Update
As I write this lecture, there is fear that the government will confiscate privately held liberty dollars. The fear that they will be removed from the secondary market has caused increased in the desirability and the price (There’s nothing like banning a book to get people to read). I have listed below a few that remain for sale. There is speculation that ebay may soon ban sales of liberty dollars.
The Liberty Dollar refers to privately minted gold, silver, and copper bullion coins manufactured by the Sunshine mint and distributed by Norfed (which later became Liberty Services). From a numismatic point of view, these are more properly referred to as “so-called dollars” since they are not minted by the government.
The organization, run by Bernard von NotHaus was political in nature. Norfed stands for “National Organization for the Repeal of the Federal Reserve and the Internal Revenue Code.” The main theme of the organization is that the federal reserve is unconstitutional and the money it prints has no intrinsic value. The liberty dollar drew the attention of the Southern Poverty Law Center, which stated that “Far-right antigovernment groups have long claimed that American dollars are illegal currency, part of a vast conspiracy by international bankers to defraud the rest of the world.”
Norfed produced alternate coins composed of gold and silver (eventually adding copper bullion coins). They also printed paper certificates backed by warehoused gold and silver.
Norfed’s argument was that they produced “real money” backed by the value of gold or silver, while the Fed produced fiat currency backed by nothing. When silver was $13 per ounce, the one ounce silver liberty dollar had a base value of $20, thus allowing a substantial profit for Norfed. This means $13 of the value was backed by actual silver while the remainder was backed by nothing. As the price of silver bullion rose, the base value was increased. The one ounce gold coins had denominations of $1000 while the price of gold fluctuated between $600 and $800.
Ron Paul Liberty Dollars
Most of the liberty dollars featured a representation of liberty that somewhat resembled US pattern coins circa 1880. An alternate designed featured Ron Paul with the designation “Gold standard in leadership” and “Ron Paul for President.” Ron Paul, currently a presidential candidate holds a similar view to Norfed that the Fed should be abolished and that our monetary system would be improved if it was based on silver and gold. These so-called dollars are highly collectable. Ron Paul himself has no relationship to Norfed.
Bernard von NotHaus, was convicted of making, possessing and selling his own coins. In other words, the coins are considered counterfeit. The coins were said to look similar to legitimate US coins, They contained the word "liberty" and a motto "Trust in God" which is similar to "In God we Trust." The bigger problems appear on the reverse of the coin, where a denomination is given. The original one ounce liberty coins had a denomination of $20 (even when silver was around $8 an ounce). Both the dollar sign and the word "dollar" were used, making it appear as if these were US coins.
Other sunshine mint products
Liberty dollars were made by the Sunshine mint, which also makes many silver rounds which are not scrutinized. Examining two such rounds, one looks like a replica of the Morgan Dollar. Another is a replica of the Buffalo nickel design, which is now used on the $50 buffalo gold coins. Why do these coins survive the government’s scrutiny while the Liberty dollars do not?
Buffalo rounds can be purchased here:
Buffalo Design 1 oz (.999) Fine Silver Round
In my opinion, one reason is von NotHaus' politics. The government described him as a domestic terrorist.
The government would prefer that there be no discussion of alternate currencies. They ordered the shutdown of the website libertydollar.org. Von NotHaus' book,The Liberty Dollar SOLUTION To the Federal Reserve
is still available, but in short supply.