Can gold confiscation happen in 2011 or 2012 ?
There are quite consistent rumors that our Federal Government will most certainly confiscate gold in 2011 or 2012 or shortly beyond, as soon as the spot price hits $2,000 USD. At this point, the gold confiscation will happen because the US Government won't be able to print money freely anymore, since the US Treasuries and dollar will be substituted somewhere along the way by the SDR, or Special Drawing Right monetary unit of the new IMF world currency made up of the Euro, Yen, Pound Sterling, Yuan, U.S. dollar and possibly gold. The government will need as much gold as it can get in order to chip in its share directly into the SDR or back US Dollar, which at this point will be like every other paper currency. Then the confiscated gold will be sold by the US Treasury for $10,000 per ounce while you get $200 per ounce for your troubles. The 2011 is featured quite prominently in this scenario. I personally don't think it is going to happen and here is why.
Everything is possible and as you know, gold confiscation is nothing new. On April 5, 1933, President Roosevelt signed Executive Order 6102, making the hoarding of gold coins among a few other gold things illegal. Just like that. But in one shot, Roosevelt increased the amount of the Federal Reserve owned gold. He had to do it to enable the Fed to print more paper and extend credit to keep the economy from slipping further.
You see, those days each US dollar was backed by gold, requiring exactly 40% in gold backing, so for every $1 you had, there was 40 cents worth of gold in Fort Knox or elsewhere, backing that promise to pay in your wallet. Today, Mr. Bernanke does not need more gold to issue more credit. The US dollar has been off gold standard since 1971 or close enough to it, so the US Federal Reserve can create money out of nothing as long as the computers and printers are working. The same goes about any other country / currency by the way, it is just the dollar still keeps that reserve status.
While I see no reason for Obama Fed to confiscate your gold, it can certainly try to make your life difficult. Your democratically elected government can be soon taxing the profits from gold sales at 70% or more. Let us face it, if gold spot price goes $2,000 or higher, the US dollar will be in serious troubles and everything can happen.
The infamous Section 9006 of the Patient Protection and Affordable Care Act widely known as Obama Care, amended the Internal Revenue Code to expand the scope of Form 1099, requiring to report to the IRS all transactions of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. That essentially would track every half-ounce gold bullion item you sell or buy, and while there is an almost universal disdain for this amendment, Republican Congress and Democratic Senate can't agree on how to substitute the taxes that would be lost if it is repealed.
The other reason that outright gold confiscation will not likely happen in 2011 or beyond, is that states are taking certain steps to limit the Fed power. Perfect example is a law that was passed last week by the Utah State House, that would recognize gold and silver issued by the federal government as legal currency. And the bill would also exempt the sale of gold from state capital gains taxes. It passed by 47 to 26 margin.
So go and buy some gold insurance. It is taking a break today along with silver, platinum and palladium, and is down quite a bit. Can end up being the most profitable investment you ever make.
Thu Mar 10, 2011 11:03AM | Copyright: www.bad-credit-advisor.com | More in Gold Investing | Comments (0)
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