The Liberty Dollar: What the government didn't like

As I write this, Bernard von NotHaus, the inventor of the so-called "liberty dollar" awaits sentencing after being convicted of  making, possessing and selling his own coins.  The coins were made by the Sunshine mint, which also makes many silver rounds which are not scrutinized.  So what are the problems with the liberty dollar?

First, the coins looked as if it might be a legitimate coin produced by the US government.  It contained an image of liberty (later replaced with Ron Paul) that looked reminiscent of classic coins from the 1880's such as the liberty nickel or morgan dollar .  In particular it contained the word "liberty" and a motto "Trust in God" which is similar to "In God we Trust."  The bigger problems appear on the reverse of the coin, where a denomination is given.  The original one ounce liberty coins had a denomination of $20 (even when silver was around $8 an ounce).  Both the dollar sign and the word "dollar" were used, making it appear as if these were  US coins.

The government also did not care for Bernard von NotHaus' politics and planned use for the coins.  Mr. NotHaus clearly wished to place the coins into circulation to compete with US coinage.  When the government called his coins "counterfeit" he filed suit against the government.  The government is clearly threatened by any introduction of alternate currency.  Anne Thomkins, the US attorney called the liberty dollar "a unique form of domestic terrorism." and called it a "challenge to the legitimacy of our democratic form of government."

The government would prefer that there be no discussion of alternate currencies.  They ordered the shutdown of the website libertydollar.org.  Von NotHaus' book,The Liberty Dollar SOLUTION To the Federal Reserve is still available, but in short supply.  

Is the liberty dollar a true threat to our democracy.  Despite Ms.Thomkins hyperbole, I hope our democracy is not that weak.

The initial seizure of the coins and the subsequent conviction caused the price of the coins to skyrocket. It is still possible to purchase a Liberty dollar coin.  Yes, nothing increases interest and value more than the government banning something.  Liberty dollar collectors may need to feel slightly nervous.  Are they possessing counterfeit coins?  Will the federal government target collectors?

Whatever happens, the Liberty dollar is sure to have its place in US numismatic history along with other privately minted coins such as the Hard Times Tokens and Mormon gold coins.

Five ounce Silver Bullion Coins -- Here they Come! (but read the caution first)

Tomorrow, April 28 at noon is when the mint will be selling the first of their America the Beautiful Five ounce silver bullion coin, depicting Hot Springs in Arkansas. The price will be a whopping $279.95 per coin with a household limit of one.  With silver approaching $50 an ounce, the markup is unexpectedly modest.  

The mint expects its computer to be overwhelmed, and a quick sellout is anticipated.

The hype reminds me of another series that is fizzling out.  I speak, of course of the first spouse gold coin series.  The first issues sold out quickly.  Then the price of gold (and the prices of the subsequent issues) rose dramatically.  Suddenly, there were few who could afford to collect the series.  

sound familiar?  At current prices, those who want to collect the oversized quarters will be paying $1400 per year for the five quarters that are issued annually. The entire series will have 56 coins.  That means it will cost nearly $16,000 for a complete set.  I predict that interest will be lost before the series expires.

The mint will dramatically increase its production for subsequent years, thus guaranteeing that the 2010 set will be the rarest and most valuable.

I wish you the best of luck battling the mint's computers for the right to purchase one.

The war against the paper dollar continues

The General Accountability (GAO) office has released a new statement on how much money  the nation would save if we exclusively used dollar coins and terminated the paper dollar.  At first the savings seem staggering: The GAO announced that we would save 5.5 billion dollars over the next thirty years.

I'm sure this is old hat to most of you, but we've had a dollar coin (on and off) since 1794).  Sadly, dollar coins  have never been popular with Americans.  As a numismatist, I hate to admit it, but Americans love paper.  I have documented this on my cynical history of the US dollar.

The big deception is the quoted savings is over a period of 30 years.  The savings is, therefore 180 million dollars per year.  With a population of approximately 300 million people, this means that each US citizen will save approximately 60 cents per year if we make the paper dollar bill defunct.  Compared to other government expenditures, this savings is negligible.  Sorry, GAO, I'm not buying your argument.