Can Gold Be Conceived?

One of the more frequently asked questions by gold investors is whether their metal can be confiscated by governments in times of emergency. It’s understandable why investors would be wary, given governments have taken drastic measures during times of difficulty.

FDR’s 1933 gold “grab,” during the Great Depression, has become legendary; though more accurately described as nationalization as individuals were compensated.

Old U.S. gold coins

As a precious metals investor, it is wise to keep your gold outside the banking system. Governments tend to seize people’s gold from those who keep it in banks.

President Roosevelt famously nationalized citizens’ gold in 1933; this could more accurately be called an assembly than confiscation as owners received compensation from their government.

Many dealers make the claim that pre-1933 U.S. gold coins are “non-confiscatable”, due to an executive order issued by President Roosevelt that exempted coin collectors. While this may be technically correct, such exemptions could become irrelevant should laws change in future years and confiscation becomes inevitable. Investment-grade coins like $5 Liberty gold pieces and $20 St. Gaudens may fare better when investing as they tend to have lower mintages compared with rare-date gold coins and have spent decades being safely stored away by banks in bank vaults over time.

Old U.S. gold bullion

History has taught us one important lesson: governments tend to seize people’s gold during times of economic instability. Perhaps the most egregious example was in 1933 during the Great Depression when President Franklin Roosevelt nationalized all of its holdings.

At that time, Roosevelt issued an order asking citizens to exchange gold coins, bullion, and certificates for paper currency. Anyone failing to comply was subject to penalties or even deportation proceedings.

Today, many telemarketers promote old U.S. gold coins as non-confiscable due to an executive order from 1933 which exempted “gold coins having recognized special value to collectors of rare and unusual coins”. Unfortunately, this is an urban legend since there are no laws which define what makes a coin “rare and unique”, so any coins could still be confiscated at any time. Furthermore, Roosevelt’s executive order did not prevent foreign gold from entering the United States nor purchasing or selling gold; only later in 1974 did legal ownership/selling of gold became legalised within United States borders.

Old U.S. gold jewelry

While gold can provide essential monetary protections, having other assets to fall back on in times of crisis is also wise. For example, the 1930s gold-grab was just one example of many when governments confiscated hard assets held by citizens, even in advanced nations such as the US. When these confiscations instances have happened in developed nations, such as coins or bars were typically targeted whereas jewelry has generally been left alone except when oppressive nations with dictators were involved.

Telemarketers frequently promote old U.S. gold coins as “non-confiscable,” yet this assertion lacks foundation in law. Roosevelt’s 1933 Executive Order exempted such coins, as defined by collectors of rare and unusual coins having recognized special value; there are no laws categorizing such coins as non-confiscable, and thus this claim can only serve to mislead. Most of these coins remain secure within European bank vaults today.

Old U.S. gold bars

Gold confiscation used to be a realistic possibility; however, as more countries have abandoned the gold standard and begun printing fiat currency instead, this seems less likely. Yet confiscation can still happen during economic crises, if there is sufficient public panic.

Store your precious metals outside the banking system to be more protected against government seizures. In the past, gold could be used as an international payment form making it harder to confiscate than other assets. Furthermore, banks often hypothecate gold and put it at systemic risk – so it is wiser to store assets with an independent vault provider than risk being hypothecated with them.

Many dealers promote pre-1933 gold coins as “non-confiscatable,” citing Franklin Delano Roosevelt’s 1933 call in of gold that exempted rare and unusual coins with special value to collectors of rare and unusual coins from confiscation. But these claims aren’t supported by law, leading dealers to justify higher prices for their products.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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