Posted on 11/02/2009 7:37:21 PM PST by blam
Gold Confiscation Risk
Commodities / Gold & Silver 2009
Nov 02, 2009 - 02:05 AM
By: Howard_Katz
Things are looking good for the gold bugs these days. September and early October saw the (long awaited) break above $1,000. This past week saw the technical pull back to the breakout point, and Thursday was the turnaround day. Friday saw some very bullish candlestick signals in many of the gold stocks.
But one thing has been bothering many gold bugs. In 1933, the U.S. Government confiscated the people’s gold. The Government even went into safety deposit boxes (in private banks) and took the gold out of them. This was done once. Perhaps it could be done again.
Actually, I find this fear to be alarmist. There were special circumstances which led to the confiscation of gold in 1933, a special legal situation unique to American history and which made the confiscation necessary if the New Dealers were to achieve their objective of taking us off the gold standard.
First, let us go back to a key event in American history. For those of you outside of the USA, this is still useful information because America was (and still is) the most wealthy country in the world, and its gold/silver standard played an important role in that accomplishment. As Senator Daniel Webster wrote early in America’s history:
“Most unquestionably there is no legal tender and there can be no legal tender in this country, under the authority of this government or any other, but gold and silver….” [as quoted by Chief Justice Salmon P. Chase, “Supreme Court Reports,” Legal Tender Cases, 12 Wall 586, Opinion of the Minority.]
This is why you don’t buy bullion coins. They can be confiscated. You buy numismatic/semi-numismatic (ie collectors) coins instead. Older, out of circulation, generally, or certain foreign coins.
Best Answer - Chosen by Voters
To have something in one's possession taken away. Usually by an authority, either as a punishment or for safety purposes.
This is why, if you own them, you store them hidden and locked and don’t tell a soul.
I would if I had any. Too frickin’ poor.
Okay.
I don't have any Krugerrands hidden in a coffee can in my back shed.
Ding, ding, ding! We have a winner.
My Great Uncle was no New Dealer and had a lot of gold in his safe in his basement. Never turned it over to the Govt and had plenty of other money to buy up land during the Depression. In the 1970’s his Widow finally sold off the gold coins that he had saved. After Nixon took devalued the dollar.
Don’t put any confidence in safe deposit boxes, that’s for sure.
Recently in England, they hit several places and carved open literally thousands of the boxes (supposedly searching for drug money), but they ended up confiscating millions of dollars in legal assets and forcing the owners to PROVE it was theirs and legal.
Many people lost huge amounts, sometimes everything, and were stuck with huge legal bills even if they got their property returned.
I wouldn’t put that same sort of thing past the Obamanite for a moment.
I’d bury my jewelry before I let the feds have it!
FDR confiscated the gold because people turned their paper money (gold certificates) to the banks/US Treasury in exchange for gold. Fearing that some people with money will buy huge amounts of gold and shipping it out of the country FDR took advantage of the bank holidays to seize gold in deposit boxes and past a law to make ownership of gold bullios illegal. People were forced to sell gold at 20 bucks and the US government turned around and sold it for 30 bucks to any foreign government.
Today the only reason the US may seize gold bullion is to prevent the dumping of the US dollar. However that may be tricky to do because over 60 percent of US dollar bills are in foreign banks. If the US government attempted to seize privately owned gold bullion, it would signal to all the foreign holders of US dollars that something is wrong with the currency. Instead of defending the dollar, the act of seizing gold may panic foreign banks and holders of the US currency to dump it for other currencies or hard assets causing the US dollar to rapidly drop even more.
The only reason that the US may seize gold is to meet our debt payments to overseas holders of US T bills/bonds. If the US dollar falls, the only hard assets left that kept its value is precious metals in our banks and private ownership. Seizure probably will be done under economic/financial emergency to save our country from total economic collapse. If it gets that bad all gold and silver will be confiscated by the US government including nurismatic coins, personal jewelry and foreign legal tenders denominated in precious metal coins. Hopefully one will see that coming and have a chance to flee to Canada or Mexico.
This won’t be your grandfather’s confiscation. Carrots this time, not sticks:
1) Things continue to go bad but gold doesn’t rise “like it should”
2) Government will announce it will buy gold directly from Americans at some tremendous premium to world price, pretext yet to be determined
3) Many people sell, laugh all the way to the bank that they’re finally directly on the receiving end of Uncle Sucker’s poor financial judgement
4) Hyperinflation. Got gold?
They can’t take what they don’t know you have. Go to coin shops, buy bullion (Eagles, Pandas, Loons, etc.) and *pay cash*. Don’t buy through the US Mint or online or off the tv or use anything other than *cash*. Don’t buy all in one place, or make large (memorable) purchases.
Agree with all.
I look at gold as a post-doomsday currency. It comes in real handy after the air clears (after a meltdown). At that point, the dollar is worthless and whatever we have in gold will be our wealth - and, eventually, it will be legal again (or at least there will be a black market).
During a meltdown, we’re talking survival, and the best thing that we can do is be ready with a huge supply of every non-perishable item we can think of (I have everything form antibiotics to 600 rolls of toilet paper) - and go into survival mode. There will ALWAYS be some food, but for long-term, gold is what you want.
My grandmother told me how they hid gold from the government, even though she loved Roosevelt for “saving the country”
I dont see Obama trying anything like this. Roosevelt had no alternative media to cope with. Obama can’t even get a public option passed.
Most likely when inflation hits we will hear more demonization of producers and call for windfall profits taxes. And about how smart Obama was with Green energy ideas Republicans opposed. It would be best of Republicans prepared for that.
I think there are a lot more guns in this country today than there were in 1933.
Agreed. The IRS thugs can freeze them on a whim, along with bank accounts and everything else. No. Safe deposit boxes can be handy for wills and car titles - - paperwork, stuff like that.
In the scenario you described, another precious metal to stock up on is lead.
Ping.
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