Posted with permission of Mark Nestmann You have my permission so long as a full citation is provided as to the name of the article, the author, the date originally published and a link back to the article. Also, please send me a link to the discussion group where it would be posted-- Best regards, Mark Nestmann LL.M. international tax law, Vienna University of Economics and Business Administration (2005) President, The Nestmann Group, Ltd. Wealth Preservation Solutions 2303 N. 44th St. #14-1025 Phoenix, AZ 85008 USA Tel. / fax (USA):************** E-mail: assetpro@nestmann.com Web: http://www.nestmann.com http://nestmannblog.sovereignsociety.com/2008/02/keep-your-han-1.html February 04, 2008 Keep Your Hands Off My Gold! [Part I] Not many Americans are still living who remember the day that President Franklin D. Roosevelt declared that the "hoarding" of gold and silver bullion by "subjects of the United States" constituted a "serious emergency." To be exact, the date was March 9, 1933. And what to do in a serious emergency involving "hoarding" of gold and silver? Confiscate the offending "hoards," naturally. To be fair, Roosevelt only ordered the partial confiscation of gold and silver bullion. When "subjects of the United States" (which included my grandparents) turned in their bullion, they received U.S. dollars in return, at the official price of US$20.67/ounce. Once the operation was reasonably complete, the confiscatory part occurred: the government unilaterally revalued gold at US$35/ounce. The revaluation was possible because this operation occurred in the days before currencies traded on the open market. Currencies were fixed in value, generally in terms of specific weights of silver and gold. The U.S. dollar, for instance, had an official value of US$20.67/ounce, set in 1834, until Roosevelt devalued it 40% in 1933. The question I'm often asked is, "could gold (and silver) confiscation happen again?" And, if so, "what can I do about it?" The answer to the first question is, "yes, definitely." The legal authority Roosevelt used to confiscate your parents' or grandparents' gold and silver—the "Trading with the Enemy Act"—remains on the books. Indeed, in a remarkable letter written in 2005, the Treasury Department claimed that it had the power to confiscate gold, silver—and everything else. (Click here for details). What might lead to a second gold and silver confiscation? President Roosevelt's issued his 1933 emergency order when the U.S. dollar was still backed by gold. At that time, both individual citizens and foreign central banks could exchange U.S. dollars for gold. Today, no holder of U.S. dollars is legally entitled to exchange their dollars for gold at the U.S. Treasury. Indeed, only a small minority of U.S. citizens own precious metals in any form. However, if a day ever comes where foreign countries demand that the U.S. Treasury pay its debts in gold—not in U.S. dollars—a second confiscation could occur. I don't see a second confiscation as particularly likely, simply because so few Americans own any gold or silver bullion. The takings would likely be so slim it simply wouldn't be worth the effort. Answering the second question is a lot harder. Tune in tomorrow for my thoughts on this matter. Copyright © 2008 by Mark Nestmann Keep Your Hands off My Gold! [Part II] In yesterday's blog entry, I described the legal precedent for the U.S. government to again confiscate privately held gold and silver, as it did in 1933. What are the best ways to protect yourself against such an event? One of the most important precautions is to not keep precious metals in a U.S. safety deposit box. President Roosevelt ordered all safety deposit boxes sealed when he issued his March 9, 1933 gold confiscation order. My grandparents couldn't retrieve their holdings from their safety deposit box until government thugs had rifled through it. Also, beware of investing in U.S.-based exchange traded gold funds. In the event of a second gold confiscation, Treasury agents would clean out any U.S. vaults these services used almost before the ink was dry on the emergency order. Some coin dealers claim that numismatic (collector) coins would be exempt from any future government confiscation of gold and silver. This claim is based on the terms of Roosevelt's 1933 emergency order, which specifically exempted "coins having recognized special value to collectors of rare and unusual coins." Some firms say that premiums of at least 15% over the spot price of bullion magically turn coins "numismatic." This notion is based on a proposed federal regulation issued in 1984, but never adopted. Other dealers claim that coins 100 years or older are automatically converted to numismatic status. It's beyond me why anyone takes these claims seriously. Why would a government that stole its citizens' property in 1933 be consistent when it does so again? Nothing obliges the federal government to pay by the same set of "rules" it imposed 75 years go. Nothing obliges the federal government to honor the terms of a proposed regulation issued a quarter century ago. And naturally, those rules can change at any time. However, should such an exemption again come into existence, U.S. law (which could naturally be swept away by legislative or executive fiat) does stipulate which specific coins are "numismatic." The 1985 legislation that authorized production of the coins now known as gold and silver Eagles stipulates that these coins are to be considered "numismatic items." Therefore, if you believe that numismatic coins would be exempt from a future gold (or silver) confiscation, you should consider purchasing the only coins specifically defined in U.S. law as "numismatic." In addition to gold and silver Eagles, keep some gold and silver bullion outside the United States, preferably in a safety deposit box or a private vault. That way, if a second confiscation occurs, your holdings won't be immediately affected—although I suspect you'd still be required to comply with the order. Copyright © by Mark Nestmann
Last time they passed that there was an exception for gold coins with numismatic value. So get coins and not bars lol...
Howdy, Well, as the author points out, the gov't can willy-nilly pass any sort of law they wish and in the process define 'numismatic value' in any way they choose. Methinks they would exempt collectible coins to some degree, but just where the line would be . . . . Author mentions those bullion coins with a numismatic premium greater than 15%. He also mentions those older than 100 years. I would think that coins that were slabbed could be justifiably assumed to have some numismatic value. You could also make the case that any Proofs would have value. On the other end of the spectrum, we could safely assume that generic rounds and ingots would not be safe. And contrary to the author, I would NOT include gold and silver eagles as being exempt. Cripes, they were invented strictly to serve the bullion market and collecting them as been secondary. However, let me go on record that I really don't trust the gov't NOT to attempt to confiscate all the bullion. and so it goes, rono
Yes they were, however they are also defined by the US Congress and by the US Mint as numismatic items.
It's funny, our Credit Union advertises the fact they they are a secure alternative against such government action... Take Care Ben
