# Think Tank > Austrian Economics / Economic Theory >  BBC's "Masters Of Money" Topic: Hayek, Bernard von Nothaus, End the Fed, Liberty Dollar

## FrankRep

OU on the BBC: Masters Of Money - Hayek
http://www.open.edu/openlearn/whats-...rs-money-hayek

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*BBC: Masters Of Money: Hayek, Bernard von Nothaus, End the Fed, Liberty Dollar, Ron Paul*


26th September 2012




http://www.youtube.com/watch?v=2hDbLrVWq_0


...
Finally the programme examines Hayek’s most explosive idea of all – abolishing national currencies altogether. Flanders reveals the story of Bernard von Nothaus who has created his own currency – the Liberty Dollar - inspired by Hayek. *The American authorities call von Nothaus a “domestic terrorist” and he now faces up to twenty five years in prison having been found guilty of counterfeiting in 2011.*

With contributors including the Governor of the Bank of England, former Chairman of the US Federal Reserve Paul Volcker, Nobel laureate Paul Krugman and US Presidential candidate Congressman Ron Paul, Lord Lawson, Lord Patten and the first ever TV interview with daughter-in-law Eska Hayek, the programme provides a telling portrait of a man whose ideas changed the course of the 20th century.
...

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## emazur

Krugman's statement on "unregulated" banks in the free banking era is completely unfounded. Prior to the Fed, it was not uncommon that banks be mandated to get a charter from the government in order to open up a bank in that state.  The deal would go like this: "You want to open a bank? We can make that happen. But first you have to loan our state $10,000.  But you only have $11,000 in capital you say, and $1000 won't make it worthwhile for you to cover your costs and make loans? No problem - we'll require you only maintain a 10% reserve ratio.  If your bank goes bust but you've followed the letter of our law, you will no be held accountable".

So there's your "unregulated" banks.

At the same time, the equivalent of state central banks were also common, and they issued fractional reserve currency (against the Constitution).

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## Dr.3D

> *The American authorities call von Nothaus a “domestic terrorist” and he now faces up to twenty five years in prison having been found guilty of counterfeiting in 2011.*


I'm still trying to figure out how coining money out of silver and gold is counterfeiting.   Must be his mistake was not making them out of paper like the real counterfeiters do.

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## FrankRep

> I'm still trying to figure out how coining money out of silver and gold is counterfeiting.   Must be his mistake was not making them out of paper like the real counterfeiters do.


The liberty dollar has the word "dollar" in it, but only the Federal Reserve can make "dollars."

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## fatjohn

> The liberty dollar has the word "dollar" in it, but only the Federal Reserve can make "dollars."


Didn't know the fed also printed the canadian ones and the australian ones.

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## angelatc

> I'm still trying to figure out how coining money out of silver and gold is counterfeiting.   Must be his mistake was not making them out of paper like the real counterfeiters do.


He went wrong when he assigned them their value in dollars.  If he had made them worth "VonNuts" he would have been ok.

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## Tudo

> The liberty dollar has the word "dollar" in it, but only the Federal Reserve can make "dollars."



Yup, still waiting for them to arrest Michael Eisener for creating those "disney dollars"

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## Travlyr

> He went wrong when he assigned them their value in dollars.  If he had made them worth "VonNuts" he would have been ok.


I know that you are right about this, but why is that a crime? 

It truly is a sad time in history when people lose their freedom for harmless crimes while illegitimate governments get to kill at will.

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## thehungarian

I saw the Hayek twitter account ranting about this last night. I shall consume.

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## rhelwig

It wasn't specifically calling them Dollars that was the problem. It was a combination of him getting successful enough to be approaching actually competing with the Fed with some stuff being too close to government coins (and maybe a little bit of some agents acting fraudulently).

The rounds had stuff on them that ignoramuses could potentially confuse with government's coins. That's the basis of the counterfeiting charge. And some of the sales happened without full and explicit explanations of the fact that they weren't strictly a voluntary currency, with the implication being that they were approved of or issued by the government.

That's one reason why Shire Silver is so radically different. Its clearly not a "coin" nor is it anything like what the government produces.

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## Dr.3D

> He went wrong when he assigned them their value in dollars.  If he had made them worth "VonNuts" he would have been ok.


The United States dollar was defined as a unit of weight equaling 371 4/16th grains (24.057 grams) of pure silver, the rounds he was making were composed of 31.1 grams of silver thus they were slightly more than a dollar.   If anything, he was more correct in calling his rounds dollars than the Federal Reserve is in calling their paper and silver colored slugs, dollars.

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## angelatc

> I know that you are right about this, but why is that a crime? 
> 
> It truly is a sad time in history when people lose their freedom for harmless crimes while illegitimate governments get to kill at will.


Oh, I agree.  Shouldn't be a crime.  There are several moderately sucessful local community alternative currencies that nobody cares about.  I think that because his was sound money it spelled potential trouble for them.

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## Austrian Econ Disciple

Give me the Suffolk System any day of the week than the monopolized bull$#@! Federal Reserve counterfeiters. When Hayek is right, he's damn right, and when he's wrong, he's so wrong. Keep Hayek in money and away from political philosophy.

_John Jay Knox_, a former _Comptroller of the United States Treasury_, stated that the success of the Suffolk Bank demonstrated that,

*the fact is established that private enterprise could be entrusted with the work of redeeming the circulating notes of the banks, and it could thus be done as safely and much more economically than the same service can be performed by the Government*

Could you imagine Timothy Geithner ever uttering such words? Ha!

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## Madison320

The way I understand it, the Constitution only allows allows the government to coin money, which means to make gold and silver coins. It is not allowed to create fiat currency and it is not allowed to prohibit private citizens from creating currency. Now it's ass backwards. The government makes only fiat currency and forbids private citizens from coining real money. Am I wrong?

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## Travlyr

> The United States dollar was defined as a unit of weight equaling 371 4/16th grains (24.057 grams) of pure silver, the rounds he was making were composed of 31.1 grams of silver thus they were slightly more than a dollar.   If anything, he was more correct in calling his rounds dollars than the Federal Reserve is in calling their paper and silver colored slugs, dollars.


And the thing is, the Morgan and Peace dollars contain 371.25 grains of pure silver.

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## FrankRep

Here's the Full Video:

*Masters of Money: Hayek (BBC)* 



http://www.youtube.com/watch?v=eSy8PojaOAY

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## Dr.3D

> And the thing is, the Morgan and Peace dollars contain 371.25 grains of pure silver.


There you are, how can somebody making coin that contains more value in silver than those two be considered counterfeiting?  After all, the value of the silver content of the coin or round if you wish, is what gives it it's value.   Calling a piece of paper that has zero silver value in it, money is just plain nuts.  If anything, that piece of paper is the counterfeit.

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## EBounding

> He went wrong when he assigned them their value in dollars.  If he had made them worth "VonNuts" he would have been ok.


Yes, exactly.  His marketing was kind of deceptive since he implied their value and utility was equivalent to Federal Reserve Notes.

In his videos he would offer to pay people with a FRN or a "$10 Silver Piece".  Of course, the people would take the silver piece because they think it's legal tender since it's in the shape of a "coin" and denominated in "dollars".  

I think if his silver piece was in the shape of a bar, they would ask "what's this?" and he'd be forced to explain that it's a piece of silver he minted and not legal tender.  They would then run away like its radioactive. 

That said, I don't think the punishment  fits the crime at all.  The feds are trying to make an example out of him and they stole from people who had legitimate title to the liberty dollars.

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## Henry Rogue

Nice documentary.  They should have done one on Mises.  Do Liberty Dollars still circulate and if so would one get into trouble possessing or using it?

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## Travlyr

> There you are, how can somebody making coin that contains more value in silver than those two be considered counterfeiting?  After all, the value of the silver content of the coin or round if you wish, is what gives it it's value.   Calling a piece of paper that has zero silver value in it, money is just plain nuts.  If anything, that piece of paper is the counterfeit.


Yep. They have the wrong guy in jail. Counterfeiting debases currency. Bernard von Nothaus did not debase currency.

The Coinage Act of 1792 says,



> *Section 19.*
> Penalty on debasing the coins.
> 
> And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.


Indeed, the Federal Reserve and the entire fractional reserve banking system are the counterfeiters.

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## Dr.3D

> Yep. They have the wrong guy in jail. Counterfeiting debases currency. Bernard von Nothaus did not debase currency.
> 
> The Coinage Act of 1792 says,
> 
> 
> Indeed, the Federal Reserve and the entire fractional reserve banking system are the counterfeiters.


Yep, all of those silver colored coins coming from the mint are in violation of Section 19.  Those responsible for this should be found guilty and suffer the consequences.

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## Dr.3D

For those who would like to read the transcript of the Liberty Dollar trial, here are the links to them.

Day One: March 8, 2010
GOVERNMENT'S WITNESSES
ANDREW F. ROMAGNUOLO
Direct Examination By Ms. Rose
Cross Examination By Mr. Lee
Redirect Examination By Ms. Rose
Recross Examination By Mr. Lee
KAREN J. WALSH
Direct Examination By Mr. Randall 

Day Two: March 9, 2010
GOVERNMENT'S WITNESSES
KAREN J. WALSH
Direct Examination By Mr. Randall
Cross Examination By Mr. Lee
Redirect Examination By Mr. Randall
Recross Examination By Mr. Lee
DANIEL P. SHAVER
Direct Examination By Mr. Randall
Cross Examination By Mr. Lee
Redirect Examination By Mr. Randall
KERRI BELSITO
Direct Examination By Ms. Rose
Cross Examination By Mr. Lee
MICHAEL SMITH
Direct Examination By Mr. Randall
Cross Examination By Mr. Lee
JULIA MUELLER
Direct Examination By Ms. Rose
Cross Examination By Mr. Lee
GARY B. GULLEDGE
Direct Examination By Ms. Rose
Cross Examination By Mr. Lee 

Day Three: March 10, 2010
GOVERNMENT'S WITNESSES
BRYANT GUNNERSON
Direct Examination By Mr. Randall
Cross Examination By Mr. Lee
Redirect Examination By Mr. Randall
Recross Examination By Mr. Lee
BRIAN SILLIMAN
Direct Examination By Ms. Rose
Cross Examination By Mr. Lee
Redirect Examination By Ms. Rose

Day Four: March: March 14, 2010
DEFENDANT'S WITNESSES
MARION HARRISON
Direct Examination By Mr. Lee
Cross Examination By Mr. Randall
Redirect Examination By Mr. Lee
JAMES BURK
Direct Examination By Mr. Lee
Cross Examination By Ms. Rose
BERNARD VON NOTHAUS
Direct Examination By Mr. Lee

Day Five: March: March 15, 2010
DEFENDANT'S WITNESSES
BERNARD VON NOTHAUS
Direct Examination By Mr. Lee

Day Six: March: March 16, 2010
DEFENDANT'S WITNESSES
BERNARD VON NOTHAUS
Direct Examination By Mr. Lee
Cross Examination By Ms. Rose
Redirect Examination By Mr. Lee
Recross Examination By Ms. Rose
VERNON ROBINSON
Direct Examination By Mr. Lee
Cross Examination By Mr. Randall
VIRGIL HENRY LANE
Direct Examination By Mr. Lee
Cross Examination By Mr. Randall
Redirect Examination By Mr. Lee

Day Seven: March: March 17, 2010
GOVERNMENT'S WITNESSES
MARCUS SCHAEFER
Direct Examination By Ms. Rose
DEFENDANT'S WITNESSES PAGE
RICHARD MATTHEW PITAGORA
Direct Examination By Mr. Lee
Cross Examination By Ms. Rose
EDWARD FIDELMAN
Direct Examination By Mr. Lee
Cross Examination By Mr. Randall
Redirect Examination By Mr. Lee
Recross Examination By Mr. Randall
JASON WILLIAM PRATT
Direct Examination By Mr. Lee
Cross Examination By Ms. Rose
Redirect Examination By Mr. Lee

Day Eight: March 18, 2010
Jury Verdict and beginning of the Forfeiture Trial

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## Bastiat's The Law

> Nice documentary.  They should have done one on Mises.  Do Liberty Dollars still circulate and if so would one get into trouble possessing or using it?


We should send them some feedback and tell them to do Mises!

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## Feeding the Abscess

Ha, Ron almost sounds like Kermit in that clip. Guess the boom mic just picked up a different timbre than a collar mic does for him.

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