On June 5, 1933, the United States abandoned the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution that nullified the right of creditors to demand payment in gold. Many investors have heard that the United States government confiscated gold from the public years ago. Is it true? Is that a rumor? Could it happen again? This is a topic that comes up again and again among gold investors. Rather than speculate, we think it's better to consider the facts.
Below is a timeline that explains exactly what happened and, more importantly, how today's investors should react and what they can do to make sure they are prepared, should it happen again. On April 5, 1933, under the pretext of a national emergency, President Franklin D. Roosevelt issued Executive Order 6102, making it illegal for U. S.
citizens to own gold bullion coins. The government shamelessly stole wealth from the American people. The government could confiscate gold again if it becomes desperate enough. I don't think those fears are unfounded.
The Government's appalling financial situation is only worsening. But would he ever do a 1933-style shot again? I don't think he will. However, there is another growing threat to your gold. Today, only a small fraction of the U.
population owns gold coins or bullion bars. Hell, I bet most Americans have never seen a gold coin, let alone appreciate its value. This was not the case in 1933, when the U. was still on a variant of the gold standard.
That's why the government probably won't repeat the 1933 scam. It's just not worth the effort. That doesn't mean that gold owners are safe. In 1980, Congress passed the Crude Oil Extraordinary Profit Tax Act, which taxed up to 70% of the “windfall” of domestic oil producers.
What the hell is a windfall anyway? As far as I can tell, it's what politicians decide it is. There are no objective measures to define it. In short, an unexpected gain is simply a gain that politicians don't like. The whole concept is a scam, a word trick to camouflage and disinfect legalized theft.
If the price of gold explodes, I wouldn't be surprised if Congress passed a Fair Share Gold Surprised Profit Tax Act that would impose an 80%, 90% or more tax on gold profits. Fortunately, there are some practical steps you can take to protect yourself from this form of politically motivated expropriation. One way to avoid a windfall tax on gold is to give up your US citizenship - but that's just not realistic for most people. Fortunately, there is a much more practical option - you can do it from your living room and you don't have to hand over your passport! The solution is to own gold shares in a Roth IRA account.
A Roth IRA is a tax-free zone - you finance it with after-tax savings and any capital gains or future income from investments in your Roth IRA are not taxable. While you can never be 100% sure what the United States government will do in terms of a future tax increase - even a windfall tax - it is much less likely to affect investments in a Roth IRA. A Roth IRA is the most practical way to protect yourself from the most likely form of gold confiscation in the future - a windfall tax - as it makes you a difficult target for taxation authorities. But there is more to do to ensure that your wealth is not lost in the next financial tsunami - how will you protect your savings in the event of a currency crisis? Precious metals and real estate will become the last safe investments for wealth retention - but they are only truly safe if they are outside an endangered jurisdiction.
Gold and silver have served as money for centuries and in many different civilizations - they have always been inherently international assets - so if you have precious metals in your portfolio you are very likely to be afraid of hyperinflation and the fall of fiat currencies - there is another risk you should be aware of: The latest version of Bread and Circus is coming to its inevitable end! The energy crisis has only just begun and is inevitable - today in the United States we see increasing signs of cultural degeneration in Hollywood, advertising, academia, science, corporations, politics and other areas of life - obtaining a second passport is a fundamental step in freeing oneself from absolute dependence on any particular country - once you have that freedom it's much harder for any government to control your destiny! As an added bonus you will receive our popular read Doug Casey's International Man Communiqué! In general terms gold is the antithesis of fiat currencies and is considered a hedge against inflation - there were some exemptions that included customary use in industry, profession or art - a provision covering artists, jewelers, dentists markers etc - we will deliver the most current and interesting sovereign financial and wealth news straight to your inbox! Are gold bullion coins legal? The answer is yes! It is true that numismatic collector-type coins were excluded in the confiscation of 1933 - whether or not they will be excluded again in any future confiscation is completely unknown - there is a logical thought process to exclude collector coins in the sense that the government was trying to gain monetary control of gold bars - however what the government has done in the past is not necessarily indicative of what it will do in the future! In conclusion: The confiscation happened - it was repealed but it could happen again in the future! The American Eagles gold became one of the best-known gold coins - so if you want to protect yourself from potential future confiscations or windfall taxes then consider investing in gold shares through a Roth IRA account or obtaining an offshore bank account! This way you can free yourself from absolute dependence on any particular country while increasing your quality of life while reducing your cost of living.