Can the Government Take My Gold?
Though we no longer operate under a gold standard and most coins don’t constitute “legal tender,” the government still requires reporting of purchases of $10,000 or more of precious metals such as coins. Telemarketers sometimes promote foreign coins which may be less likely to be confiscated, yet even these may still fall under IRS reporting requirements.
What is Gold?
Gold has long been considered an asset, serving both as a unit of wealth and as an incorruptible store of value. One of the most durable and liquid assets, it can easily be exchanged for cash or other asset classes if economic uncertainty arises; additionally, gold tends to increase in value during times of instability making it an effective hedge against currency depreciation or inflation.
Gold can be found in its free elemental state, nuggets or grains embedded in rock, veins or alluvial deposits containing it, and as gold compounds such as pyrite or tellurium. Furthermore, some people consume gold (although this should be done only with extreme caution). It may even be edible (though not recommended).
Physical gold doesn’t pay interest or dividends, making it unsuitable as an income investment. However, its unique properties make it a worthy addition to any portfolio; so highly esteemed that people go to extreme measures in pursuit of it as seen with legends of Rumpelstiltskin turning hay into gold and Jack and the Beanstalk’s golden beanstalk.
Why Should I Buy Gold?
gold bullion stands in stark contrast to paper assets like stocks, bank accounts and credit cards, in that it cannot be compromised or erased digitally or physically. Therefore, as tangible asset that cannot be printed or digitally erased it serves as an effective store of value and protection against systemic uncertainty.
Gold has long been seen as a safe haven in times of geopolitical and economic unrest, rising in price as times of turmoil persisted – providing investors and consumers alike a means of protecting themselves during times of economic distress.
Governments cannot confiscate gold as it doesn’t belong to anyone, making investing in physical coins, bars and bullion through a reputable precious metals refiner an intelligent move. Storing your precious metal overseas also makes seizing it harder as authorities would need to go through an exhaustive legal process and risk international outrage in order to enforce confiscation on foreign entities.
How Can I Protect My Gold?
Governments seeking to boost gold reserves or prevent capital flight have various options at their disposal for increasing gold reserves or stemming capital flight, including confiscating property, freezing managed super funds and freezing bank accounts – but when it comes to precious metals this option becomes nearly impossible as their unique characteristics make seizure virtually impossible without compensating owners of the metals first.
Protecting your precious metals at home is often the best solution, yet placing bullion in an easily stolen coffee can or under loose floorboards can leave it vulnerable to theft and loss.
Alternative storage methods include depositing your precious metals with your bank’s safe deposit box. While this solution offers some peace of mind, it exposes your investment to bank staff and appraisers; plus it requires disclosing bullion ownership to strangers – so to reduce exposure you may wish to consider changing ownership structures by owning parts of it in trusts or corporations that provide legal protection.
How Can I Store My Gold?
People tend to store their bullion at home for convenience and peace of mind, although this option can be more costly than alternative approaches such as banks or third party storage facilities. Bank or third party storage options tend to be less costly; however, these methods limit your direct access to your bullion; which could pose problems should a price spike occur on Friday afternoon and you need to sell quickly.
Government officials could force you to give up your gold by threatening financial penalties or even imprisonment as an incentive for cooperating.
One way to reduce this risk is to diversify your storage methods. If your metal is kept in various safes and firms, the government may find it more difficult seizing it; should they attempt to seize it anyway, finding and seizing it could take more time and energy than expected.
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