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How to Protect Your Gold from Government Confiscation If and When It Happens

Gold Confiscation
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People who own gold are worried about their holdings, given the state of our economy. Many are seeing the old specter of early 20th-century government intervention, the kind of financial controls that took gold out of people’s deposit boxes, and placed tight restrictions and surveillance on their transactional activities.

For those who hold gold coins and bars, there are three questions on their minds:

  • What will happen if gold confiscation measures are enacted?
  • What can we do to prevent our gold from being confiscated?
  • Are there types of gold coins that are not confiscatable?

Gold confiscation remains a possibility for the very fact that it is implicitly written into our laws. We cover each law in a separate article (see “US Laws That Legalize Gold Confiscation”). Gold can be nationalized under conditions of national emergency.

So, what can you do about it? Quite a few things, actually, and that’s what we're going to cover here.

The “Trading with the Enemy” Act of 1917 Is Still Active

This act allows the President of the United States to prohibit, regulate, and investigate any form of financial transaction including gold and silver during a time of war or national emergency. This law was put into effect in 1933 by FDR and again in 1947 by President Truman.

United States Code, 12 U.S.C.A. Sec 95a, states that:

“(1) During the time of war, the President may...(a) investigate, regulate, or prohibit, any transactions in foreign exchange, transfers of credit or payments between, by, through, or to any banking institution, and the importing, exporting, hoarding, melting, or earmarking of gold or silver coin or bullion, currency or securities…”

Stepping over the legalese, of which the Code has volumes worth, can the government just step in and seize your gold? Not without some recompense, and that’s what happened in 1933. But here’s what actually happened: once FDR seized all of the confiscatable gold for $20 an ounce, he then devalued the dollar by nearly 60%.

Wait, isn’t that why we’re investing in gold in the first place--as a hedge against dollar devaluations? Well, in this case, the devaluation is deliberate and sudden. Should gold once again be confiscated, it’s likely that that’s what the US Treasury is going to do.

Draconian Penalties

Gold owners who don’t comply are likely to be hit with steep draconian penalties. In 1933, the penalty was $10,000 or 10 years in prison.

Nobody can divine what today’s penalties would be like, but we can reasonably assume that the penalties would be somewhat equivalent.

As in 1933, Unusual Coins Are Still Exempt

Quoting a previous article on the laws legalizing gold confiscations we wrote the following:

“Executive Order 6102 (1933) which forbade the ‘hoarding of gold coin, gold bullion, and gold certificates within the continental United States,’ included a clause exempting certain collectible numismatic coins considered “unusual” from confiscation.   

What was that all about? What was the motivation behind this clause? The answer, though not well-known, is rather simple:the then-Treasury Secretary, William H. Woodin was an avid coin collector. He influenced the clause in a manner that protected his precious metals assets, or shall we say…’collectibles.’”

Now that you understand the historical context behind the “unusual” exemption, let’s cut to the chase.

Which coins are likely not seizable? Before we get into it, note that in order to prevent the government from seizing your gold, it helps to own gold that isn’t registered with (hence, potentially surveilled by) the government or banking system--does that make sense, or does that make sense? Therefore, avoid CUSIP coins by all means. With that out of the way, let’s get to what you wanted to know.

Unusual Coins That Are Likely Exempt From Confiscation

Canadian Mint Wildlife Coins (Struck for 1 year only) in Silver and Gold 

Royal Mint Queens Beast Coins in Gold and Silver 

Australian Commemorative and Restrike coins in Gold and Silver 

Royal Mint Chinese Lunar Coins in Gold and Silver 

Select Pre-1933 Gold US Coins (Encapsulated, Low-Population on Sheldon Rarity Scale) 

Select Pre-64 Silver US Coins (Solid Half-Dollar Rolls & Dollar Rolls)

Rose Crown Guinea Shield Coins From St. Helena (350 Year Restrike)

High Relief $100 US Gold American Eagle 2009, 2015, 2017(African American Liberty) in Gold 

America The Beautiful Coins in 5-Ounce Quarters in Silver 

US Mercury Dime 1/10 ounce Restrike in Gold 

US Standing Liberty Quarter 1/4 ounce Restrike in Gold

2020 Gold Bull Market Coin in Pure Gold and Silver (Anti-counterfeit radial lined)  

The Bottom Line

Although there are several laws that can legalize gold confiscation in times of national emergency, exemptions for “unusual” numismatic coins are still in place. That’s your first line of defense--that is, choosing coins that are considered “collectible” metals rather than “monetary” metals. Owning non-CUSIP coins and bars is your second line of defense against such draconian measures, as those assets are not as easily monitored as precious metals with CUSIP identifiers. With that said, it’s always a good idea to store your metals in a private depository rather than a bank. Stick to these two rules, and your chances of avoiding gold confiscation, should it be authorized, are almost assured.

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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