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Don’t Dismiss the Possibility of Gold Confiscation

- Jeff Thomas - Casey Reseach

Dec. 31, 1974 is the answer to your question.

It is rather far-fetched to believe that the US will again confiscate gold. In '33 when FDR did it, gold was the backing for the dollar. It has not been backed by gold for nearly 42 years. Nor would the Americans ever voluntarily choose to have a gold backed dollar again. That would be economic suicide on a grand scale. If America could get their hands on 20,000 long tons of gold and each ounce was worth $2,000, China could present about 1/3 of the Treasuries they hold for redemption and leave America with not a single speck of gold dust left at West Point (not Fort Knox or the NY Fed). And China only holds a bit over $3T of the $17T in paper thus far issued.

A far more likely scenario for asset confiscation (and one used by governments previously) would be for the government to mandate that your pension plan invest in T-Bills exclusively. There is so much more wealth held in pension plans than in gold; the only apt comparison that comes readily to mind would be to compare the size of elephants with mice. Such a move would shore up the badly damaged Treasury market (making it possible for the government to keep on running endless budget deficits) and would avert a run on the dollar by foreign creditors.

Confiscating gold makes no sense in this environment. It would make about as much sense to confiscate iron, coal, copper or any other commodity you can name that does not spoil. For a nation with little or no debt, a gold standard could be a good thing. But for a nation with massive debt, having your money backed by gold guarantees a line up at the Fed's gold window. It was precisely this situation that caused Nixon to remove the gold backing of the dollar in 1971.

If you want a clue as to just how likely the author believes in the possibility he raised in this article actually arising, be aware that the report he is pimping will cost you $99, not 2 grams of gold or 4 ounces of silver. He only accepts cash.

Commented 3967 days ago

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Beginning of the headline :If you hold precious metals in your portfolio, there is a good chance you fear hyperinflation and the crash of fiat currencies. You probably distrust governments in general and believe they are self-serving and have no interest in your economic well-being. It is likely that your holdings in gold are your lifeline – your hope to get you through these times while holding on to your wealth. But have you ever given any thought to the possibility of having this lifeline confiscated by the authori... Read More

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