Gold Confiscation

alexros
By alexros on Mon, May 20, 2013 - 1:40am

What do you think about federal government confiscating gold from american citizens during a big economic turbulence in the future? There was such a precedent already. It happened exactly eighty year ago.

4 Comments

Hrunner's picture
Hrunner
Status: Gold Member (Offline)
Joined: Dec 28 2010
Posts: 256
Better Prepare for Asset Confiscation (Gold, not so much)

 

 

Alexros,

Good questions, and anyone invested in precious metals would be wise to think about their answer to this question.

My analysis, so far:

I'm in the crowd of many here, including Chris, who came to the conclusion, after many hours of study, that PMs represent the most effective insurance policy against both deflation, but especially inflation. 

Inflation and deflation are risks at present, IMHO, and it's looking more to me like we will get both in the next couple of years- a deflation downdraft that will catch the Fed and CBs off-guard, followed by (as always) a late-to-the-party over reaction of money printing (I'm expecting tens of trillions, to be clear) that will be the final event prior to currency reset. 

I believe gold and silver will form at least part if not all of the future global trade settlement system, that the USA will be forced to participate in.  This is an important question that dovetails nicely with the very robust discussion on PP re whether to get out of IRAs and 401Ks-  epic discussion of over 50 comments by thoughtful posters. 

That said, I look at what I believe to  be true is- we have an out of control government that is non-transparent, distorting the truth or overtly lying on a daily basis, and has its tentacles wrapped around many parts of our lives, recently including healthcare of course.  The government has made promises re retirement and medical care that it cannot keep given the current configuration.  This will become more and more apparent to the have nots, and also the haves, and the haves, at least the smarter ones, will figure out ways to avoid having their wealth confiscated, leaving a desperate and surly government to get more and more aggressive with the few haves remaining until the golden egg layer is expired. 

May I ask, did California look at its worsening situation and say "gee, all that liberalism and high taxation and over-regulation didn't work, let's try something different" or did they elect a tired old inept liberal to the governor's office over a highly competent business woman, and proceed to "raise taxes on the wealthy" to alarmingly high levels?  Case closed.  Desperate entities do desperate things. 

These are estimates based on current facts on the ground, but I do not believe there will be physical confiscation of gold ala Franklin D Roosevelt because A) it won't work and they probably aren't so stupid to think so (but with this gang, you can never tell), and B) it is simpler to tax proceeds as "windfall profits".  I believe statists like Obama or his follow ons, will (cynically of course, but what's new here) single out the PM holders, since they are a small voting block, who wouldn't vote for statists anyway, and put a special 50% to more likely 75-90% on "profits from PM redemptions/ transfers.  Is this stupid and irrational and petulant?  Yes.  Did they cynically put a 10% tax on medical device manufacturers as part of Obamacare that made no sense logically or "fairness"-wise? Yes. 

To repeat, I think gold and silver make the most rational sense right now (of course not 100% of investments and only after variable interest debt and basic needs are squared away).  But the current US government, especially after the trifecta of IRS, AP phone tapping and Benghazi, is looking more and more out of control and surly to me.  So one better have a plan for the future scenarios of appreciation of spot price of PMs coincident with an increasingly invasive government. 

Assuming there is a window of time between realization of fair market price of PMs- I'm talking gold in the 3,500 to 10,000 USD per oz and silver in the 50-200 range and enactment of the "fairness" tax by the US govt, I think you have a few main options: 

1) diversify your holdings geographically, meaning outside the USA, and

2)  Wait until much later, after the currency reset, and more reasonable government prevails, PMs achieve fair market value and rotate out of PMs then- but I'm afraid this could be 10 or more years, the way things are evolving so slowly even to get to square one.

3) have a plan and the ability to rapidly, and I mean in 24 hours rapidly if necessary, rotate out of PMs to cash, to something preplanned (I'm looking for good ideas on this one, but Chris has mentioned 1oz=1 acre farmland as an exit, so real estate is one possibility.  Of course, retroactive taxation makes the "wait and rotate" strategy risky, so please critique these ideas and offer up your own.  Have you already diversified geographically?  If so, how, what countries and did you mechanically do this?

budwood's picture
budwood
Status: Member (Offline)
Joined: Dec 22 2011
Posts: 13
Asset confiscation

Hrunner makes some pertinent and logical observations.

And, it makes sense that desparate governments take desparate actions.  However, it is questionable that "our" desparate government will last much longer.  These states and localities speaking of nullification and in some cases seccession aren't the loyal cattle that they were a hundred years ago.  Given those attitudes and the present fix into which the people running the federal administration have gotten themselves, it seems that a federal "sunset" just might be in view.

With Iran (world 2nd largest producer of oil) breaking away from the "Petro-Dollar", consider very possible changes in interest rates.  At that point, the USA government will find it difficult to service the multi trillion dollar debt and there goes the US dollar into history.  If and when that happens, are the "enforcers" going to be on the job?  - - - Without geting paid in any viable purchasing power?

No, I certainly don't know what will happen.  But when (international) interest rates move upward which is a matter of when, not if, survival in what remains of the USA just might be problematic.  Any suggestion which I might have would be to get to know your neighbors better than the typical nod as you pass; we're all in this together.

Have a nice day.

pvogtus@msn.com's picture
Status: Member (Offline)
Joined: May 26 2013
Posts: 2
relocation

Relocation sounds like a great idea - provided that planes are flying and you bail out in the nick of time.

Consider warm countries where English is commonly spoken.  I have heard of Panama as a possibility.   The Dominican Republic could be a good choice.  These two are sovereign countries where English is a major language.  Is it true, as I've heard, that Costa Rica is having a problem with armed gangs roving or is that just a rumor?  Also. check out a fellow by the name of Jeff Berwick, TheDollarVigilante.

Good Luck to all of us!

goldcoinnet's picture
goldcoinnet
Status: Member (Offline)
Joined: May 21 2013
Posts: 5
We're not the same generation

We're not the same generation as eighty years ago, so I don't know how people would react to a decision like that.

 

http://www.goldcoin.net/gold-bullion-coins.php

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