I personally think that worrying about gold confiscation is an attempt to fight the last war so to speak. It's shooting behind the duck by about 80 years. Before gold was confiscated in 1933 it was held in concentrated locations by businesses and banks who thought of it as money and who held it on their publicly visible balance sheets as financial reserves. Yes, some wealthy people had gold in their safe deposit boxes which was confiscated but this was mainly theater because the amounts there were fairly small relative to the easy pickings at corporations and banks. I think the government sent out the executive order and publicly threatened private individuals mainly as a smoke screen for the robbing of the corporations. If people themselves were under attack from government they would be less inclined to speak up on behalf of corporations. In fact, the one case which was tried whereby the government tried to penalize a private citizen for not handing over his gold resulted in a loss for the government on a technicality. If the government is really serious about anything then no technicality is going to matter. Thus, I conclude that government was not serious about targeting individuals.
Because of the last government rip-off of the economy, corporations no longer carry gold on their balance sheets as reserves. The gold has been spread around a bit more now thanks to online metals dealers like Monex and Kitco, etc. This means that confiscation is no longer an easy matter. People have learned from the last rip off and are not likely to fall for it again. Nobody is going to surrender their gold if ordered to do so and with the economy and joblessness in such a bad state attempting to steal people's gold could actually touch off insurrection. The government could go looking for cold cash in the form of gold coins and instead be given hot lead. Keep in mind that government is lazy and greedy. Doing a lot of work and taking a lot of risk and spending a lot of money to collect broadly dispersed gold is not something it will sign up for.
While a significant part of the gold is distributed widely I do acknowledge that there are some gold concentrations like the GLD ETF. While it would be cost effective to steal this gold it would also carry significant risks. For example:
- GLD, a paper investment that is supposed to be backed by physical gold, has diverted money away from the physical gold market. As a result, physical gold in your hands is only worth about the same as the paper promises that GLD represents. The very notion that something in the hand is worth the same as something in someone else's hands during times of crisis is insane but that's the reality today. However, if government confiscated all of GLD holding and cashed the holders out then what do you think they would do with the cash they received back? That's right, they would go to the black market and try to buy their gold back. But at that point they would find that physical gold no longer trades at the same price as paper promises. Government confiscation of GLD would send the black market price of real, physical gold into the stratosphere, perhaps $5k per oz or more. This is completely contrary to what government wants! It would show even more than ever that people are losing faith in the government's fiat currency.
- Several very knowledgeable people contend that the GLD fund does not, in fact, hold all of the physical gold that it claims to. A significant part of the GLD holdings, they assert, are paper claims on gold. If government stepped in and demanded all their physical gold, then GLD would have to go to the market to buy whatever portion of their holdings that were not physical like they have been claiming them to be. The result would again be a dramatic rise in the price of physical gold which in fact could spike much higher than $5k/oz because the executives at the GLD fund would fear prosecution if they didn't hand over the gold stated on their balance sheet. In that event they would expend every resource (possibly to include massive borrowing) acquiring gold in a hot hurry from a marketplace of tight supply. Again, the end result would be contrary to government desires. The dollar would be exposed to be the worthless POS that it actually is by the skyrocketing price of gold. Also, whatever derivatives the GLD fund might be using in place of real gold could default and that could set off a chain reaction of defaults that could have implications far beyond the gold market. The exact risks are unknown but I'm sure the government recognizes that significant risks exist. Contrary to popular opinion, government is not stupid. It's just corrupt and greedy and crafty, and that sometimes causes it to look stupid as it rips us all off. But a careful review always reveals that we are the real patsies in the deal, not them. So who, again, is the stupid one?
- Even at $1500 per oz, all the gold reserves of the US (about 261.5 million Troy oz) are only worth about 392 billion dollars. In other words, far less than the interest payment for one year on the annual debt. In other words, gold has been relegated to the status of an economic gnat by the con men with their dishonest fiat currency (Note: gold is still very cheap.). Assuming that the people privately hold a similar amount of gold as the government does (probably a significant overstatement, but there is no way to know for sure) $400 billion is just not enough money to be worth going after given that trying to pry this money out of the hands of citizens would be very costly and very likely cause a civil war. To put this into perspective, the US government admitted to "losing" 2.3 trillion dollars of the defense budget just one day before the terrorist tragedy of 911. Unfortunately, we never got to the bottom of that "loss" because one of the terrorist aircraft happened to take out all the Pentagon computers which were tracking this budget mishap (how very convenient). Why would the government risk civil war over $400 billion when they are willing to just forget about $2.3 trillion in fraud?
Unfortunately, many people who think gold is risky because of past confiscation happily store all of their retirement earnings in government controlled accounts whose buying power is just plummeting every single day. That's what they should really be concerned about because there are trillions of dollars of easy pickings for the government to steal and they don't even have to go door to door or stare their victims in the face to steal it. All they have to do is have con man Bernanke fire up the printing presses to piss away the buying power of your 401k or IRA which is safely locked away from you by government regulations. Sorry folks but the big, easy to steal money is in your retirement account, not in publicly held gold coins. Government will go after the easy money. Strike that. Government has been going after the easy money. Each time Bernanke prints up another trillion it directly waters down the buying power of your IRA or 401k. You can see the effects directly in the rising prices of food and energy today. On the other hand, crazy, risky gold is self-compensating for the government theft and fraud. Wake up people, we are being conned and that makes we the people part of the problem. Without a willing patsy there can be no con.
