WHAT IS THIS AND HOW DID IT COME TO BE? On page 573 of The Creature from Jekyll Island, I said that, before we could abandon FRNs (Federal Reserve Notes), we first had to be able to convert them into real money which could function in their absence. I said: "That means we must create an entirely new money supply which is 100% backed by precious metal; and we must do so in a reasonably short period of time."

Well, you have to be careful what you recommend, because someone might take you seriously and actually follow your advice! The reason I am writing this message is because Bernard von NotHaus, the Senior Economist at NORFED, did exactly that.

First, you should know that NORFED stands for the National Organization for the Repeal of the FEDeral Reserve Act. When von NotHaus first contacted me with this idea, I thought the concept of an organization was great, but that trying to issue a silver-backed currency was a hair-brained idea. There were too many obstacles, too many uncertainties, too many points of view, to make it practical.

In my book, I had advocated the concept of a free-market, private money system as being potentially superior to that which is issued by governments. However, in the back of my mind, I felt this would have to wait for some future era when people were better informed about the advantages of free-market competition government regulation. So, my initial idea was that, for now at least, only the government had the resources to make a silver-backed currency work.

But, here again, von NotHaus had taken me seriously. He wanted to issue an entirely private currency, 100% backed by silver, and to let the free market decide whether it would succeed or fail. Furthermore, he wanted to do it NOW. After all, didn’t I say we must do so in a reasonably short period of time?

It was awkward trying to argue against my own advice, so I had no choice but to give his proposal serious attention. To my surprise, the more I studied the details of his plan, the more convinced I became that it was theoretically sound and, even more important, by Jove, it just might work!

1. NORFED delivers silver bars to the warehouse (Sunshine Minting in Coeur D’Alene, Idaho).

2. The warehouse converts the silver into special NORFED Silver Libertys containing 1 ounce of .999% fine silver.

3. The warehouse issues warehouse receipts to NORFED in various denominations which relate to the amount of silver they represent. These Silver Certificates are officially called American Liberty Currency.

4. Anyone who presents NORFED Certificates to the warehouse will receive NORFED Libertys in return. This guarantee is printed on each Certificate.

5. Since it is impractical for most people to travel to the warehouse in Idaho, a national network of privately owned Redemption Centers also exchange Certificates for Silver Libertys. Most of these are local businesses which offer this service as a means of attracting customers.

6. NORFED exchanges (sells) the Silver Certificates through the Redemption Center to the public for FRNs. The price of the Certificates includes, not only the market value of the underlying silver, but also such costs as converting silver bullion into Silver Libertys, storing them (pre-paid for 5 years), insurance against loss, printing and distributing the Certificates, keeping the books, supporting the local Redemption Centers, advertising, and all the other usual expenses of a free-market enterprise.

7. In addition to their silver-content value, the Silver Certificates also show their FRN value at the time of issue. That means that, even though the FRN value will eventually go down due to inflation, the Silver Certificates will hold their purchasing power because of the silver content which backs them. In other words, a $1 Silver Certificate starts out to be worth $1 FRN at time of issue but eventually will be worth $2 FRN, then $5 FRN, $20 FRN, etc. — in the same way that a 1950 U.S. silver coin imprinted with the words "One Dollar" will now buy much more than the value of $1 FRN. This money, therefore, is inflation-proof!

8. Certificate holders offer them to local merchants as payment for goods and services. At first, they are not likely to be accepted, but the certificate holder, acting in good humor, leaves a brochure for the merchant to read which explains the program. After the fourth or fifth customer makes the same offer, many merchants will decide it would be good for their business to accept the currency. By this time, they are aware that, if they cannot themselves exchange the Certificates for goods or services, they at least can redeem them for Silver Libertys which have intrinsic value. Some may wish to put these Certificates in a safe place as a hedge against inflation or for use in times of financial crisis.

9. As the network of Redemption Centers and participating merchants expands, it will eventually become necessary to develop a means of depositing the Silver Certificates into checking accounts which the banks will guarantee to be backed 100% by either the Certificates or the Silver Libertys. This is the only way that this money can be used for large transactions or for payments to remote locations. I am confident that, if the program becomes nationally popular, there will be banks that will eagerly offer this service as a means of attracting new customers. If we create a large demand for such a service, someone will supply it. That’s what free enterprise is all about.

WHAT IS THE GOAL? Will NORFED currency replace FRNs? The answer depends on how much support the project receives from the American people. Even if it does not completely replace FRNs, having it co-exist side-by-side with FRNs will dramatize the shortcomings of the present system to such an extent that it could create political pressure for reform. The Post Office improved its service greatly when private carriers such as UPS and Fed-Ex began to compete with it. The same phenomenon could happen with this money. Let us put real money into circulation and watch what happens when it competes with and outperforms the fiat system that now enjoys a monopoly.

My goal in all this is to help restore America to a sound monetary system, one which is 100% backed by precious metals. It makes little difference to me whether this materializes as a new issue of Treasury Silver Certificates or as universally accepted NORFED Silver Certificates. (Actually, that’s not quite true. I would prefer a private money system because it would be more insulated from political corruption.) Either way, we will have extracted the teeth from the Creature.

One of the prime advantages of participating in this project is that it can help our friends and neighbors become more conversant with the nature and danger of our present fiat money. These certificates, in addition to being real money, are conversational items. Showing them around will get the conversation started; and, for many people, that is more effective than handing them a tract or a book to read.

Additional talking points to consider: The certificates are beautiful. They look like money should look, not like the ugly bills the Fed is presently issuing. They might even become collectors items of substantial future value. Besides, the project is fun.

CAUTION: Even though I am enthusiastic about the NORFED program and have agreed to have The Reality Zone become a Redemption Center, you should be aware that I am not connected with NORFED or the Sunshine Mint in any way, nor do I have any control over their operational policies or business ethics. I have every reason to believe that the people who do control these matters are proficient and trustworthy, but my association with them should not be construed as a personal guarantee of their performance. As is always the case in such matters, it is your responsibility to make your own separate evaluation prior to making a commitment.

For more information, visit NORFED’s website: http://www.norfed.org.

PLACING ORDERS: NORFED Silver Certificates are available in the following denominations:

$1 - Backed by 1/10 oz. Silver Liberty
$5 - Backed by 1/2 oz. Silver Liberty
$10 - Backed by 1 oz. Silver Liberty

They may be ordered in any combination with a minimum value of $20. The dollar value stated on the Certificate is the current price.

An example of how you might order would be: A $20 packet containing one $10, one $5, and five $1 certificates.

Each order will be accompanied by a descriptive brochure to help you explain the meaning of these items to your friends. You may also find it useful to print these website pages and also those from NORFED. However, you will find that very little explanation will be necessary. The bottom line is that this is money, 100% backed by silver. Everyone will understand that.

These Silver Certificates make wonderful gifts. Just think of the conversations you will start. They can be used for tips. They are also being promoted as Y2 currency.

When you place your order, remember that they may be ordered in any combination with a minimum value of $20 and that the dollar value stated on the Certificate is the current price.

And, yes, we do accept Norfed Silver Certificates as payment for any of our products!

                                                    © G. Edward Griffin 1998

To see an enlarged version of the front and back of each certificate or silver liberty, click on the title or image. These certificates and Libertys are beautiful and may well turn out to be collectors items. In the state of California, the certificates are not taxable, but the Silver Libertys are.