Can the Government Take My Gold?
Over time, governments have historically taken measures to seize citizens’ gold during times of crise. Although the methods vary depending on which country it happens in.
FDR nationalized citizens’ gold during the Great Depression. Within nine months, he made owning gold illegal and increased its official price by 40%.
Some bullion dealers claim that purchasing rare collectable coins protects against government confiscation; this claim often serves as high pressure sales tactics.
Gold confiscation is a legitimate worry among bullion investors. While some may view this as conspiracy theory, this fear has at least some historical basis: in 1933 President Franklin D. Roosevelt issued an executive order banning American citizens from owning more than five troy ounces of gold.
He made this move in order to strengthen the United States economy during the Great Depression and avoid printing more money, which would only exacerbate matters further.
Following this announcement were numerous high-profile prosecutions of those refusing to sell their precious metals. Finally in 1974 Gerald Ford made it legal for Americans to own, buy, sell and trade gold bullion again.
While governments can create laws to limit gold ownership, such legislation is usually only implemented during times of economic distress and often takes the form of legislation banning certain precious metals such as platinum and palladium ownership. Furthermore, confiscating assets such as savings accounts or stocks and bonds has proven much harder for governments as these assets don’t hold as much stability than precious metals do.
Gold is not easily sequestered by governments due to its importance in global currency systems and being part of what’s known as the “monetary policy trilemma.” It remains one of the few non-target assets when it comes to property tax assessments or financial assets like stocks and mutual funds, however.
BullionVault customers who store their bullion outside their own country make it more difficult for governments to seize it by breaking international law by bringing an order of confiscation into another jurisdiction, where many countries have laws protecting international investors’ property rights.
But you may hear bullion promoters claim that certain coins are impervious to confiscation – an indicator of high pressure sales tactics. Most dealers who make such claims sell collectable numismatic coins not subject to reporting requirements that may be considered “non-confiscateable,” although even these coins could still be subject to confiscation in extreme circumstances.
Governments rarely confiscate instruments like stocks or savings accounts, but they can seize physical assets like gold if there’s an economic crisis – particularly when governments are struggling under unsustainable debt burdens and constant central bank money printing. That’s why investors who own gold worry that authorities could seize it during such times as well.
Franklin Roosevelt’s 1933 U.S. Nationalization Executive Order forced citizens to sell their gold bullion below market rates – perhaps one of the most notable instances in modern history – but such an event may occur again and planning should always be in place in case such events arise.
While precious metals dealers may use high pressure sales tactics to convince people that buying antique coins will protect against confiscation in the future, this is just a myth. Authorities were easily able to distinguish rare coins during previous confiscations attempts from bullion purchases; additionally, individuals would need to show proof of ownership during an emergency situation in order to prove ownership of these numismatic pieces.
Though governments could confiscate your gold in certain extreme and unprecedented circumstances, there are steps you can take to safeguard yourself against this possibility. First and foremost, it’s crucial to understand that laws concerning the ownership of precious metals vary across nations – in the US for instance, for instance, under the Fifth Amendment private property cannot be taken without just compensation; governments have restricted precious metal ownership during times of economic crises but these restrictions may no longer exist in today’s environment.
Additionally, owning physical gold outside the U.S. makes it nearly impossible for governments to seize it due to Swiss Bank Secrecy laws; any attempt would likely fail in court. Finally, legal structures like trusts or corporations may help to mitigate risk by creating an extra layer of separation between yourself and your bullion assets; this strategy should always be discussed with a qualified professional beforehand.