Many gold investors fear their precious metals being confiscated, in light of history where gold has been confiscated in times such as during the Great Depression when President Franklin Roosevelt issued Executive Order 6102 which mandated citizens turn in their gold bullion for paper currency.
What is a confiscation?
When confiscations is undertaken by the government, assets resulting from criminal conduct are taken over and their value determined; then those who gained financially must return a portion to the government as repayment.
Value-based confiscation can be used as one means to do this, including in cases where gold bullion was acquired as part of criminal activities. It should not be limited solely to gold bullion.
Notable to remember is that the United States government last attempted to seize citizens’ gold bullion in 1933. That Executive Order was ultimately overturned by Gerald Ford decades later. While bullion distributors may try to scare consumers with claims of imminent confiscation by government authorities, these claims tend to be high pressure sales tactics rather than facts; as the US does not need gold for backing its currency if needed; should they want your bullion products, it could easily get them from overseas markets.
Why is it a possibility?
One reason people invest in precious metals is because they perceive it to be a more secure store of value than currency. Governments often employ tactics such as printing money to boost the economy or pay off debt; this practice may cause inflationary consequences that diminish its value over time.
Alternative measures could include confiscating assets like gold bullion – something which occurred during the Great Depression with Executive Order 6102 in 1933, drawing sharp criticism for targeting wealthy individuals unfairly while being difficult to enforce due to how easily gold can be hidden or transported.
Now, gold confiscations is less likely given most governments no longer use a gold standard; however, governments could still decide to implement a windfall profits tax if its price spikes significantly, similar to what Congress did with oil companies in 1980. To protect yourself against such taxes and ensure privacy and protection for your assets when investing overseas, store assets in countries which value bank secrecy and asset protection as part of your overall strategy.
How can I avoid a confiscation?
Many investors invest in precious metals as a hedge against inflation or diversify their portfolio, yet some fear the government confiscating it and seizing their investment. While this fear is real, there are steps you can take to minimize its risk.
Avoid confiscation by purchasing your gold from reliable dealers that report sales to the IRS and prevent instances of tax evasion and keep track of profits made from private sellers.
Bullion distributors may claim that confiscation is imminent, yet this is almost always false. In reality, the last confiscation took place in 1933 and Gerald Ford officially repealed that Executive Order over four decades later. Modern gold confiscation myths often stem from high pressure sales tactics or conspiracy theories appealing to people with distrust towards government – in reality owning gold is no more likely to be confiscated than owning your house or bank account.
How can I protect my gold?
As economic conditions signal another financial crisis, governments may come after your assets – particularly gold – without notice from you. But there are ways you can safeguard these precious metals without running the risk of incurring fines and forcible confiscation.
One way to protect gold from government seizure is storing it abroad, which may be more expensive but does eliminate any chance of confiscation or taxation. However, local laws and regulations must still be taken into consideration before making this choice.
Another way to safeguard your gold is to store it in a secret room on your property. Although this approach provides some layer of security, keep in mind that such locations could easily be discovered by government authorities and may prove more costly than placing your precious items with someone reliable who could look after it for you.