Mr. Denninger and Gold – Part Deux or: A Rebuttal to All Fiat Money Apologists

Gordon_Gekko's picture

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huckman's picture

I wish Karl Denninger would run for president.  He is a gifted genious.  Not only that- he's honest.  His popularity growth rate is shear Guinness.

Congrats Karl on your 3 year aniversary. 

Gordon_Gekko's picture

A Narcissistic BUFFOON is what he is. 

robert_paulson's picture

Follow-up to previous post: The relationship between real rates and gold price can be confusing, but think of it this way.  Day-to-day, fiat is the more practical and investable currency, while in the long run gold may be a better store of value.  But if real rates are high, then it makes little sense to "store" value, since the value can be invested and grown at a rate that exceeds inflation.  Thus, "storage" of value in gold is sub-optimal in the short-term and demand for gold goes down, as gold is converted into fiat for the purposes of investment.


But if real rates are low/negative (as they are currently), then it makes no sense to convert value to fiat, since low/negative real rates make it difficult to grow this value through investment.  In this environment, it makes sense to store value, and thus demand for gold rises proportionally to a decline in demand for fiat.  Thus, the price of gold goes up.


If we do see significant inflation (which is unlikely in the next couple years) while still having ZIRP, then real rates will be significantly negative and the price of gold will skyrocket.  But if rates are raised significantly (IMO unlikely in the near future) while inflation remains low, then the price of gold in fiat will almost certainly decline significantly.

ToucanSam's picture

While your comment makes sense in a "normal" market, it ignores GG's main premise, which is that the price of gold is also directly affect by the confidence in fiat currency itself, hence the cause for hyperinflation.  It's not simply the increase in paper money supply that is at issue, but rather the confidence in that paper that is the real issue.  The confidence in the Euro is falling like a rock, which has caused the demand for gold over there to spike, and if not for the Central Bank's intervention in the Euro freefall, the price of gold could have spiked harder.

In a functioning market, real rates and gold prices, along with the inverse correlation with the dollar, would be presumed.  However, in a currency confidence crisis, it's not about the interest rate or supply that matters.  It's whether people think fiat money is still worth the paper they're printed on.

We're dealing with a huge soverign debt issue and the possiblity of a currency failure, not interest rate issues.  If it was all about interest rates, you'd think people would be clamoring for Greek debt at the current spreads!

akak's picture

That's all a fine hypothetical argument --- if this were 1980.  However, the circumstances have radically changed.  My point was simply that we CAN NOT see interest rates rise high enough to suppress the price of gold, a la 1980-1981, without a corresponding explosion in the interest payments on the massive federal debt, hence the federal budget deficit, hence further borrowing pressures, hence an inevitable collapse of the dollar.  The fedgov has painted themselves into a corner with all their debt, a corner in which their every action can only lead to a continued rise in the price of gold.

StychoKiller's picture

Hear hear!  When a state such as NY is "Borrowing" from a pension fund to "Pay" it's obligations to the very same pension fund, Govt is spiraling into the ground!

G. Marx's picture


If fiat money is the best option, then why does the state need legal tender laws? If legal tender laws are needed to make the citizenry use fiat money, then how good can fiat money actually be?


These are two question Karl will never answer. Two of many, many questions.


I quoted Murray Rothbard in the metals forum (from Murray's writings about the gold money era in the US) and was punished for doing so. The man has a small mind, he is a child.

robert_paulson's picture

Increase in the money supply is a necessary, but not sufficient, cause of hyperinflation.  Hyperinflation cannot occur (in the real world) without a corresponding destruction of productive capacity.  You need both dramatically increased supply of currency and dramatically decreased supply of real goods.  (Note that in the two most frequently cited examples of hyperinflation - Weimar Germany and Zimbabwe - there was a massive destruction of productive capacity.)  The excess capacity in the U.S. and the world is currently so great (and will remain so for the foreseeable future) that hyperinflation is simply not possible.  Hyperinflation is "runaway" inflation, but with surplus productive capacity, the demand for goods over fiat will reach equilibrium (albeit at an inflated level) and thus cannot "runaway".


Although I agree with you and disagree with Karl on most points, but he is correct that gold is not necessarily a good inflation hedge.  Generally, gold is better thought of as an "uncertainty hedge" or a "currency of last resort".  Specifically, the price of gold is most directly related to real interest rates.  Low/negative real rates = high gold prices.  High real rates = low gold prices.  Inflation is one-half of the equation here, but only that.  Even if inflation is high, if real rates are rising significantly then the price of gold (in fiat) will get hurt.



Snidley Whipsnae's picture

"Hyperinflation cannot occur (in the real world) without a corresponding destruction of productive capacity."

Discuss this premis with Volker! The US was on the road to hyper inflation before Volker jacked interest rates in the 70s...and, there was no 'output gap' at the time! Volker knew where the dollar was headed if he failed to jack interest rates and he also knew that he would create a recession. Volker chose the lesser evil.

Hyper inflation is primarily a LOSS OF CONFIDENCE IN THE CURRENCY BY THE PEOPLE! If you can't remember this, tatoo it on the back of your hand! Once confidence is lost the people will quickly spend currency into circulation (increasing V, the velocity of money) very quickly...Where MV=PQ.

If Bernanke thought hyper inflation impossible without an 'output gap' he would not have bottled up the enormous amounts of FRNs and Treasuries, created during QE, in the big banks and in GSE MBS purchases. If Ben thought hyper inflation could not happen without an output gap he would write more checks to be dispersed to those citizens living on Main St, stimulating the economy directly.

To be fair, Ben has another problem. The checks that were written directly to citizens were, in large part, used to pay down debt...also deflationary.

But, if Ben were to carry out his 'helicopter drop' of money, hyper inflation would ensue even though there was no output gap. People seeing money falling from the sky would know immediately that it was worthless! Not only that, Ben would have to pay enormous interest rates in order to sell treasuries.

Gold is money and gold is a bridge over troubled waters. We are without doubt in troubled waters. If one is interested in preserving their purchasing power, knowing that all fiat currencies have without exception failed, then some gold is a good insurance policy...and no piece of paper will substitute.

dumpster's picture

another attempt to explain golds   robot paulson

on a scale of 1 to 100.. a 1...

where does all this disinformation about gold come from ?

a vague hole ..


akak's picture

If we were to see real interest rates exceed the real rate of inflation today by any significant extent, the federal budget deficit would absolutely explode due to the interest payments on the federal debt, and the dollar would shortly go along with it.  You're not in Kansas anymore, Toto.

taraxias's picture

Awesome stuff from you GG.

Extremely well done.

Many thanks for posting.

LetUsHavePeace's picture

Dear Gordon:

Some of us were not given the choice of exile to the gold-bug forum by Mr. Denninger but were thrown off the island forever. We committed two sins. The first was to suggest that the Constitutional gold standard - the one that is still there in Article I Section 8 - presumed that the U.S. government's Money would be Coin or currency exchangeable on demand into specie. The second sin was to suggest to Mr. Denninger that he was wrong to label the gold-exchange standard put in place by the European and American central banks World War I as "the classical gold standard" since the gold-exchange standard lacked the essential element that allowed it to work: holders of currency could demand specie in exchange for their government paper. After the Great War the United States was the only country left that allowed people to present currency for exchange into specie. All the other countries on the gold exchange standard has currency controls and other restrictions that prevented holders of their currency from demanding coin.

Mr. Denninger is flat wrong to argue that the convertibility of the U.S. dollar ended with Nixon. The convertibility ended when Roosevelt used the war powers left on the books from WW I to make the ownership of gold itself a crime under the Trading with the Enemy Act. That was a permanent default - the only one in U.S. history. Before then, there had been two suspensions - the Civil War and World War I - but no one at either time expected the Federal government to permanently repudiate the Constitution. Even the Confederacy promised to exchange its paper for gold. No other monetary regime was conceivable because, as the Founders knew, any system that allowed the government to convert its own debt into legal tender would bring ruin on the United States just as John Law's experiment had brought ruin to our strongest ally. The Reserve Act of 1907 itself promised to adhere to the same Constitutional standard; nothing in the Act was to be construed as altering the right of holders of Federal Reserve bank notes to demand gold in exchange for their currency.

But, you already know this. The tragedy is that so very few people do. All the best.

Your anonymous contributor

TraderV's picture

"but no one at either time expected the Federal government to permanently repudiate the Constitution"


Just goes to prove that there is nothing more permanent than a temporary government program. Which is quite scary given how many temporary programs have been initiated in the past 2 years.

SamThomas's picture

I really dislike seeing guys who should be natural allies hammering each other.  

OK, Karl has a blind spot about gold which I find inexplicable.  But his site is one of my top three since he is a brilliant analyst, writes intelligently and profusely and is one of the really original thinkers out there in economic-blogger-land--certainly in the top 1% in my completely subjective, amateurish and unscientific survey. 

I think Gordo and Karl need to agree to disagree and move on to topics in which they can dedicate their considerable intellectual bandwidth more profitably for everybody, and with less animosity between themselves. 

Silversinner's picture

Don't agree with you samthomas.Would love to see this epic battle of minds to continue.Think its very profitable at

least it is for me.


Silversinner's picture

Big,big complements and respect to you GG,just keep on educating the people.Would love your opinion on this article.


RockyRacoon's picture

Excellent post as usual, Gordon.  I don't see much purpose in expending the energy that you did to refute Karl's "arguments".   They are not arguments, this would imply forethought and solid logic.   Karl contradicts himself mercilessly -- as you point out.  I believe that Karl suffers from a messianic condition of some sort.  It is, in common parlance, a control problem!  He wants those in power to "do right" so things will run smoothly.  It's a dream world.  It won't be happening.  That's what drives him nuts.  Please don't get sucked in by his delusions.

StychoKiller's picture

Perhaps Karl needs to check his premises:

"Government is not reason, it is not eloquence -- it is FORCE"
George Washington

akak's picture

And don't forget the rest of the quote!

"... Like fire, it is a dangerous servant, and a fearful master."

dumpster's picture

Gordon good post.. denninger has had a running feud with Jim Sinclair for some time

dumpster tried to engage him via e-mail one exchange and he has you on a list that will not go through.

especially the part where he said you cant have sex with gold.  Dennenger probably has no sex life , but tried gold and he is right .. lol





Shameful's picture

I would feel better about pro dollar arguments if anyone could point to a long lasting strong fiat currency.  When someone, anyone, has the power to make a chit that costs nothing and represents wealth they will abuse it.  History has proven this time after time.  If counterfeiting and printing money were so good, then why not legalize counterfeiting?  As it stands now it's only to counterfeit if you are part of a special class of citizens.  Gold is hated because the physical is rough to counterfeit, thank God for paper gold!

Also slavery was never abolished.  Private slavery was abolished.  I cannot own you and you cannot own me, but Uncle Sugar owns both of us.  If anyone doubts it, then look at the tax power they posses and the draft.  Literally they could strip you all of all your wealth and sent you to die in some God forsaken hell hole, at their pleasure.  That's sounds a lot like slavery to me.

Arm's picture

The problem is you are using faulty logical argument. Your reasoning goes:

a) Fiatco always collapse

b) Therefore gold is a good investment

Unfortunately, this is SOOO much more complex than that. Gold has never really ever been used as currency, but rather used as a store of value in a vault.  In the past silver and copper coins were the regular day to day currency.  Problem is that if convertibility between the day to day currency and gold is forbidden then quite frankly you may find you own nothing at all.  Furthemore, you are still very much subject to the cohersion of the State.  In the event of a complete collapse, the State would likely apply a tax on assets or directly expropriate your gold.  One way or another it is not an easy asset to defend, or put to productive use.

Further, if we are assuming a complete collapse of the system, then the only other time this has really happened was when the Roman Empire collapsed.  At the time many hoarded their wealth in cities and some even buried it (farmers still occasionally stumble upon a stash in a field).  However, all these individuals failed to remain wealthy, and many were killed as their money did not provide the means to defend themselves from barbarian raiders (hence they did not dig up their treasure trove)

The most successful Romans were Patricians that owned large estates in the country-side.  These estates grew after Roman cities were abandoned and in fact became the embryo for Midieval territorial partitions.  These quasi-states were self-sufficient and could rally enough men to provide some form of territorial defense.  Some European noble families can trace their line to these origins.  That is about as good wealth preservation as you can possibly hope for.  

No one and no single product can guarantee that you will keep your wealth.

Shameful's picture

So you say quite rightly that the gov will tax everything.  But then you also say land is good.  seems to me that the gov will tax land quite heavily as well.  And land has one feature that makes it rough for long lasting wealth, you can't move it.  At least with gold I can carry it from place to place.

Your argument against gold is effectively "You will get taxed or have your wealth taken.  Don't try to save it".

You are correct that if convertibility is banned the you are screed, but  if that happens you ride out of dodge.  Why do people assume that if one has their wealth in gold that they plan on living in a totalitarian police state and happily sit around while they are being pillaged?  People will flee as they have always done and go to a freer place.  Those who wish to keep their freedom and fortune must be willing to move away from the most parasitic nation states, otherwise no level of preparation will save them from the grasping hands of the all powerful state.

trav7777's picture

Those Roman families who survived the taxation were the very strong hands and the political class.  Only those who were in league with the taxman and government saw their estates grow as people sold themselves into serfdom to avoid the property and production taxes that they could not meet.

Also, confiscated property ended up where it ALWAYS ended up, again, in the hands of the political class.

Douchinger and others are fond of pointing out 1933...where'd that gold go?  TO THE FED.  Who owns the Fed, the banksters!  If the gov confiscates money down the road or anything else, look at the wealth charts of the top 1% versus everybody else.  There's a direct connection between your pockets and their bank accounts.

akak's picture

"Furthemore, you are still very much subject to the cohersion of the State.  In the event of a complete collapse, the State would likely apply a tax on assets or directly expropriate your gold."

In the event of "a complete collapse" (of what exactly?), what makes you think state authority will still exist, or will exist in the omnipotent form which you seem to assume?

And what about a NON-complete collapse, which is far more likely --- is gold still worthless?

Really, you seem to be defending state authority against the holders of gold in each of your posts.  Why?

AVP's picture

Can you say Fascist. That's why!

Nacho.Libre's picture

I don't think it's so much the defense of the state as it is the state's long history of theft.  A non-complete collapse could be more dangerous because there would be an intact organized state that would appropriate your gold for the good of the country. 

The only thing the government knows how to do is plunder.  They rarely protect the rights of the individual anymore, they always morph into a larger and larger thief demanding more control and power. 

Island_Dweller's picture

Why is evryone worried about confication of gold but not FRNs?


A while back I read an article where the author argued that the government cannot confiscate gold without admitting the fraud that they have perpetuated; made a lot of sense to me.

Arm's picture

Because FRN are confiscated every day through taxation

akak's picture

Nacho, I agree with you completely --- of course government is never to be trusted, and always to be feared.  I just bristle at anyone who tries to suggest (as many have suddenly been doing online in blogs that touch on gold) that government is omnipotent, will ALWAYS find your gold, and that to evade or not comply with their tyrannical attempts to "confiscate" your gold is always a bad idea, and always to be avoided.  There is this message being floated lately that we must ALWAYS comply with every law and demand of our government, no matter how corrupt or outrageous it may be. I am not sure if that is where ARM was going, but it sure sounded that way.

Arm's picture


Congratulations.  This is the first time I see you articulate a very coherent argument. 

I agree with almost every point, except I don't think you understand the deflationist argument fully.  Let me summarize where I think you have gotten it wrong:

1) Gold is generally a good store of value, but it is a lousy investment.  See, an investor currently holds fiat currency cash. He must use this cash to convert it into a tangible asset, of which gold is a good choice as its supply cannot be readily increased (in all other ways it is the same as owning other tangible assets such as real estate or commodities).  The exchange rate of gold vs fiatco fluctuates daily with regard to the availability of fiatco.  I think we can agree up to here.

The tricky part is that a credit collapse is not a linear nor necessarily a short lived process (as Japan has taught us).  While the currency heads to collapse fiatco's suddenly disappear.  Liquidity dries up because credits go bad or credit lines get cut (in a debt-based monetary system, credit contraction is deflationary).  This means that suddenly there are less fiatco's to chase the same amount of gold.  Thus, even though long-term the currency is doomed, this does affect the short-term exchange rate of gold to fiatco.  It lowers the price of gold in terms of fiatco's.  In other words your portfolio goes down in dollar terms.  I hope we can agree on this.

Unless you can wharehouse your gold for years, you will eventually need to convert it to fiatco's because at least in the initial stage of a currency collapse, very few people will sell you goods priced in gold.  You will thus incurr a loss.

You may argue that government printing implies that commercial debt will be unimportant and that fiatco supply will not decrease.  This idea is patently false and ignores the structure of the fiatco monetary system.  Banks issue money, not the central bank.  In fact it is estimated 95% of monetary supply is not controlled by the central bank.  This means that a 5.3% decline in commerical lending requires a doubling of government issued monetary supply.   This simply cannot be done with the current Treasury auction monetary printing system.  As long as the government does not DIRECTLY issue credit, there is no way for it to compensate for deflationary pressures. Until then the trend is deeply deflationary.  The good thing is that you will be able to quickly long gold at the appropriate time because direct issuance will be a very clear regulatory change.

Intuitively you can see this in that gold has NOT doubled in price since 2008 despite the US government more than doubling M1.  In fact, the only reason gold has not deflated like other assets (oil, copper, steel) is because it has the perceived safe-haven value.

2) You assume that gold is money.  Gold is not money, it is an asset that has convenient properties for being monetized. It is an important distinction.  Gold is only monetized if people accept it as a means of payment.  In the initial stages of a deflationary collapse, people will not accept it.  It is both hard to handle, and must be tested upon every transaction.  Additionally, in the early collapse dollars become more and more valuable.  People will not want gold, but rather the very scarce dollars that are out there and which they are required to use to pay their bills.  As per above it is only in the later stages of monetary collapse that people will in effect prefer ANY asset to holding currency

3) You assume that you will be allowed to hold your gold. It is likelly that as in the 1930's gold will be expropriated at a later stage.  Holding on to it will be near pointless.  If you cannot transact with it, then gold is demonetized.  You are left with an asset with little value in use.  Sure some people will accept your hidden stash, but not many and only at a huge discount as it is illegal.  Please remember government has in the past used force (they run the army) to get individuals to accept their paperscript.  Sorry to say, but there is no way of evading this because you cannot completely isolate yourself from society.

Thus you will be running all the risks of holding gold as an asset and will likely not benefit from it if indeed the worst case scenario materializes (please remember you must always leave some room for being wrong in your assesment).



Unfortunately there is almost nothing you can do to maintain your wealth if we do hit the degree of crisis that we appear to be heading to. Gold will be expropriated, currency will be worthless and most tangible assets will also be confiscated.  Just look at Venezuela for an idea of how it can play out.

Like Faber & Biggs have said, I believe the best bet is probably buying productive agricultural land and being ready to live on it.  This is no guarantee either, but it should be one of the last asset classes to be expropriated


FOR TRADING PURPOSES.  I expect the European banking collapse will generate a significant short-term spike in the price of gold as tens of thousands of investors seek safety in a relatively shallow market.  However, this is only short term.  Soon these investors will start getting market calls and will need to drawdown funds for everyday living.  These will all be priced in fiatco's and fiatco will be scarce so gold holdings will have to be liquidated at a price that reflects this and this will pop the current gold price.  You may attempt to time the top, but do so at the regular peril of timing bubble tops.

If you want to long gold, you must do so when this pop has ocurred and right at the time that the government starts directly lending money to citizens (essentially directly printing money).  The signs are clear: a) collapse of gold prices  b) major financial regulatory reforms which will look like they are giving away free money (I have heard bank nationalization is being discussed as a possible scenario to execute this, so look for it)

Be safe, and trade well,



akak's picture

Arm stated:


Congratulations.  This is the first time I see you articulate a very coherent argument.


Can anyone say "damning with faint praise"?

So was everything else written by GG an incoherent rant, Arm?

Boston's picture


"It is likelly that as in the 1930's gold will be expropriated at a later stage.  Holding on to it will be near pointless."

OK, but how will agricultural land be LESS vulnerable to loss at the hands of the state?

My relatives fled Eastern Europe in the 1940's when the old social/political/economic order collapsed, suddenly.  Most of their wealth was in land; the balance was in gold.

All of their land was lost--at gunpoint.  All of their gold was retained--it's in my hands today.


Arm's picture

Fair point Boston,

The answer is that we don't know. If all governments decide to confiscate gold, then you will lose the gold or you will have to stash it in some hidden vault.  For practical purposes this last option is the same thing.  If you cannot use an asset it has no value.  You are not really rich because you cannot convert your currency into well-being (goods and services).

Could a government decide to confiscate your land?  Yes, obviously so, but historically governments go after cash deposits before heading for tangible assets.

To be fair your relatives were not really expropriated because of a financial crisis.  They were driven off their land by a facist government, probably for racial reasons.  That is a different issue to a government trying to over-tax its citizens

Boston's picture


OK, they could not use the gold for about 5 years.  But when the dust settled down, they could use it--it was still in their possession AND it still retained all of its value. 

But the land is gone--forever (short-term, medium-term, and long-term)

Arm's picture

True.  I don't doubt it.  But my point is that it was not really an example of government taxation that they suffered.  They were purposefully expelled for political reasons. It is another example of the dangers of authoritarian governments. 

My point is that it is far more common for governments to take the deposits of the wealthy, which are conveniently stored in a bank vault (most gold is) than it is too throw thousands of geographically dispersed people of their land. 

However, if government decides both things can happen. 


Snidley Whipsnae's picture

"To be fair your relatives were not really expropriated because of a financial crisis.  They were driven off their land by a facist government, probably for racial reasons.  That is a different issue to a government trying to over-tax its citizens"

The rule of law is collapsing in many countries. The elite are not held to the same standard of law as ordinary working citizens. If they were many of the elite would now be in jail.

So your point is not a point at all. It makes no difference to the ordinary working citizen if he is taxed off his land because his land is coveted by the elite or if he is taxed off his land because he is in a minority that has been singled out for punishment. Read 'The Rise and Fall of the Third Reich' for many examples. In extremis governments/elitists will do anything to avoid losing power.


Nacho.Libre's picture

Thanks.  a good balanced view about how the world works and reacts when governments are involved.  The point being it's not a gold vs. fiat argument, it's a gold/free individual vs. fiat/government argument that should really be considered.

Arm's picture

You have hit the nail on the head.  The only reason for the existence of fiatco's is to allow for covert taxation.

I would love to have an asset backed currency.  In fact probably backed by gold (some have proposed a basked of commodities instead).  This however does not make gold a good investment as long as we have fiatco's.

DoChenRollingBearing's picture

Anyone who has any wealth should hold some gold.  It is unwise not to have some.  It is diversification.

How much?  5% - 10% is a very common number that even mainstream financial advisers can live with.

Disclosure: I have 6% of mine in gold, looking to make it 7%.

Arm's picture

Agreed.  All storable commodities are great inflation hedges and should be present in a balanced portfolio.

akak's picture

Arm, I find your argument for the confiscation of gold to be misleading if not  disingenuous, smacking of overt fearmongering, and implicitly and suspiciously apologetic of tyranny to boot.

In today's world, nothing would collapse both the dollar and the power of the federal government more than a call-in and illegalization of gold (there will be NO "confiscation" of gold in the USA, and never has been either).  Such a move on their part would be an announcement of the sheer desperation and bankruptcy of the federal goverment, and would most probably mark their imminent demise.  Let them go ahead and try it, I dare them --- we will just wait out their short-lived last days of desperate tyranny.

Arm's picture


Thnx for the insults.  All you have shown is that you desperately need to read up on economic history. Start with Hernando de Soto's book on the monetary history. 

Bankrupt governments have ALWAYS resorted to the confiscation of assets, and very particularly bank deposits and GOLD DEPOSITS.  Go back to the XVI and XVII century Spain.  It was done twice.  Argentina's corralito just 9 years ago was in effect a confiscation of investor deposits.  Argentina recently also expropriated private retirement accounts.

"Let them go ahead and try it, I dare them --- we will just wait out their short-lived last days of desperate tyranny"

You are more disingenous than me if you actually believe this.  Governments have the power of cohercion.  They own the really big guns.  You must be a survivalist, your M-16 will do nothing against 30 federal agents who will be arriving at your door to collect the tax (which is their salary by the way).

akak's picture

"Bankrupt governments have ALWAYS resorted to the confiscation of assets, and very particularly bank deposits and GOLD DEPOSITS.  Go back to the XVI and XVII century Spain.  It was done twice."

More misleading half-truths displaying your pronounced anti-gold bias.  Many bankrupt governments have NOT resorted to widespread confiscation of assets, least of all gold.  And to the extent that any did try to criminally round-up their citizens' gold, ALL such cases happened long in the past, when the world was on the gold standard.  Or are you telling us that the nations of Mexico, Brazil, Argentina, Peru, Ecuador, Uruguay, Chile, El Salvador, Russia, Yugoslavia, South Korea, Thailand, Malaysia, Indonesia, and most of those in sub-Saharan Africa, ALL of whom have suffered hyperinflations and/or currency crises in the last 50 years, have ALL confiscated or illegalized gold?  No, they didn't.  In fact, such a thing has happened NOT ONCE since World War II, despite the dozens of hyperinflations and currency collapses since then.  But such nations HAVE expropriated mines, agricultural lands, bank deposits, and retirement savings either covertly or overtly.

Now tell me again why holding gold today is so "risky"?