"Counterfeiting"

    In this post I'd like to talk about a so-called case of domestic terrorism. This terrorist didn't kill anyone or hurt anyone. He is guilty of using a different currency than "U.S." currency(1,2,3).

     This is Title 18 Section 486 of the U.S. Code: “Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.”

Von Nothaus was found guilty of counterfeiting U.S. coins. What do they look like? 

What do U.S. coins look like?

You might say they look somewhat similar. However, U.S. coins follow a similar design as those from the Roman Empire and countless other places during many times. For example, here are some ancient coins

According to Romancoins, this is a roman coin from the reign of Constantine ca. 307-337 A.D. Here's another      

Here's a two shilling coin from England, 1963 

Here's a 2005 5 Euro coin 

     I wonder how similar these are to the U.S. coin in the eyes of U.S. Attorney Anne Tompkins. This is the really frightening part about this entire situation. Ms. Tompkins views this as a form of domestic terrorism. Since when is voluntary exchange domestic terrorism. She says, "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." She also feels that Von Nothaus and his Liberty Dollars "challenge the legitimacy of our democratic form of government". How can that be? How, in a free country can voluntary exchange challenge democracy and freedom? Over at Vox Popoli, commenter Jeigh Di says, "They are just looking for a 'legal' way to confiscate the metal." Indeed, according to the Citizen Times the government wants to confiscate 16000 pounds of precious metals from Mr. von Nothaus that is worth about $7 million.

     Not only are there millions of dollars worth of silver to be had, the government is also worried about tax evasion. That's where the "domestic terrorism" argument really comes in. The Liberty Dollar is worth more than U.S. coins because of its high silver content. Not only that, but confidence in the U.S. dollar has been shaken since the financial crisis in 2008. The U.S. government is really concerned here about competition in the free market over the value of the money it prints. Over the past three years the Federal Reserve has been attempting to cover up its utter failure in its mandates. Those mandates are "to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates" (from here).

     Let's see here, maximum employment-nope (how does a central bank even accomplish such a thing, aside from actually determining what maximum employment is), stable prices-nope, and moderate long-term interest rates-that's not a desirable goal in the first place. The Federal Reserve's role in the economy has been destructive from day one and now people are beginning to realize this. Firstly, it cannot accomplish all of these goals at the same time with the tools it has. If it had the necessary tools we would no longer live in a free country and our economy would be in even more dire straits than it is now. Secondly, controlling the value of money is neither a desirable goal nor is it possible. Value is subjective in the first place, so controlling it requires controlling perceptions. Ultimately, however, the federal reserves, and those support it, are falling victim to the problem of economic calculation.

     Ludwig von Mises wrote, "The paradox of "planning" is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all. It is just a system of groping about in the dark. There is no question of a rational choice of means for the best possible attainment of the ultimate ends sought. What is called conscious planning is precisely the elimination of conscious purposive action." (Human Action) Why can't central planning of an economy work? It cannot work because an economy requires the knowledge and value judgments of each person acting within it. Central planning, in other words, cannot even plan because it doesn't know what to plan for.

     So, the Federal Reserve cannot fulfill its core mandates and it is not even desirable that it do so. It is not desirable because an economy is always fluctuating and shifting as individual actors seek different goods and services. Money, as the medium of exchange, facilitates these actions. Money only represents wealth as long as people think it does. This is part of the reason that a fiat currency is undesirable, but there's a reason that governments use it. Governments use it because it is easy to produce a lot of it for state projects and for creating the illusion of wealth. If other forms of currency can compete openly and fairly with U.S. money, then inevitably U.S. fiat currency will lose because it is less valuable on the open market. 
     An alternate, or local, currency also posea a threat to the U.S. government because the government cannot tax transactions that occur with it use. That is a common argument against currencies such as the Liberty Dollar, but it is irrelevant. The government does not have the right to meddle in every economic interaction that takes place in a free country. At least, it should not. In fact, the attitude that it should is antithetical to freedom. It hurts freedom of exchange and it hurts impoverished areas that do not have as much "official" currency around. According to Wikipedia, Jane Jacobs, an advocate of local currency, argued that it could benefit depressed areas by creating a basis for local exchange. This is where socialism and fascism can become very dangerous. In order to survive, a socialist, or even semi-socialist or fascist, state must be able to tax its citizens. If it cannot tax, it cannot impose its designs. This is the antithesis of economic freedom and ultimately is damaging to the economy as a whole and to society. Now that government officials are saying that using a local currency is tantamount to terrorism we have entered a very dangerous time in our history. People will be, and have been, arrested and imprisoned simply for interacting freely and exchanging goods according to the currency they wish to use. 


Freedom=slavery I guess.