Is U.S. Terrorized by Gold?

By Patrick A. Heller March 22, 2011

Last Friday, Bernard von NotHaus was convicted of four charges of issuing, passing, selling and possessing privately manufactured Liberty Dollars, including the intent to use them as current money and of conspiracy against the United States.

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The trial was held in Statesville, N.C., and lasted eight days. The jury deliberated for only two hours before returning a guilty decision on all charges. Von NotHaus is currently free on bond awaiting sentencing.

In the Department of Justice press release issued March 18 on the conclusion of this trial, the U.S. Attorney for the Western District of North Carolina, Anne M. Tompkins, said, “Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country.”

Von NotHaus was charged and convicted for the act of issuing silver and gold private barter currency which listed a face value on them. At the times they were issued, the pieces were stamped with a value and traded at prices above the intrinsic metal value.

During the trial, the prosecution’s witnesses admitted that the pieces were of full weight and purity as stated on the pieces, which is why there were no charges for fraudulent description of the merchandise being bartered.

Is it true, as Tompkins’ asserts, that selling gold and silver is an act of “terrorism” that “represents a clear and present danger to the economic stability of this country?” This contention contradicts the U.S. government’s past inaction on this issue.

For example, Christopher Bechtler and his son August of Rutherford County, North Carolina issued $1, $2.50 and $5-denominated gold pieces from 1830 to 1852. It happened that at least some of the issues contained about 1 percent more gold content than coins of the same denomination struck by the U.S. Mint in Philadelphia. Despite this long period of operation, the U.S. government never once prosecuted the Bechtler’s for the same charges pressed against von NotHaus. There are reports that the Bechtler coins were so popular that they were readily accepted at par by banks in North Carolina into the early 20th century.

The March 20 issue of “The New York Sun” carries a great editorial. It begins:

“Here is a thought experiment concerning two men who have issued money. One issued gold and silver coins that will today bring more in dollars than he charged for them. The other issued paper notes that are today worth but a fraction of the gold or silver they were worth at the time they were issued. One man is facing the possibility of years in prison after a federal jury found his issuing of money to have been a crime. The other man is walking around free and being treated by the authorities with great deference. Which is which?”

“It turns out that the man walking free is Ben Bernanke, the chairman of the Federal Reserve. A $1 note that his bank issued used to be worth – as recently as, say, the start of President Bush’s first term – a 265th of an ounce of gold; today it’s value has plunged to less than 1,400th of an ounce of gold. The man who issued the coins that will fetch more dollars today than when he issued them is Bernard von NotHaus, 67.”

You can read the complete editorial at http://www.nysun.com/editorials/a-unique-form-of-terrorism/87269/.

If selling (and, by implication) buying gold and silver coins is an act of domestic terrorism that needs to be prosecuted, is the Department of Justice going to go after “terrorist organizations” that are major manufacturers and sellers of gold and silver such as the United States Mint, Royal Canadian Mint, Perth Mint, Royal Mint, Austrian Mint, South African Mint, Casa de Moneda, and others? They all produce large quantities of gold and silver issues sold to people who are not purchasing them for their numismatic value but rather for their status as safe haven alternatives to owning Federal Reserve Notes. Then is the Department of Justice going to go after every “domestic terrorist” who owns any gold or silver bullion-priced coins and ingots?

The sales of Liberty Dollars barely totaled $10 million before it was shut down by the U.S. government. Does this comparatively modest amount really “represent a clear and present danger to the economic stability of this country?” If so, shouldn’t the Department of Justice aggressively go after those responsible for the major damage to the economic stability of the U.S. – the President, members of Congress, the Federal Reserve and officials at the U.S. Treasury Department?

Think about it. If the U.S. government issued a sound currency, then actions such as the issuing of Liberty Dollars would have no impact on the economic stability of the U.S. It is only by the actions and inactions of U.S. government officials that the stability of the U.S. dollar ever comes into question. The depreciation of the U.S. dollar is now wreaking havoc among American citizens.

As the value of the U.S. dollar continues to fall (now at a 15-month low) the wealth of Americans is being stolen by the U.S. government as a result of the inflation of the money supply. Von NotHaus is not responsible for this condition, but he has just been convicted of contributing to this problem.

Where is the justice in the von NotHaus conviction?

Contrast that story to the U.S. Supreme Court decision announced March 21 that confirmed a trial judge’s order to the Federal Reserve to release 231 pages of documents related to emergency bank loans made in April and May 2008, along with the loan amounts made by the Fed. These documents are to be released within five days.

This is the second time that the Fed has been ordered to disclose information that it sought to shield from the public. One of the Fed’s objections to the disclosure is that it could affect the future operations of the Fed and banks in pursuing, for instance, economic stability. Should the Department of Justice add the Supreme Court to a list of “terrorists?”

Sacramento ANA Report

The American Numismatic Association National Money Show was held in Sacramento, Calif., this past week. When this show was last held in Sacramento in 1999, it set an all-time attendance record.

Activity was much livelier than I observed at the show in Long Beach six weeks earlier. Still, attendance was significantly less than the prior Sacramento show. The public attendance was well down. As a result, most of the activity was dealer to dealer. As I asked around the floor, dealers told me that they generally had an acceptably good show. Nobody told me they were having a spectacular show and only one dealer considered the show to be not worth his time and cost.

Dealers were willing to step up to purchase inventory, with Morgan dollars probably being the strongest area of interest. During the course of the show, dealer bids for common MS-63 and MS-64 Morgans rose about 5 percent. Mint State rolls and even circulated issues were in demand. There was also some interest in picking up U.S. gold coins, though prices remained relatively static.

A number of dealers told me that it continues to get ever more difficult to find new material to acquire. That was also my experience. My numismatic purchases at the show were the lowest of any show in at least a year, despite my willingness to stretch to buy coins I sought. Still, my surprisingly high sales made the overall result satisfying.

In the previous 10 days, my own company had seen the demand for precious metals fall about 80 percent toward silver and 20 percent to gold. When I asked several dealers around the country about the experience in their shops, they all agreed that demand for silver has been strong – several times the amount they have been selling in gold bullion-priced items. The strongest demand, relative to available supply, seems to be for 1- and 10-ounce size silver rounds and ingots.

One California dealer lamented that he appreciated doing so much bullion business, but he really missed doing as much numismatic volume (with its higher profit margins) as he used to do. Among areas of special demand right now, beyond Morgan and Peace dollars, are U.S. Civil War-dated coinage, Chinese Panda and other issues and ancient coins. There continues to be interest in the classic commemorative half dollars with Civil War-related themes.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at CoinUpdate (http://www.coinupdate.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).