Is it possible that the U.S. government will once again “confiscate” gold as it did in 1933?
Well, it’s remotely possible.
It’s highly probable.
Of course, it’s unavoidable!
Those are a few of the answers you may receive, each from a well-meaning and possibly well-informed sources.
First and foremost, no one can say with any degree of certainty if gold or silver will be “recalled” in the future. Additionally, speculating on which items would be part of, or excluded from, another recall is just that – speculation.
The best argument for another recall involves legal precedence, which is so weighty in the eyes of the United States government. According to Vince Fon of George Washington University, courts are expected to be persuaded by past decisions, “when there is a sufficient level of consistency between two cases.”
Simply put, politicians, judges and others in positions of importance would like to do as little work as possible. So, when a situation comes up that is similar to something that happened in the past, they use legal precedence as a guide. The legal precedent everyone refers to today when discussing the confiscation of gold was FDR’s Executive Order 6102. One of the major exceptions to that order was Section 2B, which stated that “gold coins having recognized value to collectors of rare and unusual coins” were not subject to President Franklin Delano Roosevelt’s gold confiscation.
This was at best ambiguous, and the only attempt to quantify the definition came a decade after the order was lifted in 1974. The proposed legislation classified rare gold and silver coins as “collector coins from which the gross proceeds from a sale exceed more than a minimum 15% of the underlying precious metal content.” One has to wonder why such clarification was deemed necessary so long after the need for it had expired.
Therefore, legal precedence shows us that gold bullion confiscation is a real issue in the United States – but that alone is not clear proof that another recall is coming.
Another point that “confiscationers” make is that the U.S. dollar is only an IOU, so if everyone lost confidence in that currency the government would need a real and international monetary item to pay its bills and back up the dollar…as was the case in 1933. They also argue that gold is the only asset that the government could take from its citizens that could support our nation and satisfy its debtors because your stocks, bonds, or your debt-based assets like your car or your home, because they offer no relief or international value.
The argument that another confiscation is impossible may sound weak after discussing legal precedence but there are some valid points to consider. In 1933 the United States was on the gold standard so the Federal Reserve needed more gold to increase the money supply, which it did between 1933 and 1937. Today the U.S. dollar is not backed by gold so the federal government has no motive to confiscate; they can simply run the printing press. Others say that the world’s derivative financial structure is far different from 1933, which is true, and that there is not as much incentive or reward for another confiscation.
Also, a reputable Arizona bullion dealer’s entire case against preparing for gold confiscation revolves around the fact that rare coins are more expensive, which is true, but making that his primary argument for why confiscation is impossible may simply indicate low intelligence or extreme gullibility. There is nothing on this side of the coin that can match legal precedence, which is so strong in the United States.
What do US legal experts say?
David L Ganz, a prominent New York City attorney who specializes in precious metals and numismatic law, has authored over 30 books and is a highly regarded consultant, writer and lawyer in the field of precious metals. Attorney Ganz says, “Governments change laws from time to time, and yes, it’s possible that under the right circumstances some governments might try to confiscate their citizens’ gold.”
John Halloran is the top metals expert here at Certified Gold Exchange. “In the U.S.A. it’s ‘united we stand and divided we fall’. Just like recent events in Cyprus proved, governments will do whatever it takes to keep afloat, and rightfully so. Governments don’t simply surrender in a financial crises. Bills must be paid and currencies must be restructured. Does anyone expect this? No. This is why its called a crisis.”
Halloran adds that outside of knowing which day your credit card statement will arrive, no one knows what the future holds. He suggests educating yourself to the history of confiscation by reading the following three pages.
Should gold bullion confiscation be an issue for you? You alone should decide, not a bullion or coin dealer. To help, we have formulated two questions that may clarify your position.
First, are you a gold or silver speculator? In other words, do you believe gold or silver prices will go up dramatically in the next few years, at which point you could sell your metals and take your anticipated profits? Or, are you buying gold because you personally don’t completely trust the money supply, and you know that if our government did something before, today’s lawmakers can use legal precedence to do it again. Ultimately you’re not a gold or silver speculator but you just really like the safety aspects of gold, and having the ability to control it in your hands to bulletproof yourself against another unexpected national disaster, similar to a 1933-style depression?
Secondly, do you believe the government is looking out for you with its current fiscal policy? Or do you feel that ultimately you alone are responsible for your financial well-being and safety.
Rest assured the Certified Gold Exchange offers both popular bullion products as well as certified investment-grade coins to satisfied investors on both side of the gold confiscation debate. Also, all of our certified investment collector coins automatically come with our PriceMatchPlus® guarantee, which states that we will beat any legitimate dealer’s confirmed price by 1% so you can invest with confidence.