Liberty Dollar
The Liberty dollar is an alternative form of currency issued in the United States by NORFED, a non-profit organization based in Evansville, Indiana. The paper currency is backed by precious metal (silver and gold bullion) and is redeemable when presented at a NORFED Regional Currency Office. The coin currency is minted from pure silver or gold.
NORFED stands for National Organization for the Repeal of the Federal Reserve Act, whose stated goal is to encourage use of the Liberty currency and to highlight the fallacies of the U.S. Federal Reserve "fiat currency."
Legality
Just as many states, banks, and local communities once issued their own currency in the past, the Liberty dollar is a legal form of currency and is not considered counterfeit by the U.S. Government. According to NORFED, the currency was submitted to the U.S. Treasury Bureau of Engraving & Printing for review, which verified the legal legitimacy of the currency.
Concept
The Liberty currency is designed to be interchangeable on a $1 to $1 basis with Federal Reserve notes. The flexibility of the Liberty Dollar to remain backed by precious metals, yet be interchangeable on a $1 to $1 basis with Federal Reserve notes achieved as follows. Silver coins minted with a face value of $10 are to be re-minted at $20 when the value of the Federal Reserve notes devalue sufficiently due to inflation. The currency is produced in coinage, paper currency, and electronic forms.
Security
Liberty silver and gold coins are minted from .999 pure silver, or .9999 pure gold. Modern security features are built-in to Liberty paper currency, including holograms, microprinting, hot gold or silver foil stamping and an invisible synthetic DNA security thread. Anyone familiar with the appearance of the certificates can easily spot a counterfeit.
Liberty dollars in the marketplace
NORFED maintains a list of merchants who specifically accept the Liberty dollar, however, the organization encourages the tendering of Liberty currency for all purchases. Surprisingly, a high number of merchants will accept Liberty coinage without realizing the money is not produced by the Federal Reserve. Undoubtedly, these merchants may experience problems with their bank rejecting the coinage for deposit. As a solution to this, some businesses tender the currency back out to customers, or exchange the Liberty dollars for Federal Reserve currency through NORFED. Others, however, train cashiers to not accept Liberty currency. Due to the Liberty dollar's limited circulation, the full retail reaction to the currency remains to be seen.