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Who's really undermining the currency, economic stability, and democracy?

Section: Daily Dispatches

5:33p ET Saturday, March 19, 2011

Dear Friend of GATA and Gold (and Silver):

Here's hoping that yesterday's conviction of Liberty Dollar founder Bernard von NotHaus in federal court in North Carolina won't discourage the advocates of free markets in gold and silver and competitive currencies.

Those objectives were advanced by Liberty Dollar's seeking to put precious metal back into the hands of the people and back into circulation as currency. But the details of von NotHaus' conviction, as cited in the statement issued by the U.S. attorney for the Western District of North Carolina, Anne Tompkins, suggest that Liberty Dollar pursued those objectives in the wrong way -- a way the government was able to construe as more or less counterfeiting.

That is, Liberty Dollar's coins "were marked with the dollar sign, the words 'dollar,' 'USA,' 'Liberty,' 'Trust in God' (instead of 'In God We Trust'), and other features associated with legitimate U.S. coinage."

Of course the suggestion of counterfeiting was always a little silly, insofar as Liberty Dollar's coins were precious metal and general-circulation U.S. currency coins have all been base metal since 1965. How can a supposed counterfeit be worth more than a legitimate original? It's doubtful that any user of a Liberty Dollar coin was ever really confused about the difference.

... Dispatch continues below ...


Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

But Liberty Dollar also was part of an organization that aimed to repeal the Federal Reserve System and thus was more easily construed as subversion. Certainly the Liberty Dollar operation was politically subversive, and the government seems to have gone nearly berserk about it precisely because of its politics.

"Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism," U.S. Attorney Tompkins said. "While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country. ... We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government."

Undermining the legitimate currency of this country? Representing a clear and present danger to the country's economic stability?

Does the U.S. attorney mean undermining the currency that has lost something like 98 percent of its value since the enactment in 1913 of the Federal Reserve System about which the Liberty Dollar operation complained? Does the U.S. attorney mean a danger to the economic stability of the country that has been using that ever-devaluing currency, the country that has experienced only booms and busts and even a couple of depressions under the reign of the Federal Reserve? And by "democratic form of government," does the U.S. attorney mean the Federal Reserve System that, in secret, rigs markets and bestows virtually infinite patronage on the large banking houses that have been looting the country?

If undermining that currency and the economic stability of the country that uses it is really a crime, and if damaging democracy is really a crime, why haven't a few Fed chairmen been prosecuted?

As for the nececessity for the government to infiltrate organizations that might challenge the currency system, the Liberty Dollar enterprise functioned entirely in the open. It operated an Internet site and distributed press releases. Unlike the government, it wasn't in the business of keeping secrets. It seems to have been quite candid about what it was doing.

Nevertheless, Liberty Dollar probably was mistaken, legally and tactically, in its minting format, its using devices that could liken its coins to government coins. If the Liberty Dollar coins didn't use those devices, if Liberty Dollar had distinguished its coins by weight of metal rather than any dollar value and had imprinted on them some legend explicitly distinguishing them from government coins, the case might have ended differently -- or well might not have been prosecuted at all.

In any event the Liberty Dollar case was more a political case than a case of counterfeiting, fraud, or deceit. Indeed, the country probably has gained more from it -- gained some understanding of the currency system -- than the country has lost from the circulation of some precious metal coinage. U.S. District Court Judge Richard Voorhees should take this into account when sentencing von NotHaus.

Today's story in the Asheville Citizen-Times about the conviction of von NotHaus is appended. And some sardonic commentary about his conviction can be found at Zero Hedge here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Liberty Dollar Creator Convicted in Federal Court

By Clarke Morrison
Asheville Citizen-Times
Asheville, North Carolina
Saturday, March 19, 2011

The leader of a group that marketed a fake currency called Liberty Dollars in the Asheville area and elsewhere has been found guilty by a federal jury of conspiracy against the government in a case of "domestic terrorism."

Bernard von NotHaus was convicted Friday at the conclusion of an eight-day trial in U.S. District Court in Statesville. The jury deliberated less than two hours, according to the Department of Justice.

Charges remain pending against William Kevin Innes, an Asheville man who authorities said recruited merchants in Western North Carolina willing to accept the "barter" currency, according to court records. Innes was indicted along with von NotHaus in 2009.

"Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism," U.S. Attorney Anne Tompkins said. "While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country."

The case was investigated by the FBI, Buncombe County Sheriff's Office, and U.S. Secret Service with help from the U.S. Mint.

"We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government," Tompkins said.

Von NotHaus, 67, faces up to 25 years in prison during sentencing, which hasn't been scheduled. The government also is seeking the forfeiture of about 16,000 pounds of Liberty Dollar coins and precious metals valued at nearly $7 million.

According to court documents, von NotHaus founded the National Organization for the Repeal of the Federal Reserve and Internal Revenue Code in Evansville, Ind., in 1998, and developed the Liberty Dollar. He touted the silver medallions as an inflation-proof alternative to official currency.

The coins were marked with the dollar sign, the words "dollar," "USA," "Liberty," "Trust in God" (instead of "In God We Trust") and other features associated with legitimate U.S. coins.

A 2007 affidavit said more than 70 businesses in the Asheville area agreed to accept the Liberty Dollar. Innes held the title of North Carolina regional currency officer and was one of three members of the group’s executive committee, an indictment states.

The charges against Innes include passing coins resembling genuine U.S. coins and intended for use as money, mail fraud, and possession Liberty Dollar coins with intent to defraud. Authorities said when he was arrested that he faces up to 45 years in prison.

Despite warnings from the federal government, Innes told the Citizen-Times in 2006 that Liberty Dollars were legal.

"One of the first things I did when I started this in Asheville was to go to the police and tell them what I was doing," he said.

Federal agents raided von NotHaus' company headquarters in 2007 and seized documents and precious metals. A private mint in Coeur d'Alene, Idaho, that produced the coins was raided the same day.

Congress has exclusive power to coin money in the U.S. and to regulate its value, according to the Treasury Department.

* * *

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Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY) and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit: