What Kind of Gold Cannot Be Confiscated?
Gold cannot be confiscated is an urban legend propagated by bullion dealers seeking to maximize profits, yet there are steps you can take to safeguard your precious metals.
Keep your gold overseas. Governments find it harder to enforce asset confiscation laws on foreign entities, making court battles more likely for ownership disputes between those entities and claimants that are spurious or improperly claimed as more difficult.
What Kind of Gold Can’t Be Confiscated?
One reason people invest in gold is to hedge against government confiscation. After the Roosevelt gold call-in and other similar government seizures of property and cash assets from citizens, gold confiscations is less likely now. First, global monetary systems have changed since 1933 with most countries now using fiat currencies that don’t tie directly to physical commodities; secondly, many governments have upheld property rights and civil liberties making seizing assets like gold more difficult.
However, modern bullion coins such as American Gold Eagles and Krugerrands remain sound investments for those fearful of potential confiscation. Furthermore, rare coin investors should distinguish between numismatic and bullion coins to prevent being scammed by telemarketers selling old European coins for higher than their actual gold content.
Old U.S. Gold Coins Can’t Be Confiscated
Gold confiscation remains possible today but less likely than it was 100 years ago for several reasons. First and foremost, governments no longer rely on gold to back their currencies; banking systems in modern times are far superior than they were then; during the Great Depression President Franklin Delano Roosevelt nationalized private ownership of American gold bullion coins and certificates owned privately.
The misconception that specific forms of gold cannot be confiscated stems from an Executive Order issued by President Roosevelt during his gold call in 1933. This Order exempted “gold coins having recognized special value to collectors of rare and unusual coins”, although this exemption doesn’t extend to most forms of bullion.
Modern investors must remain wary of being caught up in fear of confiscation. At the same time, however, investors must bear in mind that such an event is highly unlikely; nearly all nations have international agreements and treaties that protect free movement of capital and goods; governments who attempted to seize citizens’ assets would face stiff financial penalties and public outrage for doing so.
Bullion Can’t Be Confiscated
Reason number one why most people purchase gold is security. In times of desperate and panicked governments, confiscating assets such as property, managed funds, bank accounts and even physical cash may become common practice. Mad dictators such as Saddam Hussein or communist oppressors like the Soviet Union viewed private ownership of hard assets such as gold bars or coins as an existential threat against their power and national sovereignty.
Many bullion dealers promote rare coins as a hedge against confiscation. Unfortunately, most often these coins are just bullion coins sold at high premiums above spot price – often sold by telemarketers employing scare tactics and misinformation tactics in order to secure sales.
As governments increasingly turn toward panic-inducing measures to combat financial uncertainty, bullion has become a primary target. While there are methods available to you for protecting it from confiscation, the best protection lies with legal structures like trusts or corporations – although this should only be undertaken after consultation with an experienced tax professional.
Pre-1933 Gold Coins Can’t Be Confiscated
Retail precious metals investors’ primary worry when purchasing gold is its confiscation in the future. After all, this would be devastating should your wealth become vulnerable due to economic or monetary crises; having it taken from you would be absolutely devastating!
Unfortunately, the fear of future confiscations is an urban legend, spread by high pressure sales tactics employed by certain rare coin dealers to move higher premium coins. The last time gold was confiscated was in 1933 and that law has long since been repealed.
Since 1933, most countries have moved away from using gold as currency and adopted fiat currencies instead. But some governments still pass laws permitting government authorities to seize private citizens’ gold during times of extreme economic distress; though collectible coins from before 1933 may be exempt.
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