Let's talk about gold confiscation (again)

Switters

I think gold confiscation is a distinct possibility.  It makes perfect sense once it becomes obvious to the US and the world that gold is real money and fiat currency is worthless...but other possibilities exist  including confiscation of 401Ks, roth accounts, confiscation of land by taxation, heavy taxation or confiscation of overseas investments, and the list goes on.   

Will the population comply if ownership is made illegal?  will this include gold and silver?  who knows...

Trying to keep a close eye on the chatter, of which Dr. Martenson does a great job, is probably a good idea.  Any signals that ownership would be made illegal would be an impetus to move into another asset.  Fortunately PMs are very liquid and can be unloaded rather quickly, unlike trying to sell a piece of land.

I don't believe it will be confiscated, unless the price were to hit the moon. Look at yesterday when India bought 200 tons of gold for $6.8 billion. That's chump change in today's world of paper stocks, trillion dollar deficits and bailouts. Now, if gold was priced 5 or even 10 times that amount, then we'd be talking some serious coinage and maybe then I'd change my mind.

Chris wrote a piece about gold confiscation last November that you may want to read again.

http://www.peakprosperity.com/blog/gold-confiscation/9436

I think that it would be unecessary for a government to make physical possession of gold illegal unless the US were to attempt to return to a gold-backed currency.  Otherwise the government would have no reason to want the gold - they would only want the value, and the American public does not hold enough to make it worthwhile to specifically target gold (you might as well target real estate holdings, other commodities, &c).

Value confiscation can more easily be achieved through taxes and restrictions.  Even today the inflation-blind capital gains tax accomplishes this purpose.  Suppose you own $1,000 worth of gold.  The dollar thereafter declines by 50%.  The true value of the gold has remained steady, but the nominal price is now $2,000.   You sell your gold for $2,000.  Even though $2,000 post-inflation will buy no more than $1,000 did pre-inflation, you must pay capital gains tax on $1,000 in fictitious profits.  The capital gains tax on fictitious profits efficiently confiscates a portion of the original value.  If the government wished to confiscate the value of precious metals holdings, why not merely increase the capital gains tax on precious metals to 40%?  60%?  The only reason why Washington needed the physical metal in the 1930's was because they were attempting to sustain a gold-backed currency system.

Hi Bluestone,  I'm new to this, today in fact is my first day.   Can you tell me what PM's are?  thank you

Cynthia,

Welcome to the site.

PM means precious metals, mostly gold and silver but also other costly metals that have commercial value.

they have to know you have the gold to take it.  Well hello officer! No I do not own any gold, but thank you for asking.

Now if you store your gold at a bank or even overseas bank like switzerland for "safety" you expose yourself not to common burglars. but to state pilfering.  Yes even the Swiss are now assisting the Feds in tax evasion investigations.

A perfect illustration of why confiscation of gold is not worthwhile.  America is neither as trusting nor as politically cohesive as it was in the 1930's.  People would be much less likely to comply with any order to relinquish possession of property.  Furthermore, a much smaller part of the population owns gold today, and the part that does own it is the part that is least likely to give it up. 

It is almost comical to imagine a few thousand IRS and FBI agents fanning out across the country trying to physically find and seize what little gold is held by the American public, and it is more comical to imagine that it would be financially worthwhile for the government to do it.

There are more effective ways of neutralizing any threat gold may pose to the currency.  For a start, how about making contracts payable in gold legally unenforceable, placing a high capital gains tax on precious metals (and vigorously prosecuting tax evaders) , and restricting speculation in precious metals.  Who would tender payment in gold if they knew that they had no legal protection from the courts?  If the person they paid could turn around and sue them for payment once again in legal tender?  It takes a certain degree of trust.  Legitimate businesses cannot afford to make business deals that the courts will not enforce.   

Right now the American public holds such a small amount of physcal gold and silver that it isn't practical to use it as a medium of exchange to rival the dollar -- there simply isn't enough physical to make a market.  Without a large national or international market for precious metals, gold would be useful only for small black-market transactions.  While the current holders of gold may be willing to keep it and hide it, the person you attempt to give it to in the future may not be interested in taking it if they are not familiar with gold: they may simply demand that you discount it to the official rate that they could get for it if they turned it in. 

It just isn't necessary for the government to seize gold.  There is so little of it in people's physical possession that it can't be an effective threat to the government currency system.  Furthermore, if the government were truly hell-bent on confiscating what little value in gold/silver held by the people, the most effective way of doing that would be through high capital gains taxes and taxes at point of sale.

The arguments against gold confiscation make me feel a little more at ease.  However, most gold purchases can be easily traced.  Everything has an electronic paper trail unless you purchase your gold with cash from a local dealer.  Couldn't the IRS just get a list of gold bullion owners from the gold bullion dealers such as Kitco, Monex, and others.  Suppose a person owns 100 ounces of gold and bought it through Kitco.  It really wouldn't take much effort to find out who he is and to send an IRS agent to his doorstep to confiscate the gold.  This would make a nice easy profit for the government.  What if he refuses.  They just threaten to throw him in jail.  In this scenario, you wouldn't see mass protest from the citizenry because such a small percentage of the population owns gold. 

didn't South Korea confiscate gold from its citizensafter the Asian economic crisis in the late 1990s?

anyway, those are my thoughts.

Brian

Strabes

in the future, it may end up being the black market where we are able to purchase real goods of real value.  If we go to a system where only the chip implanted gold coins are legal tender, I think the unchipped gold will still have a value.  Its not the chip giving the gold coin value.  the chips can be mass produced and can be done cheaply.  gold still is gold.  

Brian

Having said that, I don't think there's a risk of confiscation in the US since gold doesn't play a role in the monetary system like it did in the 30's.  And even if they tried confiscating it, as people here have said, no need to give it to them.

If I understand, you are saying that since we are not on the gold standard and/or don't use gold as a currency on a day to day basis that the government won't have much of an interest in it.

The key phrase here is "THE monetary system". When THE monetary system, meaning our current monetary system which is made only of a fiat currency, collapses then PM's will play a very big role in our new monetary system.

As far as confiscation goes the real threat isn't that the government breaks down your door and shakes it out of your matress. The real threat is making it illegal. It will become more difficult to trade with it especially in any large way. If you want to buy a clock radio, no problem. However if you want to buy a house, land, a business, pay taxes, etc. You will most certainly be expected to explain were the 'money' came from.

If you want to deal in the black market expect to get a lower exchange for your gold. Why? Because the black market always charges more than things are worth, because, after all what you are doing is illegal. And, of course, don't forget the snitches, theives and extortionist all of whom can't be prosecuted because you weren't supposed to have it in the first place.

governments are just the enforcement arm for the bankers.

Strabes nails it right on the head here.  We need no more proof then when the bankers needed the bailout.  90%+ where against it but it passed anyways.  Here is the great twist though.  The people didn't have the money so the government had to come up with the money but the government does have the money, so it has to borrow it.  The only way money gets created in our system is when banks make loans.  So the government goes to the very banks that are crying for a bailout and borrows trillions of dollars from them and then turns around and gives all the money right back to them, and still owes them an equal amount plus interest on top of that.

+1 for Stabes.

+1 for Larry.

Larry is correct there was no need for any gold confiscation, they could have just demonetized it.  I guess the bankers wanted to have all the gold plus 10%.

If you own jewellry there is no certificate of ownership to be confiscated, and you have paid a jeweller to make this crazy commodity into something a little more useful.

In the future people are fearing will we need the amounts of gold required to keep us obscenely rich or just enough to have purchasing power for the daily requirements we won't be able to supply for ourselves? Watch nature's hoarders in action and see what they put away and where they put it. It's not called 'squirelling away' for no reason!

Is the US not heading towards the worst type of communism-fascism? It seems the purest forms of communism keep the elite in the 'pink.'  Vis a vis North Korea, China, old USSR and esp 1984. Fascism is less about who you know and more about what you own/run. That's the only difference I notice but I'm a simpleton who thinks food, water and shelter-abutted by close family, is all that is really important.

If you want to go beyond survival in this bleak future-http://classics.mit.edu/Tzu/artwar.html here you go!

I agree that there's a chance that the gov't will make it illegal to buy and sell gold.  Reasoning is that tptb looks at anyone who owns physical gold as the enemy (other than themselves of course).  Anyone that has bought will be seen to be the anti ptb group.  And because most of tptb hold/own their gold outside the US, it will not affect them in any way.  

As for the gov't being chastised for doing something like this:  Only 1% (I read that figure somewhere/I'll try to find it) of the american population owns physical gold in bullion/investment form.  The gov't will be able to spin it easily to their advantage and I don't think they're too worried about pissing off 1% of the population.  

These two considerations have made me change my buying %'s up on silver and down on gold.  And the fact that silver is at a ratio that's just outlandish in historical terms.  

My point wasn't that you don't need gold, it was that you don't need the amount to stay obscenely rich as is the 'norm' today. Jewellry is sufficient to get your plough etc. As is bartering and other things. methinks maybe you wish for consumerism to flourish?

Silver won't be confiscated unless they decide to call it in for "National Security".  It's in most electronics so they'd be hard pressed to get their hands on it.  As I said, I've changed my buying to silver for the foreseeable future.  IMO, there's more upside in $ value and the ratios are just to good to pass up.  

Now the only thing that I worry about (very little worry btw) is that tptb are much more heavily into Gold than Silver.  So in order for their wealth to increase the value of Gold must increase.....not so much silver.  So if they're going to manipulate either of the two upward in value it will most likely be Gold.  But again, you could go round and round with that one so.....diversify your holdings in different ways.

-Own Silver, Gold and I would also suggest having a little Platinum as well (inflationary PM).

-Have Physical Gold and Silver at home, and offshore.

-Have them all in different forms, ie:  Coin, bars, junk, jewelry

-Bury some in your yard in case you get robbed or there is a forced confiscation (I know, very unlikely but to be safe, do it)

-If you can, get bars and coins from different mfg, countries, etc....

TELL NO ONE!!!!!  But make sure you leave info on finding all of your holdings to your spouse and children....NO ONE ELSE!!!!  And have a "dummy" safe in your house with a little PM's and some cash stowed away.  Use this in case of robbery so the thieves leave with something and you don't lose your whole stash.  Thieves apply to the Government as well;-)