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 Replies: 15 / Views: 1,744 |
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New Member
United States
12 Posts |
Just for arguments sake, let's assume we go into era of hyperinflation and $100 bills are not much more than toilet tissue. Let's assume also that the govt. calls in all the gold as it did in 1933. Question: Would holding Canadian or South African or other foreign gold coins be safe or would they be subject to call-in also? Opinions?
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Pillar of the Community
Canada
1177 Posts |
i would assume all gold in the country, but I would love someone to answer positively!
-J
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Bedrock of the Community
13014 Posts |
More than likely yes as gold is gold, but just like the first time it happened people will just hide theirs and keep it. Its the banks and the real wealthy that have large stacks of gold in storage that will get hit the hardest, probably Gold ETF owners too as I assume theyd be forced to sell and give up any potential claim to what they "own".
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Pillar of the Community
Canada
1177 Posts |
IF this ever happened would they confiscate paper gold too (like non-physical)?
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Bedrock of the Community
13014 Posts |
Youd have to at least sell it. All paper gold is supposed to be able to be translated in real gold. I guess they could say you could keep it but cant ever convert it into physical gold no matter what, but a confiscation would more than likely result in a set price of gold and destroy the swings since you couldnt buy and sell it anymore eliminating the point (and probably causing you to lose money) of the paper gold. Without speculation it would sit closer to its true value which isn't 1700+ an ounce that speculation has made it rise too
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Pillar of the Community
Canada
1177 Posts |
dern, that would stink.
Edited by Bryan1315 to make Family Friendly. Please remember if you wouldn't want a young kid saying the words please do not use them on this forum
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Pillar of the Community
United States
4008 Posts |
Quote:
All paper gold is supposed to be able to be translated in real gold. All depends on the prospectus for the gold ETF a person owns. The GLD, for example, allows share holders to redeem shares for gold but ONLY if you own a LOT of shares... think thousands or more. Small share holders MUST redeem their shares for cash. The BIG investors, such as guys like Soros and hedge funds, invest millions of dollars in these metals ETFs and they can redeem their shares for either currency or metal, their choice. The Sprott funds allow small shareholders to redeem their shares for cash or metal but there is a lower limit and I am not sure what that is. My guess would be a 100 oz. silver bar and a 100 gram gold bar as the minimums but I don't know for sure. Their prospectus docs will mention this, probably under "redemptions". |
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Pillar of the Community
United States
4008 Posts |
As to gold confiscation... back in 1933, gold and silver were circulated throughout the US economy as money, so there was quite a lot of it around. These days, not so much. A few people own a little gold. Some rich people own more but can easily own it outside the US, such as in Switzerland, Hong Kong, or Singapore. It is possible to find gold and silver companies that sell PMs and who store them in their vaults but that are not part of the banking system. This means that they do not have to follow all the rules that banks do. It also means that they do not report your holdings to the US IRS and there is no way for the US government to force them to do so, as they can with banks.
My question on this would be: If I have some gold in a trust, it technically does not belong to me. Would that protect it from the thieves bureaucrats in government? Probably not but it is an interesting legal question.
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Moderator
 Australia
16830 Posts |
The gold recall in 1933, specifically Executive Order 6102, was for all privately-owned gold coin and bullion, not just American gold coins. Paper gold (gold certificates) also fell under the ban. Some things ought to be noted: - It wasn't "confiscated" in the sense of "seized without compensation"; it was a form of eminent domain; people sold their gold to the government at the official price ($20.67/ounce). Though it perhaps "felt like" confiscation when the government raised the official price to $35/ounce shortly afterwards. - They didn't take all your gold - you were allowed to keep up to five double-eagles per person, or equivalent thereof. Gold in jewellery or other non-bullion forms and collectable coins were also exempt. - They didn't send stormtroopers around and search everyone's house, nor did they send agents to systematically search every bank vault and safety deposit box in the country looking for gold. But if they happened to find a gold hoard in the process of other investigations eg. tax fraud, then they confiscated it. Gold seizure is unlikely in today's economy, since gold is no longer the cornerstone of either everyday commerce nor international finance. There isn't, for instance, a "government price" for gold; if the government wants to buy gold it pays the free market rate, same as everyone else. It would also serve little purpose, since seizing every single ounce of gold in the country and selling it off would barely even scratch the surface of the national debt. Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
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Pillar of the Community
Canada
1177 Posts |
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Bedrock of the Community
13014 Posts |
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The GLD, for example, allows share holders to redeem shares for gold but ONLY if you own a LOT of shares. Exactly, but each share is supposed to be able to be paid out regardless of whether you meet the requirements or not, I doubt that many if any of them actually could pay out every share. Quote:
If I have some gold in a trust, it technically does not belong to me. Would that protect it from the thieves bureaucrats in government? Would probably depend on the type of trust and the details of it. And also whether or not its reported anywhere, Id suspect most trust fund managers would try and hide it to keep their clients. You tell a client their 100 ounces of gold was taken and its a pretty quick way to get fired. Quote:
Gold seizure is unlikely in today's economy, since gold is no longer the cornerstone of either everyday commerce nor international finance. There isn't, for instance, a "government price" for gold; if the government wants to buy gold it pays the free market rate, same as everyone else. It would also serve little purpose, since seizing every single ounce of gold in the country and selling it off would barely even scratch the surface of the national debt.  |
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Pillar of the Community
United States
870 Posts |
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@sap, very good facts! But facts dull my pitchfork and douse my torch. |
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Pillar of the Community
United States
4008 Posts |
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It wasn't "confiscated" in the sense of "seized without compensation"; it was a form of eminent domain; people sold their gold to the government at the official price ($20.67/ounce). Though it perhaps "felt like" confiscation when the government raised the official price to $35/ounce shortly afterwards. Anytime someone uses force to compel me to sell something that I do not wish to sell is confiscation, most especially when I do not want what they are offering in trade. Quote:
They didn't take all your gold - you were allowed to keep up to five double-eagles per person, or equivalent thereof. I suppose that they thought in those days that most everyday people did not have this much in gold anyway, so no problem for them. Fact is, the gold confiscation of 1933 was aimed primarily at the banks because they had a LOT of gold and were hoarding it instead of loaning it into the US economy, as the government wished them to do to stimulate business growth. When jaw-boning failed to achieve results, EO 6102 came into play. It was an interesting aside that the coming confiscation was announced in April of '33 but did not take effect until May of '33. That gave those who wanted to keep their gold plenty of time to send it to banks in other countries. Unlike today, foreign financial holdings were not reported to the IRS. |
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Pillar of the Community
Canada
3692 Posts |
Ed_B: Quote:
Fact is, the gold confiscation of 1933 was aimed primarily at the banks because they had a LOT of gold and were hoarding it instead of loaning it into the US economy, as the government wished them to do to stimulate business growth. When jaw-boning failed to achieve results, EO 6102 came into play. Are you saying that confiscating all gold was supposed to stimulate the economy? Back then gold was money, so how would stealing it accomplish this goal? I'm with you, though, Ed, in that I would not take their lousy inflated paper in trade for my useful metal if I had any. It's as if I came to your house, raided your fridge, and gave you an IOU in the names of my unborn children. Empty promises, and quite worthless. Sap: Quote:
It would also serve little purpose, since seizing every single ounce of gold in the country and selling it off would barely even scratch the surface of the national debt. I don't want to put you on the spot, and no one has all the answers, but how would the governors scratch the surface if they cared enough to try? And we know by now that printing more paper is not the answer. There has to be some type of constriction and better regulation. |
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Pillar of the Community
United States
667 Posts |
The government did not have to send storm troopers or do anything else to get the gold. They had the best possible weapon better than either of these, they made it illegal.
Thus if you kept over the 5 that you were permitted you just cut you actual worth, and ability to buy goods better than if they had broken through the door of your home.
I would not bet the farm on the fact that gold is not used as money, they could change that in a heart beat. Something they did in the past. Did they really pay market price? I would not call it fair that they raise the market value after they took it from you.
At one time I was 100% trusting of our government, over the past couple of years not so much now.
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Pillar of the Community
United States
4008 Posts |
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Are you saying that confiscating all gold was supposed to stimulate the economy? Back then gold was money, so how would stealing it accomplish this goal? Yes, that is exactly what I am saying. Remember, in those days gold was divided into only a few parts of the economy: 1) government; 2) banks; and 3) citizens. They also backed the paper money of the time with silver and gold, which were the certificates they issued that looked like today's money but were exchangeable on demand for gold and silver coin in the amount specified on the currency. If you took a $100 US Gold Certificate to your bank, they would give you the equivalent of $100 in gold coin if that was what you wanted. Since gold was price-fixed by the US government at $20.67 per ounce, you would get 4 ozs. of gold and the rest in silver. Because of the 1930s depression, banks were hoarding gold, big-time. The government had some gold, the banks had a lot of gold, but the citizens did not have much gold because the banks were not circulating it. Like a roach motel, gold went into the banks but it was not coming out. Since money was backed by gold, the government could not simply print off as much as they thought necessary. Once the hoarded gold was taken from the banks, the government could then print more currency, which was then "injected" into the economy as the Fed does today. There was a multiplier effect that the government hoped to use even though the gold itself was not circulated because its equivalent in currency could be spent into the economy to stimulate it. It's possible, maybe even likely, that the money used to pay for the WPA and CCC programs came from this source. While these programs helped stimulate the economy somewhat, it was not until WWII that the US economy really took off and finally exited The Great Depression. Quote:
Empty promises, and quite worthless. Agree 100%! This is, unfortunately, one of the VERY few things that politicians are really good at.  |
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Replies: 15 / Views: 1,744 |
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Posted 10/01/2012 4:13 pm
