_currencies.htm

 


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Readers' Comments


Currencies need not be tied to a metalic values, they can all float and find ther own values.
But before that you all should know this.

WHO RUNS THE WORLD AND WHY YOU NEED TO KNOW IMMEDIATELY
By Carolyn Baker
Monday, 01 October 2007

A review of The True Story Of The Bilderberg Group, By Daniel Estulin

Posted by: moneylender on November 18, 2007 12:23 PM

 


An exchange of emails with Peter Tocci, relating to this article:


17 Nov 2007 - Peter:

How are you. I do agree that this raid was bad news. But again, this whole thing goes back to the BAD IDEA that metal money and metal-backed paper are. I've written to these people with the concerns, but never got the courtesy of a response. This I suspect is because they don't know what to say, and/or their agenda is more important to them than the truth. Mike Ruppert at least had the brass to say it's too bad about indigeneous peoples and the planet, but that's the way it goes if investors are to be saved :-)


18 Nov 2007 - Sepp:

Yes, I appreciate the differences between metal money and metal backed paper and other currencies. There is always something of a profit motivation with the initiators of private currencies that are associated with precious metals.

I have now added a few paragraphs to the article to make my point of view on this more clear.

It's the last paragraphs of the article from Store of value vs. Circulation to the end.


18 Nov 2007 - Peter:

Thanks for the info.
A few thoughts:

I don't know the Liberty people personally--maybe you do. As I said, they wouldn't talk to me. And I'm not really familiar with their operation--how it worked. But in any case, even though I don't like being too cynical, how does anyone know they weren't in on the bust, somehow profiting from it? They now want a 'legal defense fund.' Who gets that but law sharks within the questionable legal system. More money down the sinkhole?

There is still a seemingly important dimension missing in the metal/money discussion: The flaw (it seems to me) of allowing the standard of value to become a commodity itself. This seems crazy. You end up buying/selling the standard (affecting its value) with that which it standardizes. It's like saying we can change the length of an inch to suit conditions :-) I still think that the medium of exchange, if we are to have one, might be based on something that has inherent value (gold/silver have only assigned value). One thing that comes to mind is human effort--labor. It's the only thing that produces wealth. Why not a currency based on that. But the standard can't fluctuate. That's crazy. And it underlies the problem you cite with metal deflation. It also seems that a non-fluctuating standard would support the "dual function" of money.

You say: One argument of those who would prefer a precious-metal based currency is that money based on gold and silver tends [[to]] resist inflation. That is true. Indeed metal-based money tends to deflate, meaning its value goes up. However deflation may be just as disruptive to the economy or even more so than inflation. Deflation leads to economic stagnation and eventually recession. Factories closing, people going hungry, not enough money to go around. Misery.

However, isn't the increasing value of metal also the inflation of a metal-based currency? In any case, the inflation/deflation 'laws' can't be viewed independently of a system first invented and defined by the Elite, and where the supply side is heavily controlled/manipulated. The Rothschilds/Oppenheimers/DeBeers have totally controlled the diamond market, creating the mystique and artificially inflating value to steal wealth. The banksters still got stinking rich before there was fiat currency (with fractional lending for one thing). In fact, we might even need 'economic stagnation' in a sense, because eternal growth in a finite world is a suicidal oxymoron--a big scam put over by Elite PR. The only reason it has appeared to work to this point is because our primary capital asset--the Earth--is in liquidation.

Another key element missing from the discussion is the inherent criminality of usury--or the selling of money. It should be disallowed, as should the "volume discount." But it is true that fiat currency lends itself better to the BIG FIX in the system: Debt/Inflation/Growth, the key mechanism used to transfer wealth.

You say: So while I think that gold and silver currencies like the Liberty Dollar are not ideal, they should be allowed to exist, as should be paper and internet-based currencies that merely exchange electronic bits. In a truly free market, we should be able to choose our currencies freely. After all, it's only fair.

But it most certainly is not fair to those peoples destroyed by the search for metal, based on demand. Nor is it fair to our Earth Mother, who is being raped for our convenience and thoughtless worship of "the market." This was Ruppert's narcissistic disregard. And behind all of it is the (capitalist) desire to hoard, and amass fortune--a sickness in my view. Here are examples:

The enviro destruction continues on Papua in gigantic proportion:
"With a few taps on a keyboard, satellite images quickly reveal the deepening spiral that Freeport has bored out of its Grasberg mine as it pursues a virtually bottomless store of gold hidden inside. They also show a spreading soot-colored bruise of almost a billion tons of mine waste that the New Orleans-based company has dumped directly into a jungle river of what had been one of the world's last untouched landscapes..."
(www.truthout.org)

Here's another story of devastation:
http://www.peuplesmonde.com/article.php3?id_article=481

Also, it's nice to speak in ideals, but in the real world the global elite control/manipulate markets and the mining industries. So--there IS no free market. To attempt to play "fair" with the toy of the rigged system, even in a parallel one, is futile, and will be until the Elite MO is exposed and stopped. I'm not sure anyway that we can clean up a fundamentally sick concept. The Liberty people remind me of the 'health' industry's attempt to duplicate horrible foods like hot dogs and hamburgers with soy-based garbage sold as 'improved.' It leads to the same disease by a different path.


30 Nov 2007 - Sepp:

I also don't know the Liberty people personally - but I would not go so far as to assume that they are in some way profiting from the bust by the Feds.

On the metal/money discussion, yes, it is crazy to use something that can be a commodity by its inherent value as the means of exchange. It seriously confounds matters. I very much agree with Silvio Gesell that money, to be a good mediator of exchange, should not have value in and of itself.

What we call inflation is when money loses value, when it buys less goods for each unit of currency. In that sense, when the metal that a currency is based on increases in value, the currency would buy more per unit and that is generally called deflation.

The names 'inflation' and 'deflation' probably come from the amount of currency available, which generally is the cause of money losing or gaining value. Inflation in that case means there is more money available (an 'inflated' money supply) which - in accordance with the principle of supply and demand means that each unit of the now more abundant monetary units buys less. Deflation is the opposite situation, where less money in circulation means we have a 'deflated' money supply. The consequence of that is that each unit of currency now buys more than it used to. Deflation also means that goods remain unsold and that in consequence production will become less. In the extreme, this may be quite problematic.

As for mining of precious metals being destructive to the environment, I agree with you that this is a problem, and an argument against using precious metals (or any potentially scarce resource) as the basis for money. But the same is true - and perhaps to a much greater extent - for our propensity to mine coal and oil as fuels and burn them for our energy needs.


1 Dec 2007 - Peter:

I would also not "assume" that about Liberty. I was asking "how do we know." See the difference :-)

Admittedly, financial things tie my brain in knots :-) In that regard, I'm not sure about fiat dollar value being driven by more or less money in circulation. In other words, I don't see why the variance, by itself, should affect money's value, since the dollars are not divided over the value of a set standard. I would think manipulated commodity markets, prices and interest-rate manipulation drive inflation, not money supply. To me, more money in circulation should mean you can buy more of things at the same price :-) BUT--it's not like money is just given out.

I don't understand the mechanism of money supply affecting money value. Maybe it has something to do with money being a commodity too--another thing that ought to be outlawed, along with the standard of value being a commodity. Also, it might have to do with the fact that "money" is not money but debt. But again, I'm not sure how. The whole thing is a bunch of goddam smoke and mirrors :-) But if you couldn't buy and sell money or its standard, that would close off that aspect of manipulation. Then, demand and supply of goods and services would more reliably set prices. How do we know that, done honestly, a fiat system of currency wouldn't actually work!

Yes, all rape of the earth is just that. There's no "but" as I see it. We're just way down the road after taking a wrong turn, and are now in this dilemma of liquidating our source of life to survive. But if it were
mainly survival, as opposed to meeting our perceived "needs," then the earth and we would stand a much better chance.

Best,
P.

Posted by: Sepp on December 4, 2007 09:01 AM

 


When is someone going to do something about the Federal Reserve's monopoly on currency. Why should they be allowed to get away with raiding a legitimate minting or printing establishement. It is they who are breaking the law, not the people minting the silver dollar.

Posted by: Ali Saracino on February 19, 2008 11:28 AM

 


the concept of Currency swap is the major factor i think, because of that major problems in import and export occurs so usually the Govt. hesitate to take such steps.
with love from Harris

Posted by: harrisandreson on March 27, 2010 04:29 AM

 















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