One of the factors that hold back potential investors from buying gold is the fear of possible government confiscation. There’s good foundation for this fear – it had happened before, in the wake of the Great Depression in 1933.
Prior to 1933, gold coins were in circulation and were used as legal tender. When the Great Depression struck, President Franklin D. Roosevelt ordered the confiscation of all gold coins and assets owned by private citizens, with the coins redeemed at their face value with paper money. The gold coins and assets were then melted and cast into gold bars to beef up the country’s gold reserves.
The ban on private gold ownership lasted until 1975, when ordinary citizens were once again allowed to own gold. To this day, however, many still fear a repeat of the 1933 Presidential Executive Order – fear that prevents them from investing in gold.
Advantages of a private gold investment
Gold has always been known as an investment safe haven – a fact that has been proven over several centuries. It has an intrinsic value that’s retained through time, and through external factors that affect the value of currencies and paper assets. In times of economic downturns or political turmoil, the price of gold normally goes up, as people turn to it to hedge their investments.
Can private gold be confiscated again in the future?
The question in many people’s minds is, will the government do a repeat of 1933, and confiscate citizens’ private gold?
Many analysts say that it won’t. The U.S. government mints national gold coins that anyone can buy as investments. Gold is allowed in IRAs, and gold bullions are widely available for private citizens to buy and sell.
Unfortunately, the possibility that the government would once again confiscate private gold assets can never be totally discounted. While the notion seems out-of-sync with present government policies, no one can tell with certainty what could happen in the future.
What can you do?
You might have heard that investing in gold-based Exchange Traded Funds or ETFs can protect your assets from confiscation. However, it’s also likely that if the government does decide to seize private gold assets in the future, it would include gold stocks in depositories around the country.
Additionally, investing in paper shares means you won’t have your gold assets in your possession. In worst-case scenarios, when the dollar has all but lost its value, you would want to have quick and easy access to your gold coins and bars. In a survival situation, they could be used to pay for your everyday expenses.
It might help to keep in mind that buying gold bullion coins and bars is a private transaction that does not need IRS reporting. Selling certain types of gold bullion coins, like Gold American Eagles and Gold American Buffalos, is also exempt from IRS reporting within a certain amount.
When you buy from a highly-reputable gold and silver bullion dealer, your privacy is well-guaranteed and your private gold will be delivered straight at your doorstep for you to secure anyway you see fit.
You could even consider storing the gold in another county where it may be safe from U.S. government confiscation. In any case, once a gold coin or bar is in the hands of private citizens, tracking down its whereabouts can be very difficult.
Give us a call and let us know about your apprehensions. We shall be happy to talk with you about your possible options on investing in private gold.