Be Careful with What You Trade

I’ve heard about people who printed off “money” on their inkjet printer, and then successfully passed off the counterfeit dollars at McDonalds. I’ve also heard about people who invest heavily in more sophisticated counterfeiting operations. The goal in both cases is for the perpetrator to enrich himself with the buying power of real money by producing it all himself. It’s dishonest. It’s also illegal.

But now I’ve heard it all. Someone making an alternative currency has been convicted of… terrorism? Sounds like a real muddle. Without knowing all the facts of the case, I leave open the possibility that the convict was doing something dishonest. It may have even been illegal. But it doesn’t sound like it was the same thing as counterfeiting money, though the conviction has that ring.

It sounds as though the perp was creating a local currency that could be used as an alternative to US dollars. It’s been done before, and apparently is not usually considered a form of terrorism. In fact, I’m told that the old saying about wooden nickels goes back to a local currency in southern Oregon made from myrtle wood. So what’s different this time? For one thing, the charges give the impression that this particular local currency shared too many design similarities with US Treasury money.

The coins were marked with the dollar sign, the words “dollar,” “USA,” “Liberty,” “Trust in God” (instead of “In God We Trust”) and other features associated with legitimate U.S. coins.

I can understand why the US Treasury would want any local currencies to appear completely distinct, and would assume that the jury found these to be confusingly similar. On the other hand, real counterfeit money is always worth less in materials and work than obtaining the actual US money it represents. Otherwise counterfeiting would be a complete waste of time and effort. It sounds like this currency is actually worth more than American money, because it’s minted with valuable metals, which are not subject to having their value erased by inflation.

The government also is seeking the forfeiture of about 16,000 pounds of Liberty Dollar coins and precious metals valued at nearly $7 million.

OK. What should we make of this? A US Attorney described the government’s investigative and prosecution efforts in very strong language: “We are determined to meet these threats through infiltration, disruption and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.” How does a superior local currency “challenge the legitimacy of our democratic form of goverment?”

Answer: it provides a means for some American citizens to safeguard the value stored in their money, in a time when the monetary strategy of the United States is to devalue all of our money in an attempt to shrink the impossibly-large debt burden our government has accumulated, and perhaps lessen the titanic trade imbalance that threatens to destabilize our economy. If certain (i.e. the “wrong”) Americans find a way to preserve the value of their savings over against the rest of the country, then it will throw the whole strategy out of whack, as their economic influence increases disproportionately against the rest. That’s my theory, anyway. I hope expressing it doesn’t amount to terrorism.

Does the monetary policy (when to print, when to retire money, how to introduce it into the economy) of your country fall under the fourth commandment (to obey earthly authorities)? It seems there are laws about money, but there seems to be a gray area here. We must pay our taxes in US Dollars, but is it wrong to barter for everything else? Is it a form of terrorism to use a local currency? Maybe it’s wrong only when your money is better than an inflationary fiat money.

3 thoughts on “Be Careful with What You Trade

  1. There is a local company here that gives out “Digi-bucks,” the first half of the world being a play on the company name. There are many vendors locally who have signs posted, “We accept digi-bucks.”

    Or how about the discount cards that one of the local sports team sell. I present that card at the check-out, and get a certain amount knocked off my bill. The amount of discount I get depends upon the agreement the local merchant has made with the sports team. All these local agreements are listed on the front and back of the card (in print that’s waaayyy too small for this 40-something to read). There are probably 40 or 50 merchants represented. And for those merchants, that card represents a monetary value.

    Either of these examples do not sound much different than what Mr. von NotHaus did.

    As you pointed out, his money looked similar to a real dollar. But also he seems to have been outspoken about federal monetary policy. So I wonder if the outspokenness is the problem. It seems to come down to a freedom of speech issue more than money or terrorism. “We have to shut this guy up. He’s making us look bad.”

  2. Like everything this author writes, 10% of this post is obvious, 75% is practically important, 10% is thought provoking, and 5% brings up a pivotal underlying issue that is completely mystifying.

    The obvious: This guy is no terrorist. To convict him as one strains the definition of the word past the breaking point.

    The practical: It sure seems unfair that the gov’t took this guy’s $7 million in precious metals. Also, if a guy is going to try and invent a currency alternative, then he should probably avoid naming it “the dollar.” (Uncle Sam got to that word first, and he doesn’t have much of a sense of humor about it.)

    The thought-provoking: Does the government have a monopoly on currency production? …hmm… Does “Render unto Caesar what is Caesar’s” apply? I’m a bit baffled as to the answer, because…

    The mystifying: Just what IS currency, anyway? What intrinsic value does money have other than the fact that we all THINK it has value? Is economics anything more than a walk on a slippery rock and the dollar just a smile on a dog?

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