LIBERTY DOLLAR NEWS: August 2007 Vol. 9 No. 8

I am very pleased to report that the Ron Paul Dollar has been doing exactly what it was designed to do. And that is to draw more attention to the Congressman’s Presidential campaign. Plus the Ron Paul Dollars are finding their way into a lot of creative uses. For example, recently three were donated to an auction in San Antonio Texas, where they generated over $800 in bids! And that was for three ounces of silver! Think outside the box... think how you can generate more buzz for Ron’s campaign. And if you are going to an event that Ron will attend, please contact the office to see what we can do.

And remember that although Ron Paul is a hard money person... he still needs those dreaded Federal Reserve Notes for his advertising, etc., because not everybody takes the new Liberty Dollar... yet. But let’s keep working on that... so when the US dollar fails and it is finally publicized by mainstream press, there is something good to use.

FLASH: Did you know we also issued a Platinum Ron Paul Dollar? Amazingly, 55 out of an issue of only 100 have been exchanged for those dreaded FRNs at the ridiculous rate of $1495. I say “ridiculous” because the final costs were a lot more than I had originally figured. The balance of 45 will be made available at a more reasonable market price later this year. If you are interested, please call the office and get your name on the list and they will call you when we offer the 45 Platinums.

ETA on the Ron Paul Coppers is still scheduled for November. Many thanks for all the orders. As you will read below, ordering the Copper Libertys was a real learning experience! We can only hope that we can solve some of the problems with the Ron Paul Coppers.

NEWS FLASH: We have just heard a rumor that someone may issue a cheap one ounce Ron Paul “round” with the sole purpose to make money off the Ron Paul campaign. I personally find this type of behavior most regrettable. While Liberty Dollar spent thousands and thousands on a sculptured master and the best dies possible to present Ron Paul in the very best way possible with a face value of $20 plus a donation, this group appears to prefer the cheap way which will not generate any donations nor buzz that the Ron Paul campaign enjoys from the Ron Paul Dollar. Be aware! Cheap is not good. Face value enables it to circulate and draws honor to Ron Paul, the ideals of hard money and his serious campaign.

Please note the Success Story regarding the first use of a Ron Paul Dollar below.

Finally at looong last the shipment of Copper Libertys arrived. After delays and delays, intense negotiations with the trucking company, spending way more money than we had wildly considered and the intervention by Sarah’s brother to personally truck the order to Evansville... they arrived on Monday, August 27, six weeks later than expected. Even without waiting for the next day, the Office swung into full speed. In fact, the Office has been preparing for the shipment for weeks. Much of the paperwork was done and they were ready. Just last Friday the Shipping Department set a new record for the number of packages shipped in a single day – an unbelievable 84 packages in one day! If you have not received your Copper Libertys, you will soon.

The Copper Ron Paul Dollars have been ordered. Now with our first heralding international experience behind us... we remain hopeful that the Copper Ron Paul Dollars will be received and shipped in November. When in November is anyone’s guess. Hopefully this last experience will help us keep the second shipment on schedule. And of course we will keep you informed and will ship ASAP.

Many thanks again for your patience and support of a value based currency.

Credit crunch or Debt Bomb? Call it what you will. For me it’s the same old “confidence game.” A bunch of crooks... Excuse me, central bankers, flooding the world with more fiat money and ripping off your purchasing power. By pumping in trillions of “liquidity” (BS dollars) into the monetary system to protect their ponzi banking scam, our money is going to be worth less... a lot less.

Need more “confidence”? Just pour in more "liquidity." Ever notice the word “money” is never mentioned in articles? If “money” was mentioned, someone might ask, where did that money come from? Heaven help us indeed if the media ever asks a relevant question. Just check out the numbers from these clips from recent articles for a quick idea:

Tuesday August 7, the panic began in Europe . Shortly after 9 a.m. , on the second floor of the European Central Bank's 37-story glass and metal office tower in Frankfurt , the European Central Bank injected record amounts of cash to prevent a financial system seizure as the European Central Bank (ECB) pumped funds into the interbank lending markets.

Wednesday August 8, the ECB is closely monitoring the situation and stands ready to act to assure orderly conditions in the Euro money market and announced that it would accept all bids to borrow money made by 1:05 pm . The most obvious sign of confidence slippage was the European Central Bank (ECB) to provide 94.8 billion euros ($130 billion) in response to a sudden demand for cash banks.

Thursday August 9, Federal Reserve added $24 billion of extra liquidity.

Friday August 10, the European Central Bank made a second loan to banks to alleviate a money shortage sparked by concerns over investments in U.S. mortgages. Today's 61.05 billion euros ($83.4 billion) brings the two-day total of money lent to 155.85 billion euros ($212.9 billion).

Bank of Japan supplied 1.0 trillion yen ($8.45 billion) to assuage a credit crunch.

The Reserve Bank of Australia added more than twice the usual amount of money into the banking system, injecting $4.95 billion AD ($4.19 billion USD) in the morning.

Monday August 13, the ECB added 47.7 billion EUR of "liquidities" to the markets.

Tuesday August 14, the ECB made its fourth intervention since last Thursday. The E7.7 billion ($10.4 billion) injected was down from E47.67 billion on Monday and E95 billion put in on Thursday.

To date the ECB had "injected" a total of 210 Billion EUR in emergency liquidity in three days equal to $284 Billion USD, well or over 400 million ounces of gold at today's rates as they tried to restore normal trading conditions to the global money.

The Federal Reserve also continued to provide emergency liquidity on Monday with $2 billion of temporary reserves.

The Bank of Canada also intervened on Monday, injecting C$670 million to improve liquidity. This is the third occasion on which the Bank of Canada has intervened following a C$1.64 billion injection of overnight money on Thursday.

The Fed pumped $38 billion into the banking system in three separate open market operations last week.

Wednesday August 15, Stocks recovered some ground Wednesday, drawing some reassurance from the Federal Reserve's announcement that it was adding more cash to the banking system. Everybody likes free money!

On Friday August 17, the Fed cut the rate at which it lends directly to banks, and it encouraged lenders to use its discount window in an attempt to restore confidence in credit markets... The initial euphoria in financial markets after Friday's Federal Reserve discount rate cut faded on Monday, and questions began to be asked about what more needed to be done to improve confidence in lending.

US markets ended in positive territory on Friday, in spite of huge falls in European equities, after the Fed's interventions to pump in $38 billion appeared to calm nerves.

Monday August 20, the Federal Reserve added another $3.5 billion to the money supply... I mean liquidity. But it failed to calm the money markets as commercial paper dump continues. Money market investors staged a dramatic flight to safety. Yields on short-term US government debt plunged as Federal Reserve tired to shore up the system with more money and sneaky behind-the-scenes antics to create more confidence.

But it was not just the Federal Reserve flooding the system with mega bucks. Practically every bank in the whole world was printing money to put the crisis at bay. But the Federal Reserve found it was not enough to bolster confidence. Investors shrugged off the Federal Reserve's attempt to inflate the credit markets and bought up the safest government securities, triggering the biggest drop in yields on short-term Treasury bills in nearly 19 years. Everybody wants to get out of money market funds and wanting to get into Treasuries. Their actions signaled a vote of “no confidence” in the Fed's move, by the investors.

Both individual and institutional investors are worried about risks in the commercial-paper market, they have been shifting money to Treasury-only funds. Now there are problems with commercial paper... Meanwhile, the $2,200 billion market for asset-backed commercial paper (ABCP) has emerged as the powder keg in the fast spreading crisis, which has now moved far beyond US sub-prime debt.

Mutual-fund companies came under fire because of their commercial paper as money-market investors overall poured $50 billion into these Treasury only funds. Money market investors staged a dramatic flight to safety on Monday, knocking down yields on short-term US government debt, as top Treasury and the Federal Reserve continued behind-the-scenes efforts to maintain confidence in the credit markets.

The latest wave of risk aversion in the credit markets is a sign of significant fear in the financial system investors snapped up three-month Treasury bills yesterday. It was a frantic scramble to obtain short-term government paper as investors refused to buy or accept as collateral securities that in normal times would be of unquestioned worth. The yield on the 3-month note dropped within a period of two hours from 3.76 percent to 2.55 percent, the biggest shift since January 1989.

All these liquidity injections were designed to ensure that money markets continued to function and did not succumb to a credit freeze. The US Federal Reserve followed suit, with the biggest cash infusions since 9-11. In just a few days U.S. Federal Reserve tried desperately to rescue the nation's gigantic $10 trillion mortgage market …Flooding the banking system with cold cash …Slashing its discount rate by a half point, and literally begging America's largest banks to borrow!

These “injections of liquidity” (like a drug in the money system) were designed to ensure that money markets continued to function and protect the housing market from failure. The mortgage market is $9.9 Trillion... even larger that the US national debt... and key to the US economy. But foreclosures are up 87%... and while we are not in a recession... the US economy is teetering on the edge of collapse...

Then Countrywide Financial, the largest mortgage lender in the U.S., blew through their $11.5 billion credit line. The stock plunged as a result, down about 55% year-to-date! Then Countrywide Financial laid off 1,200 sales workers as the massive U.S. mortgage market crumbles in 20,000 cities and towns all across America.

But wait! The Federal Reserve saved the day. Countrywide Financial just got a $500 million loan from Bank of America... Who got the $500 million from the Federal Reserve? Where did the Federal Reserve get the $500? Or the $500 they loaned to Citi Bank, and the $500 million loaned to two other Big Banks? It’s just another $2 billion in this high stakes poker game... Who cares?

You should care! Hell yes! It is your money that will be impacted! Trust me, this theft of your purchasing power, otherwise called “inflation” by the government economic whores, is planted to grow in the future. BIG Time “inflation”! The government does not have to raid your house. They are raiding your billfold, pocket purse, retirement fund. They are stealing your money damnit!

In past financial bailouts, the destruction was limited to one or two institutions. This time it is on a global basis to the tune of hundreds of billions in "liquidity." Thus the central banks have set a dangerous precedent. When Long Term Capital Management (LTCM) began to implode, the bailout involved a bond squeeze of $100 billion. Now it involves trillions. Will this inflation evolve into hyperinflation? Is this the beginning of the end of fiat money? What will replace it? Simple tyranny? A brave new world? Or the Liberty Dollar?

Initially, turmoil was limited to credit markets, but it has quickly spread to global stock markets after central banks were forced to intervene to keep markets from collapsing completely. Panic selling by hedge funds has emerged as the hidden cause of the contagion spreading through the global financial system. The increased payments forced hedge funds to sell assets to cover their losses.

Nobody is safe. No government money is safe. And most certainly not the US dollar. And nobody says it more simply than my friend Martin Weiss, “We are in the midst of a financial crisis. Not a downturn. Not a slump. Not a blip. This is a full-blown meltdown.” He goes on to say there has been too much housing speculation, too much stupid lending and too much financial leverage. The banks gambled with easy money and lost. And now we have hell to pay with our money.

All this is the result of just one small sector of the massive derivatives market going haywire. There are similar time bombs buried all over the markets. There are more bailouts to come now that the precedent has been set.

The dollar has plunged to new lows, right on the heels of a similar plunges. Get out of the US dollar and get back to value. Fortune favors the brave. Get value. Please get some Liberty Dollars too and help return our great country to value based monetary system.

Remember this is still “Summer Time” and the livin’ is easy. Please don’t wait for the Fall! Silver is cheap! The market has yet to absorb the shock of 2 million adjustable mortgages with "teaser" rates that will be reset upwards by 35 percent over the coming months. The worst is yet to come. There could be 3-5 years of hell before the monetary system throws off the chains of fiat money and gets back to value. Maybe even longer.

This is just the beginning of a massive monetary tidal wave. Stay tuned for developing events. I gotta get to the beach... remember I am in Hawaii .

PS: And don’t forget we the people get to pay the interest on all this “liquidity” that was “loaned” to maintain their ponzi scheme. Great way to insure that the IRSlaves continue to pay “tribute” every April 15th!

By Jeremy Grant for the Financial Times, London, Tuesday, August 14, 2007, and posted at www.GATA.org  – the good guys who tell the truth about the gold and silver market.

WASHINGTON -- The US government is on a "burning platform" of unsustainable policies and practices with fiscal deficits, chronic healthcare under-funding, immigration, and overseas military commitments threatening a crisis if action is not taken soon, the country’s top government inspector has warned.

David Walker, Comptroller General of the US, issued the unusually downbeat assessment of his country's future in a report that lays out what he called "chilling long-term simulations."

These include "dramatic" tax rises, slashed government services, and the large-scale dumping by foreign governments of holdings of US debt.

Drawing parallels with the end of the Roman Empire, Mr. Walker warned there were "striking similarities" between America's current situation and the factors that brought down Rome, including "declining moral values and political civility at home, an over-confident and over-extended military in foreign lands, and fiscal irresponsibility by the central government."

"Sound familiar?" Mr. Walker said. "In my view, it's time to learn from history and take steps to ensure that the American Republic is the first to stand the test of time."

Mr. Walker's views carry weight because he is a non-partisan figure in charge of the Government Accountability Office, often described as the investigative arm of the US Congress.

While most of its studies are commissioned by legislators, about 10 percent -- such as the one containing his latest warnings -- are initiated by the Comptroller General himself.

In an interview with the Financial Times, Mr. Walker said he had mentioned some of the issues before but now wanted to "turn up the volume." Some of them were too sensitive for others in government to "have their names associated with."

"I'm trying to sound an alarm and issue a wake-up call," he said. "As Comptroller General, I've got an ability to look longer-range and take on issues that others may be hesitant, and in many cases may not be in a position, to take on.

"One of the concerns is obviously we are a great country but we face major sustainability challenges that we are not taking seriously enough," said Mr. Walker, who was appointed during the Clinton Administration to the post, which carries a 15-year term.

The fiscal imbalance meant the US was "on a path toward an explosion of debt."

"With the looming retirement of baby boomers, spiraling healthcare costs, plummeting savings rates, and increasing reliance on foreign lenders, we face unprecedented fiscal risks," said Mr. Walker, a former senior executive at PwC Auditing Firm.

Current US policy on education, energy, the environment, immigration, and Iraq also was on an "unsustainable path."

"Our very prosperity is placing greater demands on our physical infrastructure. Billions of dollars will be needed to modernize everything from highways and airports to water and sewage systems. The recent bridge collapse in Minneapolis was a sobering wake-up call."

Mr. Walker said he would offer to brief the would-be presidential candidates next spring.

"They need to make fiscal responsibility and inter-generational equity one of their top priorities. If they do, I think we have a chance to turn this around, but if they don't, I think the risk of a serious crisis rises considerably."

Mr. Walker’s complete 12-page article is available at Freedom Phoenix News:

http://www.freedomsphoenix.com/Find-Freedom.htm?At=022435&From=News 
www.gao.gov/cghome.htm

The Liberty Dollar continues to evolve, expand and develop the private money concept. The latest and more interesting development was Wednesday’s issue of paper money in Hawaii. For only the second time, a community has taken a bold step to protect itself from the ravages of an undisciplined federal currency, in this case the Federal Reserve Notes, masquerading as the US dollar.

Some months ago while reviewing an old Hawaii file, I found an envelope with the very first sketch of the paper currency that became the Liberty Dollar. If you have read our home page (www.LibertyDollar.org) then you know the Liberty Dollar evolved out of my 23 years of research and development for a Hawaiian currency. As I paused to mull over the design, I noticed that it was on an old Merrill Lynch statement envelop post marked 1977.

1977... I thought... and realized that was 30 years ago! Where had the time gone? My sons had come and gone their separate ways. A lifetime had passed and I still had not issued the currency of my dream... my desire to return, protect and empower a very special island nation to its former independent status. As I sat there in my new penthouse, I wondered if I could commemorate the 30^th Anniversary by issuing the Hawaii Dala Certificate.

I quickly called my currency artist and asked him if he had time to work up the design, now quite different that the original after 30 years of development. And although he was busy, he liked the idea and identified with my sentimental call to action. I then called the printer, and sure enough, he could fit a quick currency run into his schedule too. And finally I called Wayne Takazono, my close friend and noted Hawaiian artist who had played a major role in many of my designs since 1991. I asked Wayne to do all the original artwork necessary for the $1 Hawaii Dala certificate. Wayne, always the gentleman, immediately rallied forth.

Within just a few moments and three calls, a 30-year-old dream was revived and launched into action. Unfortunately, I only had a very small window in my 9th Annual National Tour, but I knew I would have to go to Hawaii to issue the currency. Yes, dashing off to Hawaii is a tough tour of duty but somebody had to do it. In this case, it had to be me. So I set aside an overnight to visit Hawaii.

Very quickly, the project took on a life of its own. Bud Gregory, the new operator of the Royal Hawaiian Mint, needed my assistance. Then Sam Slom, an old friend and certainly one of the most dynamic business leaders in Hawaii , agreed to distribute the Hawaii Dala... An overnight in Hawaii , even two nights, or three nights would not suffice. Quickly my little project grew and as I write this, I am in Hawaii for a week!

Just yesterday, August 29, Sam Slom, and I, plus a hundred or more friends held a Press Conference and Reception for the introduction of the $1 Hawaii Dala silver certificate. You should have been there. Complete with the media, Hawaiian blessing, a cake decorated like the $1 currency and live Hawaiian music... at the Pagoda Hotel in Honolulu... the event was wonderful.

Plus it was historic, as a certain group of Hawaii citizens banded together to use a new “inflation proof” currency to protect themselves from the depreciating federal money. This is a dynamic time. And an exciting time. And yes, it can be a very profitable time for anyone who is willing to get out of the box and take action. Have you started a Liberty Dollar for your community? Think about it!

If you are interested, want to learn more or even get some Hawaii Dalas, welcome aboard. This September 11th will be my 33rd anniversary in the metals/money business. What a life! Please visit www.HawaiiDala.com for info or to place an order. The Hawaii Dala is available in $20, $10 and $5 specie form and the new $1 paper Silver Certificate.

A sincere mahalo to all my friends and business associates. Thank you for your support.

First, please don’t think that because the Lawsuit is the sixth article in this issue of the Liberty Dollar News that it is any less important, because it is not. It’s just that regardless of the devastation that the government warning is having on the Liberty Dollar business, the nature of the lawsuit takes time. Our attorneys have requested and been granted more time to reply to the government’s Motion to Dismiss. Current, our attorneys are using their extended time to mount the best defense. Our deadline is September 19. Then the government will have 15, 30 maybe even a total of 60 days to respond to our motion to deny their original Motion to Dismiss our lawsuit. Stay tuned. A lot of diligent work is being done. This is a serious case. The legal points are very important. Your continued support and $20 donations (or even more) are greatly appreciated. Thank you.

[Editor note: Liberty Dollar does not usually cover the IRS issue. But the Tom Cryer case, and especially his win, is not usual. It points out the weaknesses within the fraudulent “income” tax scam. And although this is not an area for the faint of heart, it is an area that needs to be corrected most urgently. Here is Tom’s story and links.]

IRS loses challenge to prove tax liability
Lawyer is acquitted after arguing income levy lacks legal foundation

The Internal Revenue Service has lost a lawyer's challenge in front of a jury to prove a constitutional foundation for the nation's income tax, and the victorious attorney now is setting his sights higher.

"I think now people are beginning to realize that this has got to be the largest fraud, backed up by intimidation and extortion and by the sheer force of taking people’s property and hard-earned money without any lawful authorization whatsoever," lawyer Tom Cryer told WND just days after a jury in Louisiana acquitted him of two criminal tax counts.

And before you consign him to the legions of "tin foil hat brigades" who argue against paying taxes, and then want payment to explain how to do that, he addresses the issue up front.

Read the complete article at: http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=56855