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Saturday, November 17, 2007

Liberty Dollar IRS Raid!

I found two threads on the Ron Paul Forum discussing an IRS raid on the Liberty Dollar offices in Evansville on the morning of November 15, 2007. In Google News, I could only find one article mentioning the raid. A later Google search revealed an article from an Evanston newspaper, an article in Reason magazine, and a blog post. This thread on the Ron Paul Forum was getting new posts faster than I could read them. Literally, I would read one page of posts, move to the next page, and the page count would have increased by 2-5.

I doubt that any national mainstream media outlet will pick up the story of the raid on the Liberty Dollar corporation. If they do cover the story, they will portray the Liberty Dollar corporation as criminals, rather than people trying to run a business. (IMHO, the Liberty Dollar corporation IS dishonest, but not for the reasons the government is giving.) I doubt that a mainstream media outlet will cover this story in a manner that's sympathetic to the Liberty Dollar corporation.

Government agents seized all the silver and gold that was backing paper and electronic Liberty Dollars. I didn't know that you could also buy electronic Liberty Dollars. Those are also worthless now. They also seized their records and all their Federal Reserve Notes.

I already made a post on The Liberty Dollar Scam. I warned people that a Liberty Dollar 1 ounce silver coin is only worth its metal value. I warned that paper Liberty Dollars were worthless.

At this point, I would like to mention "NYAH! NYAH! TOLD YOU SO!".

I checked the Liberty Dollar website, and it made no mention of the raid. If the story is true, they have bigger problems than updating their website. Some people said that if you click on the link to by Liberty Dollars, you get a 404 error.

If you desire hard currency, you should buy generic silver or gold rounds or bars, where you pay only a slight premium to the spot price of silver. Paying $20 for $14.50 of silver is foolish.

When I first wrote my Liberty Dollar article, the spot price of silver was around $13. Now, the spot price of silver is $14.50. That's a pretty high increase in a short period of time. If you are holding a "$20" one ounce Liberty Dollar silver coin, the spot price of silver should be worth $20 within 2-3 years. At least you didn't get a 100% loss like the fools holding paper or electronic Liberty Dollars. On the other hand, a 25% loss is still significant.

As I said in a previous post, a silver Liberty Dollar coin is valued based on the spot price of silver. If you paid more for a silver Liberty Dollar, you got conned. If you bought paper or electronic Liberty Dollars, you are a fool who deserved a 100% loss.

This also shows that storing your silver or gold with a 3rd party is too risky. The risk of a red market raid is too high. The only silver or gold investment I would trust is physical metal in my possession, concealed in my residence. I also would consider storing some of my metal with friends and relatives, to diversify.

The primary risk of owning silver or gold is not that you will be robbed by ordinary criminals. The risk is that you will be robbed by criminals wearing shiny badges and uniforms!

Some people pointed out that a one ounce silver Liberty Dollar coin with "$20" printed on it could be redeemed at the Liberty Dollar corporation for 20 Federal Reserve Points. Not anymore! Your one ounce silver Liberty Dollar coin is now worth the same as a generic one ounce silver coin.

Some sources said the raid was conducted by the IRS. Other sources said the raid was conducted by the Secret Service or FBI.

A raid by the Secret Service does not make sense to me. That would mean that the Liberty Dollar corporation was being accused of counterfeiting. They already had a government ruling that their money was considered misleading, but not counterfeit.

A raid by the IRS does make sense, under the rules of a corrupt taxation system. Suppose I bought an electronic Liberty Dollar when the spot price of silver is $12/ounce, and sell that electronic Liberty Dollar to you when the spot price of silver is $14/ounce. In the eyes of the IRS, I had a capital gain of $2 and owed taxes at the 28% rate used for collectibles. According to the IRS, the Liberty Dollar corporation had an obligation to report all these taxable transactions.

That's the whole reason why income taxes are evil. Anyone who tries to set up an alternate monetary system runs afoul of income tax regulations. If you set up an alternate monetary system and pay full income taxes, your alternate monetary system is more expensive and cumbersome to use than Federal Reserve Points. Anybody who sets up an alternate monetary system is guilty of "facilitating money laundering".

However, there was no prior warning of the raid. On the one hand, if warned of a raid, the Liberty Dollar corporation would move their gold and silver to a safer location. On the other hand, the Liberty Dollar corporation and their owners are entitled to due process. They should have been given the opportunity to defend themselves in court before being subjected to a raid. The raid has interrupted their business. The raid has undermined the credibility of the Liberty Dollar. (Although, IMHO, the Liberty Dollar was not credible to begin with.)

I consider this raid to be an unreasonable search and seizure. Of course, it's the Federal courts that count. The policemen who conduct an improper raid are absolutely immune from personal liability.

Some people are suggesting a class action lawsuit against the government by people holding paper or electronic Liberty Dollars, to recover their metal. My response to that is "HAHAHAHAHAHA!!!!" There's no way you'll get a fair trial on that issue in a Federal court.

As I said before, if you want to set up an alternate monetary system, the only way to do it is in a decentralized fashion. If it's centralized, it risks being shut down by an IRS raid. If you're seriously interested in an alternate fair monetary system, the Social Credit Monetary System is the only workable solution.

Legally, it's impossible to set up an on-the-books business that sponsors an alternate monetary system. If you are in 100% compliance with government regulations, the taxes and cost of regulation compliance will make your business useless. If you aren't in 100% compliance with regulations, you will eventually be shut down by red market violence.

I saw references to the official warrant authorizing the illegal raid. I haven't been able to find a copy online. If you have a link to it, please post it.


FSK said...

The Liberty Dollar website has been updated to acknowledge the raid. They provide links to a copy of the search and seizure warrant there:

FSK said...

After further analysis, the warrant does not describe the REASON for the search and seizure. It was merely the document authorizing the raid. In other words, it contained everything but what I'm actually interested in reading.

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