This question is much debated these days among those who would want to prepare for some sort of economic collapse. I believe most people would say the US government will confiscate gold.
However, in my own studies I have come to the conclusion that I must agree with Jim Sinclair. Governments will confiscate cash, not gold. If you don’t visit his site on a regular basis, you should. He and his partners give commentary on what is really going on behind the scenes on financial news. I have been following his site for over a decade and he has been correct almost all of the time. I link his site on this site. To gold experts he is considered the gold and monetary expert.
Jim wrote passionately, twice recently, that the US Government will NOT confiscate gold. He said in one post,
There was much to be gained by gold confiscation in the 1930s because we were on a gold standard. Without taking you into complicated explanations, please accept the true fact that gold in the 1930s was the only instruments of QE. It is not now nor will it be again in the future. There may be more to gain by a significant price of gold in the new reserve currency. There is no reason except some sort of fear of revenge to consider confiscation of gold, gold shares or the gold ETFs now. Those that worry so much about this do not really understand what gold was under a gold standard.
Why was energy not confiscated at $145 crude? Why not confiscate Apple at $750? Confiscation is NOT going to occur, nor will the gold bullion or gold share profits be confiscated via punitive taxation. It serves no monetary purpose and just might injure the efforts for a new reserve currency that is sure to come.
Back in 1930, all Americans had gold as money. Daily pay was $2 per day (2 silver dollars containing 1.5 ounces of silver) and two weeks’ pay (about ten days) saved up for the average American was a one ounce gold coin. The Fed was created in 1913 but the Fed had not yet asserted its will by making all Americans use paper money. In 1933 the Depression was in full swing and the economy needed more cash – as Jim said above that’s the bottom line – more cash was needed. So they confiscated all the gold and then raised the price of gold (from $20 to $35 per ounce) so that more paper money could be issued as represented by the gold. It was indeed the QE back then.
Jim wrote again in another post,
Your fears…are based on totally wrong reasoning and misunderstanding. Gold was not confiscated because it was going up in price. Gold’s order of confiscation came as a tool of monetary stimulation in order to create monetary creation in order to attempt to increase employment.
The government didn’t take gold to be greedy – they did it to increase the availability of cash to keep the economy running and keep the banking system from collapsing. Sounds like what they are trying to do today, is it not?
So far since 2008 we have had three QE’s (QE is Quantitative Easing – the “printing” of money and buying of debt by the Fed). The western banking system is still sinking. Instead of letting it crash and start over, the toxic assets known as derivatives are kept on the books and the banks are still being propped up. So what will be done for a future QE?
The western governments will not confiscate gold. Only 1% or less of the people own it which is far different than 1933. No, to keep things afloat the western governments will confiscate cash. It’s already happening. Bill Holter, a Christian and financial expert partnering with Jim Sinclair, has written about it here. Bill writes,
First and foremost, those in power understand the viability to the current system is now very limited. In other words, they know the system is going to come down. On one hand the West has already passed legislation for “bail ins”. On the other hand, how best would it be best to corral capital into these banks they know will be bailed in? Now your putting the dots together!
How would governments confiscate cash? One way is by bail-ins – where banks just take some percentage of the money in your bank account. A second way is by forcing you to take all the investments in your 401k, sell them, and buy US Treasuries which in the end would become worthless.
A third way is the most effective: literally make cash illegal to have and use. By doing this you are forced to have all your savings in a bank so that all of your excess wealth is at the mercy of the government and banks. You can use the money in your account for transactions – to pay your rent or mortgage, to buy gas and food. But to take any cash out would not be possible.
This third way, cash confiscation, has a twin called negative interest rates. Perhaps you’ve heard of them. Germany is already using them. Some banks charge -0.1% interest. That’s right. If you have $1,000 in your account the bank takes 0.1% ($1) at the end of the year. You get to pay the bank to keep your money! This is indeed an upside down world. Eventually, if negative interest rates are extreme enough and you don’t add value to your bank account it will eventually go to zero, i.e. cash confiscation. This can also be thought of as a wealth tax.
In this way, the banks would have more money to keep their balances from looking like they are insolvent. This would be the new QE. So forget gold. Most people don’t even know you can buy it or how to buy it. The American people might have a few thousand tons – worth today about $50 billion. But the banking system needs twenty times that and would get it by cash confiscation.
Please read the posts and articles linked to this post and give the some thought. Please give these matters prayer. When the Second Signpost finally arrives, and the western banking system is coming down with the destruction too of the credit system, western governments will be clawing their way to survive and coming up with all kinds of new rules to grab as much of your wealth as it can. US and European governments have become so big and bloated, they have taken on a life of their own. The most important thing to any of these governments is not the people they govern; it is the survival of that government as an entity.
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