Can Government Refiss Gold Bars?

Due to history, many people wonder if governments can seize gold bars. Although this may still happen occasionally, its likelihood is much less likely now than it ever has been in the past.

Telemarketers often advertise rare coins as being exempt from confiscation; however, this claim is an urban legend.

Why do governments want to confiscate gold?

While the chances of confiscation have significantly declined over time, they still exist and governments may feel obliged to seize gold in times of severe currency crises or war as part of efforts to control money supply and curb capital flight.

Governments typically only confiscate physical precious metals like coins and bullion bars during these situations, leaving other assets such as stocks, bonds, and savings accounts alone. Therefore, holding physical precious metals as protection from confiscation should be included as part of your portfolio.

Gold confiscation made headlines worldwide in 1933 when President Franklin D. Roosevelt nationalized gold coin and bullion under Executive Order 6102 and gave Americans only about one month to hand in their holdings. Telemarketers often claim that rare numismatic coins should be exempted because they’re considered collectibles; this argument falls apart under close examination.

How can they confiscate gold?

Governments throughout history have routinely confiscated people’s gold during economic crises under their power of eminent domain, which stipulates that private property may be taken for public use with just compensation being offered in return.

One notable instance was when the US government nationalized gold during the Great Depression through Executive Order 6102, although this wasn’t truly confiscation; citizens were compensated at less-than-market prices for their gold holdings.

Today, governments find it much harder to confiscate gold due to the decline of most major currencies being backed by metal, as well as due to globalization; many people can easily sell their gold abroad and evade local government scrutiny this way. Still, individuals need to understand their risks from potential confiscations and have plans in place for mitigating these risks; one strategy being keeping gold stored away in an offsite safe location.

What are the chances of a government confiscating gold?

Though gold confiscation may be less likely today than it once was, situations can still arise that necessitate drastic measures to preserve currency and banking systems. Even though many countries have abandoned gold standards in favor of fiat currencies unbacked by physical commodity, governments still wish to maintain control of money supply and prevent capital flight.

Roosevelt’s Executive Order during 1933’s gold nationalization (more accurately termed confiscation) excluded certain rare coins that were considered “non-confiscateable”, although many telemarketers today are selling European bullion coins and claim this exemption applies despite noting Roosevelt only exempted such products due to high production numbers rather than rarity.

Additionally, gold being traded freely around the globe would reduce a government’s ability to dictate its price as was the case in 1933, further diminishing their ability to impact markets and provoking disapproval among citizens.

What can you do to protect your gold?

While it may be farfetched for investors to think that government would confiscate their precious metals, the possibility exists and should be of serious concern to anyone concerned about unsustainable debt levels, central bank money creation and runaway government spending. Furthermore, such events stress the importance of having a suitable alternative way of protecting against currency devaluation or inflation.

Unfortunately, there’s no foolproof way of protecting against gold confiscation; however, you can take measures to lower the risk of losing your investment. One such way is diversifying your holdings across multiple countries that offer strong property rights protections and storage your precious metals therein. Another option for protecting gold from confiscation is storing it in a private vault outside of banking systems, while bullion and coins with numismatic value may provide some form of shelter against confiscation; this practice was made popular through Roosevelt’s Executive Order which excluded “gold coins with special value for collectors of rare and unusual coins” from confiscation; but this protection is far from foolproof.


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