Do you recall Bernard von NotHaus’s Liberty Dollar project? The creator of the precious metal money was convicted in a spectacular trial in 2011 because the court considered his coins to be counterfeits; the FBI even defamed him as “domestic terrorist”. Now, von NotHaus is back with a new variety, the LDFA: Liberty Dollar Financial Association. What is it?
It Is NOT Legal Tender
Let’s start with a different question: what is it not? It isn’t legal tender. The website repeats that over and over. The FAQ expressly state that the Liberty Dollar is not trying to compete with the US dollar and isn’t circulation money. In fact, the Liberty Dollar is not available anymore in the form of coins – von NotHaus has learned from his mistakes and wants to be on the safe side regarding the law. Let’s recall.
The First Attempt: The Liberty Dollar
In the 1990s, Bernard von NotHaus came to the conclusion that the modern monetary economy could not function because fiat money was based exclusively on one’s trust in the issuing state while the currency had no intrinsic value. In 1998 he started to issue his own coins, Liberty Dollars. The design was quite similar to the actual dollar. However, the coins were made from precious metal – the common 20 Liberty Dollar piece contained one ounce of silver. Von NotHaus states that over the following eight years, more than 250,000 people bought Liberty Dollars for more than $85 million. And the Liberty Dollar certainly wasn’t considered a mere investment product, numerous shops accepted the currency and people paid with it for everyday transactions. This resulted in a spectacular legal battle with the US judiciary. In the end, von NotHaus was convicted in 2011. In 2014, the Appellate Court significantly softened the sentence, however, it did not change the classification of the Liberty Dollar as illegal currency. The project remained dead.
The Second Attempt: The New Liberty Dollar
In 2013, a collector of the Liberty Dollar, Joseph Vaughn Perling, issued the so-called New Liberty Dollar, which was extremely similar to the Liberty Dollar. Officially, the coins were intended to be exchanged on coin fairs and Perling sibyllinely clarified: ‘The product is what it is, what you do with it once you own it is entirely your concern.’ Perling is an expert for crypto currencies and interested in alternative means of payment such as Bitcoin. The website of the New Liberty Dollar is no longer active, and there are no news of the project.
The Third Attempt: the Liberty Dollar Financial Association
Now there is a third attempt: the Liberty Dollar Financial Association. Von NotHaus has teamed up for this with a former comrade-in-arms of his first Liberty Dollar project, Wayne Hicks. Their website advertises with the slogan: ‘Private money for private people.’ The basic idea is: first, you have to become a member of the association, because the project does not want to be part of the public sphere – and thus not to be subject to its legislation. Or, as the website euphoniously states: “If you choose the Public, you have chosen to live under public rules and laws. If you choose the Private, many of those rules are no longer applicable.”
Once you are in the private sphere, you can buy silver that is deposited at the LDFA. The association guarantees that it will buy back the silver at any time. The Liberty Dollar sets itself apart from circulation money and understands itself as Paper Warehouse Receipts, i.e. bearer instruments in the form of paper money. The LDFA expressly states that no coins will be minted to avoid a new legal conflict. Members can therefore only trade their shares with each other if they buy goods. A kind of barter with precious metal shares whose value is calculated according to the current silver price.
It Isn’t Money – But What Is It?
It doesn’t sound as if von NotHaus wants to drive the well-established state currencies out of their monopoly with such a project. Is the new Liberty Dollar a flight into the precious metal money of the past? Above all, it’s a provocative experiments that asks: is our current form of currency the only one possible? Due to the association character, it is limited to the private sphere and will hardly gain worldwide significance or endanger the monetary system.
And, of course, even in the private sphere of the US, public laws apply. Otherwise, there would be no reason against issuing Liberty Dollars in the form of minted coins. However, with such a project you certainly have to stick your head up in the clouds a bit and breathe the air of freedom.
Here you can find the LDFA website.
By the way, for archiving purposes, you can still access the old website of the Liberty Dollar.
If you want to become a member of the LDFA, you can register here.
At the time, we covered Perling’s project on the New Liberty Dollars.
And in 2014 we reported on the appeal of the verdict against von NotHaus.
Von NotHaus also issued “dollars” in the slipstream of political upstarts such as Ron Paul Dollars in 2007 and Trump Dollars in 2017, on which he explicitly wrote that they were not circulation money. But they certainly were a political message against the government.