The Liberty Dollars were produced by a now-defunct organization with the unwieldy name "National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code," or NORFED for short. NORFED's goal, according its founder Bernard Von NotHaus, was to provide an alternative currency to that which is issued by the U.S. federal government: a currency that is backed by gold and silver, and therefore inflation-proof. NORFED has manufactured these coins in various denominations, including $1, $5, $10, and $20 in silver, and $500 in gold.
The U.S. Mint issued a consumer advisory warning people that the NORFED Liberty Dollars might be confusing to consumers, and stating that their use as circulating money was a federal crime (which NORFED disputes.) What makes these Liberty Dollars so dangerous in the eyes of the U.S. Mint is that the Liberty Dollars have been designed to look very much like the existing circulating U.S. coinage. These are the similarities and how to tell them apart:
- LIBERTY inscription - Genuine legal tender coins also bear the LIBERTY inscription
- TRUST IN GOD inscription - Genuine legal tender coins are inscribed IN GOD WE TRUST
- Value is stated in Dollars - Genuine U.S. currency is also given in Dollars
- Depiction of the Statue of Liberty - The Presidential Dollars also bear the Statue of Liberty
- The inscription "USA" - USA is widely understood to mean United States of America
- 1.800.NEW.DOLLAR on the reverse - The United States does not put phone numbers on its coinage
- LibertyDollar.Org on the reverse - The U.S. doesn't put Web addresses on its coins either
In addition to the coins being distributed by NORFED, there is printed currency in the form of various denominations of dollar bills. These paper Liberty Dollars are far less worrisome, since they don't look anything at all like real U.S. paper money.
Confusion About the NORFED Dollars - The reason these Liberty Dollar coins were deemed potentially confusing by the U.S. Mint is that the Mint introduced a new One Dollar coin type in February 2007, called the Presidential Dollar. Any time there is a major change to the coinage, there is bound to be some confusion, and unfortunately the Mint feels that these so-called "Liberty Dollars" are similar enough to genuine U.S. coinage that people might take them during monetary transactions without realizing that they're not U.S. legal tender.
What to do if you encounter NORFED Liberty Dollars - Although it is not against the law to own these Liberty Dollars as a collectible item, it is illegal to use them to conduct any commerce in the United States. If a merchant tries to give you one, politely refuse it. If they insist, claiming these coins are legal tender, you should cancel the entire transaction with that merchant and report them to your local Secret Service Field Office.
The Presidential Dollars are golden-colored - If someone tries to give you a dollar coin that you don't recognize or aren't sure about, just remember that the only U.S. Dollar coin type is the "golden dollar," the same size and color as the Sacagawea Dollar. The U.S. does not make any penny, nickel, or dime-sized dollar or multiple-dollar coins out of a silver-colored alloy.