munKNEE.com Your Key to Making Money
There has been a persistent fear among…owners of gold that…their gold will be confiscated by their governments, as was the case in 1933. For very different reasons, we believe that that danger persists and is growing by the day. We feel that because gold is rapidly returning to an active role in the global monetary system…investors should be aware of the conditions in which this would happen. We also indicate what we feel to be a solid solution for protecting yourself against a gold confiscation. (Words: 1581: Charts: 2)
So says Julian Phillips (http://www.goldforecaster.com/) in edited excerpts from his original article* posted on Financial Sense under the title How to Protect One’s Gold from Government Confiscation.
[Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below to some degree for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Phillips goes on to say, in part:
Gold Has Moved to Pivotal Role in Global Monetary System
…Here is a look at the percentage of gold in foreign exchange reserves held by the central banks of 12 major countries [Also read: [Also read: Gold: The Top 10 Holders & Producers by Country– and 23 Investment Options]:
The on-going acquisition of gold by the emerging world and the firm grip on current gold holdings by the world’s banks show just how important a reserve asset gold still is and how it is becoming increasingly important. Bear in mind too that the bulk of this gold was bought by these banks at around $35 a [troy] ounce. [Read: Gold: What Does a “Troy” Ounce or “18/24 Karat” Gold Really Mean?] At the current level…[in excess of $1,700/ozt], the increase in value of gold from the 1960’s when this gold was bought has been nearly 48- fold, nearly 100% a year. Not bad for an investment?
Tier I Asset Will Bring the Banking System to Gold
Gold’s elevation from a Tier II asset (where only 50% of its value can be allotted to the bank held assets in terms of capital ratio) to a Tier I asset (where 100% of its value can be allotted to bank held assets in terms of capital ratio) is expected to be implemented on January 1st 2013.
At this point, not only will central banks want to hold gold but so will commercial banks. This brings into the gold markets a whole new demand feature, one that could prove a major driving force in the market place. It institutionalizes gold again!
Monetization of Gold Could Happen to Shore Up the Monetary System
The monetization of gold will dramatically change the way it will be looked at by the powers that be. It doesn’t require a dollar collapse for this to happen; it will happen because of falling confidence levels in currencies and the potential danger we might well face in the near future.
Just as the confiscation of gold in 1933 was done so as to rectify a major fault in the U.S. monetary system then, and to prepare the world for the conflagration of WWII, [Also read: James Turk: Here’s the Real Reason the Gov’t Confiscated Gold in 1933] the return of gold now is for the positive aspects gold can bring to shore up confidence in the current monetary system. At that time, the gold price may well be encouraged to rise to such a high level that confidence in the dollar and other key currencies will be restored. This again will enable the banking system to be used as a means to a further unlimited expansion of credit. Gold’s role will be to provide a value anchor to currencies from then on.
Volatility Control Needed
In such an important role, can each government allow its citizen’s to affect the gold price as they want at any time? Could such freedom affect gold’s role in the system to become unstable? It’s more than likely that one or more central banks—perhaps acting in concert?—would want to remove its citizen’s privilege of owning gold once again, as a measure solely to keep the gold market stable. We’re not simply talking about manipulating the gold price; we are talking about keeping the market price with a low volatility.
Please note that while several countries may confiscate the gold of their citizens at the same time, you may also see country after country act separately as the credibility of their currencies become doubtful. This could reach all countries within the global monetary system at one time or another.
The world as we know it cannot afford a dollar or any major currency collapse and no government will willingly sit idly by and watch it happen. They will do all in their power to avert such an event. This means acting before it’s likely to happen, while credibility still remains.
Gold Price to Eventually “Float” Up to a Much Higher “Managed” Level
We’ve lived in a world of currency decay for a long time now…. As we have seen in the last three years, gold has begun to compliment currencies and facilitate their liquidity and the lowering of risk in international loans. It has worked. We expect that the monetary authorities have already made plans to capitalize on this, and it is just a matter of time before the complete rehabilitation of gold is complete.
We do not envisage a “Gold Standard” system because this implies a fixed price of gold. Instead, we see a gold price that must ‘float’ in a stable manner; to achieve this, however, central banks would need to be able to control the gold price to ensure that stability. The price would have to rise dramatically to achieve this, but under central bank control this could be done. Without such measures, confidence in the global monetary system may well move to collapse on a broad, domino-like front, the likes of which we have never seen. It is this objective that will trigger central bank confiscation of its citizen’s gold. There may well be other stated reasons, but this will underlie them.
- Martin Armstrong: There Will Be NO Return to the Gold Standard Without Serious Unrest & Collapse – Here’s Why
- A Return to a Global Gold Standard is Inevitable – Here are 4 Scenarios that Could Cause it to Happen
- Governments Will Want – Will NEED – Much Higher Gold Prices! Here’s Why
- Your Gold & Silver Will NEVER Be “Confiscated”! Here’s Why
- Be Careful! Owning Gold Bullion is a Revocable Privilege in the U.S. – Not a Basic Right!
How Will Confiscation Be Instituted?
Expect no warnings at all. Don’t be surprised if such an event were preceded by denials. Most likely it would happen over a weekend or public holiday so as to catch all off-guard. This would maximise the gold caught in the authorities net.
The objective of such legislation would be to ensure that a nation could reap as much gold as possible into the State’s coffers.
[Below is the sequence of events that would probably unfold to bring total government confiscation of gold about:]- Bank-stored Gold: First would be gold held—on behalf of clients or the banks themselves—by banks. [Nick Barisheff: Make Sure You’ll Actually OWN the Gold Bullion Before You Buy – Here’s Why and How]
- ETF Gold Funds: In the U.S., the prime target would be the SPDR gold Exchange Traded Fund (GLD) [Read: Surprise! A Close Look at GLD Reveals What it IS and is NOT], with more than 1,600 tonnes of gold held by its Custodian, HSBC. For the sake of keeping its license (as we see in the speed it pays heavy fines to regulators) it would simply hand over that gold to the central bank. Expect their clients to be offered market-related prices at the time or U.S. Treasury bonds in payment for the gold. SPDR would then simply inform their clients of what happened, and the fund’s gold would be gone!
- Private Vaulted Gold: Next would be the private gold vaults within the jurisdiction of the monetary authority doing the confiscating. Again, the law would force them to hand over their gold to the authorities, backed up by the relevant legislation or government order and, again, the haul would be substantial. [Read: Vaulted Gold: What Is It and How Does It Compare With Other Gold Investments?]
- Gold Dealers & Clients: Next would be gold dealers and their clients, within the jurisdiction of the confiscating authority. Again, the haul would be good and easily attached.
Under the coming legislation [FATCA] and possibly new supporting legislation, a declaration of assets, including gold by citizens and institutions would likely be ordered.
U.S. Citizen-Owned Foreign-held Gold at Risk of Confiscation
You would think this could only apply to institutions and individuals whose gold is within the jurisdiction of the confiscating authority, but a look at the tenacity with which the I.R.S. has taken on foreign banks hiding U.S. citizen’s money overseas, shows that their tentacles reach all over the world. U.S. citizens living and working overseas –for as long as they have a U.S. passport—are liable to U.S. tax. Any foreign bank operating inside the States is liable to lose its license to bank inside the U.S. if they don’t cooperate with the U.S. monetary authorities. That’s why Swiss banks no longer want new U.S. clients. They have reviewed the proposed FATCA legislation too and are getting ready for it now so U.S. citizen-owned, foreign-held gold remains vulnerable to any confiscation order made inside the U.S.
Confiscation of Gold Held Outside U.S. Unlikely However
The mighty U.S. will not try to impose such a confiscation order on other nations. [Such attempts] would be thrown out of court – jurisdiction is everything – [but they would]…bluster noisily enough to give the impression they would. They never would, …[though, because] no country has successfully tried to impose Capital or Exchange Controls outside its jurisdiction just as no foreign nation would attempt to enforce their laws inside the U.S…..
- Why It’s Exit Time – For Your Gold, Your Wealth and Your Family
- Update: U.S. Currency Control Implementation Has Been Delayed Until Jan. 1, 2017! How Will It Affect You?
The U.S., [instead,]… would simply impose the law on the owner of the gold, not the gold itself. It’s easier to force an institution or individual to transfer ownership of the title to that gold to the government, with a gold market, price-related payment being made to close the deal (in 2% Treasuries?) than to venture into a foreign court on spurious ownership claims. Likewise, where it remains directly under the ownership and control of the individual, extreme penalties for non-cooperation would soon diminish the virtues of his gold.
[You should be aware, however, that] there is a way that has just been set up that we believe will provide [you a way to] avoid gold confiscation without being penalized….[Go here for the details.]
*http://www.financialsense.com/contributors/julian-phillips/gold-confiscation-protection
[Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.]
Related Articles:
There are those who keep insisting that there be a return to the gold standard without serious unrest and collapse. What they do not realize is that such propositions are really a call to arms. Government will not return to a gold standard because it would be a loss of power and overturn the very nature of how our republics (not real democracies) actually function….Words: 308
2. Gold’s Long-term Bull Market Is Intact With Prices Expected to Surge – Here’s Why
Gold prices have been trending higher in the last twelve years and might continue to do so over the next decade. This article is in defense of current gold prices from a money creation perspective. Further, this article completely rules out a bubble in gold. Hence, the expectation is that the long-term bull market for gold is intact and gold will surge higher over the next decade. Words: 914
3. Gold: The Top 10 Holders & Producers by Country– and 23 Investment Options
Gold is one of the rarest metals in the world, and has a long history as a valuable and intensely sought-after element. The precious metal has served as the basis for physical currency for thousands of years, and many monetary systems throughout human history have utilized a gold standard that focused on the precious metal. Exploration and production of gold has become a major industry in regions that maintain significant deposits of the metal, and quests for gold have been the impetus of countless expeditions and discoveries. [Below are a list of the top 10 gold producing countries, the top 10 gold producing companies and a definitive guide as to the multiple options of investing in the metal.]
4. Gold: What Does a “Troy” Ounce or “18/24 Karat” Gold Really Mean?
You have no doubt read countless articles on the price of gold costing “x dollars per ounce” and possibly own a gold ring or some other piece of gold jewellery but do you really understand exactly what you are buying? What’s the difference between 1 troy ounce of gold and 1 (regular) ounce? What’s the difference between 18 and 10 karat gold? Let me explain. Words: 637
In the years ahead we will witness the death of paper money and the reemergence of a global gold standard. This article examines why this transition is inevitable, how it might occur, and how to protect yourself from it. Words: 1086
6. Nick Barisheff: Make Sure You’ll Actually OWN the Gold Bullion Before You Buy – Here’s Why and How
Worldwide economic uncertainty has created a growing interest in precious metals as a way to…protect one’s wealth from impending economic Armageddon…Unfortunately, many today don’t know how to purchase or store bullion, and consequently may find themselves as vulnerable to financial collapse as those who didn’t purchase any bullion at all. [This article outlines what rigorous due diligence is absolutely required when entering into an agreement to buy gold bullion and how it should be stored and why. Don’t buy any gold product without reading this article first.]
7. Governments Will Want – Will NEED – Much Higher Gold Prices! Here’s Why
That governments will want – and will NEED – much, much higher gold and silver prices in the future is counter intuitive, given that they have done everything within their power to throttle back and to keep a lid on bullion prices. Let me explain why. Words: 1300
8. Vaulted Gold: What Is It and How Does It Compare With Other Gold Investments?
The infographic below on vaulted gold explains what vaulted gold is and visualizes key facts relating to investments in gold that is stored on behalf of investors in high-security vaults.
9. Before Buying a Gold-related ETF Check Out These Alternatives
There are many legitimate reasons to trade in gold and its derivatives. Gold has been proven time and time again to be an excellent “safe haven” investment, a holding that will appreciate in value during times of economic uncertainty. As such, gold may offer some valuable hedging and diversification benefits for a long-term portfolio. A number of exchange-traded products offering exposure to gold prices but not all gold ETFs are created equal. Here’s a quick rundown of factors to consider when making an investment in a gold ETF. Words: 1268
10. Surprise! A Close Look at GLD Reveals What it IS and is NOT
The most common misunderstandings regarding the primary gold ETF, SPDR Gold Trust (NYSE:GLD) is that it buys and sells gold. That is not the case. It is just a paper asset. It is not a way to buy gold and have someone else store your holdings for you. It is just an innovative way to “own gold.” [Below I outline more of just what GLD is and is not:] Words: 1470
11. All Gold & Silver ETFs Are NOT the Same: a Lease vs. Own Comparison
I have always been leery of the two big exchange traded funds, SLV and GLD, because they lease the gold and silver that they sell you. I much prefer the ETFs SGOL, CEF, PSVL and PHYS which actually own the gold and silver they sell you and store it for you segregated vaults. Words: 717
12. All Gold and Silver ETFs are NOT Created Equal! Here’s the Best
Whole oceans of ink have been spilled detailing the good and not-so-good points of the closed-end fund CEF (Central Fund of Canada) and the twin ETF’s GLD (SPDR Gold Trust) and SLV (iShares Silver Trust) funds. My goal here is to distill the salient points down to the fewest words possible to help make your due diligence task somewhat less…well…tasking. [Let’s go!] Words: 650
13. Protect Yourself From Inflation With Gold or Precious Metals Funds
Investing in some form of precious metals is the preferable way to protect oneself from rising inflation/decrease in the value of the U.S. dollar and here are 10 ETFs and ETNs and 5 mutual funds to do just that. Words: 879
14. Your Gold & Silver Will NEVER Be “Confiscated”! Here’s Why
People ask me on a consistent basis if I think the government will confiscate their gold and silver coins if times get rough. I feel there is little chance of this happening, and here’s why. Words: 390
15. James Turk: Here’s the Real Reason the Gov’t Confiscated Gold in 1933
FDR confiscated American’s gold for the same reason Lenin confiscated it in Russia and Hitler confiscated it in Germany, namely, to get it out of the hands of the people. [That view is contrary to the prevailing belief that such was done] to re-establish confidence in the dollar. [Let me explain the background of this confiscation and my rationale for coming to such a conclusion.] Words: 815
16. Be Careful! Owning Gold Bullion is a Revocable Privilege in the U.S. – Not a Basic Right!
The laws of gold confiscation are very clear in the U.S.: During any time of national crisis, it becomes illegal to buy, sell, or “hoard” gold bullion in any form. It is delineated under an Executive Order and can be re-administered as quickly as the assets in your checking account can be frozen. The penalties for violation are 10 years in prison, $10,000 fine, or both. Words: 821
17. Will U.S. Government Seize Private Gold and Then Devalue Dollar – Again?
Imagine living in a country where the government suddenly decides to make it illegal to hold a certain type of asset, and goes on a systematic process to relieve its citizens of such an asset? Such actions happen in wartime and by politically-corrupt regimes but how about private-asset seizure in the good old U.S.A.? Well, it has happened before. [The 64 trillion (in keeping with the times) dollar question is: “Will it happen again?”] Words: 585
Do we really honest-to-God no-fingers-crossed cherry-on-top believe that the powers-that-be will simply allow us to mosey up to the cashiers cage and redeem or convert our Gold for whatever monetary unit reigns supreme or is created [should our current financial system and currencies collapse? As such,] IF there comes a time when the best move forward is to sell most of our Gold and switch to another asset class, one more likely to survive the transition intact, will we be able to see this as obvious and a no brainer? [Let me explain what could well happen and the effect such a development would have on all things Gold.] Words: 3037
19. Internationalize to Keep Your Assets Safe From Your Out-of-control Government – Here’s How
The politicians will do whatever they find convenient, because there is no longer anything to stop them – not an electorate that is jealous of its freedoms and certainly not the Constitution, which is now just a playhouse for judicial imagineering. No one can know what’s coming next from the government and the financial system it has fostered, but for many of us there is an awful suspicion that we are not going to like it. Most Americans still have yet to stick a single financial toe across the border, but more and more are considering it [and in this article I outline 10 ways to internationalize your assets to provide you with some much needed protection as the future unfolds.] Words: 3923
20. Why It’s Exit Time – For Your Gold, Your Wealth and Your Family
The United States and most of Europe…risk an eruption and collapse of the mountain of unsustainable sovereign debt built up over the last two decades. Frankly, the U.S. dollar and national debt situation is so dire – and our means to contain a sovereign debt crisis so limited by multiple wars and Washington’s debt and political incompetence at home – that anything could happen, almost overnight. [The best] America and most European governments and the central banking elites, which created the criminal sovereign debt fiasco, [appear able to do is] try to buy more time and delay the inevitable. This inaction means the threat of an immediate US debt and dollar collapse cannot be ruled out. Therefore, readers who have not protected themselves certainly have cause to worry because now could be too late. [Let me explain further.] Words: 1689
21. Beware: Official U.S. Government Price for Gold is Only $42.22/oz.
The United States has seen four different gold confiscations — the last of which was in 1933. Few people realize that when the freedom to own gold was restored in 1972, the President retained the power to require us to surrender our gold which he can do again any time (probably on a Friday) with the mere stroke of a pen. That means all confiscated gold could possibly be compensated at only $42.22 per 1oz. and not at the world market price. Don’t take this decision lightly. It was another blatant warning that the government may be contemplating grand larceny — AGAIN. Words: 1740
22. Phase 5 of Economic Cycle Fast Approaching: Are You Ready?
What phase are we in today? We are in the middle to late stages of Phase IV and Phase V — monetary reform to inflate away mountains of debt — is right around the corner! Words: 1864
Long the champion and beneficiary of free trade and the free flow of capital, the United States has enacted legislation that becomes effective, in part, on January 1, 2014 [revised from January 1, 2013 date mentioned in the original article] that a growing number of commentators and professionals believe could be the start of capital controls in America and have serious unintended consequences. Let me explain…… Words: 1252
If this happens, as I’ve mentioned before, expect to see those in the know, shift their wealth to other PM’s before the Gov’t. GRAB happens. If I had millions, which I do not, I’d be looking at copper, rare earths and fresh water rights!