Just before we get into the burgeoning scandal of the presidential coins, let us review the facts in respect Bernard von NotHaus. He is the man who is facing the possibility of years in prison after being convicted in Federal Court in March of the felony of counterfeiting because he issued a coin, called the Liberty Dollar, that is made out of silver. We’ve issued two editorials about Von NotHaus, one in March and another in June. He may yet be sentenced to years of prison even though his silver medallians kept their value while the the paper money being issued by the Federal Reserve has been plunging. In terms of Federal Reserve notes, Liberty Dollars are worth much more than when Von NotHaus issued them.

Now feature the latest news out of Philadelphia, where, according to ABC News Radio, it turns out that the United States Mint has been cranking out something it calls “$1 Presidential Coins” even though nobody wants them. ABC reports that these “manganese brass dollars have proven unpopular with a public that prefers paper.” The mint is now scrambling to find a place to store the slugs. It reports: “ABC News went to one such storage facility, the Federal Reserve in Baltimore, where the coins are in plastics bags and cardboard boxes, stacked one on top of another, creating several aisles of presidential coinage worth millions of dollars.”

The Federal Reserve, according to the ABC report, has told Congress that the coins are “piling up so quickly,” as ABC paraphrases the report, the central bank “will need to spend $650,000 to build a new vault in Dallas to hold them. Shipping the coins to the new secure facility will cost an additional $3 million.” The idea of Congress in precipitating the Mint into this scheme seems to be, as ABC put it, “to honor every dead president.” But it reports that not even a sponsor of the original bill, Senator Reed of Rhode Island, uses the gold-colored slugs that have no gold in them.* ABC quotes the senator as saying he does use nickles, dimes, and quarters — “like everyone else.”

So ABC says that Mr. Reed and “other senators” sent a letter this week to the chairman of the Federal Reserve board, Ben Bernanke, and the acting director of the Mint, Rich’d Peterson, asking for what ABC calls “help in improving the program while eliminating waste of taxpayer resources.” But according to the radio network, “the coins keep coming off the production lines, already more than a billion made and counting.” It quotes the Fed as estimating that it could have what ABC characterizes as “more than $2 billion in excess $1 coins by the time the program is expected to end five years from now.”

What in the world are the rest of America’s taxpayers supposed to make of all this? Their government is feuding over whether to raise taxes or cut spending, and the government is stamping out slugs it denominates as being a dollar and storing them by the millions in sacks in a warehouse because nobody wants the coins. And it supposedly is doing this to honor some presidents. And meantime the government is trying to put into prison a man who issued coins that people so desperately wanted that their price in United States dollars has been soaring. The government is even likening Von NotHaus’ issuance of competing coins to terrorism.

We don’t mind saying that we have never purchased a Liberty Dollar. We don’t own any. We’ve never met Von NotHaus. We carry no brief for him. This newspaper is neither a judge nor a psychiatrist. But we also don’t mind saying that Von NotHaus’s occasional emails to us make him seem like a sane and reasonable fellow with an idealistic streak. Our interest in this story is journalistic, for what it illustrates about the principles of political economy. What it illustrates is that something is upside down in Washington. The government can sneer at Ron Paul, the leading campaigner for sound money. It can pursue Bernard Von NotHaus until the cows come home. But sooner or later it will have to explain. What can it possibly be thinking in minting millions of manganese slugs dolled up to look like gold and storing them in warehouses in the midst of this crisis, all while refusing to redeem in real gold from its own reserves the paper money it has been issuing?

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* Just to mark the point, the slugs are colored gold but have no gold in them. What does one figure the government was thinking? Why not color them green or purple or embed them with rhinestones? Surely the government didn’t mean to trick people into thinking the coins were gold. But then why, with all colors of the rainbow, make these coins look, at first blush, as if they might be gold. It’s a mystery.