Guest Post: The Number 1 Problem When Owning Gold

Tyler Durden's picture




 

Submitted by Simon Black of Sovereign Man blog,

In official testimony before Congress in December 1912, just three months before his death, J.P. Morgan stated quite plainly:

"[Credit] is not the money itself. Money is gold, and nothing else."

(the quote is almost Shakespearean in its unrhymed iambic pentameter...)

Of course, this testimony came only 253 days before H.R. 7837, better known as the Federal Reserve Act, was introduced on the floor of Congress.

The Federal Reserve Act went on to become law and pave the way for the perpetual fraud of fiat currency which underpins our modern financial system.

And if unbacked paper currency isn't bad enough, we award dictatorial control of the money supply to a tiny handful of people, and then simply trust them to be good guys.

Between the four of them, Masaakai Shirakawa (Bank of Japan), Mario Draghi (European Central Bank), Mervyn King (Bank of England), and Benjamin Shalom Bernanke (US Federal Reserve) control an astounding $8.85 trillion.

And given the speed with which they are printing currency and expanding credit, it's a number that's only going to increase.

Morgan was right. Credit is not money. The word credit comes from the Latin 'credere', which means 'to believe or trust.'

And when it comes to maintaining the purchasing power of their currencies, these guys have an absolutely stellar long-term track record, completely unblemished by success. In short, they have given us no reason to trust them.

Owning gold is the same as voting against this system, turning your paper currency into something that they cannot inflate or conjure out of thin air.

Yet there's one problem.

While the world's central bankers have given us absolutely no reason to trust them, our governments have given us every reason to NOT trust them.

Governments, especially the bankrupt insolvent ones, have a long history of theft, deceit, and plunder. As we have discussed so many times before, confiscation and/or criminalization of gold is not exactly a zero-risk prospect.

So while it's critical to own gold, it's equally important to store it abroad in a safe, stable jurisdiction outside of your home country.

One option if you have the means is to fly overseas and personally deposit your gold in a private, secure storage facility like Das Safe in Vienna or Cisco Certis in Singapore.

In general, it is perfectly legitimate to travel with precious metals. If you're entering, leaving, or transiting through the US, be sure to file FinCEN form 105 if the FACE VALUE of your gold exceeds $10,000.

For example, as a US 1-ounce gold Eagle has a face value of $50, you would need to file the form if you're carrying more than 200 Eagles (not including any additional cash/currency you happen to be carrying). 

Canada, the UK, and continental Europe have similar rules in their own currencies. 

If you don't want to carry gold, both Singapore and Austria are full of options to purchase bullion, tax-free. In Austria, most banks sell Austrian Philharmonic coins-- a 24 karat coin struck in 999.9 fineness that's recognized around the world.

In Singapore, it's also easy to buy gold at many banks, particularly the main branch of UOB downtown. Or if you prefer, you can stop in Hong Kong along the way and buy your gold there-- Hong Kong banks consistently have ultra-low gold premiums.

A private box at Das Safe in Vienna starts at 360 euros per year (about $470). At Cisco Certis in Singapore, it's much more cost effective at S$149 annually (about $120). 

It's also worth mentioning that if you are a US taxpayer, foreign safety deposit boxes where you have ultimate custody of your metal are currently non-reportable to Uncle Sam.

So not only can you make a giant vote against the financial system, you can also regain some privacy.

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Wed, 03/06/2013 - 16:35 | 3305969 Soda Popinski
Soda Popinski's picture

#1 problem is seeing the same fake paper price every morning. 

Wed, 03/06/2013 - 16:38 | 3305982 Al Huxley
Al Huxley's picture

It's insurance.  You want to pay LESS for it, not MORE.

Wed, 03/06/2013 - 16:41 | 3306002 MagicHandPuppet
MagicHandPuppet's picture

I'm trying to decide how much to take outside the border.... pretty sure it will be hard as hell to get to it when the SHTF.

Wed, 03/06/2013 - 16:51 | 3306019 Pladizow
Pladizow's picture

The Bank never "goes broke." If the Bank runs out of money, the Banker may issue as much more as needed by writing on any ordinary paper.” – Monopoly Board Game - Rule Book, Third Paragraph of Section titled - The Bank…..

Wed, 03/06/2013 - 16:54 | 3306049 ParkAveFlasher
ParkAveFlasher's picture

That is the most awesome comment ever.

Wed, 03/06/2013 - 17:11 | 3306093 knukles
knukles's picture

Simon should debate Krugman for our entertainment.

Wed, 03/06/2013 - 17:15 | 3306107 New England Patriot
New England Patriot's picture

"H.R. 7837, better known as the Federal Reserve Act"

 

Even better known as, the "Con Hapless Citizenry Out of Their Gold Act." 

Wed, 03/06/2013 - 17:49 | 3306269 Dane Bramage
Dane Bramage's picture

Why do so many authors insist on holding physical gold out of country?   Posession is 9/10 of the law.  What are the odds of your home being robbed?  The last US Gold confiscation, Executive Order number 6102, resulted in how many homes being raided for their "hoarded gold"?  Safety deposit boxes?  Yes, but anyone's home?  I think none (or 1, maybe, in the entire US?).  Listen, if your home isn't a safe place to store your gold from the government you'll be in such a state that gold will likely be the least of your concerns.  On the other hand, transferring physical gold internationally and having it stored in some bank's vaults.... ?  Yeah - you'll be able to withdraw that no problemo when SHTF.  Just catch a flight, make it back thru customs (agan), etc., etc.,.  Methinks all these proponents of expatriating one's physcial gold have a condo to sell.

Wed, 03/06/2013 - 18:17 | 3306371 mr1963
mr1963's picture

If I'm not mistaken, and I could be, I think they criminalized owning gold, you in fact had to turn it in for paper. While homes may not have been invaded, they certainly would have had they caught wind of it, and without hesitation. Today, there's a lot more police/DHS people running around then there was then, not to mention the "national guard." While I don't yet believe in the overseas diversification of gold because once one government like ours goes, the others will as well, I certainly believe in confiscation, including home invasion.

And I don't think you'll get back into the country with gold without being found out by either the country you're leaving or coming to. I think Simon's point has always been to find shelter and have assets in another country, not transport it back into the US.

Wed, 03/06/2013 - 18:46 | 3306491 ersatzteil
ersatzteil's picture

The Executive Order signed by FDR made it a criminal act to hold anything over a few gold coins, punishable by fines and jailtime. Everyone had to give the government their gold holdings redeemable at something like 20$/oz, and afterwards the Government established the price of gold as 30$/oz.

I see the advantage in storing wealth in a geographically isolated yet market-friendly country that does not have a history of throwing its citizens in concentration camps. This rules out the United States, as our German- Italian- and Japanese-American friends will attest.

Wed, 03/06/2013 - 19:02 | 3306563 DoChenRollingBearing
DoChenRollingBearing's picture

Simon sez:

"In general, it is perfectly legitimate to travel with precious metals. If you're entering, leaving, or transiting through the US, be sure to file FinCEN form 105 if the FACE VALUE of your gold exceeds $10,000.

For example, as a US 1-ounce gold Eagle has a face value of $50, you would need to file the form if you're carrying more than 200 Eagles (not including any additional cash/currency you happen to be carrying)."

Wrong, wrong, wrong!  If you carry more than $10,000 (actual gold value) you must fill out a Customs form upon leaving the international airport.  Customs told me this when I was leaving once!!!  Carry all you want, but DECLARE IT if it is over $10,000 in VALUE (NOT face).

***

Don´t go to jail...

Wed, 03/06/2013 - 19:10 | 3306594 akak
akak's picture

DoChen, while you may have been told that, it was flat-out incorrect, at least according to current US Customs information from their own website.  Gold is NOT considered a "monetary instrument", so gold coins are only subject to reporting based on their face values, NOT on their market values.

Now, there may very well be other reporting requirements regarding the import/export of gold to and from the USA, but not as far as the US Customs Service is concerned.

Wed, 03/06/2013 - 19:31 | 3306662 DoChenRollingBearing
DoChenRollingBearing's picture

I BELIEVE if you have over $10,000 in ALL LIQUID ASSETS with you when you leave, you have to fill out a Customs Form, I did.  Back when the price of gold was $900...

 :)

 

EDIT:

akak, I had CUY for the first time last night!  We are in Cajamarca now!

Wed, 03/06/2013 - 19:34 | 3306678 akak
akak's picture

Again, you may have been told that, but it is incorrect.

The pertinent amount is more than $10,000 in monetary instruments.  And according to official US government and US Treasury doctrine, gold in and of itself (not talking about face value of coins here) is NOT a monetary instrument, so is not subject to reporting, at least under US Customs regulations.

If it were otherwise, any woman traveling with several ounces of gold jewelry, or with a string of real pearls, or with a 4 carat diamond ring, would be subject to reporting requirements as well, yet they are most certainly not, as I know women who have carried each of those items in foreign travel to and from the USA with no problems.

Wed, 03/06/2013 - 19:42 | 3306709 DoChenRollingBearing
DoChenRollingBearing's picture

(more info below)

I myself would not carry a decent 4 carat diamond (decent one) if it is LIQUID (a diamond may not count, as they only give you 30% if you sell it, but that´s another story for another time...).  THAT term, LIQUIDITY, is the one in question.  I believe you are CORRECT re gold not a monetary instrument, but gold is LIQUID, THAT´s what .gov cares about I believe.

Wed, 03/06/2013 - 21:00 | 3306976 Jack Napier
Jack Napier's picture

You can't run from the beast. If you really want to try you're better off using BitCoins than trying to convince the TSA tools that you have rights. You won't catch me at an aiport. What I ate for breakfast is priviliged information!

Thu, 03/07/2013 - 00:52 | 3307748 downrodeo
downrodeo's picture

bitcoin! bitcoin! bitcoin! yay!

Thu, 03/07/2013 - 01:47 | 3307852 Boris Alatovkrap
Boris Alatovkrap's picture

You are thread jack! And for what, Bitcoin?!

Thu, 03/07/2013 - 02:10 | 3307861 TruthInSunshine
TruthInSunshine's picture

Comrade Yugoshlvenski always remind that better to jack thread than jack Stolichnaya from officer's quarters.

Thu, 03/07/2013 - 02:21 | 3307888 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is prefer potato for vodka, but is do well to stay clear from officer hind quarter.

Thu, 03/07/2013 - 02:19 | 3307886 prains
prains's picture

Boris

it time to give biachislov a taste of the kozlov

Thu, 03/07/2013 - 02:25 | 3307892 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is once try for Russian Wrestling Team, but after Chernobyl, bone is brittle and teeth is fall out.

Thu, 03/07/2013 - 02:58 | 3307896 prains
prains's picture

when rat in tunnel, keep out finger, put in gerbil

Thu, 03/07/2013 - 03:08 | 3307932 TruthInSunshine
TruthInSunshine's picture

To the question posted above about declarations:

 

Importing gold coins, medals, and bullion

What are the regulations for importing gold coins, medals, and bullion into the U.S.?

There is no duty on gold coins, medals or bullion but these items must be declared to a Customs and Border Protection (CBP) Officer. Please note a FinCEN 105 form must be completed at the time of entry for monetary instruments over $10,000. This includes currency, ie. gold coins, valued over $10,000. The FINCEN definition of currency: The coin and paper money of the United States or any other country that is (1) designated as legal tender and that (2) circulates and (3) is customarily accepted as a medium of exchange in the country of issuance.

If you have doubt whether your gold/gold coin is considered a monetary instrument it is in your best interest to declare the item(s) with a CBP Officer, so you do not give a false declaration.

 

Currency / Monetary Instruments - Definition of "Negotiable Monetary Instruments" for currency reporting requirements

What constitutes as "Negotiable Monetary Instruments" for currency reporting requirements?

Negotiable monetary instruments that must be reported by travelers or persons sending or receiving them (other then by electronic means by a banking concern) are:

  • Coin or currency from the U.S. and/or other countries, including gold coins*
  • Travelers Checks
  • Checks, promissory notes or money orders that can be cashed by the bearer. This includes checks or money orders made out to someone other than the bearer that are endorsed without restriction(i.e. for deposit only.), and incomplete checks, money orders, promissory notes that are signed but on which the name of the payee has been omitted (the "To" line is left blank)
  • Securities or stocks in bearer form

You can obtain the currency reporting form FinCEN 105 for more information.  Monetary instruments that are made payable to a named person, but are not endorsed or which bear restrictive endorsements are not subject to reporting requirements, nor are credit cards with credit lines of over $10,000.

Gold Bullion is not a monetary instrument for purposes of this requirement, but still must be declared upon entry.

*There is no duty on gold coins, medals or bullion but these items must be declared to a Customs and Border Protection (CBP) Officer.  Please note a FinCEN 105 form must be completed at the time of entry for monetary instruments over $10,000. This includes currency, ie. gold coins, valued over $10,000. The FINCEN definition of currency: The coin and paper money of the United States or any other country that is (1) designated as legal tender and that (2) circulates and (3) is customarily accepted as a medium of exchange in the country of issuance.

Thu, 03/07/2013 - 03:21 | 3307944 Boris Alatovkrap
Boris Alatovkrap's picture

You are forget to declare vodka on list of valuable. But in Russia, to declare is certain to have confiscation. Maybe soon in Amerika, too!

Thu, 03/07/2013 - 03:36 | 3307952 TruthInSunshine
TruthInSunshine's picture

In Amerika, following Russian tradition, border guards have alternative non-written form allowing non-declaration for gratuity to border guard. No such form is listed on official website but is sure thing and widely known.

Wed, 03/06/2013 - 21:27 | 3307090 glenlloyd
glenlloyd's picture

105 specifically states monetary instruments, gold (as of now) is not a monetary instrument as defined in 105 and it is face value, not market value. If it were market value you could leave for the airport with less than $10k and arrive with more than $10k purely on market movements. The face value of the coin is all that's relevant in this case.

If TSA told you that they were wrong...but it wouldn't surprise me if they did.

Thu, 03/07/2013 - 00:34 | 3307704 merizobeach
merizobeach's picture

While I'm glad to see this clarification of US customs law, the discussion misses an equally important point: the customs laws of all countries through which one may transit as well as the onward destination.  I don't know any of those laws, but I can easily imagine that they may differ.

Thu, 03/07/2013 - 02:34 | 3307902 Rusty Diggins
Rusty Diggins's picture

I wish someone would clarify what type of excise tax I have to pay for bringing more than 1 liter of hard liquer back to the ussa, what kind of limit is that?!?

Thu, 03/07/2013 - 02:41 | 3307911 tenpanhandle
tenpanhandle's picture

Example:

Custom official in unknown cuntry:  do you have anything to declare?

U.S. Traveler: nothing to declare. all I have in my suitcase is a cheap suit and two million dollars in gold bars.

Custom official in unknown cuntry: no problemo-witz.  Do you have any next of kin?

U.S. Traveler: Why do I need to tell you that?

Custom official in unknown cuntry: we need to know who to send the suit to.

Wed, 03/06/2013 - 19:43 | 3306712 DoChenRollingBearing
DoChenRollingBearing's picture

You didn´t even ask me if I liked the cuy...   :)

Wed, 03/06/2013 - 19:49 | 3306735 akak
akak's picture

Sorry DoChen, but no need, is there?

The cuy (and pretty much all Peruvian/Andean food) is ALWAYS good!

 

Wed, 03/06/2013 - 19:55 | 3306756 DoChenRollingBearing
DoChenRollingBearing's picture

10-4!

Lomo saltado tonight!

Wed, 03/06/2013 - 23:57 | 3307607 Turin Turambar
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Dochen,
Check out Zarco's down by the Plaza de Armas.  Ceviche for lunch w chicha morada, followed by a little aji de gallina in the evening.  Don't forget to try the causa.  Enjoy!

Thu, 03/07/2013 - 00:42 | 3307723 akak
akak's picture

Hey Turin, I make aji de gallina regularly now, after having had it for the first time in Bolivia more than 20 years ago.

Thu, 03/07/2013 - 08:57 | 3308230 Turin Turambar
Turin Turambar's picture

Good stuff!  My wife makes it about every two weeks for me.  I've only ever had it in Peru.  If I ever get back to Bolivia, I'll try it there.  I'd love to go back, but the political climate is not the best.  My favorite place is a little town called Copacabana just across the border from Peru on Lake Titicaca.  Gorgeous place.  One of the islands offshore is where Ponce de Leon thought the Fountain of Youth was.  I tried the water, but it didn't work.  ;-)

Thu, 03/07/2013 - 14:45 | 3309373 akak
akak's picture

Yes, Turin, Copacabana and La Isla del Sol --- I know them well.  Got stuck in Copa once for TWO DAYS trying to break a 200 Boliviano bill, which nobody in the town could break, in order to pay my hotel bill!  (In Bolivia, ALWAYS have LOTS of small bills and change!)  Munched on lots of bags of that lightly frosted choclo in the meantime, and gawked at that incredibly precious metals-laden cathedral as well. That solid silver altar, and that side chapel with the jewel-encrusted Virgin of Lake Titicaca, are truly amazing, aren't they?

Thu, 03/07/2013 - 03:03 | 3307924 Doug Eberhardt
Doug Eberhardt's picture

I actually wrote customs on this a few years back. The reply was, you cannot use the $50 face amount as declared value, but market value of the gold coins. 

The Gold Bullion Coin ACt of 1985 made the American Gold Eagle coins legal tender. 

The customs form says, "Currency: The coin and paper money of the United States or any other country that

is (1) designated as legal tender and that (2) circulates and (3) is customarily

accepted as a medium of exchange in the country of issuance."

But you are right about jewelry and diamonds. Some women's diamond wedding/engagement rings alone are worth well over $10,000.

The penalties are too severe to try and play the game of trying to fool customs on a face amount decleration of less than market value.

PENALTIES: Civil and criminal penalties, including under certain circumstances a

fine of not more than $500,000 and Imprisonment of not more than ten years, are

provided for failure to file a report, filing a report containing a material omission or

misstatement, or filing a false or fraudulent report. In addition, the currency or

monetary instrument may be subject to seizure and forfeiture."

 

Wed, 03/06/2013 - 19:37 | 3306688 DoChenRollingBearing
DoChenRollingBearing's picture

More comments for akak,

I forget the form number, but when I was leaving for Peru all those years ago (when gold was at $900), I went to see outbound Customs (hard to find, at MIAMI anyway), the bitch had to make a call because she knew NOTHING about that $10k liquidity declaration business.  So she made her call.

Then she asked me: "How much is that worth...?"  I told her the truth, because bitch was trying to set me up.

I had read this a few years ago, MAYBE things have changed but I doubt it.

You can always carry $9000 in gold, your wife as well, each time you leave, but make sure ALL LIQUID items are under $10k total if you do NOT declare.

IMHO...

Wed, 03/06/2013 - 19:48 | 3306732 piceridu
piceridu's picture

Do Chen, you're describing the exact situation when police try and tell you they know gun laws...9 times out of 10 they are completely wrong. Knowing the law is your first line of defense.   Check this beautiful moment out: 

http://www.youtube.com/watch?v=jfdEbe7e9GE

Wed, 03/06/2013 - 20:02 | 3306778 DoChenRollingBearing
DoChenRollingBearing's picture

Well you guys MIGHT be right, but I read years ago that there is a Customs Form (4 digit number form) that said ANY AND ALL LIQUID ITEMS in total over $10,000 had to be declared.  And bitch at Customs said so, AFTER making her call.  MAYBE (?) it´s an IRS thing too???

Have doubts?  Talk to a lawyer, not some Bearing with a hole in the middle where a brain should be...

Wed, 03/06/2013 - 23:53 | 3307602 Turin Turambar
Turin Turambar's picture

DoChen,

Enjoy the trip.  I was in Cajamarca in December with my wife.  We have family there.  If you've got the time, you need to check out the seat of the Inca that overlooks the city.  Great view!

Wed, 03/06/2013 - 21:18 | 3307056 Moe Hamhead
Moe Hamhead's picture

It's a good idea to declare it when you leave--so you don't have to pay duty o n  it when you return.

Wed, 03/06/2013 - 19:20 | 3306601 sdmjake
sdmjake's picture

EXACTLY DoChen! If you try to carry 199 Eagles without declaring it because the "Face" is less than $10k then you fucked.

https://help.cbp.gov/app/answers/detail/a_id/322/~/importing-gold-coins,-medals,-and-bullion

There is no duty on gold coins, medals or bullion but these items must be declared to a Customs and Border Protection (CBP) Officer. Please note a FinCEN 105 form must be completed at the time of entry for monetary instruments over $10,000. This includes currency, ie. gold coins, valued over $10,000.

Wed, 03/06/2013 - 19:37 | 3306664 akak
akak's picture

Read the form itself in your link:

http://www.fincen.gov/fin105_cmir.pdf

According to US Customs and the US Treasury itself, gold is officially NOT a monetary instrument, and gold coins are officially reportable only at their face value.

That said, it would be foolish to make the attempt to travel with multiple ounces of gold, or other valuables, to and from the USA (or anywhere for that matter) without receiving clear and multiply-verified information from ALL possibly involved government agencies.

What a fucked-up world we live in, in which merely possessing or traveling with a metal, or more than a certain amount of the fucking government's OWN fiat currency, can automatically make one a 'criminal'.

Wed, 03/06/2013 - 19:48 | 3306730 sdmjake
sdmjake's picture

I hear ya AKAK--the form reads as if it excludes a gold eagle coin... or more correctly that it would be reported at face value... BUT the DHS/TSA/Customs ain't going to go by that form. Hence the reason i sent THEIR "help page" as the original link. They base gold coins on "VALUE" for FinCen105 purposes. You walk in with a dozen pounds of gold and don't claim it you ain't leavin with that suitcase full o phys...

BTW-This discussion is like another interesting gold coinage debate: me wanting to be paid in gold eagles and then claiming to the IRS that I only made $10,000 (face) taxable income for the 200 eagles I got. There is legal precedence but the plain and simple truth is you ain't getting away with that shit. Your ol Uncle Sam will fuck you hard if you try it.

Wed, 03/06/2013 - 19:51 | 3306743 akak
akak's picture

I can't argue with you on anything there, sdmjake.

We live in a fundamentally lawless world ruled by criminals and sociopaths.  You and I are just a means to a sick perverted, insatiably power-hungry end to them.

Thu, 03/07/2013 - 00:27 | 3307685 imaginalis
imaginalis's picture

200 gold eagles might fetch indefinate detainment without trial

Thu, 03/07/2013 - 02:55 | 3307923 putaipan
putaipan's picture

barbarous relics sewn itno the hems of their garments- beahtches! thanks for the bitcoin thread jacking boris....you guys ..... the last part of the thread reminds me of the days circa '84 ,the first time i left the us of a with 9500$ casheesh for buisness and was \stopped  questioned frisked right before boarding. much less the 'escort' i had in the city of landing. this shit's been goin' on for years...but it is about to get wierd. get going!

Wed, 03/06/2013 - 18:57 | 3306536 Dane Bramage
Dane Bramage's picture

I think they criminalized owning gold, you in fact had to turn it in for paper.

 

There exists a massive chasm between criminalization and "had to turn it in."  What FDR achieved was 99.9999999999% NON-COMPLIANCE.  Not a single home was invaded by government thugs and gold confiscated.  Does anyone in theri right mind think that would change today?  How in the hell would .gov know who even has gold, yet alone where the f it was burined/squirreled-away (buried PVC tubes FTW)??   Catch wind of what?!  Even if we had a Stasi network like East Germany one would have to advertise.  Goverment is the polar opposite of omnipotence.  Utterly unrealistic to think that a home-to-home confiscation of gold would ever happen.  The only people who would turn in their gold would be the same dolts who turn in their weapons when .gov offers a "gun buyback". 

Exactly right you'd never get back with your gold... and much good it will do you in some other country.

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