Pre 1933 versus bullion - scare tactic?

OK, I had a conversation with a dealer in gold who ran me through the "three different types of gold" spiel.

Mostly it was either gold bullion, low quality pre 1933 coins and high quality pre 1933 coins.

He was making a case that:

a) there is a riks of the govt confiscation bullion again.

b) he claims the returns (forget period of time) are like 1%, 5% and 10% for the three types of gold. Obviously the pre 1993 high quality returned more per the discussion.

I would be curious the opinions of this board regarding the real chances of them confiscating gold again, and the relative value of investing in the different types of gold.

Thanks.

 

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I can't imagine that bullion would be confiscated again. When it was, we were in a very bad depression (much worse than now). Plus, and even more importantly...our currency was backed by bullion. It no longer is.

 

Frankly not a living soul knows what or if the government would do. For all we know whatever government is in place as the SHTF can do whatever it pleases at the point of an M-16 in your chest.

People have been running around spouting off all sorts of scenarios that are not worth your time or effort. Frankly some power may come along that recognises all gold as strictly bullion - happened before and most collectors that have any accumulation of gold have at least some that might have been some ancient treasure or coin at sometime, but that got melted down by thieves or a government looking strictly for gold.

 

I admit I was put off by the inference that I should be investing in high grade coins as MUCH better than buffalos.

Any comments on that?

 

Yeah, run, do not walk, run.

 

Agreed. IMHO, investing in bullion is much safer than investing in rare and high grade coins. Historical trends with bullion usually show an upward movement...the same cannot be said about coins.

 

It was a real simple matter for the government to confiscate gold in 1933...because most of it was in the banks. That's not the case today...and I believe it would be much harder for them to confiscate anywhere close to the amount of gold that they were able sieze to in 1933. If yours is in the safe deposit box at the bank...they can take it if they get a wild hair.

Nightowl

 

How would they know what is in a safety deposit box?

 

There are scanning devices that reveal what the contents are. Then they drill them.

But in my opinion, none of this should be among the top 100 things you consider when buying a coin. Find a new dealer with a tighter grasp of reality.

 

OK It isn't in my list of biggest concerns but interesting that they have the technology to determine if you have gold. One wonders however how they would differentiate between my few gold coins and my wifes large gold jewelry collection.

 

When the government confiscated gold back in 1933, they sealed all safety deposit boxes. They could only be opened in the presence of an IRS agent so it was impossible to hide gold in them unless you wanted it to remain until the ban was lifted (and who knew when that was going to be).

 

Personally....I think security should be somewhere in your top 100 concerns when buying anything of value.

Why do you think people didn't trust banks after the market crash and ensuing events? The whole seizure of privately held gold thing was a HUGE violation of personal liberty....in the name of patriotism.

If you think there's some kind of sanctity in your safe deposit box, you might want to study up a bit.

Nightowl

 

Probably not. But the probability of the government drilling into your box is far smaller than the probability that the jewelry will be lost at home due to fire, theft, earthquake, plane crash, getting eaten by a pet, or any one of innumerable other ways.

 

The Rockefellers, Vanderbilts etc. wised up to what was coming down the pike in the late 1920's and shipped their gold to Europe.

 

One should have thier gold in a fire-proof safe, and the safe needs to be hidden. This means don't tell your wife about it. I know a guy who had his gold and cash stolen by his wife. Then she sent a moving van to take all the furniture. If you totally trust your wife, that's fine, but she could shoot off her mouth and her nephew could steal it.

 

I didn't know that...but I'm not surprised.

 

Except for the 2008-W fractionals....if they never make these again it would be interesting to see what their value would be 50 years from now.
Do like I do, collect both.

 

Actually the major players in gold holdings back then lost very little if any gold in the recall in 1933, it was mostly little old ladies that turned in their "prized" $2.50 etc. Some part of me thinks that people were a bit less sophisticated back then and took what the government doled out like spoon feeding, but then we could all point out examples of the very same behaviour today.

 

I have no doubt you are correct. One thing that I don't understand is...how did so much of our gold coinage survive the recall? There are many US gold coins that are only worth melt or slightly above...yet all these coins would have been subject to the recall in 1933.

 

Because quite a bit of it went to Europe before and after the recall. The gold that went to Europe afterwards reflected central banks over there withdrawing their gold holdings in the USA and taking their payments in USA gold coins. When you have gold in a known form, why bother to melt it when it is already coined and doesn't need to be assayed etc over and over again? So the banks over there just held onto the gold in coin form and then started releasing it later in some of their gold selloffs even into the 1990's.

I remember in Paris you could walk into Banque Paribas and buy gold coins at a small percentage over melt. Of course they were not particularly interested in you going and cherry picking for nice BU $20s, and preferred you buy in quantity. At that time though, I thought USA coins were rather useless to me in Europe - since I then viewed gold more as a tangible emergency funding anyway - so I kept my holdings in Napoleons and Vrenellis, and a few Dutch 10 guldens.