Yes, The U.S Government Can Still Confiscate Gold
Yes, The U.S Government Can Still Confiscate Gold BY– Gold Telegraph
People around the world love gold. It has always been the most reliable hedge against economic uncertainty. Yet few people consider that the government (who is usually responsible for the turndown in the first place), has the authority to seize your gold.
Historically, the government will seize gold when it’s the most valuable, during times when its fiat currency has become utterly devalued. When President Roosevelt made ownership of gold bullions illegal in 1933, the move was preceded by the boom of the Roaring Twenties, then the crash of 1929. Although Roosevelt didn’t call it gold confiscation; he preferred the term “gold hoarding.”
By the 1930s, the US government was facing its most severe financial crisis, and it needed gold (something of value), to stimulate the economy that was running on the fumes of fiat currency. So, it took people’s gold. It was as simple as that. Non-compliance was threatened with severe punishment.
We may be facing another financial crisis, and it might be best to avoid the role of fugitive “gold hoarder.” At this point, it doesn’t make sense for the government to confiscate private gold, as a cashless society will indirectly control peoples finances.
Why would the government seize gold? In 1933, under the 1913 Federal Reserve Act, the dollar had to be backed by 40 percent gold. This would give the Federal Reserve room to print new money when needed. What’s a government to do when it needs to print money, but doesn’t have the gold reserves needed to back it up? It passes an Executive Order making gold ownership illegal but buys up the illegal gold itself. That’s what Roosevelt did. When the government continued to print more money, it declared ownership of silver illegal a year later.
Soon after the government confiscated all gold, the price rose by 40 percent. As if by magic, the US government had a lot more funds than it had before. What happens is that the government buys your gold with cash, then devalues the cash and raises the value of the gold. It wins, you lose.
While the government attributes artificial value to money, it can do and does the same to the value of gold. The government currently holds 261 million ounces of gold in reserve at marked on its book at $42.22 per ounce. That’s a total value of $11 billion. Or is it? The fair market value of gold today is around $1,300 per ounce. As Jim Rickards pointed out in the New Case For Gold, gold is actually what kept the Federal Reserve solvent in 2008.