Peter Ferrara

The American people enjoy the legal right to buy, sell, and own gold and silver, including gold and silver coins, as specifically recognized by Federal statute. This includes newly minted coins or medallions produced by private companies, as the right to own gold and silver is not limited to trading coins that were already produced before a certain date.

You are also free to trade anything you own for anything else that someone is willing to exchange with you. If someone is willing to trade you their used car for 6 truckloads of freshly cut logs, there is no law that prohibits that exchange. Similarly, there is no law that prohibits you from trading 6 gold coins with one ounce of gold each (one ounce of gold currently trades for roughly $1,000) for a used car, or for anything else that anyone is willing to trade with you. Ditto that for silver coins.

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Bernard Von NotHaus decided to expand this concept through his gold and silver company, Liberty Dollar, Inc. His company has minted Liberty Dollar medallions in denominations of $1, $5, $10, $20, and $50. (He opposes calling them coins to avoid any confusion that they are official government currency). The company sold these medallions nationwide through a network of associates and regional marketers.

The company has also sold and distributed paper notes redeemable in gold and silver, identical to warehouse receipts for gold and silver stores that can be used to go pick up the applicable share of the precious metal at any time. Liberty Dollars can also be owned in digital form that can be traded over the Internet.

Von NotHaus and his company have also encouraged merchants, or small businesses, to accept Liberty Dollars for purchases, and even to make change for customers in Liberty Dollar currency. Liberty Dollars have consequently now been in widespread use in Asheville, North Carolina, Austin, Texas, and Berryville, Arkansas, with at least $20 million Liberty Dollars in circulation, and thousands of merchants accepting the currency and offering it as change.

Those trading in this currency are simply exercising fundamental American freedoms of property ownership, freedom of contract, and freedom of exchange. Nevertheless, in June the FBI arrested Von NotHaus and three senior employees of his company, charging them under federal indictment with the crime of counterfeiting. A court order forced Von NotHaus to close his Liberty Dollar company even before trial.

Peter Ferrara

Peter Ferrara is a senior fellow at the National Center for Policy Analysis and a Senior Fellow at the Heartland Institute.