It used to be that America s ever-loved money was worth something. New money doesnt bug Federal Reserve
- Florida -- Some Ridge residents now using Liberty DollarsParadise Post Thursday, January 9, 2003By: Trevor Warner, Staff WriterIt used to be that America s ever-loved money was worth something.It was backed by precious metals, specifically silver or gold, and a person could trade it in and get is face value in these metals per the instructions printed on a bill, will pay to the bearer on demand.Now what the public is stuck with is debt-backed Federal Reserve Notes that arent worth the paper they are printed on, said Paradise resident Charles Douglas.It costs the same in ink and paper to make a $100 bill that it does to make a $1 dollar bill, Douglas said.He said that is one of the reasons the United State is in such debt; the more Federal Reserve Notes, commonly called dollars, that are in circulation, the more the US government owes the Federal Reserve Bank in interest.(Federal Reserve Notes) belong to the Federal Reserve and they loan it to the government with interest, he said. It is a debt instrument and the government has to pay the debt on the backs of the American people.By the way, Douglas and many others attest that the Federal Reserve Bank is a private run bank and not federal at all.The June 10, 1932 Congressional Record page 12595 seems to give weight to that argument stating, some people think the Federal Reserve Banks are United States Government Institutions, they are not government institutions, they are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers.However, Douglas thinks he has found a way to circumvent at least part of the national debt and educate people about the Federal Reserve at the same time.An avid coin collector, he has been interested in silver and gold as a commodity in general for most of his life.About five years ago came across what is called the Liberty dollar, issued by NORFED, which claims that each Liberty dollar is worth 100 percent of its face value in silver and is 100 percent redeemable.In fact, each Liberty dollar boldly states the old Redeemable by bearer on demand instructions.NORFED stands for the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code started in October of 1998 by Bernard von NotHaus, the organizations senior economist.Each Liberty dollar states that it is a receipt for one-tenth ($1), one-half ($5) or one ($10) of .999 fine Troy ounce of silver and is signed by Von NotHaus.According to the organizations web sight, www.norfed.org, the silver is stored in a warehouse in Idaho .Von NotHaus or representatives from his organization were not available for comment at press time.Each Liberty dollar further states that it is an exercise in the First Amendment Right to petition the government for a silver based currency as mandated in the United States Constitution.They come in $1, $5 and $10 denominations and can be exchanged dollar for dollar with Federal Reserve Notes.However, what good is money if you cant spend it?Federal Reserve Notes are everywhere and everybody uses them to buy goods and services. After all, they are the national currency.The common use of Federal Reserve Notes gives them their value and trading power.Though NORFED claims to have 500,000 to a million liberty dollars in circulation, that is next to nothing compared to the billions of Federal Reserve Notes used in America on a daily basis.Though liberty dollars are the second most used currency in the nation, few people know about them and even fewer will accept them, effectively devaluing their trading power.That doesnt stop Don Maydole, owner of Paradise Natural Foods for 17 years, from accepting them or using them himself.Maydole said he likes the premise of the Liberty dollar and its potential to knock down the national debt, however he knows it will take some time to catch on.People dont like change, he said. Sometimes it is hard to get people to try something new.He likens the Liberty dollar to credit cards and the dominance of Visa and MasterCard over newer cards like Discover.When Discover first came out people wouldnt take it, he said. But people got used to it and most places will take it, now.He said the liberty dollar is a grassroots effort to get rid of the national debt and he believes that awareness about the liberty dollar will kick start its popularity.Once people realize that Federal Reserve Notes arent backed by anything, he said he thinks the liberty dollar will start gaining popularity.So, what is the point of carrying around paper notes when it is the silver that has the actual value?Maydole said the weight of the coins could easily wear holes in someones pockets and a person could lose the money.Aside from that, it is just more convenient.That is why they went to the paper system in the first place, he said.Though Liberty dollars can be used dollar to dollar with Federal Reserve Notes, Chico insurance agent Ed Black said they are not legal tender.Black uses the Liberty dollar himself and said legal tender can only be issued by the government and has to be accepted for goods and services.The Liberty dollar is used voluntarily and people are not forced to accept it for goods and services he said.So as long as a Liberty dollar user doesnt claim that the liberty dollar is legal tender, the liberty dollar is perfectly legal to use if people choose to accept it, he said.Paradise Post Tuesday, January 14, 2003By: Trevor Warner, Staff WriterThe Federal Reserve Bank is not worried about Bernard von NotHaus and his new money, the liberty dollar.Von NotHaus said he was tired of seeing the value of the American dollar, called a Federal Reserve Note, constantly depreciate and hurt the economy.Instead of shrugging his shoulders and saying, what can I do? he decided to do something and founded NORFED, which distributes the liberty dollar.NORFED stands for the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code.Von NotHaus and local users like Charles Douglas and Paradise Natural Foods Store owner, Don Maydole, said the liberty dollar is backed by silver, not debt, as they claim Federal Reserve Notes are.Federal Reserve Spokeswoman Carol Eckord said what von NotHaus and NORFED are doing is not illegal.It is similar to a gift certificate at a department store, she said, and people accept them at their own risk.Von NotHaus, who has been working on the silver-backed currency concept for 23 years and implemented it in October of 1998, said the whole point of the liberty dollar is to educate people about the Federal Reserve and its money scam.There is a gigantic bubble in the debt-based currency, von NotHaus said. We need to return value to our monetary system. A government that does not control the money is a government that can be controlled.He said Federal Reserve Notes, commonly called dollars, are not owned by the American People or the United States Government, they are owned by the Federal Reserve Bank, which he said is a private bank and not federal at all.The Federal Reserve Bank loans the notes to the government with interest, which causes inflation, he said.He said the more Federal Reserve Notes that go into circulation, the more the government owes the Federal Reserve in interest, which puts America into an unpayable debt.Eckord said fiat money (Federal Reserve Notes) is decreed to be legal tender of the land and though it is not backed by precious metals like silver or gold, it is backed by the full faith and credit of the U.S. government.In other words, Federal Reserve Notes have value because people believe they do and trust the government, she said.Eckord said the magnitude of the U.S. dollar and the fact that it is recognized world wide as viable currency shows that it is still valuable and people dont have to worry about losing faith in the good old greenback.She said a dollar will always be worth a dollar to merchants and consumers and the dollar has never gone down in value.There are 660 billion dollars circulating worldwide, she said. Two-thirds of that is probably over seas. Most people believe in the full faith and credit of the United States .She said could not speculate on what would happen if the liberty dollar caught on and people did lose faith in Federal Reserve Notes.Von NotHaus said it is better that people catch on to the liberty dollar idea slowly and admits if everyone suddenly quit using Federal Reserve Notes it would be very bad for the country.That would be the worst thing for the county and the people, he said. This isnt anti-government. This isnt a revolutionary process, it is a slow, evolutionary process. Were trying to do it peacefully.He said economic collapses in Russia , Mexico and Argentina prove that money backed by debt is destined to fail.He believes Japan is next in line for an economic collapse and America will not be far behind."In the next monetary crisis, more peoples money will be protected (with liberty dollars), he said. Before five years ago (when NORFED started), people had no choice but to bend over.Von NotHaus said there are over 3 million liberty dollars in circulation compared to trillions of Federal Reserve Notes.The liberty dollars are on a one to one trade with Federal Reserve Notes because he said NORFED acknowledges that the notes are the big gorilla of the world.The silver that backs each liberty dollar is kept in a warehouse in Coeur d Alene, Idaho, he said, and an auditor does a monthly audit of the warehouse to ensure there is enough silver to back each liberty dollar.The liberty dollars, which are warehouse receipts for the silver, are not issued until the auditor confirms the silver is available to back it.Liberty dollars come in $1, $5 and $10 denominations with the $10 liberty dollar backed by one ounce of silver.The $1 liberty is worth one-tenth ounce of silver and the $5 is worth a half ounce of silver.Ridge resident David Smith thinks he smells a scam because one ounce of silver on the market is worth about $4.A person with a $10 liberty dollar would ultimately lose out on $6, Smith said.However, von NotHaus said Smith is confusing the bulk price of silver and the manufactured price.Von NotHaus said no one can buy silver for the spot price from the New York Commodity Exchange, where NORFED gets its silver.Furthermore, he said the price of a liberty dollar certificate includes the market value of the silver, storage, printing, distribution and other expenses of a free market enterprise.Besides, what will you get if you tried to trade in your Federal Reserve Note? he asked. Nothing.
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