People ask me on a consistent basis if I think the government will confiscate their gold and silver coins if times get rough. I feel there is little chance of this happening, and here’s why. Gold and silver coins are predominantly held by the wealthy (especially gold). The wealthy are not going to allow the government they support with campaign money to take their gold. It is just not going to happen. Think about it, poor and moderate income people (and that is at least half the population) do not have a significant holding of gold or silver. Most of the rest of the population have the bulk of their wealth tied up in 401-K’s or IRA’s. This may come as a surprise, but most rich people do not have 401-K’s or IRA’s. They have stocks and bonds, but the rich also have the money and smarts to diversify their portfolios.
In my years as a correspondent at ABC and CNN, I used to check in with a coin and bullion dealer in New York City to see what was going on at the street level. He turned into a friend of mine and a great source. He was a real expert and had been in the rare coin and bullion business since the 1970’s. Around 2007, wealthy people and hedge fund folks started buying physical gold and silver. (Gold was in the $600-$800 range.) He told me he would sell Gold Eagles in $100,000 orders to individuals on a routine basis. He also told me he had “connected” clients who had never bought physical gold and silver before and were buying it for the first time in their lives. In 2008, he told me he started seeing big orders for silver coins. For example, one order was for forty, 500 ounce boxes of Silver Eagles. (It was shipped abroad.) If things get tight, the government is not going to demand their bullion coins back from rich campaign donors.
Another reason I think the government is not going to confiscate gold and silver coins is state governments are legalizing their use as money. South Carolina is the latest state to approve legislation (after Utah), and at least 12 other states are proposing the same thing. (Click here for more on this story.) There is also a federal legislation in Congress to allow gold and silver to be used as money. (Click her for more on the story.) The trend is moving towards gold and silver coming back into the monetary system, not outlawing it. Now, if you asked me if the government would nationalize gold or silver mines in the continental U.S. or Alaska, I say that is a possibility. I also think the U.S. government could confiscate foreign gold holdings on deposit at the New York Federal Reserve bank, which are roughly 6,000 tons. This is the low hanging fruit. So, I think confiscation of gold and silver coins are unlikely.
Chris Duane of TheGreatestTruthNeverTold.com thinks the same way I do. Duane lays out a very compelling case for not confiscating gold and silver (especially silver) in the video below. Enjoy and Happy Easter Monday:
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.