Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Should You Actually Worry About Gold Confiscation?

Commodities / Gold and Silver 2015 Sep 17, 2015 - 11:14 AM GMT

By: MoneyMetals

Commodities

Guy Christopher writes: Most gold owners are familiar with worries of forced government gold confiscation - that one day black-ops shock teams will toss homes to find that stash of coins and bars.

The sole historical source for the modern fear of "confiscation" was President Franklin Roosevelt's 1933 Executive Order 6102 telling America to cough up its gold in the midst of The Great Depression.


But closely reading FDR's infamous order offers a sobering perspective, which doesn't fit the ever-evolving folklore. This reality might calm some confiscation fears...

  • FDR's executive order was far from an outright grand theft "confiscation." It was a paid-for expropriation. Surrendering a $20 double-eagle to the bank got you a $20 fiat paper note. While aiming to steal the economic power of gold, FDR left its nominal value in citizen's pockets. (Yes, he did devalue the dollar soon thereafter.)

  • FDR did not outlaw the ownership of gold. He outlawed the "hoarding" of gold. The distinction is not minor. FDR intended to destroy gold as an everyday currency and took aim at larger concentrations of gold meant for everyday commerce. He had no intention, and no means, of putting millions of Americans in jail.

  • FDR left a lot of gold on the table, allowing each citizen to personally keep $100 in gold coin. That meant anywhere from 100 individual one-dollar gold pieces to 5 twenty-dollar double-eagles. The population exceeded 120 million in 1933, meaning technically hundreds of millions of gold coins (more than existed) were exempted. Roosevelt wasn't worried. He knew depression-ravaged Americans needed every penny they could find, and gold was suddenly not spendable.

  • He added exemptions for jeweler's gold stocks, gold marked for export, and rare, collectible coins, but without specifically defining which coins qualified as rare. (The collectible coin exemption has since been over-hyped by unscrupulous marketers to get investors to pay huge markups for supposedly "rare" coins.)

  • Enforcement against "hoarding" was largely impossible and largely ignored. The late economist Milton Friedman found that one year after FDR's order, 78% of America's gold was still in private hands. The evidence for that is the abundance of "classic" pre-1933 gold coins surviving today. Those coins had been quickly shipped to Europe and South America for safekeeping - or were buried in tin cans on the family farm. It's apparent our great-grandparents knew more about history and economics than FDR and his socialist hand puppets. Our forefathers simply told FDR to shove it.

  • Prosecution for hoarding gold was microscopically rare. The case cited most often was that of a New York attorney who publicly challenged FDR to take his gold. He was tried for the crime of hoarding gold - and acquitted!

Over the Years, the Confiscation Perception Became the Reality

While FDR could not confiscate gold's place in history as the ultimate store of wealth, the damage was done. Fear of confiscation was encouraged to evolve, thanks to an educational system void of economics teaching, egged on by a lazy and ignorant media.

Despite any nuances in FDR's order, the government war on America's gold and American economic liberty was quite successful. Today, most Americans don't see gold as money and have no working knowledge of gold as currency or wealth. The resulting popular beliefs about "confiscation" left Americans believing gold would forever be marked with a bull's eye.

Just because you own some gold and silver doesn't make you the Lone Ranger. Every government believes it can confiscate anything it wants from any citizen at any time without payment.

In 2007, GATA's Chris Powell reported his correspondence with George Bush's Treasury department revealed the government could claim "not just gold and silver but any damn thing the government feels like confiscating."

A recent example of confiscation in California has government claiming control of water supplies and water delivery systems, tearing up long standing legal contracts in the midst of the drought now four years running.

Fail to pay your property tax, and government will confiscate your home without reimbursing you a dime. Put your cash in the bank, and it faces confiscation through planned bail-ins.

Since 2008, Congress has openly kicked around the notion of confiscating IRA's and 401(k)s. Less recognized but equally devastating, the confiscation of wealth through sinister, planned inflation has stolen more buying power from all Americans over the past century than the value of all the gold supposedly still in Fort Knox.

The buying power of your paper money and your private retirement funds, along with everything you own, from your firearms down to your water well, seem to be far more important targets for an inept and corrupt government than your gold.

Proudly boasting of a verifiable stack of government gold is not important to a corrupt Washington. What's more important is having unlimited ability to print trillions in suffocating paper and digital debt.

Personally, I'm not worried about "confiscation." FDR's 1933 actions tell me little about the threats we face today.

What worries me more is how readily the rewrites of history are perpetuated.

The government has belittled and demeaned gold as insignificant for the past 80 years. FDR's aim was to destroy gold as an everyday currency. Washington today does not have that problem. Yet.

The day Washington orders confiscation is the day it broadcasts to the world, including to America's sworn and powerful enemies, it has lost all control of its disastrous economic policies.

That same day would mark widespread chaos throughout international markets and foreign capitals. On that day, for the very reasons you now own gold, you are going to need that gold. My guess is, based on the historical record, not many will give it up.

Guy Christopher

MoneyMetals.com

Money Metals columnist Guy Christopher is a veteran writer living on the Gulf Coast. A retired investigative journalist, published author, and former stockbroker, Christopher has taught college as an adjunct professor and is a veteran of the 101st Airborne in Vietnam.

© 2015 Guy Christopher - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules