Central banks own over 80 percent of the world gold. 1930’s gold was used in coins and convertible to paper certificates. In order for gov to control it they had to take it out of circulation. There are ways to avoid confiscation. Buy gold jewelry in lieu of bullion. Gov cannot outlaw jewelry stores if they decide to confiscate all forms of gold. Since most of the world gold is in the hands of bankers, there is no need to seize it. Seizing it will make foreigners dump dollars even faster because most of the USD is stored in overseas foreign banks. IMHO a major currency collapse will lead to a currency reset and a new asset will be used to back the currencies of the world. If the dollar is not the reserve currency it will be devalued after the bank holiday is over. Look at what happen in Argentina and Mexico recently. People who owned hard assets were able to exchange it for more of the new reset currencies thus preserving the buying power of their wealth. People who stuck to paper money ended up exchanging all their savings based on paper currency for a smaller amount of the new reset currency. In Mexico people lost 20 percent in the first reset (and it happened several times) and it happened several times. In Argentina people lost up to 90 percent of their buying power in the first reset. Today the Fed Reserve has up to 10 folds of US dollars in circulation or digital form. If US lose world reserve currency status and must reset to how much USD exist vs its gold reserve in Ft Knox and Central Banks, you may find the reset currency may be 1/7 or 1/12 (depending how one calculates it) of today’s worth. Savers and pensioners will be in big trouble, and anyone in debt will be in big trouble.
The reason the central banks own so much gold is because there is so little of it. The precious metal supplies have grown at an average rate of less than two per cent per yr for the last 500 yrs (which includes the precious metals taken from the New World by the Spaniards.
It is precisely that low growth rate which has driven nations away from gold as money since it pretty much ensures constant recession and prices falling, deflation. Unless the money supply grows at a rate sufficient to keep unemployment in control political conflict and failure ensues.
I don’t know what you mean by “reset”. In the past (under fixed exchange rates) currencies were revalued up or down in a sort of “reset”. However, for the last three plus decades we have been on a floating exchange rate regime which continuously resets the values of currencies relative to each other. Or do you mean changing prices of the precious metals as a reset?
“Today the Fed Reserve has up to 10 folds of US dollars in circulation or digital form.” I have no idea what this means.