Big, bad news! Liberty Dollar offices raided.

[Lloyd Danforth]

Every pizza shop

[Little Owl]

Yeah so, no crime has been charged, no one has been arrested and it took them 10 years to do this.

Sounds like this is a step to procure evidence for charges of a crime.  According to the affidavit, the investigation took two years, not ten.  It also suggests that some of the lower members of the hierarchy may have some accountability.

Owl... the US dollar is based on nothing.. it gets debased all the time.

True, but its not being marketed as "inflation proof currency".

When are people going to finally figure out it was done to discredit Ron and nothing more?

There is absolutely no evidence to support this!  Read the affidavit.

"Debasement" is what happens to the dollar, not to the Liberty.

A liberty buys half as much silver as it used to.  I'd call that debasement.

If it's a crime to have a large spread between raw materials costs and finished product price, then why aren't they raiding Coca-Cola?

If you read the affidavit, the problem stems from the "100% backed by silver" claim combined with the spot spread.  They're not claiming the spot spread in itself is a crime.  I've always considered this facet of Liberty Dollar's to be a bit underhanded, but not necessarily illegal.

There are some dumb assertions in the affidavit as well.  Like the "similarity" between Liberties and FRNs.  They also seem to think hypocrisy is a crime, claiming that its wrong for NotHaus to accept FRNs (which he calls "worthless") for Liberties.

[anarchicluv]

The Soviet-Style Attack on NORFED
by Jacob G. Hornberger, November 21, 2007

It would be difficult to find a better example of federal heavy-handedness than the recent six-hour federal raid on NORFED, the National Organization for the Repeal of the Federal Reserve and Internal Revenue Code. In fact, it would be virtually impossible to distinguish the NORFED raid from similar raids conducted by Soviet and Chinese communist officials against private businesses operating in those countries.

After all, by confiscating all the assets of the company, including its coins, computers, records, and equipment, the feds have totally shut down the NORFED operation. But where is the court order authorizing them to shut down this privately owned business? The answer: There is no such court order. All federal agents had was a search warrant issued by a federal magistrate.

Here's what the feds did that enabled them to engage in their Soviet-style attack on NORFED. Unlike the system that existed in the Soviet Union and that still exists in Communist China, the U.S. government is precluded by law from simply closing down businesses it doesn't like or that it is feels are violating the law. If the government wishes to have a business shut down, the law provides a remedy called an injunction, which is a formal order issued by a judge that requires a person or business to cease and desist from engaging in a certain operation.

In order to secure a federal injunction, the petitioner files an application for the injunction with a federal district judge. The judge sets a date for the hearing on the application and gives notice to the respondent of the application and the hearing. What is significant about the hearing on the temporary injunction is that the respondent has the right to be present to defend his side of things. He can have his lawyer present, cross-examine witnesses, present witnesses, introduce evidence, file motions and briefs, and make legal arguments to the judge.

At the conclusion of the temporary-injunction hearing, the judge can either grant or deny the request for a temporary injunction. If he grants it, he sets a bond as a prerequisite to the issuance of the injunction, in order to protect the respondent from damages suffered if it later turns out that the injunction was wrongfully issued. The respondent has the right to appeal the grant of the injunction to the federal court of appeals, which ordinarily grants priority to such cases because of their importance and urgency. Unless the court of appeals vacates the temporary injunction, it remains in effect until a trial on the merits is later held, which may be a trial by jury. At that time, it is determined whether to make the temporary injunction permanent.

What makes the injunction process fair and just is that it permits both sides to be heard. It also protects the respondent by requiring the petitioner to file a bond in an amount intended to compensate him for damages suffered during the pendency of the injunction, including claims filed by irate customers. (Among the assets the feds seized were coins that had been purchased and paid for by NORFED's customers.)

So, did the FBI and Justice Department employ the injunction process to close down the NORFED operation? Did they ask a judge for a temporary injunction to shut down the operation? Did a federal judge enter an order enjoining NORFED from continuing to operate its business?

[this is an excerpt, to read the full article click on the link in the title above]

[Ruger Mason]

I agree with Little Owl.  Others have expressed concern about Liberty Dollar's approach being one essentially of fraud.

According to the government affidavit, Liberty Dollar was preparing to restrike its $20 Liberties into $50 Liberties once the spot price of silver reached, I think it was $16.75, just as it had recently restruck its $10 into $20, thereby dramatically increasing its profits, which apparently it realizes in US dollars (shocker!).  Much of the debate among the liberty community seems to be focused on the outrage of government going against a competing currency, etc., and rightfully so but the whole fraud thing is treated like a dirty little secret.  I had a conversation with some Liberty Dollar people last week, and I walked away from it with the feeling that the Liberty Dollar advocates felt awkward addressing the whole debasement issue, of whether or not it was honest to put a face value on a 1 oz silver coin.

The irony is not lost on me.  While Liberty Dollar criticizes the Fed for printing new "fiat" dollars, they do precisely the same by restriking their coins with arbitrarily higher face values.  Why $16.75 spot price to make them $50 face values?  Its an arbitrary number, but the time seems right.  Time to rake the dough!  FRNs only, please!

FRAUDS!

[Dreepa]

Owl and Mason.

I think those are good points.
You guys should ask those questions at the Liberty Forum where Bernard will be speaking.

[anarchicluv]

The irony is not lost on me.  While Liberty Dollar criticizes the Fed for printing new "fiat" dollars, they do precisely the same by restriking their coins with arbitrarily higher face values.  Why $16.75 spot price to make them $50 face values?  Its an arbitrary number, but the time seems right.  Time to rake the dough!  FRNs only, please!

No, it was not arbitrary.  The plan for the move-up was clearly laid out for all to see.  Once silver had reached a specific spot price and stayed there for a 30 day moving average, then it was time to do the move-up.  You can read all about it here (this is about the move-up to the $20 base, but it works similarly for the move-up to $50 base).

So, it's fraudulent even though it was clearly worked out YEARS in advance and posted for all to see?

[Ruger Mason]

The irony is not lost on me.  While Liberty Dollar criticizes the Fed for printing new "fiat" dollars, they do precisely the same by restriking their coins with arbitrarily higher face values.  Why $16.75 spot price to make them $50 face values?  Its an arbitrary number, but the time seems right.  Time to rake the dough!  FRNs only, please!

No, it was not arbitrary.  The plan for the move-up was clearly laid out for all to see.  Once silver had reached a specific spot price and stayed there for a 30 day moving average, then it was time to do the move-up.  You can read all about it here (this is about the move-up to the $20 base, but it works similarly for the move-up to $50 base).

So, it's fraudulent even though it was clearly worked out YEARS in advance and posted for all to see?

The $7.50 and $16.50 "crossover" prices *ARE* arbitrary.  Why those numbers?  Because von Nothaus pulled those numbers out of thin air -- perhaps not purely arbitrarily, but to maximize his profit in U.S. dollars.  Those two numbers aren't even consistent, suggesting they were arbitrary even more.  The $10 Liberties were restruck into $20 Liberties when the spot price reached $7.50, resulting in an immediate "profit" of $12.50 US, a 266% increase in "value".  When the $20 Liberties are restruck into $50 Liberties at a $16.50 US spot price, the "profit" jumps dramatically to $43.50 US, or a $303% increase.  These numbers have no relationship to one another.  Apparently, the $50 restriking was still "in the works" and not published, so its not true to say it was worked out years in advance.  The spot price of silver could hit $16.50 very soon.

To say its not fraudulent because it was "worked out" for years is just not true.  The only people who know about the "crossover" and restriking are those who are very familiar with Liberty Dollar's business, namely the Liberty Associates and RCOs.  It is consumers and merchants who are being defrauded, and clearly so, since Liberty Dollar encourages people to use them at face value, as if they were equivalent to US dollars.  Yes, the Liberty Associates and RCOs may all be aware of the "crossover" for "years" but this fact only implicates them in the fraud.  Right on Liberty Dollar's website, as has been pointed out by many others, is their recipe for defrauding merchants.

[Little Owl]

anarchicluv, I agree that the seizure of assets and business equipment should not go uncompensated should NORFED be acquitted of all charges.  And they need to either file charges soon or return all assets and compensate people for their loss.  Time will tell what transpires, but "innocent until proven guilty" goes both ways, and I'm not prepared to assume this is part of some colossal government conspiracy against Ron Paul until I see evidence of that.  So far I see none.

I hate FRNs and wish we would return to specie currency.  (At one point I had as much gold as the Feds seized from Sunshine in the form of American Eagles)  For this reason, the Liberty Dollar system is particularly distasteful.  Contrary to claims, it actually hinders the cause of specie currency since it was done in such a questionable manner.  Had they done Liberty Dollars the right way, I'd be behind it 100%.

You guys should ask those questions at the Liberty Forum where Bernard will be speaking.

Don't know if I'll be at the Liberty Forum this year (too few FRNs).  And I have serious doubts as to whether Bernard will attend.  But if he did, I highly doubt I would get straight answers to these questions.  Its more enlightening to watch what people do than to hear their spin on the issue.

So, it's fraudulent even though it was clearly worked out YEARS in advance and posted for all to see?

The man in the street can hardly be expected to be privy to these dealings.  Extending Ruger's sense of irony, NORFED berates the Federal Reserve for exploiting people's ignorance of money, then pulls the granddaddy of ignorance exploitation by planning to mint $16.75 of silver into rounds marked "$50".

I have yet to receive a satisfactory answer to the question of why Liberties weren't issued in fixed denominations based on weight of metal.  That would be truly "inflation proof" and would eliminate questions as to their value.  But then, why not simply trade in generic silver rounds?

[error]

They ARE offered in fixed denominations based on weight of metal! And they don't "debase" either. If you have a "$10" one-ounce piece, you can (or could, before the raid) trade it in for a "$20" one-ounce piece. The same with the warehouse receipts.

While I prefer generic silver to Liberty Dollars, it's hard for me to find fault with anything that Liberty Dollar has done, except perhaps that some people posting in this thread are criticizing the LD because they think the FRN is money and silver rounds are not.

[MengerFan]

A liberty buys half as much silver as it used to.  I'd call that debasement.

Yeah, but if you have an old Liberty, you just trade it in for the new one. At the end of the day, it is just a lump of silver with a number stamped on it, that isn't worth any more than what someone will give you for it.

There is no way this fraud deal will stick. The LD website had so much detail of how the system works, that there is no excuse for anyone being fooled. There isn't anything in the affidavit stating that LD associates were trained in any misleading tactics whatsoever. While it is certainly true that I, as a LD holder, could lie to someone and make them believe that it was a government-sanctioned coin, but that would be my fault, not the LD organization's. If I fool you into accepting Monopoly money instead of US currency, is the government going to raid Parker Brothers and steal all of their assets, accusing them of fraud?

[Ruger Mason]

They ARE offered in fixed denominations based on weight of metal! And they don't "debase" either. If you have a "$10" one-ounce piece, you can (or could, before the raid) trade it in for a "$20" one-ounce piece. The same with the warehouse receipts.

But error, this is besides the point.  The fraud isn't being perpetrated between Liberty Dollar and its agents -- who are all presumably on board (and thus, sadly, all parties to the fraud, with levels of awareness likely varying widely between individual LAs and RCOs).  The primary fraud is being perpetrated against consumers and merchants, who are being lead to believe, intentionally, that $1 Liberty = $1 US dollar, and through deliberate omission, that a Liberty is legal tender.  The RCO or Liberty Associate might not feel he is being defrauded as long as he can pass the fraud on to a naive or inattentive store clerk.  As they say, "shit rolls down hill."

[Ruger Mason]

A liberty buys half as much silver as it used to.  I'd call that debasement.

The LD website had so much detail of how the system works, that there is no excuse for anyone being fooled.

I'll grant them this, they do have a lot of guts to outline exactly how they commit fraud on their website.  Unfortunately for them, this openness will be used to convict them.

http://www.libertydollar.org/ld/spend-liberty-dollars/howtospend.htm

Some highlights:

4. Simply offer The Liberty Dollar with the confidence that it will be accepted. After all, why wouldn't it? When you offer the American Express Card, if it is not accepted, they tell you. Likewise, if the store does not accept Liberty Dollars, the cashier will tell you and you can simply pay another way.

They expressly rely on clerk ignorance here.  Every clerk knows what an American Express card is.  Not every clerk knows that the silver coin you just handed him is counterfeit.  It looks a lot like the silver coins they've likely "heard of".  It looks a lot like a US coin, says "USA" on it and says it is worth $20, so they take it, and you buy $20 US in goods with a coin that's only worth $15.  Had the Feds not put them out of business, pretty soon you could use the same coin to purchase $50 US in goods.  Unfortunately, when that merchant takes the coin to the bank, that bank will not give him $50 US in exchange.  So the individual that uses the Liberty Dollar in this way is nothing but a petty thief.  This is how Liberty Dollar WANTS it to be used:  to steal from people!

6. Now the hardest part - don't say anything! Just wait. Let the person marvel at its beauty, weight, and discover it says TWENTY DOLLARS. When asked "Is it real?" Answer: "Yes, one ounce of silver PRIVATE currency valued at 20 dollars." Do not rush. Just stand there and wait, patiently. No need to smile. Just wait.

Valued at 20 dollars?  That's an outright lie!  Pretty soon they'll be able to use the same coin to say "valued at $50".  Where did that value come from?  Straight out of von Nothaus's ass and into his wallet (US dollars only please!)

9. The Federal Reserve does not require anyone to understand the monetary system to use their currency. In fact, they thrive on the people's ignorance about money. The Liberty Dollar is all about knowing what money is and simply brings choice to the marketplace.

I love this one.  If the Federal Reserve is doing it, then so can we!  But please, make all payments in US dollars!

Fraud, deliberately perpetrated.  Liberty Dollar is kaput, and von Nothaus is going to jail.

[MengerFan]

The primary fraud is being perpetrated against consumers and merchants, who are being lead to believe, intentionally, that $1 Liberty = $1 US dollar, and through deliberate omission, that a Liberty is legal tender.  The RCO or Liberty Associate might not feel he is being defrauded as long as he can pass the fraud on to a naive or inattentive store clerk.

What evidence is there of this behavior on the part of a Liberty associate? There certainly isn't any mentioned in the affidavit.

Here is your argument: a) Some people don't understand federal currency. b) We cannot, at any cost, let people be fooled by non-government currencies. c) Therefore, we must raid and plunder the property of anything that might fool someone sometime.

Again, why aren't they raiding Parker Brothers? Because that would be absurd. Why did they raid the Liberty Dollar when that is equally absurd? Because it is a threat to the government's ability to keep us enslaved.

[John Edward Mercier]

If the LDs are imprinted 'USA' that will make it even worse for them.
Parker Brothers never tried to develop an open market exchange platform for its Monopoly money.

[Ruger Mason]

The primary fraud is being perpetrated against consumers and merchants, who are being lead to believe, intentionally, that $1 Liberty = $1 US dollar, and through deliberate omission, that a Liberty is legal tender.  The RCO or Liberty Associate might not feel he is being defrauded as long as he can pass the fraud on to a naive or inattentive store clerk.

What evidence is there of this behavior on the part of a Liberty associate? There certainly isn't any mentioned in the affidavit.

Because that is what Liberty Dollar urges them and anyone else who possesses Liberties to do:
http://www.libertydollar.org/ld/spend-liberty-dollars/howtospend.htm

Here is your argument: a) Some people don't understand federal currency. b) We cannot, at any cost, let people be fooled by non-government currencies. c) Therefore, we must raid and plunder the property of anything that might fool someone sometime.

Hardly.  People aren't being fooled by non-government currencies, they're being fooled by people trying to pass particular non-government currency, the Liberty Dollar, as if they were official government currencies.  That's called fraud.

Again, why aren't they raiding Parker Brothers? Because that would be absurd. Why did they raid the Liberty Dollar when that is equally absurd? Because it is a threat to the government's ability to keep us enslaved.

I'm not even going to answer that question.