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In this
part of the series on the subject of Confiscation, we look at the realities
that you face in trying to avoid your gold being confiscated should a
Confiscation Order be issued in your country. But first we ask the question, is there really a danger of gold being
confiscated? We believe that there is.
“Importantly,
Central Banks and the Authorities possibly will not wait for the monetary
system to crash before acting to ensure they have enough gold to keep the
monetary system working. They will act well ahead of that time to make sure
they avoid a collapse and attempt to engineer the event so as to catch gold
investors by surprise, removing their chances of making any contingency
plans. With their prime objective being to shore up confidence in the
monetary and banking system, they could not afford to signal the market about
their intentions beforehand. We are not just talking about the U.S.A. but
many other countries that may precede or follow the U.S. in these acts. The
trouble is that the gold they ‘acquire’ maybe yours. Wisdom
demands that the banking crises we have seen since 2007 don’t happen
again, because this time around they may well collapse. Prudence demands that
investors don’t take that risk but act before they
it is too late. The risks of not guarding against this eventuality are
enormous and the rewards of guarding against it are massive. If it
doesn’t happen then you lose little if anything. If confiscation does
happen then you lose a lot. It’s a matter of risk and reward!”
We
believe that the confiscation of gold for this purpose is a very real and
present danger and have organized a way to protect against that eventuality.
[Contact us
through www.GoldForecaster.com or admin@Stockbridgemgmt.com for
more information]
Jurisdiction is
Everything!
Let’s
look at the realities of what will happen when this comes about. One has to
bear in mind that the Authorities have to target only their citizens over
whom they have Jurisdiction. Nobody outside this Jurisdiction will be
affected. More importantly your Authorities cannot impose their laws in other
Jurisdictions. That’s good, I hear you say, but think on…
How will
your authorities then act to get your gold? As we said in the last part of
the series, they will target you directly, applying pressure directly. In the
1933 Gold Confiscation Order in the U.S. they threatened fines of $10,000 or
10 years in prison or both. So you have to obviate these threats. This
involves far more than simply holding your gold overseas.
What will the
Authorities do when they want your gold?
· The first thing they will
do is to ask you if you own gold. Yes, the Tax form 1040 may not require you
to own up to owning gold at the moment, but Authorities, realizing that so
many people do own gold overseas will, as part of the Confiscation Order,
institute a form asking you to declare if own gold or not. It’s at this
point that you must decide to act inside or outside the law, assessing the
risks/rewards thereafter.
· Secondly, they will then
instruct you to hand your gold over to the nearest Federal Reserve or its
office nearest to you.
· Thirdly, as they’re not
fools, they will require all gold
dealers to give them records of their clients and purchases and sales and
whatever else is available to give them information on who bought and sold
gold as well as confiscate gold dealers stocks of gold.
· Fourthly, they will
require the banks to make their records available on who sent money out of
the country and to whom. This will include records of money sent to foreign
gold dealers and the like.
· Fifthly, just as you have to
report your foreign financial accounts and foreign assets, so they will
enlarge this to ask you to report foreign gold holdings.
In our
experience of over 40 years of seeing Capital and Exchange Controls in
action, we’ve always been amazed at the thoroughness of the Authorities
in sourcing information about its citizens. When they act, they take such
matters very seriously. It’s
also our experience that they remain focused. If it’s your gold they
want, then they won’t chase your cash or other assets unless
they’ve discovered you have broken the law, then
they go after you to, as the French say, “encourage the others”.
Patriotic
‘Righteousness’
So you
have to structure yourself now, so as not
to be found against the law. It’s at such times that the
Authorities claim the righteousness to their cause, it being, “in the nation’s interests”.
But
where an organization is accessible through their branch inside the U.S.,
they will take on the U.S. branch, as we have seen in the case of foreign
banks, i.e. UBS, so you don’t want to face such vulnerabilities. You need to use an organization that does
not have branches in your country. As we said in the earlier parts, we
believe that Switzerland is the most reliable and safest of havens
internationally and has been so for more than 300 years. That’s why
that’s a good country in which to build your defenses!
Correct
Structuring
If you
have structured yourself in such a way that you cannot comply with the law,
despite your good efforts, the Authorities then have to decide whether or not
it’s worth going outside their Jurisdiction to pursue the gold
directly. In our experience they do not because such laws are not enforceable
outside their Jurisdiction.
Certainly
in the case of Switzerland the Swiss will be deeply offended at a foreign
government trying to chase its citizens in its Jurisdiction.
So you
need an organization that has control over the repatriation of your gold but
no other control over it. That’s what www.Stockbridgemgmt.com does. We know of no other structure that does
this.
How will you
use your gold if it is illegal to own it?
You wake
up one morning on a Monday, most likely and see the news that a Gold
Confiscation Order has been imposed. You can do nothing about your situation.
If you haven’t done anything you must decide to hand your gold over, or
hold your gold illegally.
No doubt
your intention for owning gold in the first place was to be able to use it
when push came to shove. But that’s why the Confiscation Order was put
in place. You want to be able to sell it a bit at a time, to cover your needs
as well as ensure that as the value of money fell
the value of your gold rises. And it does.
Your
gold dealer is likely now out of business because he’s not allowed to
deal in gold and has given all client information to the government who has
taken his stocks of gold too. He knows that he would court tremendous
personal danger if he continues to deal in gold, so he’s off elsewhere
to make a living.
Who do you go to? If it is possible to find a
buyer likely he would want to do a one-off deal and get out of sight quickly.
He won’t want to be vulnerable to you informing the Authorities that he
has bought your gold. What would he do with it? If he smuggled it out of the
country he could get rid of it for sure. But that’s quite a risk.
Suddenly the entire gold business has gone to the dark side.
I can only talked from my experience of being
involved with Capital and Exchange Controls in the various countries over the
last 40+ years and helped tackle similar problems within the law. I can only
say that in those countries, when people had to choose between accepting the
nation’s requirements and safeguarding their family’s futures,
they chose their families and almost inevitably left the country with their
funds. But in a world where the Confiscation of Gold is now a reality,
several countries will be doing the same. It’s like a war, where other
countries are dragged in. Most likely people will not be prepared to leave
their country, so a solution must be found to accommodate this.
In the U.S., your home, where your friends and
family will remain, that option is nowhere near so easy. Also the resources
and ability to penetrate your life in the U.S. is considerably greater. The
U.S. is where people would want to go as it is the ‘tree trunk’
of nations. Will Canada, likely a branch on that trunk be able to act
independently of the U.S. on this subject if their currency continues to
relate so closely to the U.S. dollar? What about other countries? We would
expect something of a ‘domino effect’ to follow a nation like the
U.S. confiscating citizen’s gold.
How many countries can stand with their currency
independent of the monetary system? We have seen a recurring trait of
competitive devaluations in the most economically solid nations fighting for
their trade competitiveness showing the interdependence of nations around the
world. That’s precisely why we think that if a large developed nation
confiscates its citizen’s gold others will follow. The exception will
be Switzerland whose very financial structure requires it to guard
foreigner’s assets within its borders.
Will a
‘Black Market’ in gold work?
If a ‘Black Market in gold does spring up in a
country where gold is confiscated it will be very different to one where a
‘Black Market’ in gold already exists. In a normal ‘Black
Market’ there is two-way traffic. As in India there already exists a
culture of opposing government and using a gold ‘black market’
that already serves to provide a ‘shadow’ banking system. But in
the developed world where financial visibility under the eye of government is
the norm, such ‘Black Markets’ are rare and small, if they exist
at all.
In a developed country where confiscation has
already taken place, one cannot see a two-way market. The most telling
difficulty you will face is that that a ‘black’ gold market will
be one-way. Most people who are breaking the confiscation law will be
sellers. So, who will your buyers be? As we said above, where there are
questionable characters prepared to buy your gold then, they will want large
one-off deals to make it worth their while and then move out of sight.
Would it be realistic to think that they would be
prepared to take the risks of being drip-fed small amounts of gold and face
the attendant risks? And if so at what price? Do you think that you would get
a decent price in such a buyer’s market? Apart from that the emotional
stress you face would be destructive to you and your family’s health?
The only way to achieve these ends is to place your
gold in a structure that leaves you inside the law, in a place where you are
free to sell your gold, at the full international market price, in the
amounts that you need to give you a drip-fed source of cash. This would
likely exclude the international banks.
Julian D. W. Phillips
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Standard or Money Supply Expander
Confiscation Nevertheless
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