The indictment states, without citation to authority, “It is a violation of law for private coin systems to compete with the official coinage of the United States.” No it is not. If the Congress wants to prohibit private circulation and trade in gold and silver coins, it can. But it hasn’t. To the contrary, it has expressly provided by law that the American people enjoy the freedom to own and trade in gold and silver.
That is why the specific crimes alleged in the indictment reference no such law prohibiting currency competition. Instead, they allege violations of the specific federal statutes prohibiting counterfeiting, and of mail fraud in carrying out the counterfeiting “conspiracy.”
But counterfeiting means creating phony currency made to look like and trade as federal currency itself. It involves fraud and stealing, as those who exchange goods and services for it are misled into thinking they are receiving standard U.S. currency in return, and what they receive instead are worthless fakes.
This is quite different from exercising the freedom to openly exchange gold and silver for other goods and services, which is the same as bartering. Congress has not prohibited this. Instead, it has effectively authorized it through statutory recognition of the right to own gold and silver.
The criminal prosecution of Von NotHaus and his associates is consequently an abuse of power. If Congress wants to prohibit trade in gold and silver coins and alternative currencies, it should have to pass a law doing so. In the process, we can have a debate over the desirability of currency competition.
Nobel Prize winning economists such as Friedrich Hayek have argued that such currency competition is highly desirable, as it would push the government to maintain the value of its currency and avoid inflation. But federal prosecutors know nothing about such economic arguments, and should not be making monetary policy. Most importantly, they should not be making up crimes, and falsely prosecuting American citizens. That abuse of power threatens the ultimate liberty of us all.
When Fed Ex got started, the Feds charged it with violating the legal monopoly of the post office. When Fed Ex won that battle, it was a landmark victory for all Americans. The case against Liberty Dollar offers another potential landmark victory for American liberty.