Will the US Government Confiscate Gold Again?

Under current federal law, the US government has the power to confiscate gold bars in times of national crisis. However, rare coins are exempt from this provision as they are considered collectibles. Gold is now traded in open markets around the world and the US does not dictate its price. Unlike in 1933, the government has no way of controlling the price of gold and thus confiscation could carry potential risks.

But would they really do a 1933-style move again? Although there is no federal law explicitly stating that the government can request its gold, during extreme crises the government has the means to seize it, either in the form of an executive order or law. Investment grade 22-karat (91.6% gold, just like an American Eagle coin) and 24-karat (99.99% pure gold) pieces are an affordable alternative to most costume jewelry found in stores today. Classic designs that provide much more ingots for your money. Gold re-entered US society in a completely different light.

While it is still, and always will be, a way for people to protect their wealth, the government is no more likely to confiscate it than their home or the contents of their bank account. This is because the US dollar is no longer backed by gold. The government doesn't need its gold to inflate the money supply; it can do it with the floating value of the dollar. The myth that certain types of gold coins are “not confiscable” stems from the Executive Order that President Roosevelt issued in 1933 asking for gold.

The executive order required all those who held gold coins, bars or gold certificates to hand them over to the Federal Reserve before May 1, 1933. By transferring all the nation's gold to the government, he hoped to exert more control over the gold market. In fact, gold was desperately needed by a Federal Reserve that, at the time, could only increase the money supply to the point where it was backed by 40% gold, due to the nation's gold standard. The important distinction about this gold ban is that it happened when Britain was not on a gold standard. Each currency in the world was defined as a certain amount of physical gold or linked to another currency that had a definition of gold, usually the US dollar. In 1971, President Richard Nixon officially and completely broke the gold standard by announcing that there would no longer be a fixed value conversion rate between gold and US dollars. The United States Gold Office, Directors and Representatives do not guarantee to customers that they will make a profit or guarantee that losses will not be incurred as a result of following its recommendations for collecting coins or the settlement of coins purchased from the United States Gold Office. Why Gold Prices Rise and Fall: Five Charts Since the disappearance of the gold standard in the early 1970s, the precious metal has gone through four distinct phases.

Possession of gold remained illegal in the United States until 1974, when President Gerald Ford signed legislation allowing citizens and entities to own gold once again. December 17, 1985 — President Reagan signed into law the gold bullion coins law that allowed the United States Mint to produce gold coins from “newly mined domestic sources”.However, there were some prosecutions for illegal gold grabbing, including the arrest of 13 people in 1939 for participating in the illegal sale of gold. And in 1966, to stop the fall of the pound, the UK government banned citizens from owning more than four gold or silver coins and blocked private imports of gold.

Alan Crippen
Alan Crippen

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