by Daniel S. Comiskey
Evansville strip mall, Bernard von NotHaus ran the most successful
alternative currency in the country. Then the FBI raided his headquarters,
arrested him, and seized eight tons of gold and silver backing the
notes. But even as he awaits sentencing, the $65 million question
remains: Was it really counterfeiting?
Say what you
will about Bernard von NotHaus, the man has led his federal probation
officers to some beautiful places. First, there was the waterfront
penthouse in Miami Beach. Then there was the penthouse at the Marco
Polo condominium in Honolulu. Today, he occupies a multimillion-dollar,
40-acre estate in Malibu owned by a longtime friend. Make no mistake,
though: NotHaus is broke.
the FBI raided the Evansville office of his alternative currency,
the Liberty Dollar, in 2007 seizing his assets and arresting
him for counterfeiting the 68-year-old has been living on Social
Security and the kindness of wealthy acquaintances.
how someone who drives a beat-up, 90s-era Pontiac Grand Am
received his regular visit from the probation department yesterday
at a spectacular house with a driveway so winding and steep that
the officer refused to ascend it.
Wearing a Hawaiian
shirt and his long gray hair in a ponytail, NotHaus greets me at
the front gate and welcomes me inside. His companion of 40 years,
Talena Telle Presley, disappears to a back room. If
he wants to do another interview, thats his business. A documentary
filmmaker from Los Angeles has been shooting him here lately, and
the BBC plans to sit down with him next week. NotHaus wastes no
time spreading dozens of old coins and bills on a table for the
beginning of a monetary history lesson.
the U.S. government has been printing billions of dollars a year,
he says. Thats like watering down good Chivas whiskey!
And it always leads to hyperinflation eventually.
He picks up
a worn bill with German writing and considers it.
in January of 1919, it took 12 German marks to buy one ounce of
silver. Then in November 1923, just four years later, a little guy
with a moustache jumped on a table at a beer hall in Munich and
said the revolution had begun. Usually, people dont keep records
of inflation during chaotic times, but the Germans did. And at the
end of that year, it took 543 billion marks to buy the same ounce
of silver. Are you familiar with the French assignat?
He picks up
another wrinkled note.
one from 1792. The French thought, Other people have f ed
up with paper money, but it cant happen here. We know how
to manage it. Well, during the rise of the Republic, the assignat
entered hyperinflation and became worthless.
an American colonial dollar from 1796. Ever heard the expression
Not worth a colonial dollar? And look at this recent
$100 trillion note from Zimbabwe.
so excited explaining the difference between these fiat
currencies those not backed by a commodity like precious metal and
his own Liberty Dollar that he can no longer remain in his seat.
my words, he says, standing. One day, gold will hit
$100,000 an ounce, and silver will hit $1,000.
Even the most
avid supporter of returning our money to the gold or silver standard
would have to be startled by that prediction. While its true
that silver has risen from $5 an ounce to more than $30 over the
past few years as Federal Reserve dollars have slowly depreciated,
no calamity seems imminent. Yet, in less than a decade, NotHauss
Liberty Dollar surged to become the most pervasive alternative to
the American buck. His makeshift Indiana bank printed or minted
more than $65 million bills and silver coins that spread to
buyers in all 50 states. Hundreds of merchants nationwide came to
accept the stuff. And the bizarre story of how the Liberty came
about, how the government came to see it as counterfeiting, and
how NotHaus believes it still might save us from an economic collapse
is richer than any currency can measure.
von NotHaus was born near Kansas City, Missouri, where his father
was a salesman, his mother taught swimming lessons, and absolutely
no one was interested in economics. He studied architecture at Kansas
State University for six years before dropping out to enjoy what
remained of the 60s in Europe. He claims to have traveled
a little with John Lennon. Dated Lennons cook. Wandered around
Pakistan and Afghanistan. Ultimately, NotHaus moved to Hawaii in
1971 for the same reasons everyone moves to Hawaii.
Living on Oahu
in absolute poverty and happiness, he and his girlfriend, Telle,
built a rustic little cabin together. They partied on the beach
with the trust-fund crowd, smoked pot with the right people. Telle
bore him two sons, Random and Extra. (When asked about the unusual
names, NotHaus offers only that theyre unusual boys.)
And then on Sept. 11, 1974 he has no problem remembering the
date NotHaus had an experience that he says defined the rest
of his life. A spiritual visitation. A voice invoking him to spread
the word about gold. An epiphany.
and flowed over a period of about two weeks, he remembers
at the Malibu house, his eyes welling with tears. And it was
wonderful. I had no background in economics. Come to think of it,
I still dont its dry, boring. Money is cool. Anyway,
at the end of it, I knew I had to write this economic research paper.
how delirious that sounds. You can make fun of it if you like,
he says. But there are religions where God comes to you on
a little wafer. They had some good people selling that one. Imagine
marketing a crucifixion as a beautiful experience. Give me a naked
woman and a joint.
So the hippie
apostle of no one in particular read up on the history of gold ownership
and wrote his gospel on its potential to rescue us from a coming
depression. The 21-page report, titled simply To Know Value An
Economic Research Paper, studied the devaluation of the dollar
over the last century along with golds relative steadiness.
Simplified charts were thrown in for good measure. And heres
the strangest part: It made a decent argument. NotHaus began selling
copies of the paper for $3 to his friends in the neighborhood. People
thought, Bernard has lost it! he says with a frenzy
in his eyes that suggests he might have. I didnt even
point out that private ownership of gold was illegal at the time!
That decades-old prohibition, intended to reserve the metal for
federal purposes, would change shortly thereafter, in December 1974.
And after reading NotHauss paper, several of his wealthy Hawaiian
friends decided they wanted some gold of their own.
with a market for precious metal, NotHaus had a problem. He didnt
know the first thing about minting. A more orthodox person might
have taken a few classes. Instead, NotHaus called every private
mintmaster he could find until one in California named Earl Butler
grudgingly agreed to share a few secrets over the phone. Still,
it was a complicated process melting, rolling, tumbling, die-making,
pressing. Perfecting it took time. And there was this added complication:
NotHaus didnt own his own press. But his friend Henry Stotsenberg,
a young consultant living in Hawaii and eventual owner of the Malibu
house, knew financiers and how to pitch them for the $100,000 loan
the operation needed. NotHaus got his press.
By the early
1980s, the Royal Hawaiian Mint, as it came to be known, was churning
out some of the most beautiful collectible coins in the country.
The medallions commemorated everything from the anniversary of Pearl
Harbor to the historic kings of the islands. Dignitaries such as
the governor of Hawaii would even come out for their release on
occasion. Advertising his gold and silver pieces in numismatic magazines
such as Coin World, NotHaus slowly became a rich man. He
moved his family to the exclusive Diamond Head area. His son Random
attended the Punahou School, from which Barack Obama had graduated.
NotHaus and his boys would travel the world for two months each
year, Captain Rough Seas and the Crew of Two, visiting
mints, collectors, and others related to the industry everywhere
they went. All the while, he continued to study monetary theory.
Though he would spend 25 years at the Royal Hawaiian Mint, his time
there served as financing for a loftier goal one that had
nothing to do with collectibles. NotHaus abhorred the Federal Reserves
relentless printing of fiat money and the accompanying depreciation
of the dollar, which had lost almost half its value in his lifetime.
If he could create his own system of money based on silver or gold,
he thought, he might be able to protect the American people not
only from inflation, but something far worse. Every country
that has hyperinflated its currency has ended up in a dictatorship,
he says. Societies collapse in the absence of value.
to design a new system of cash based on gold and silver. He sketched
out the paper bills, experimented with molds that would make the
coins, and used his savings to buy thousands of ounces of gold and
silver bullion. By the summer of 1998, all he needed was a name
for his newly minted operation and a more centralized U.S. location
than Hawaii for its headquarters. The Liberty Dollar began its life
under the clunky moniker National Organization for the Repeal
of the Federal Reserve (NORFED). And as he began to publicize
his plan among libertarian and anti-establishment groups, NotHaus
received the break he needed: a call from a man named Jim Thomas
of Evansville, Indiana.
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