DEFINITION of 'Liberty Dollar'
An alternate currency created by Bernard von NotHaus in 1998 for the purpose of combating inflation. Liberty dollars were backed originally by silver, then later gold, copper and platinum. Through his National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code (NORFED), von NotHaus had the silver liberty dollars minted at a private mint in Idaho. Unlike official U.S. currency, liberty dollars were supposed to be inflation proof since they were made of a precious metal.
BREAKING DOWN 'Liberty Dollar'
Because of the similarities in appearance between liberty dollars and U.S. government coins, von NotHaus was arrested in 2009 on charges of intent to defraud and was found guilty of conspiracy against the federal government in March 2011. U.S. Attorney Anne Tompkins called von NotHaus's actions "domestic terrorism," according to the Asheville, N.C., Citizen Times. The U.S. government said that the coins were not legal tender, but that von NotHaus tried to make them appear as such. It also said that NORFED encouraged businesses to accept the coins and to offer them to consumers as change.