Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
Israel’s 50-Year Time Bomb, Pushing Palestinians to the Edge - 19th Oct 18
Bitcoin Trend Analysis 2018 - 19th Oct 18
History's Worst Stock Market Crash and the Greatest Investing Lesson! - 19th Oct 18
More Signs of a Stocks Bull Market Top and Start of a Bear Market in 2019 - 19th Oct 18
Stock Market Detailed Map Of Expected Price Movement Before The Breakout - 18th Oct 18
Determining the Outlook for Gold Mining Stock - 18th Oct 18
Investor Alert: Is the Trump Agenda in Peril? - 18th Oct 18
Stock Market is Making a Sharp Rally After a Sharp Drop. What’s Next? - 18th Oct 18
Global Warming (Assuming You Believe In It) Does Not Affect Gold - 18th Oct 18
Best Waterproof Compact Camera Olympus Tough TG-5 Review - Unboxing - 18th Oct 18
Silver's Time Is Coming - 17th Oct 18
Stock Market Volatility Breeds Contempt - 17th Oct 18
Gold 7-Year Bear Market Phase Is Over - 17th Oct 18
Gold - A Golden Escape - 17th Oct 18
Tec Stocks Sector Set For A Rebound? - 16th Oct 18
Real Estate Transactions are Becoming Seamless with Blockchain-Powered Data Sets - 16th Oct 18
Important Elements of a Viral Landing Page - 16th Oct 18
Stephen Leeb Predicts 3-Digit Silver and 5 Digit Gold?! - 16th Oct 18
BREXIT, Italy’s Deficit, The EU Summit And Fomcs Minutes In Focus - 16th Oct 18
Is this the Start of a Bear Market for Stocks? - 16th Oct 18
Chinese Economic Prospects Amid US Trade Wars - 16th Oct 18
2019’s Hottest Commodity Is About To Explode - 15th Oct 18
Keep A Proper Perspective About Stock Market Recent Move - 15th Oct 18
Is the Stocks Bull Dead? - 15th Oct 18
Stock Market Bottoms are a Process - 15th Oct 18
Fed is Doing More Than Just Raising Rates - 14th Oct 18
Stock Markets Last Cheap Sector - Gold - 14th Oct 18
Next Points for Crude Oil Bears - 13th Oct 18
Stock Market Crash: Time to Buy Stocks? - 12th Oct 18
Sheffield Best Secondary School Clusters for 2018-19 Place Applications - 12th Oct 18
Trump’s Tariffs Echo US Trade Policy That Led to the Great Depression - 12th Oct 18
US Dollar Engulfing Bearish Pattern Warns Of Dollar Weakness - 12th Oct 18
Stock Market Storm Crash, Dow Plunges to Trend Forecast! - 12th Oct 18

Market Oracle FREE Newsletter

Trading Any Market

How to Protect All of Your Assets (Including Gold) from Government Seizure

Commodities / Gold and Silver 2017 Nov 07, 2017 - 03:28 PM GMT

By: HAA

Commodities

Olivier Garret : On April 5, 1933, President Franklin D. Roosevelt issued an executive order making private ownership of gold illegal. The order forced Americans to sell their bullion to the Treasury at the then legal price of $20.32. 

Gold ownership remained illegal in the US until 1974. 

Failure to tender your gold could get you a maximum fine of $10,000 (492 ounces of gold or approximately $625,000 at today’s prices) and up to 10 years’ imprisonment. 


Franklin’s order was also followed by the Gold Reserve Act of 1934.  The act lifted the nominal price of gold from $20.67 to $35.

The penalties were exceptionally high to ensure compliance with what was a disguised 42% tax on savers. 

Is it possible that our indebted government could force similar measures on gold owners today? We can’t rule it out, but it’s less likely to happen today than it was in the 1930s.

Why the US Is Not Likely to Confiscate Gold Today

Desperate times call for desperate measures. Franklin’s order was justified as a measure to overcome the Great Depression.

Nobody knows how severe the next recession will be and what measures it may call for. However, gold will be less of a target for a few obvious reasons.

First, the US dollar is no longer backed by gold reserves.  Second, gold represents a tiny portion of today’s financial assets.  For this reason, it’s unlikely to be the prime target for taxation or seizure.

All the gold ever mined is worth about $7.5 trillion as of this writing.  Meanwhile, total financial assets make up $294 trillion globally.  Why would government focus on gold ownership when gold is a mere 2.5% of total assets today?

There is much larger fish to fry.

However, in times like these, nobody is safe. And there’s no guarantee that gold owners won’t become the targets of desperate governments. When things go sour, anyone who owns tangible assets is a potential target for any form of taxation or confiscation.

Why You Should Use Gold as a Hedge

What can investors do to protect all of their assets from the risk of government seizure?

First, you have to understand how government seizes assets from citizens—and what actions may not be politically acceptable even in desperate times.

Outright default on insolvent pension funds would be political suicide. No sane politician would ever campaign for that. However, a progressive default through debt monetization (e.g. quantitative easing) would be more likely.

This means that the dollar is almost certain to lose its value against hard assets like gold. 

There are more reasons why investing in precious metals is safer than hoarding cash.

Cash is convenient and essential, but holding large sums in cash exposes you to a bigger risk of seizure and devaluation.

Bail-ins of bank accounts with savings that exceed the FDIC insurance level ($250,000) will be more politically legitimate than taxing those who have no savings. Most voters simply won’t feel sorry for the rich.

That’s why gold is a much safer store of value in the long run despite the risk of seizure.

How to Minimize the Gold Seizure Risk

This risk can be minimized, too.

If it ever happens again, it will likely be focused on domestic holdings—as it was in 1933.

The untouchable billionaires and politicians have their assets tucked away in foreign trusts and will make sure they are kept safe there.  The US government will save itself the trouble and chase domestic holdings instead.

The middle class and small entrepreneurs will once again be the prime targets of government seizure and taxation.

To avoid this, I’d recommend investors storing their metals in a safe foreign jurisdiction like Switzerland or Singapore.

With your gold stored abroad, you may have some time to react.  

If you feel the threat is product specific, you can liquidate those products and diversify into other precious metals products. Another option would be to take delivery before such a legislation comes into effect.

However, no risk can be fully eliminated. There is no perfect solution. Nonetheless, diversification can be an essential element of an overall protection strategy against an increasingly uncertain future.

Learn how to make asset correlation work for you, how to buy metal (plus how much you need), and which type of gold makes for the safest investment. You’ll also get tips for finding a dealer you can trust and discover what professional storage offers that the banking system can’t.

It’s the definitive guide for investors new to the precious metals market. Get it now.

© 2017 Copyright Hard Assets Alliance - 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,


© 2005-2018 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