Like other digital currencies located in the United States which are now under a microscope pending new US laws and regulations…and facing trouble from the US Mint, in early December, NORFED Inc. was dissolved by the Board of Directors. Immediately after, the old company shed its skin and emerged with a new name and ‘tone’.
They have corrected some of the issues which may have originally brought on the allegations from the US Mint. Bernard von NotHaus, the Monetary Architect for the Liberty Dollar explained that, “We simply realized that the Liberty Dollar would succeed easier and faster without any political baggage.”
Von NotHaus vows that this new transition is simply a sign of maturity and the Liberty Dollar will survive and continue to be used across the country and even around the world.
NORFED was originally started in 1998 as a grass roots organization to enlighten people about US Federal Reserve policy and the company called for a repeal of the Federal Reserve’s control over US money. In my opinion that original goal was very successful because during the last number of years in circulation, many US citizens learned about Fed policy, the issuing of money and by offering them the LD, they were then given a choice of methods to pay for their goods and services.
The ‘Liberty Dollar’ was billed as the world’s first ‘free market currency’ and is based on gold and silver backing. In addition to paper bills and gold or silver Liberty Dollars, the eLiberty Dollar was also used online as a digital currency. While not as popular as some of the other precious metal backed digital currencies such as e-gold or Pecunix, many people paid for products online using the eLD, including myself.
One striking difference between the Liberty Dollar and other alternative physical currency backed by silver is a policy used by the company known as the ‘Silver Base’ system. In contrast to the daily spot price of silver which is constantly changing, a one ounce silver Liberty Dollar has a static face value. That face value will always be higher than the spot price because of their ‘Silver Base’ policy.
Originally that ‘base’ or face value was $10, but since metals have moved up, the ‘Silver Base’ is now $20. There is no randomness to raising the base to a higher price mark and it is a very public set of rules with smart reasoning behind it. However, with the spot price of silver today hovering around $13 USD per ounce, the one ounce silver LD’s face value is still set at $20 and merchants are expected to exchange $20 of goods for that one ounce piece. This is a voluntary transaction between buyer and seller, no one is ever required to use the LD.
Here is an example, if the widget you are selling costs you just $4 USD and you are selling it at $20, with your price mark up — knowing the spot price of silver is about $13 USD you are still in the profit zone. In a case such as this, the merchant is likely to accept Liberty Dollars at face value.
The same idea is used for merchants providing a service such as computer tech. If you are charging $20 and hour, but you know silver is only $13 an ounce spot price, you may be willing to accept LDs if it will mean more business for you or you can then buy other merchandise you need with the $20 face value silver piece. This is the basis of a barter transaction between two individuals. You could stamp $20 on an apple and exchange it for products or services worth $20 if the seller will accept your apples as having a $20 value. After all at today’s prices, the copper value of a US penny is higher than the 1 cent face value, but users still accept it at face value.
The ‘Silver Base’ method also allows the company to sell currency to users and agents at a slight discount which provides an incentive to ‘spread the word’. Both users and agents alike can turn a profit by recruiting new merchants or users.
Another physical silver currency used in barter transactions is the Phoenix Dollar. Unlike the Liberty Dollar, each one ounce pure silver disc, is exchanged at that days spot price. There is no set face value so users are exchanging products and goods for exactly the same value of pure silver.
The big difference between the old Liberty Dollar and the LD 2.0 is that the company has dropped the acronym NORFED and the accompanying political rhetoric which called for not only the repeal of the Federal Reserve but also income tax. The LD 2.0 is politically neutral, low key, referred to as a ‘Private barter monetary system’ and carries the slogan “Protecting and growing your money – one Liberty Dollar at a time”. This upgraded version is being marketed to businesses as a ‘private barter currency’ which is not only ‘good for the community but it also can be profitable for users’. The company is making every attempt to insure that their new barter currency will NOT be mistaken as any part of the US Mint or the US government monetary system.
Despite the very public warnings from the US, Mint von NotHaus remains adamant in his claims that the old version and the new version are both legal private currency. He reinforces his opinion further by quoting Andrew Williams, spokesman for the Federal Reserve Board in Washington, DC, who said, “There is no law that says goods and services must be paid for with Federal Reserve notes. Parties entering into a transaction can establish any medium of exchange that is agreed upon.”
Worldwide LDs? Yes…
Bernard has also created LDs for Puerto Rico, Panama, and Ecuador. The one ounce Silver Libertys available in these regions carry the new LIBERTAD obverse with the 2007 date and CONFIE EN DIOS for Trust in God. No comments yet from any of these governments but Pure Silver as a currency should be well accepted in these areas.
For further info on the ‘new’ Liberty Dollar 2.0, please contact a Regional Currency Office nearest you. Find one here: http://www.libertydollar.org/ld/rco/rco-find.htm or call 888.LIB.DOLLAR (888-421-6181).
There are an estimated $20 million dollars of LDs currently in circulation.