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by
T.A.V.
NORFED stands for the National Organization for the Repeal of the
Federal Reserve Act and the Internal Revenue Code.
We, at The American Voice,
believe that anyone who knows much of anything about the creation,
operation and general principles of the federal reserve bank/board
should support the repeal of the Federal Reserve Act and the IRS code,
as we do.
The objective, to repeal the Federal Reserve Act and IRS code, is
not at issue in this article. What is at issue is the same thing that is
at issue with Bill Clinton, that being, “Is deliberately misleading
people wrong?” We believe it is. Who
NORFED Says It Is
In its own words, NORFED “...is a membership-based nonprofit
organization dedicated to using all its revenue to restore a honest
monetary system for all Americans, as required by our Constitution. It
is governed by a Board of Directors and a Members Advisory Council.
NORFED solicits your support to effect a change to our nation's monetary
standards.” What
NORFED Says The American Liberty Currency (ALC) Is
“America's only Silver Backed Currency - the Currency that will
survive Y2K provides you with a legal Warehouse Receipt which is your
title of ownership to pure .999 fine silver.” Features
and Benefits NORFED Attributes To The ALC
“Legal and Supports the U.S. Constitution; 100% Redeemable
Genuine Warehouse Receipt; Value-backed with .999 pure silver; Three
Denominations: $1, $5, $10; Operates in parallel with Federal Reserve
Notes; Superior security features compared to Federal Reserve Notes;
Every certificate contains a toll free number and web address; Carries a
petition for the Government to reform the currency. Benefits: Choice of
a better currency; Valuable collectors item; provides a trusted basis
for savings; Pride of owning your own currency; Better control of your
own finances; Freedom from the current banking system; Builds a better
community for your family; Warehouse Receipt is proof of ownership of
the silver as stated in the certificate. Redemption Centers
(franchises?) are profitable; Positions company as pro-American; Draws
people to your business as a traffic builder; Positions business for
positive economic change” Enough
Already!
OK, some of you are probably thinking, “Sounds good, what could
be wrong with all that?”
NORFED does make it all seem very good...and of course
patriotic. However, I have developed many concerns as I read about
NORFED and noticed that most of my concerns are conveniently absent any
explanation. Much of what is addressed I find both contradictory
and misleading.
Much of NORFED’s message comes through as implication and
impression, dependent upon the readers pre-conceptions of the specific
terminology utilized. The “speak” is well crafted, for sure. Collectors
Item?
Let’s start with some of the
apparent contradictions. NORFED makes the statement that “The American
Liberty Currency is not an investment. It is a currency.” But they go
on, elsewhere, to describe one of the benefits of the ALC as a
“Valuable collectors item” and “sure to appreciate.” I ask you,
why do people generally “collect” stamps, coins, antiques, etc.?
Isn’t the promise or hope of appreciation in value an investment? So,
to tout the collectability and appreciation prospects of an item and
also state that it is not an investment, could be viewed as misleading. Warehouse
Receipt
NORFED describes the ALC as
“Warehouse Receipts,” “Silver Certificates” and several
different kinds of “currency,” such as “Y2K Money Your Survival
Currency,” “Free Market Currency (FMC)” and “Silver Backed
Currency.”
If there is actual silver in a warehouse somewhere, which
“members” own and have access to, then the ALC’s are warehouse
receipts, indeed.
But, NORFED states that “For collectors there are also proofs,
specimens and uncut sheets of the eye-catching currency.” Again I ask,
why do “collectors” collect things? And do you know of any
“circulating currency” being promoted as having an additional
collectors value?
So, these “collectable” warehouse receipts themselves seem to
have a set value, independent of the silver they presumably evidence
ownership of. My point is this: if there is, let’s say, $5.17 worth of
silver (1 oz) “warehoused,” and the receipt that evidences your
“ownership” of that silver has a face value of $10, doesn’t that
mean the “receipt” has a additional value of $5.00? Remember, they
are collectors items that “are sure to appreciate.” But don’t they
also tell us this is NOT an investment? Why, then, even mention
“appreciation?” Silver
Certificate The term “Silver Certificate” may be technically true, but is, all the same, misleading. A Silver Certificate is defined in The American College Dictionary (1964) as, “a certificate issued by the U.S. government and circulating as money, bearing a statement that silver to a specified amount had been deposited in the Treasury for its redemption.” I believe NORFED is correct in demonstrating the right to issue the receipts. So the part about the U.S. government and Treasury is null, as well as the “circulating as money” part. However, “bearing a statement that silver to a specified amount had been deposited (warehoused)...for its redemption” is an issue. Is the specified amount ten dollars, or one ounce of silver?
Based on the disclosure contained upon their receipts which
states that, “This is a receipt for Ten (US$10.00) Dollars given in
exchange for Title to One (1) Troy ounce of .999 Fine Silver,” it
would seem NORFED is technically within the law to call these “Silver
Certificates.” To not technically tell an untruth, yet still cause
someone to think something other than the complete truth, could be
considered a valid definition of the art of confidence.
Quoting: NORFED states “...certificates which are then shipped
in special tamper-proof cartons to the warehouse where they are stored
in the vault until issued against the silver that was previously stored
in the warehouse. “Then and only then are the authorized warehouse
receipts released to NORFED to be issued to the Redemption Centers.”
This raises a few questions. It seems the “certificates” are
shipped and stored in a vault until they are issued against the silver
“that was previously stored in the vault.” PREVIOUSLY? What happened
to the silver? Where did it go?
Then something called “warehouse receipts” are released to
NORFED, to be issued to the Redemption Centers. O.K., where did these
warehouse receipts come from? What are they, really? If they are the
certificates, what’s the purpose of calling them something else? Once
again, to not technically tell an untruth, yet still cause someone to
think something other than the complete truth, could be considered a
valid definition of the art of confidence
The truth is: to utilize the term “Silver Certificate” is to
conjure up remembrances of a currency that was backed by a
non-fluctuating, fixed value precious metal. That is not the case with
the ALC. Y2K
Money?
The claim that the ALC is Y2K Money, Your Survival Currency, begs
explanation. NORFED claims this when they state that “American Liberty
Currency is now being recognized as the Y2K$ - The Survivable Currency
for the Year 2000 computer problem as it is neither bank-based nor
computer-driven. It is people-based. And because it is backed by silver,
it has every reason to appreciate, as the true extent of the Y2K
computer problem becomes ever more evident.” Once again, why mention
“appreciation” UNLESS you mean to imply (while not actually saying)
investment?
Man, that sounds great but what does it mean? How does any of
that explain how the ALC is going to help me deal with the fact that I
may not have electricity, gasoline or food (if I have not prepared)?
Suppose you have prepared, are you going to go drive to a
redemption center (in one of 33 states)? Who will take them (NORFED
lists 17 businesses nationwide)? I’m sorry, but this claim seems to be
a plain and simple capitalization of peoples fear of Y2K. Free
Market Currency?
NORFED claims that “American Liberty Currency is the first
example of a Free Market Currency (FMC).” I have no basis on which I
can comment on the validity of the existence of such a thing, or to
comment on what it actually is, other than it must be exactly what
NORFED says it is, given the fact that it seems as though they made it
up. Silver
Backed Currency
Again, the same argument holds true for the claim of a “Silver
Backed Currency” as with “Silver Certificate.” This leads people
to believe that the same conditions are in place now as when there was
actually a legitimate, non-fluctuating, fixed value precious metal
backing the currency. That is not the case with ALC. Perhaps that is
what “Free Market Currency” really means?
NORFED states that, “If your goal is to buy silver then you
should buy silver bullion.” We could not agree more.
However, NORFED goes on to state, “Please remember that the
spot price of silver you see in the paper is for a 5000 ounce ingot in
New York. One ounce silver pieces like the U.S. Mint's Silver Eagle is
sold for spot plus $2.00 to $4.00, depending on where and how many you
are buying. So at $5.00 silver, one ounce pieces run $7.00 to $9.00,
about the same for the $10 Certificate.”
I buy .999 pure silver by the ounce, in quantities as small as
one ounce, for approximately twenty-five cents over spot. They are
called “silver rounds.” They are privately minted, one troy ounce,
.999 pure silver coins that do not display a face value. These are
generally bought back by dealers for approximately twenty-five cents
under spot. From my experience these “rounds” are usually traded
privately for whatever the spot price is.
Silver rounds are not the same as the U.S. Mint’s Silver Eagle.
NORFED mixes two distinctly different
things, the result of which gives an impression that is not true.
The truth is you can purchase .999 pure silver, in quantities as small
as one ounce, for just a fraction of one dollar over spot. Supports
the Constitution?
Let’s move on to some more direct concerns and clarification.
NORFED claims that the ALC “Supports the U.S. Constitution.” How?
The Constitution addresses gold and silver and coin and securities but
rests that authority in the Congress. And all mention in the
Constitution to money seems to refer to the Treasury, not a private
membership, non-profit organization. While I have no quarrel with
private money per se, it does nothing to support the Constitution.
The U.S. Constitution states that, “No State shall...make any
Thing but gold and silver Coin a Tender in Payment of debts.”
“Silver Coin” in your possession is substance, not merely evidence
of “partial” substance. It would certainly seem that if one wanted
to support the U.S. Constitution concerning the money issue, one would
use actual gold and silver coin, and work to get the Federal Reserve Act
and the IRS code repealed. I am confused as to how the ALC works toward
that end. Three
Denominations
NORFED claims that ALC is “100% Redeemable Genuine Warehouse
Receipt; Value-backed with .999 pure silver; Three Denominations: $1,
$5, $10.” It is true, there are three denominations at the present
time. However, when one presents the statement that something is 100%
redeemable, value backed with .999 pure silver and in three
denominations, the impression is that the three denominations are 100%
redeemable, at face value, in .999 pure silver. The actual wording is
very carefully crafted, in order to separate (;) each statement so it
does not actually say what it leads one to believe.
I contacted NORFED and asked what they intended to do if, and of
course when, the FRN redemption rate for silver went up. They responded
with this answer. “In answer to you question if the price went over
$10.00 then NORFED would issue new ALC's in $20.00 to equal the one
ounce SL.” Does that even raise the slightest concern with you?
And what if it goes over $20.00 (silver has been as high as
$40.00)? Does NORFED then print a $40.00 warehouse receipt/currency?
Would that mean that there would be three “currencies” with
different face values ($10, $20 & $40) backed by the same amount of
silver? Do you see any problem with that?
As silver goes up, can I redeem my $10.00 receipt for the new
$20.00 receipt? If I can, will shopkeepers sell me double the product
for an old $10.00 versus the new $20.00, because they are both backed by
the same amount of silver? I doubt it. What do we call that, when you
can now buy the same amount of product for $20.00 that you used to be
able to buy for $10.00? Is it inflation, or depreciation? I believe the
results are the same, regardless of what you call it. Miscellaneous
NORFED states that the ALC “Operates in parallel with Federal
Reserve Notes.” The definition of “parallel” is “extending in
the same direction and at a constant distance apart, so as never to
meet.” Considering the fact that NORFED accepts the “dreaded”
Federal Reserve Note (FRN) in exchange for it’s ALC, and that the
denominations of the ALC are dependent upon the fluctuating value of the
FRN (based on it’s redemption rate to silver) it seems
inaccurate to describe the ALC as “operating in parallel” with the
Federal Reserve Note.
NORFED utilizes many sounds good, feels good, marketing
statements. However, few, if any of them, can be demonstrated in any way
other than the most abstract and subjective. Some examples are:
“provides a trusted basis for savings; Pride of owning your own
currency; Better control of your own finances; Freedom from the current
banking system; Builds a better community for your family; Positions
company as pro-American; Draws people to your business as a traffic
builder; Positions business for positive economic change.” What? Huh?
How does it do all THAT?
NORFED asks us to, “...use a currency that will not be taxed
away by inflation.” Taxed away by inflation...what does THAT mean? Is
inflation a tax? And how does a “currency” tied to a fluctuating
commodity (open market silver) that’s redemption rate is dependent
upon a fluctuating, zero substance, confidence backed currency/commodity
avoid the ravages of inflation? NORFED
also tells us, “Special Note: It’s NOT the purpose of American
Liberty Currency to avoid paying taxes!” Paying taxes on WHAT? The
currency, or the profits earned from the Redemption Center/franchise?
Now, all this is not to say that we do not like some things about
the ALC. The ALC’s are very attractive in their design and color
scheme. It appears that NORFED’s claim that they are harder to forge
than the FRN is true. They could rightfully be considered a work of art.
As such, we feel that the ALC would be a very suitable collectors item,
and given the guarantee of being tied to a certain amount of silver, and
given the current low price of silver, there could be justifiable
expectation of appreciation. Likewise goes for the minted American
Liberty silver piece. But that would be an investment, wouldn’t it?
This is not, however, how NORFED presents the ALC. In our
estimation, you can not create a stable currency by backing it with a
fluctuating commodity. And to present one in a way that leads someone to
believe you can, seems to us, at the very least, misleading.
Some of you, who have not heard of NORFED or their ALC, may be
wondering why we have gone into such depth to explain what we feel is
wrong with it, or it may be as obvious to you as it is to us. However,
NORFED has been backed and supported by several large “Patriot”
publications and we have a duty, as stated in our mission statement, to
focus your attention on situations that we perceive to be not what they
are presented to be.
Media Bypass, Tri-State Redemption Center, NORFED (suite 6) and
Constitutional Colleagues in Granite(suite 5) are all located in the
same building, at 4900 Tippecanoe-Drive in Evansville, Indiana. We
contacted Media Bypass Magazine, as we found their support of NORFED
quite extreme and their connection quite intimate. We are informed by
Media Bypass that there is no direct “ownership interest” and
although they support NORFED and Constitutional Colleagues they receive
“no revenue” from either. But wait, doesn’t NORFED promote a
Redemption Center/franchise as being profitable? Oh, that’s right,
technically, profit is not revenue, or is it? More food for thought.
Although we have not addressed all the inconsistencies regarding
NORFED, we have attempted to raise your awareness and give you reason to
be cautious. Caveat emptor. §
[Statements attributed to NORFED and quoted can be found on
their website (as
of February 1999) at www.norfed.org] 
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