Liberty Dollar

The Liberty Dollar and the Goldback®

When I started working in the precious metals space in 2015, I had the benefit of having one of the greatest mentors that I could’ve hoped for. Lawrence Hilton wrote what became the draft for the Utah Legal Tender Act of 2011. He isn’t a lawmaker. He is just a lawyer and a concerned citizen that was able to write a document that became state law. He is a normal person that did something incredible.

My new job was with the United Precious Metals Association. They specialize in vaulting legal tender gold and silver coins. One of the questions that I was often faced with as a new employee at a vaulting company was something like… “Well, you know what happened to the Liberty Dollar right? What is your plan if ‘they’ come for you?”

My early response involved pointing out a video where the Attorney General of Utah, Sean Reyes, declares his commitment to protecting precious metals institutions like ours from the Federal Government.

At the time, I didn’t really understand what happened with Liberty Dollar, so I asked Larry and he told me something like this… (keep in mind that a memory of a conversation from five years ago is historical fiction at best).

This conversation created in my mind a reality in which the Federal Reserve, in conjunction with the Federal government, actively seeks out and destroys competitors. Liberty Dollar was a threat so it was dismantled. My answers to “What would you do if ‘they’ come to get you…?” revolved around a protective, friendly state government for years as a result of this paradigm. The Federal Reserve working with the State to quash competition became the boogeyman. This paradigm was reinforced by what happened in Libya [Video], when President Gaddafi was supposedly killed by Western backed terrorists for trying to make a gold currency.

When we started working on the Goldback in 2019, the fear of suffering a similar fate to the Liberty Dollar was real. It was like a dark gloomy cloud hanging over the entire project. Why make a cutting edge gold currency if all we are really doing is inviting the boogeyman to come and get us? Am I just stupid or crazy?

I set my small team into researching the Liberty Dollar in depth. I wanted to know everything that was written regarding what happened with them. My understanding was that they had made a precious-metal-based currency that was meant to be circulated much like the Goldback. What is encouraging is that the creators of the Liberty Dollar didn’t get clandestinely disappeared in some alleyway, they were shut down in court. Even if the FBI’s case was “threadbare,” then there must’ve been a case that could convince a jury. I wanted to know what the case was so we could prepare ourselves for whatever may come.

The benefit of making something like the Goldback after the Liberty Dollar is that you get to learn from your predecessor’s mistakes. They made plenty of mistakes according to the FBI. The case against the Liberty Dollar was built over several years before it was brought to the courts. The FBI even had moles within NorFed, the organization that made the Liberty Dollar. We read over 50 pages of the FBI’s case and then we broke down the major complaints into a list:

1. They used the term “Dollars” on all of the currency.

2. They used a version of “In God We Trust” (“Trust in God”).

3. They used the dollar sign ($).

4. They made it easy for themselves to be branded as anti-government because they openly created a university that preached the sovereign citizen movement and other groups deemed to be anti-government.

5. They used many federal images such as the Statue of Liberty that may have confused many people into thinking that the currency was official.

6. They didn’t deny being s U.S. dollar legal tender on the currency.

7. Liberty Dollars used the exact same denominations as the Federal Reserve Notes: 1, 5, 10, 20, 50.

8. They had an aggressive mission statement against the Federal Reserve and positioned themselves as a competing currency to take down “the Fed.” (They named the organization NorFed.)

9. Liberty Dollar used multi-level-marketing (MLM) with massive profit margins. They would sell a $4 (melt value) round of silver for $10. (This is a ~150% premium when 5-10% was typical for rounds.) Liberty Dollar was able to get coin stores to carry their product by offering them exorbitant profits. Then they would have the user pass it off as a $10 “coin” to someone that didn’t suspect that it was probably worth quite a bit less.

10. When silver appreciated in price past about $7 per ounce, they melted the silver down and recast all the silver rounds to, say, “$20” instead of “$10”. The FBI cast this as disingenuous.

11. The supposed stated intent of the Liberty Dollar was to undermine the U.S. financial system. This, the FBI argued, was an example of domestic terrorism.

While Teddy was compiling the above list, I went ahead and did my own research on YouTube to see what I could find. Rather quickly, I found a documentary about the Liberty Dollar by the Learning Channel. From this documentary, I learned quite a few things. It is a great watch because you have the Federal Reserve spokesperson (Did you know this was a job?) as well as Bernard Von NotHaus discussing local currencies and Liberty Dollars during their heyday. I highly recommend watching it.

The 5:00 to 6:10 minute mark section of this video changed my mind about the whole issue. Bernard Von NotHaus gives two in-person examples of spending Liberty Dollars. In both instances, I am convinced that the person accepting the coin thought it was a U.S. minted coin. See for yourself. At this point, I was no longer worried about Goldback suffering the same fate as the Liberty Dollar. The projects are too different.

Here is a breakdown of how we made the Goldback different based on the list above:

1. They used the term “Dollars” on all of the currency.

   Goldbacks only mention dollars to say that Goldbacks are not dollars. In fact, if you tried to pass a Goldback off as a dollar you’d lose over 2/3rds of your value. You wouldn’t even get melt value.

2. They used a version of “In God We Trust” (Trust in God)

   Goldbacks have scripture on them, but nothing like “In God We Trust” or other mottos found on official coins.

3. They used the dollar sign ($)

   Goldbacks never use the dollar sign ($) as they are not dollars. We don’t want anyone to think they are dollars.

4. They made it easy for themselves to be branded as anti-government because they openly had a university that preached the sovereign citizen movement and other groups deemed to be anti-government.

   Goldback Inc. does not do anything remotely like this.

5. They used many federal images such as the Statue of Liberty that may have confused many people into thinking that the currency was official.

   Everything about the design of the Goldback was to ensure that even the most easy-to-confuse American wouldn’t confuse a Goldback with a dollar. We use vertically-oriented women while dollars use horizontally-oriented men. Dollars are green while Goldbacks are gold. We have yet to meet anyone that thinks a Goldback is a dollar or any kind of official currency. We even put “privately issued” on the complementary currency (The Goldback).

6. They didn’t deny being U.S. dollar legal tender on the currency.

   Goldbacks have language that affirms that they are not U.S. dollar legal tender. As of this writing, there may be debate as to whether or not Goldbacks could be considered state legal tender, but there is no language on the Goldback indicating that this is the case.

7. They used the exact same denominations as the Federal Reserve Note: 1, 5, 10, 20, 50.

   This particular point is part of what led to the creation of the 25 Goldback denomination vs. a 20 Goldback denomination.

8. They had an aggressive mission statement against the Federal Reserve and positioned themselves as a competing currency to take down “the Fed.” (They named the organization NorFed.)

   The Goldback is a complementary barter currency as well as a gold product. It can also be considered a local currency depending on the context. It is not a competing currency.

9. Liberty Dollar used multi-level marketing (MLM), with massive profit margins. They would sell a $4 (melt value) round of silver for $10. (This is a ~150% premium when 5-10% was typical for rounds.) Liberty Dollar was able to get coin stores to carry their product by offering them exorbitant profits. Then they would have the user pass it off as a $10 “coin” to someone that didn’t suspect that it was probably worth quite a bit less.

   Most of the cost above melt with the Goldback is a result of the expensive vacuum deposition creation process. The actual profit margins aren’t high enough for the government to make these claims. Nor does Goldback Inc. in any way use MLM.

10. When silver appreciated in price past about $7 per ounce, they melted the silver down and recast all the silver rounds, to say, “$20” instead of “$10”. The FBI cast this as disingenuous.

    This point isn’t even applicable. We aren’t pegging the Goldback to the Federal Reserve note dollar.

11. The supposed stated intent of the Liberty Dollar was to undermine the U.S. financial system. This, the FBI argued, was an example of domestic terrorism.

    The Goldback is not a competing currency. It is a gold product designed to be conveniently used as a complementary or local currency. While some individuals may choose to use Goldbacks instead of dollars in some cases, this isn’t less true for other barter currencies or gold in general.

I’ve never met Bernard VonNotHaus so I can not claim to know him or his intentions. I suspect that he is a particularly bold and courageous guy that may have just been a day late and a dollar short with his methods. If everyone worked as hard as he did to attempt to achieve a higher degree of Liberty then we would be unstoppable. Hindsight is 20/20. I’m grateful that we can learn from the pitfalls of his project. In truth Western Civilization is just a long history of learning from past mistakes and improving. Perhaps some group will come after Goldback someday and do an even better job than us!

It took the government seven years to shut down the Liberty Dollar. I personally believe that they had a good case for counterfeiting because Liberty Dollars were passed off as “the new $10 silver” coins to unsuspecting people, at least sometimes. This was a weird realization for me to come to. It is unfortunate that the fate of the Liberty Dollar has cast a cloud of doubt and fear over other complementary currency projects such as the Goldback. It is my hope that over time the community will be less afraid and take courage.

(The Goldback should not be seen as threatening by central banks anyway, and for many reasons. Perhaps I’ll write an article on that subject later.)