Purchase of rare gold coins with numismatic value can offer some protection from confiscation, but even this doesn’t fully hold up against scrutiny; historically, rare coins were often classified as collectors’ items and excluded from 1933 seizure laws.
Unfortunately, in modern society it can be challenging to safeguard gold. One important question remains – can governments confiscate the bars?
Legality
People who buy gold bullion often fear that the government will confiscate it; while this was possible in 1933, today there are numerous factors that make confiscating it unlikely.
First of all, the government no longer adheres to the Gold Standard policy that required some amount of printed currency be backed by physical gold reserves; this practice ended in 1974.
Though the 1933 Executive Order prohibited ownership of gold bullion, this did not extend to rare or collectible coins – creating a loophole used by telemarketers who promote high-premium gold coins.
Gold can be difficult to confiscate because it’s traded globally on a free market, making it harder for governments to control its price by way of embargo or any other means. Storing your gold outside the banking system may help safeguard it against seizure; banks have been known to hypothecate customers’ gold, putting it at risk.
Risks
Many investors turn to gold as an asset of diversification in a period of currency or economic instability, yet some worry the government might confiscate their gold investment. While this concern is understandable, it’s essential that one understands and mitigates risk as effectively as possible.
Gold confiscation typically occurs during periods of severe financial stress that threaten both currency and banking stability, and oppressive regimes have historically seen many cases of gold confiscations.
As only a handful of major countries today remain committed to the gold standard, it is unlikely they would seek to confiscate gold bars and coins at large scale. Therefore, diversifying your holdings by investing in pre-1933 bullion coins provides some degree of protection from confiscation orders; failing to comply with such an order could incur financial penalties and possibly jail time.
Seizures
Due to previous gold confiscations instances in history, many investors worry that they could fall victim to similar confiscations practices themselves. Fortunately, however, today the risk of gold confiscation has significantly reduced thanks to changes to our monetary system and governments having more tools available to manage economic crises.
However, it is essential to remember that even though the risk of confiscation may be minimal, it cannot be discounted entirely as The United States holds on to sovereign powers which allow it to seize citizens’ gold bullion, coins and currency under certain conditions.
At its height during the Great Depression, President Franklin Roosevelt nationalized gold supplies through Executive Order 6102 and forced people to sell at well below market rates – this sort of confiscation wasn’t meant to address financial crises as much as increase money supply through inflation – hence most confiscations of monetary metals like bars and coins while leaving jewelry unscathed.
Buying Gold
Many individuals feel betrayed by government, leading them to purchase gold bars as an easy and safe hedge against confiscation risks. But these risks have become significantly reduced since we no longer follow the gold standard and it’s more difficult for governments to confiscate people’s precious metals than before.
Many people purchase expensive old coins in an attempt to avoid confiscation; however, this is often just an illusion perpetrated to sell high-priced bullion to novice collectors. Government confiscations is difficult because rare coin buyers cannot always be distinguished from bullion investors; instead consider investing in gold bullion that trades on its pure gold content like bars, South African Krugerrands, or U.S. Eagles as these offer better protection.
Avoid confiscation with caution by staying informed and investing wisely. Be wary of high pressure sales tactics or conspiracy theories plaguing the industry, instead choosing an established precious metals dealer who offers products at fair prices.
