[NYTr] Washington Post ridicules feds' raid on Liberty Dollar

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Washington Post ridicules feds' raid on Liberty Dollar

The Washington Post Blog - Nov 19, 2007
http://blog.washingtonpost.com/the-trail/2007/11/19/if_its_good_enough_for_mickey.html


If It's Good Enough for Mickey, Why Not for Paul?

By Alec MacGillis

News of a federal raid last week on a "sound money" outfit that is
selling "Ron Paul Dollars," reported in Saturday's Post, is generating
no end of quips in the blogosphere about what this development says
about the Paul campaign's eye-popping recent fundraising success.
Wags ask: How much of that record $4.2 million one-day haul that
Paul collected earlier this month actually came in the form of
dubloons imprinted with Paul's face, not U.S. legal tender?

But these jokes may be missing the point entirely. In fact, the
lack of confidence that many Paul supporters have in U.S. currency
may well be one reason why they are sending so many of their
greenbacks to Paul's campaign, and thereby making his outsider
libertarian bid for the Republican presidential nomination a force
to be reckoned with. For sound-money supporters who fear a coming
collapse in the value of the dollar, it makes eminent sense to send
a few hundred dollars to the one candidate who is arguing for a
monetary revolution, instead of simply watching that money rapidly
crumble in value.

As Exhibit A, consider Peter Schiff, a financial adviser and
sound-money advocate whose Connecticut firm, Euro Pacific Capital,
specializes in investing clients' money in overseas assets to spare
them what he argues will be a destructive decline in the value of
the dollar followed by major deterioration in the U.S. economy.
Schiff, who earlier this year published the investment guide "Crash
Proof," recently sent out a "call to action" e-mail to the 60,000
people in his database urging them to send the $2,300 maximum-allowed
contribution to Paul's campaign, describing this as one of the most
productive uses for their rapidly fading U.S. dollars.

"If you are fortunate enough to be one of my clients, writing a
$2,300 check should not be a problem. As I have likely made you
tons of money over the years, here is an opportunity to donate some
of it to a worthy cause. We have made our money by betting against
the U.S and betting against the dollar. Giving $2,300 of our winnings
to Ron Paul gives us the opportunity to bet ON America for a change.
And it's a bet none of us can afford to lose, and the best part
about it is that if we all make this bet together we can't lose,"
Schiff wrote in the e-mail. "My penchant for foreign investments
has from time to time caused some of my critics to label me
unpatriotic. While such attacks are clearly out of line, using some
of our foreign profits to secure the election of Ron Paul goes a
long way toward defusing such allegations. If you are not a client
and you think $2,300 is a lot of money, it's not. In fact, if Ron
Paul is not our next President, such a sum will be practically
worthless by the end of the term of whoever is. So what do you have to
lose? Just write the check and hope for the best."

In an interview today, Schiff said he expects that the federal raid
on the National Organization for the Repeal of the Federal Reserve
and Internal Revenue Code had added more weight to his argument for
giving to the Paul campaign. "The federal government is debasing
the currency and then it comes in and punishes people who are doing
something to protect themselves," he said. "The fact that these
guys would come in and raid this organization shows how much they've
got to fear from this. If more and more people start shunning the
currency, it takes away from their power."

Norfed, which is based in Evansville, Ind., says that in the last
decade it has put into circulation more than $20 million in "Liberty
Dollars," metal medallions and paper certificates that it says are
backed by silver and gold stored in Idaho. The group's founder and
director, Bernard von NotHaus, says that federal agents seized more
than 50,000 copper "Ron Paul Dollars" that the group was selling
for $1, in addition to smaller amounts of silver Ron Paul Dollars
that sold for $20, gold ones that went for $1,000 and platinum ones
that went for $2,000. Agents also raided the Idaho minting company
that makes the organization's medallions, seizing the huge pallets
of silver and gold stored there, von NotHaus said.

The FBI and U.S. Attorney's office in western North Carolina, which
is handling the case, have declined to comment on the raids, but
an affidavit filed in Asheville earlier this month describes a
two-year long undercover investigation of the group, based partly
on evidence obtained by an informant who posed as someone wanting
to become a regional associate for the group. The affidavit states
the group is being investigated for federal violations including
"uttering coins of gold, silver or other metal" and "making of
possessing likenesses of coins." "The goal of Norfed is to undermine
the United States goverment's financial systems by the issuance of
a non-governmental competing currency," the affidavit states.

This argument met with ridicule over the weekend from the prolific
on-line network of Ron Paul supporters and sound money advocates,
some of whom sarcastically predicted that the feds would next be
going after Disneyworld for selling "Disney Dollars" for use inside
the amusement park. "Here is a Mickey Mouse coin issued by that
criminal, separatist organization, the Walt Disney Corporation. Did
someone fail Common Sense 101?" wrote one commenter on the Post's
Web site, offering a link to an image of the offending Mickey
dubloon. Wrote another, "With commemorative coins advertised in
every Sunday newspaper, and given the Donald Duck silver coins sold
at Disney Land, this is an obvious attack on Ron Paul, a legitimate
Presidential candidate, by the Federal Government. I am going to
respond by going to Ron Paul's web site, easily found with Google,
and giving $100 today."

Lawrence White, an economics professor at the University of
Missouri-St. Louis, said Liberty Dollar supporters had a point in
charging overreaction on the part of the federal government. The
question to be asked of Liberty Dollars, he said, is whether they
make any sense for customers to buy -- while the certificates may
offer a hedge for those convinced that the dollar will go in the
tank, they come with the obvious downside that it is difficult to
find others willing to accept the Liberty Dollars as a legal tender
(though not in Berryville, Ark., where, according to the chamber
of commerce, about half of the town's 80 merchants accept Liberty
Dollars.)But that choice should be up to Americans to make, White
said. "Unless they think people are being defrauded, it seems absurd
to me," he said of the raid."The public ought to have a choice.
Thank goodness we have an alternative to the post office."

A spokesman for the U.S. Mint responded to questions today by
pointing reporters to the "consumer alerts" portion of its Web site,
which carries warnings against using Liberty Dollars alongside
warnings against mistaking as legitimate currency coins including:
"Silver surfer" quarters created to help market the Fox movie
"Fantastic Four: Rise of the Silver Surfer"; a "Freedom Tower Silver
Dollar" originating from the Commonwealth of the Northern Mariana
Islands; and an "Elvis Presley 25th Anniversary Tennessee State
Quarter Tribute."

A Paul campaign spokesman, Jesse Benton, today reiterated that the
campaign has no connection with the Ron Paul Dollars (though
supporters have taken pictures of grinning Paul next to the coins.)
He said the campaign is seeing an "uptick" in Web site visits and
contributions following reports of the raid. The real test of the
campaign's fundraising strength, though, will come next month, when
supporters are organizing another one-day fundraising "bomb" timed
with the anniversary of the Boston Tea Party.

Von NotHaus is doing his part, urging on his Web site (which he
says has seen a huge spike in traffic) that supporters respond to
the raid by contributing to Paul, as well as urging them to sign
up as part of a class-action lawsuit against the federal government
over the coin seizures. He is biding his time at his home in Miami,
expecting to be arrested and indicted some time in the near future.
In fact, he said today that he is kind of hoping that the government
makes its move sooner than later, so eager is he to make a stand
on the part of sound money theories.

"I'm sure I'm going to be arrested, and I'd be disappointed if I'm
not," he said. "I want to get going. I think it's going to be
exciting."