Saturday, November 17, 2007

Margarine hates butter.

Federal agents on Thursday raided the Evansville, Ind., headquarters of the National Organization for the Repeal of the Federal Reserve Act and Internal Revenue Code (Norfed), an organization of "sound money" advocates that for the past decade has been selling a private currency it calls "Liberty Dollars." The company says it has put into circulation more than $20 million in Liberty Dollars, coins and paper certificates it contends are backed by silver and gold stored in Idaho, are far more reliable than a U.S. dollar and are accepted for use by a nationwide underground economy.


In the affidavit, an FBI special agent states that he is investigating Norfed for federal violations including "uttering coins of gold, silver, or other metal," "making or possessing likeness of coins," mail fraud, wire fraud, money laundering and conspiracy. "The goal of Norfed is to undermine the United States government's financial systems by the issuance of a non-governmental competing currency for the purpose of repealing the Federal Reserve and Internal Revenue Code," he states.


I suspect that if you look closely at whatever statute the FBI claims to derive the "uttering coins" and "making or possessing likeness of coins" phrases, you will find that the statute defines "coins" to be United States coins. That is, it would be illegal to strike coins that purport to be United States coins.

These Liberty coins could only be mistaken for US coins by a complete moron. ...Which I know is most Americans, but still.

By the FBI's misleading and fraudulent use of that statute, they would seem to be obligated to seize the assets of the Franklin Mint and jail them for striking commemorative Snow White coins or World Fair 1968 coins or whatever.

The government's case is asinine.

Is it legal to trade a broken-down but fixable truck for three cords of firewood?


Is it legal to trade a gold nugget you found in the river for three cords of firewood?


Is it legal to melt that nugget of gold into a flat, circular disc and shine it up and trade that for three cords of firewood?


Is it legal to strike an image of Mickey Mouse onto the disc and trade it for the firewood? (There would some copyright infringement, but you get the point. Come up with your own symbol or image.) Can you do this?


As a matter of fact, companies have been doing this centuries. They're called assayers. Such an image on a coin is like a trademarked symbol. It tells any who might trade with such a coin that this particular company has certified that the silver or gold is of a guaranteed weight and fineness.

There is nothing illegal about this.

It would be illegal, however, if you struck a coin that purported to be a United States coin.

So, as usual, the FBI is misusing statutes to achieve some political end. These aren't quite the Ephraim Zimbalist Junior heydays of law enforcement.

And that end is to drive real money out of circulation so that the garbage money will have no competition.