Can the Government Take My Gold?
People investing in precious metals often worry about government confiscation in times of emergency, prompting many questions from investors. Unfortunately, less-than-reputable dealers, firms, and websites often provide unsubstantiated solutions and scare tactics that leave investors confused and vulnerable.
Example: They might claim that only coins with historical value would be exempt from confiscation, which is simply false as governments can change laws at any time.
It’s Not Impossible
Many who invest in gold see it as an effective way of safeguarding their wealth against economic crises such as stock market crashes or global war, with many people keeping their precious metals stored at home, hoping that doing so will prevent governments from seizing and seizing assets as soon as crisis arises.
However, this line of thinking has one major flaw: Government has historically confiscated gold – most notably during Roosevelt’s nationalization of it in 1933.
Governments may levy a windfall profits tax on gold investments, which can be substantial. Therefore, it’s wise to store your gold outside the banking system or in an overseas vault that’s independent from any country’s control if possible; alternatively try not storing your gold near banks that have a history of hypothecating it during times of turmoil.
Most gold investors understand the significance of precious metal ownership as one way of safeguarding wealth from corrupt governments, yet it isn’t impossible for governments to confiscate your gold. President Franklin Roosevelt issued Executive Order 6102 prohibiting Americans from possessing or hoarding any gold bullion or coins until 1974 when Gerald Ford repealed it.
Even though it might seem shocking, this scenario could play out again during a national emergency or severe recession. Physical gold has long been seen as an economic threat by governments and central banks due to its independence.
It’s Not a Good Idea
Many who own gold bullion are wary that their investment could be at risk, fearing the US government could seize and confiscate it in 1933 (actually more like nationalization as citizens were compensated), which they fear might happen again today.
At present, it’s unlikely your gold will be taken by the government. Given most countries have moved away from gold-backed currency systems in favor of fiat currencies that don’t bind directly with physical commodities, there’s little need for the state to seize private gold reserves.
But in an emergency scenario, a windfall profits tax on gold is not out of the question. Anyone holding substantial quantities of rare coins or European gold tubes sold at 30% markup would certainly be at risk; unfortunately this type of meddling in markets will only cause investors to seek alternative investments as investors flee back from gold investments – not good for either economy nor society!
It’s Not the End of the World
Many owners of precious metals opt to store their gold bullion at home or in safe deposit boxes in an effort to shield it from government confiscation. Many believe it will be nearly impossible for the government to seize such bullion stored this way.
However, this is an incorrect assumption; governments in democratic nations can and have taken gold from its citizens – even during times like the Great Depression when US nationalized gold during President Roosevelt’s nationalization decrees and then paid below-market rates for it surrender.
There have been reports that something similar may happen again, though most likely the government will only target domestic holdings instead. Even if your gold were taken by authorities, chances are only a portion would reach them because smart investors typically store it abroad in international vaults outside their own nation.
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