Can the Government Take Gold?
Many investors wonder, “Can the government confiscate gold?”. Their anxiety stems from history, in which governments have confiscated assets during times of crises.
The 1933 Executive Order mandating the seizure and confiscation of gold bars and coins exempted coins with special collector value from confiscation, yet many telemarketers often promote costly old coins as non-confiscatable gold.
Although gold confiscation might sound like a dire warning, it has actually happened before. President Franklin Delano Roosevelt nationalized gold ownership during the Great Depression and required people to turn over their precious metals in exchange for dollars as compensation; though this created a national crisis situation, FDR’s move wasn’t considered true confiscation as citizens received compensation in return for giving up their bullion; in a true confiscation situation your precious metals would simply be taken without compensation or return.
Governments often swoop in during economic crises to supplement their reserves with gold, but do not confiscate bonds, stocks or savings accounts which are vulnerable to currency devaluation. Instead they “request” citizens hand over their gold as it’s an asset they cannot easily liquidate through devaluation. One way of protecting against US-style confiscations would be storing bullion in another jurisdiction without co-operation from Washington; Switzerland offers such security. Many investors use Switzerland for this reason alone.
Gold enthusiasts have likely heard stories about confiscation. Some may have even purchased old or collectible coins with the hope of escaping such fate; however, such claims should be disregarded as they lack substance and should be disregarded altogether.
People may believe their gold cannot be confiscated due to the United States no longer having a gold standard, yet confiscation still occurs today. One way to prevent this from happening would be purchasing genuine numismatic coins with true rarity and distinctive characteristics; unfortunately most telemarketers sell European coins that do not meet this criteria and therefore may be subject to confiscation.
Holding onto gold in an independent storage facility is also highly advised. Banks have been known to hypothecate clients’ gold during times of economic distress and won’t fight on behalf of their clients in cases of government seizure.
Common belief holds that certain gold coins cannot be confiscated. This comes from President Roosevelt’s 1933 Executive Order mandating private ownership of gold coins and bullion; it exempted those that had “recognized special value to collectors of rare and unusual coins”. Unfortunately, no law defines such collectibles, and this myth persists due to telemarketers offering high-priced $20 Libertys and St. Gaudens from sale as collectibles rather than investments/currencies.
Gold confiscation today would be extremely challenging due to its global movement and easy saleability, plus investors’ responses could quickly lead them away from this precious metal and toward other currencies controlled by another nation; making government’s job even harder or even making matters worse!
Many people invest in gold bullion as an insurance policy against economic instability, yet should a government seek to confiscate your gold there is no recourse short of giving up citizenship and moving abroad.
Though confiscations might seem farfetched to investors accustomed to stocks and real estate investments, it has actually happened before – most famously during Franklin D Roosevelt’s 1933 gold nationalisation campaign in America.
Japan has long had a fascination for gold dating back to when Marco Polo visited in 13th century. Daimyo (feudal lords of Japan at that time) would use gold mines within their territories for minting coins, precious metal jewelry making, or both purposes – especially earrings unearthed from tombuli (tumuli). Gold items were believed to symbolize power and wealth of those buried.