UTAH - Y2K Threat Has Passes, But Utahns Holding On To Silver-Backed Liberty Currency

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Title: Y2K Threat Has Passed, But Utahns Holding On To Silver-Backed Liberty Currency


While the rest of the country celebrates the creation of the new Sacagawea coin, a handful of Utahns proudly display their maroon and brown silver-backed notes. American Liberty Currency originally was billed as survival money for a potential Y2K disaster. Although the cataclysmic computer failures never materialized on New Year's Day, boosters of the loot have not lost their zeal for the alternative cash.

"Why do I believe in it?" asks Murray's Hal Massey, who boasts that he is the first Utahn to discover the new currency. "Have you watched the stock market lately?"

Nationwide, there are more than 300 redemption centers where people can exchange traditional U.S. Federal Reserve notes for the currency, which is purportedly backed 100 percent by a large cache of Idaho silver. The currency can be bought on a dollar-for-dollar basis and is actually a "warehouse receipt" redeemable in pure silver. In Utah, there are two redemption centers -- in Murray and Vernal. There are also five redemption centers each in Idaho and Colorado and several more in Utah's other neighboring states.

American Liberty Currency (ALC) is the brainchild of Bernard von NotHaus, a self-acclaimed "senior economist" for the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Service (NORFED), an Indiana organization whose unabashed aim is to bring the Federal Reserve to its knees. Last year, von NotHaus published a book about the currency, Y2K Money: Your Survival Currency, explaining the value of the newly minted dollars in the event of a year 2000 cash meltdown. Each bill contains von NotHaus' signature, a picture of the Statue of Liberty and a phone number to the NORFED organization.

Because worldwide chaos didn't occur at the century switch, many people have been left with a large amount of the alternative cash. But Utahns contacted by the The Salt Lake Tribune didn't seem to mind.

Manti's Peggy Layton, who dabbles in the "New American" currency, says she is not trying to make a political statement. Instead, she bought some of the unique-looking bills and coins at a trade show because she thought they were "cool."

"It's more of a novelty thing," says Layton, who sells food-storage cookbooks from her home. "[The NORFED people] seemed to have a cause, they seemed pretty weird to me. We just bought some bills because we thought they were neat."

Layton accepts the currency -- $1, $5 and $10 bills -- as payment for her cookbooks, though no one has actually done so. Her business is even listed on the NORFED Web site, www.norfed.org.

Tom Curtis of Salt Lake City's Healthy Choices, another company that accepts ALC, says he has used the bills at businesses in Oregon and California. He declined to name the stores, however.

"We accept the currency because it's real money, that's the real reason," Curtis says. "It's not really a political thing. When I was young we had silver-backed currency and I think we should have it again. That is what this new currency offers."

Indeed, the silver is stored at the Sunshine Minting Inc. warehouse in Coeur d' Alene, Idaho, according to an official NORFED statement. Sunshine Minting Inc. is totally independent, conducts independent audits and is not part of NORFED, according to the organization.

The alternative money is perfectly legal tender, says Claudia Dickens, a spokeswoman with the U.S. Department of Treasury's Bureau of Engraving and Printing in Washington, D.C. But holders of the money might have difficulty finding a business owner that accepts it -- or has even heard of it.

"The U.S. government cannot tell a merchant what not to accept," Dickens says. "It is illegal, however, for someone to say this is the same as U.S. currency minted by the Bureau of Engraving and Printing."

The United States has been off the gold standard since the early 1930s. Backers of ALC say the new notes give them choice -- the new, stable currency vs. the Fed, and what they contend are "worthless" greenbacks. "This money is backed by silver; greenbacks are backed by nothing," says Massey, who runs the only redemption center on the Wasatch Front. "Roosevelt took away the gold and Nixon the silver."

Massey, a former state chairman of the conservative American Party, says he made the discovery almost by happenstance.

"I found it on the Internet," Massey says. "It looked good and it sounded good. I'm in it for what value it is to me."

Only "one or two people" have exchanged their Federal Reserve notes for ALC, Massey says. "I'm not out pushing this. It's just a personal interest."

Although hard to find because so few people have heard about it, there are critics. One organization, calling itself the "Militia Watchdog," says there is a danger that no actual silver is behind the notes and coins, despite the "independent audits" that NORFED assures people are conducted. In this case, people would be exchanging good money for worthless money, the organization says. The group, which maintains it is not alleging any illegal activity, says there are "many other potential problems as well, all of which cry out for careful scrutiny of NORFED and its operations," according to a statement by the nonprofit watchdog organization. But supporters of the currency say they are careful to follow all laws. And von NotHaus swears his new currency is 100 percent legitimate.

"Legal opinions have been obtained by prominent attorneys who say the American Liberty Currency complies with all U.S. laws and the Uniform Commercial Code," the NORFED leader says.



-- (Dee360Degree@aol.com), April 10, 2000

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