“Liberty Merchant” decals are affixed to the windows of mom-and-pop retailers around the country as if they were tags from the Better Business Bureau, and laminated counter mats by the registers suggest you “Ask for Your Change in Silver.”

Until a little over a year ago, the Liberty Dollar had attracted scant attention beyond the odd consumer with a coin fetish and libertarian diehards. (One of the rounds, a copper ounce, is imprinted with the countenance of Texas congressman Ron Paul, with “Gold Standard in Leadership” haloed about his head.) But as the country’s financial system has disintegrated, and as average citizens and bankers alike have been disabused of their faith in serpentine market abstractions, the Liberty Dollar, with its heavy-metal challenge to federal monetary policy, has come to seem alluringly rational—or, at the very least, easier to comprehend than the policies of the Federal Reserve, which von NotHaus believes have endangered Americans’ savings.¹

Though the dollar has become a refuge for investors as markets worldwide have flailed and commodity prices have dropped—the reserves of powerful countries are still mostly composed of dollars, and international trade is still pegged to the dollar—the impression remains that the Federal Reserve is incapable of defending its currency and that the value of the dollar will continue to decline. Von NotHaus, a former master minter of Hawaiian collectible coins, calls his currency “bullion with a mission,” and as the appeal of financial escapism has grown over the last year, so has its popularity—and so has the FBI’s interest in it. The company is currently under investigation for printing money that purports to be legal tender, a violation of federal counterfeiting law, and von NotHaus expects to be arrested any day. A search-and-seizure affidavit from late last year reads: “The goal of [the Liberty Dollar] is to undermine the United States government’s financial systems by the issuance of a non-governmental competing currency.”

The investigation began in mid-2005, when several congressmen received letters from constituents asking whether the Liberty Dollar was legal. In August 2005, an undercover FBI operative began buying Liberties from a Regional Currency Office run out of an attic in Asheville, North Carolina. Over the next two years, the feds embedded themselves in meetings and training seminars for Liberty retailers and slowly made their way to the Evansville headquarters, where a local woman named Sarah Bledsoe had been working as office manager for the previous nine years. She remembers setting out for work on November 14, 2007, and “thinking to myself just how good things were. It was just one of those really nice, unusually warm days.”

As she parked her car in front of the Liberty Dollar storefront, she noticed a police cruiser a few spaces away. The engine was off, and two cops were inside. Squad cars sometimes appeared in the lot first thing in the morning, presumably a sign that a couple of officers were browsing the gun shop next door, but something seemed odd this time. Bledsoe felt like she was being watched. She saw a new employee waiting by the entrance for her first day of packing and shipping and, not wanting to give the poor girl the wrong idea, rushed to open the front door. She barely had the key in the lock when the roar of turbo-charged V-8s thundered behind her. “All of a sudden I see all these cars coming at us,” she recalls. A dozen FBI and Homeland Security agents sprang from six unmarked sedans, which had formed a semicircle around Bledsoe and her car. An FBI agent named Andrew Romagnuolo marched up to her with a search warrant in hand and barked, “Let us in.”

The agents spent six hours scouring the shop. They seized the computers, searched the filing cabinets, and took every record of sale from the business’s nine years of operation and whatever metals were to be found, depositing everything in a rental truck. Bledsoe heard one agent announce they were “making a withdrawal.” In the end, the FBI confiscated $80,000 in coins and bullion. The Liberty Dollar’s business account, containing $250,000, was frozen. There was a din of confusion and interest in Evansville, where local schemes and scandals usually involve meth labs or marijuana farms, and conspiracy theories mostly relate to the sad state of the university’s basketball team.

Five hundred miles away, the Sunshine Mint in Coeur D’Alene, Idaho, was also being raided. There the FBI confiscated over three million dollars’ worth of silver and gold. Most of what was seized belonged not to Liberty Dollar but to hundreds of people across the country whose investments in the currency were significant enough that they held paper certificates and “digital dollars” in lieu of the actual coins stored in the Sunshine vault.

Bledsoe had been working on a TJ Maxx factory line, threading price tags into discount garments in eight-hour shifts, until she took the job at Liberty Dollar sight unseen. It had never occurred to her to think about money in the abstract; the man who picked up the phone when she called about the job had asked her whether she knew anything about money, and she had replied, “Well, I know how to spend it.”

Over the years, Bledsoe says she steadily acquired a deeper understanding of the wares she was offering, and began to think hard about where money comes from, how value is determined, why a certain value is ascribed to these pieces of cotton paper, and how that value is regulated. She had concluded that Liberty Dollar’s business was legitimate. “I’m just a regular mom, just out there trying to make a living,” she says by phone a few weeks after the raid. “If I thought I was doing something wrong, I wouldn’t be here.” She pauses to think for a second. “I’ve never even had a speeding ticket.” II.
It’s a cloudless January morning in Miami, two months after the FBI raided Liberty Dollar on charges of conspiracy, counterfeiting, and fraud. Von NotHaus and I are sitting at a worn maple table in the center of his rented one-room penthouse, and a breeze is blowing through an open balcony door. He’s ranting about something that has only a tangential relation to his operation—something about income taxes and the small print of the 1040—and no relation at all to what I’d asked him. “They’re your constitutional rights! How fucking dumb are you?!” he exclaims. I’ve known von NotHaus for all of an hour, and he’s gone from lamenting the fate of poor Timothy Leary to condemning the perfidy of Washington, DC. I get the sense that he’d like to speak only in exclamatory phrases.

Bernard von NotHaus grew up in the Plains state of Kansas and spent the better part of the 1960s at Kansas State University, before leaving for Germany and London without a degree. He studied architecture and art history and built things in the meantime—a crude theater next to KSU’s campus, some sort of open-mic space in London under John Lennon’s stewardship, a wood and glass home that he calls the Spaceship, which he built for himself and his wife for a few hundred dollars in Hawaii before they went bankrupt. He moved to Hawaii in the early ’70s, and it was there he began designing coins. In 1973, he acquired his economic theories through a night of automatic writing that followed what he describes as a “psychic experience”; soon after, he published a pamphlet on the fallacy of the Federal Reserve that he sold around Honolulu for a couple bucks apiece.

Today, von NotHaus’s silver hair is just long enough to stay tame in a ponytail, and he wears a thin white beard and conservative wire-frame glasses, behind which his eyes flash with enthusiasm that sometimes borders on the hysterical. He’s clad in sandals, khaki shorts, and a blue Hawaiian shirt with green bamboo shoots and leaves. A few moments after von NotHaus lets me into his apartment, I ask him whether he might not be overstating his case against federal monetary policy in order to bolster his cause (and his sales). “The recession is happening,” he responds, smiling. “Do I think it’s going to happen? I’m watching it happen! The acceleration should be scaring the shit out of everybody dealing with the US dollar!”

The night before, I had walked through a darkened, empty terminal in the Miami airport, having accepted an invitation from von NotHaus to see firsthand the new Liberty Dollars. (He had yet to be given a cease-and-desist order, so cease and desist he would not.) All the televisions hanging from the ceiling were playing CNN, producing a strobe that flashed down the laminated corridor. Someone sitting next to Anderson Cooper was warning of the worst economic crisis since 1929. Von NotHaus’s apocalyptic view of the economy had become that of the pundit class, which was now charged with explaining subprime mortgages, credit-default swaps, derivatives trading, and the failure of the Federal Reserve.

Von NotHaus’s endeavor is characterized by a confusing blend of opportunism and pragmatism, conflicting tendencies that also motivated his forerunners. The story of modern state-issued banknotes begins with the putative financial genius John Law, who in 1716 set up a French bank that issued paper money guaranteed by the king. The currency he printed was ostensibly backed by the riches to be found in the Mississippi Territory, about which the French knew next to nothing; Law sold royal titles to French social climbers and exaggerated the wealth of Louisiana to sell stock in the Mississippi Company, which he effectively owned, until so many shares had been purchased that he was able to singlehandedly pay down the national debt. Then, with Law having been elevated to the position of comptroller general, a few skittish speculators began selling shares, and they demanded coins from Law’s bank, which had almost none—the bluff was called, the paper currency was revealed to be a sham, and even a detachment of Swiss Guards couldn’t keep la foule from running him out of the country. Though he was left a penniless, itinerant pariah, his credo—“My secret is to make gold out of paper”—became the basis of the global economy.

The story is a parable for what von NotHaus sees as the Federal Reserve’s unforgivable folly: In 1971, with our national debt soaring, the French called our Bretton Woods bluff at thirty-five dollars an ounce, and President Nixon, fearing an international run on our gold, thumbed his nose across the Atlantic and abandoned the gold standard altogether. Since then, the US has been using what’s called a fiat monetary system, in which the value of the dollar isn’t linked to gold, silver, or any other precious good, but rather to the authority of the government. By its nature, fiat currencies streamline international trade, free economies from mining restrictions, and rely on the presumed strength of the country whence they originate—a quality “as good as gold.” The foundation of the modern monetary system is the treatment of the US dollar as a commodity in and of itself, and the attendant mechanisms employed to manipulate its rise and fall. Von NotHaus’s counterpoint is elementary: We should have a currency that works for a localized economy and can’t be corrupted by the vicissitudes of global finance; or, at least, people should have a choice between the two.

Ralph Borsodi, a 1960s economist and a forerunner of von NotHaus, challenged the divorce from the gold standard in the ’70s with a system he called the Constant, which used as currency pieces of silver tied to stocks of various commodities—its own sort of inflation-proof safety net. He died, and the Constant never caught on, but his quixotic effort can be understood as a revolt against the precedent set by Law, whose own campaign began as a giddy frontier mission driven by a rare hunger for profit. Von NotHaus is a mongrel of both men, steeled equally by the speculator’s opportunism and Main Street’s folksy pragmatism. Regardless of his motivations, a severe downturn would surely be a vindication for von NotHaus, and perhaps a windfall. He’s a patriarch to street-corner goldies prophesying end times, and now more than ever it’s in his interest to play the role of fearmonger, so long as he’s shielded by a perceived prescience. As William Jennings Bryan—racist, creationist, and silver bug—put it: “The humblest citizen in all the land when clad in the armor of righteous cause is stronger than all the whole hosts of error they can bring.” Works aspiring to the populist creed of Jenning Bryan’s “Cross of Gold” speech cram a waist-high bookshelf that divides von NotHaus’s apartment into bedroom and living room, books with fearsome titles like The Empire of Debt and The Coming Collapse of the Dollar. On a nearby wall, a metal sign reads “Be Your Own Bank—Give the Feds a Run for ‘Their’ Money.” A bare two-by-four is propped beneath the table like an extra leg to keep its surface from splitting when von NotHaus hammers his hallmark into the coins mailed to him by sympathizers. (“A Picasso with his signature is worth more than one without it,” he quips.) With the investigation dragging on, and no charges yet filed, von NotHaus expects his nemesis “Agent Andy” to arrest him any day. He seems annoyed by the wait and bides his time raising money for counsel: For ten dollars plus shipping, he’ll stamp your Liberty with a tiny pair of handcuffs.

The symbolism of von NotHaus’s struggle is not lost on him; indeed, it has become the Liberty Dollar’s central marketing device. That von NotHaus has designed the coins so attractively can be understood as a kind of petulance, a goading protest finally answered by the federal government with last winter’s raid. He now entices potential Liberty “associates” with the following appeal: “If you ever yearned to be a part of American history…this is your opportunity.” He proudly and repeatedly declares himself a “patriot” and somberly meditates on the question of what makes a hero before insisting that he is not one. The Liberty Dollar, he explains, is a return to the simpler, more honest times of value-for-value exchanges—an anachronistic ideal defined by the hard consistencies that populate the lives of most Americans, manifest in precious metals. “All across the country,” his pitch continues, “‘Good Americans’ are doing what is right to get America back on track with the ideals of our Founding Fathers. Will you be one?”

III.
One might think of von NotHaus as an incarnation of Samuel Johnson, who reproached the perceived sophistry of Bishop Berkeley’s theory on the nonexistence of matter with the simple kick of a rock: “I refute it thus.” But nearly every badged-and-pinned economist views a return to the gold standard as the worst sort of primitivism: The proposition ignores not only the complexities of the global economy but also the limited supply of gold, and even its prohibitive weight. The system now in place enables the US to fuel the world economy with dollars held in international reserves, and it is meant to be elegant and flexible, not plain and simple.

The word confidence is thrown around so profusely in the realms of business and finance precisely because the planet’s wealth depends on it. Faith in the intelligence of currency markets is hardly different from faith in God or Santa Claus, except that one is reminded of the value of the chosen icon only after an exchange is completed, whenever a dollar is passed from pocket to till and someone walks away with a new pair of sneakers—a miracle, some would have it. Large measures of national debt corrupt that confidence by weakening the dollar against what other countries are trading for it; suddenly, it takes more and more of these dollars to produce the miraculous at your grocery store or gas station.

The Federal Reserve has always presumed its main responsibility to be the suppression of inflation through the adjustment of interest rates. It was Alan Greenspan who claimed that, with the global economy settled on US currency as its foundation, the dollar had become its own sort of gold standard, printable on demand. And thus the abstraction of value was handed over to us all: In God We Trust. As John Connally, who was secretary of the Treasury when Nixon abandoned gold, put it to the world’s banks: “It may be our currency, but it’s your problem.”

In March, I sought out Joseph Stiglitz, Nobel laureate and former chief economist of the World Bank. It’s been only a week since the Bear Stearns calamity, but Stiglitz is the model of Olympian remove. “It’s probably the worst downturn in twenty-five years, and maybe the worst since the Great Depression,” he admits. But by now this sentiment is entirely common, with pinstriped Cassandras and self-abnegating hedge-fund managers marched out on cable news to recite the same sorry lines each night. Stiglitz maintains, as do they, that a full-fledged depression is “unlikely but not impossible. The dollar is very likely to decline—it’s proven itself not a good store of value,” he says. “We will experience much higher inflation than in the past, absolutely. If I were living abroad, do I think putting my money in dollars would be a good investment? I’d say no.” I ask him directly about returning to the gold standard. “Oh, no!” he cries. “There’s going to be a fundamental rethink, but not back to the gold standard.” He goes on to say that we must have greater oversight and more exacting management of risks—the system that’s been in place provides incentives to people who invent flimsy financial products that create risk, like the mortgage-backed securities and derivatives at the center of the crisis.

Over the following weeks and months, dwindling international confidence in US currency led the value of the dollar to decline sharply, while gold, silver, and oil continued to climb. At the end of the summer, shortly before the national debt clock near my Times Square office ran out of digits, I talked to another economist, Nouriel Roubini, who has been predicting financial cataclysm for five years. He said it’s not a question of when we’re going to enter a recession, but how long it will last. He also claims a return to the gold standard would be “utter nonsense,” reiterating Stiglitz’s position. “But the US consumer is on the ropes, and the Fed is in a tough situation. Traditional monetary policy isn’t going to work very well. It’s a brave new world.”

It’s difficult to determine the degree to which this succession of crises, which has now culminated in The Crisis, is symptomatic of a larger problem—the reign of fiat money over the financial market, the endless abstraction of value. But suppose you had the option of deserting the symbolic economy, of leaving the entire speculative mess behind?

This is precisely what many Liberty Dollar adherents have in mind and, indeed, what many libertarians aspire to—the proposed secessionist forts of Paulville, Texas, and the Free State Project of New Hampshire would most likely adopt the Liberty Dollar as their currency. (Ron Paul has expressed solidarity with von NotHaus and introduced a bill in Congress that would create a competitive currency market.) For holders of Liberty Dollars, these times are grimly reminiscent of the hyperinflation that struck Germany after WWI and China after WWII; they expect the dollar to follow suit. Karl Reille, who runs the Buffalo Liberty Dollar Regional Currency Office out of his home, says, “We can see the train wreck coming, and it’s here, unfortunately.” He lost a few thousand ounces of silver stock—about thirty thousand dollars—when the FBI raided Sunshine. His father, Gerhardt, a retired German immigrant, sold his home last year and then wired Sarah Bledsoe one hundred thousand dollars to convert to Liberties on the day before the raid.

When I asked Stiglitz whether he sympathized with those who believe in “alternative currencies,” he made a parallel that gave alternative currencies some credence. “If you had bank accounts where you could go into the bank and put your money in euros or dollars, Americans would be putting their money in euros,” he said. “So far, people haven’t been doing it, but it’s just a matter of time if the current weakness of the dollar continues.” But while the euro may be trending stronger than the dollar, and may soon overtake its primacy in international reserves, the multinational fiat note remains a novel experiment—and for von NotHaus, any fiat currency is nothing but a ticking inflationary time bomb.

The Americans who tend to be taken with this assessment of the dollar are almost exclusively white men over forty who harbor indignation and outrage at the power of the government. The seizure of gold and silver owned by private citizens confirms their suspicions about the feds and harks back to Roosevelt’s ban on private gold ownership during the Great Depression, which was meant to protect the federal supply. (The ban was not rolled back until 1975.) Dave Gillie, who runs Gillie’s Coney Island in Flint, Michigan, and began selling Liberty Dollars next to his cash register in 2001, lost about twenty thousand dollars’ worth in the Sunshine raid, though he has been able to make it back and then some auctioning coins on eBay. “They don’t have the right to tell a free people in a supposedly free country what we can use as exchange,” he says.

Another Liberty associate, Dan Morrow, lost the most in the raid, nineteen hundred pounds of silver Liberties. In 2006, Morrow noticed his union pension was earning just 1 percent annually—not even enough to account for inflation. He looked into buying silver bullion, the value of which was rising 9 percent a month. He withdrew his pension after filing for disability later that year and sent von NotHaus $260,000 on the advice of a man he’d met in a Bakersfield highway diner—the man had shown Morrow one of the Liberty Dollar’s paper certificates as he paid for his cheeseburger. Two months before the raid, he visited Sunshine to inspect his silver stock, which was bagged like treasure in burlap sacks and worth twice as much as his initial investment. Now he doesn’t know when he’ll see it again.

Stiglitz had only this to say about the human tendency to turn to gold and silver—known quantities, materials of verifiable weight and composure—in times of financial crisis: “It’s a traditional response and an understandable response. People are drawn to metals.”

Morrow, who was a journeyman electrician in the Bay Area for thirty-eight years, traces his involvement to his father, who hoarded silver in the family’s basement after the US went fiat in 1971. “It wasn’t a big rage against new money,” he explains. “It was just more valuable.”

IV.
“The problem with spending a twenty-dollar Liberty today,” von NotHaus says, rolling a worn Ron Paul in his hands, “is that you can get thirty dollars for it on eBay.” While Liberty currency is occasionally subjected to a “move up” to keep it in line with the price of silver, the FBI raid has inflated the value of the coins in such a way as to reinforce their position as numismatic pieces. Von NotHaus can now sell a T-1, a first-run Liberty from 1998, for seven hundred dollars.


The day of the raid, the Ron Paul coppers were transformed into rare collectibles, and a sympathizer sent von NotHaus one hundred of them, which he sold for around five thousand dollars. Von NotHaus lost three thousand ounces of silver at Sunshine, and his income at the moment comes solely from what he sells on eBay. Liberty Dollar did about four million dollars in sales in 2006, but when I ask him how much he’s made from the company, he claims to have no idea, joking, “But am I in it for the money? You bet I am.”

With this, he retrieves his worn-out briefcase, the pockets of which are so crammed with Liberty Dollar memorabilia that it seems not to have a single free cubic millimeter of space, and withdraws a black velvet pouch. “You want me to show you the new ones?” he asks, smiling mischievously, proceeding to empty the contents onto the table with a magician’s flourish. There are silver and copper Ron Pauls. A Liberty designed for the American Numismatic Association. A striking Liberty with the crest of Chambersburg, Pennsylvania, foiled on the back. A California Dollar. A Gillie’s Restaurant Dollar. A few of the Hawaiians. A Peace Dollar. One for Ecuador. A Golden Liberty worth a cool grand. He’s positively giddy, taking one after the other into the leathery palm of his hand. We’re not talking about the law anymore, or Agent Andy, or the Federal Reserve. We’re high on that old inebriant of children and the young at heart: the fanatically assembled collection, whether of baseball cards, stamps, or coins. The Liberty Dollar was born of a resentment of the infinite abstractions that govern our economic exchanges; here was the antidote in its most visceral form.

“Oh, here’s one of my most favorites,” von NotHaus exclaims, picking up a ten-dollar Hawaiian. “The most beautiful piece we’ve done for Hawaii. This is Queen Liliuokalani—look at that hair.” He sets that coin down and fingers the antiwar Peace Dollar sentimentally. “Oh, here’s a wonderful piece; the feds got almost all of these.” He pauses, looks me in the eye, and plucks from the bottom of the pouch a brand-new 2008 silver Liberty. He’s just received ten of them, and they’re all pressed into thick plastic cases for safekeeping, the profile of Lady Liberty a matte glaze against pure, mirrored silver. The back was redesigned after the raid, with two conspicuous sets of initials: MSRP on one side and PVBC (Private Voluntary Barter Currency) on the other. Between them is a wide space of untouched silver where Von NotHaus will stamp the tenth-anniversary logo.

“I shouldn’t have to make something ugly to exist in the marketplace,” he tells me, uncovering a new Liberty and turning it over on a cloth-covered steel block. “Sex sells. This Liberty Dollar is as beautiful as the ideals it represents.” He puts the coin on the table, lines up his punch, and gives it a smooth, almost delicate knock with his hammer. The sonorous ring and the low-pitched vibration of the table hang in the air as he lifts the coin up to his nose, so that he might peer through a loupe at his handiwork. “I’ll be damned!” he says.

When I first called him, von NotHaus pointed me to quotes from Thomas Jefferson (“The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution”), Ernest Hemingway (“The first panacea for a mismanaged nation is inflation of the currency; second is war”), and Alan Greenspan (“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation”). He seemed to want nothing more than to add himself to that pantheon. Now he goes quiet for a moment as he hands the coin over to me, his fingers pinching the edge. He’s careful about his words, as if withdrawn to a part of his brain reserved for intimations of posterity. But it all comes out in a huff: “I’ll be goddamned if I’m denied my day in court! I have to be arrested!”

V.
In the months that followed, von NotHaus remained very much at large—he even let slip that Liberty Dollar might team with MasterCard to offer a debit card tied to gold, then rebuffed further inquiries. “It’s confidential.” In July, he told me he was retiring, replacing himself as CEO, and moving back to Hawaii to work on a new project. “It’ll blow your mind,” he assured.

In early October, I received a call from von NotHaus after his Cadillac had blown a gasket head in the Nevada desert, leaving him to endure his annual twenty-thousand-mile pilgrimage to Liberty Dollar retailers and adherents in a rusted Toyota Camry. I asked him whether he felt vindicated by the death of Wall Street. “Vindicated? I feel vindicated. But my vindication hasn’t been confirmed by most people because most people don’t know what the problem is,” he said. “The Federal Reserve dupes relatively bright people into thinking they can do the impossible. But there’s no anchor of value. And once you lose that anchor, you’re adrift.” The financial crisis signaled a graver collapse. “People have lost their sense of value. What we’ll see is the total destruction of morality in society.”