What The Next Gold Confiscation Will Look Like

Submitted by Nick Giambruno via Doug Casey's International Man blog,

You may be familiar with the story of how the US government confiscated gold bullion and then made owning it illegal back in 1933.

Actually this event is more accurately termed a nationalization. Americans were forced under harsh penalties to sell their gold at an artificially low “official price.” If it were an outright confiscation, the government would have just taken the gold without giving anything in return. But no matter how you label it, the end result was the same: the theft of purchasing power.

Many have speculated that the US government could once again turn to gold confiscation/nationalization if it became desperate enough. These fears are not unfounded given the abysmal financial situation of the US government that only continues to get worse, coupled with a total lack of political will to cut spending.

But would the US government really turn to a 1933-style grab again?

I would argue that they wouldn’t, but that doesn’t mean the threat to your gold has diminished. Quite the opposite.

More Likely Than Outright Confiscation

Today only a tiny fraction of the overall US population owns gold. That wasn’t the case back in 1933 when the US was still on a variation of the gold standard.

Heck, I’d bet most Americans today have never even seen a gold coin, much less appreciate its value.

This is why I think it’s unlikely we’ll see a repeat of the 1933 ripoff. It’s simply not worth the effort. If the government is looking to confiscate wealth, they’ll likely go for the low-hanging fruit… like financial accounts, which can be plundered with a few mouse clicks. Or they’ll continue to ramp up the inflationary money printing, which is a way to confiscate from savers.

But that doesn’t mean gold owners are in the clear.

Instead there will be a new scam. And that scam is likely to be a windfall profits tax on gold.

A windfall profits tax on gold would be much easier for the government to administer than what they did in 1933. And thanks to the system of citizenship-based taxation, a windfall profits tax on gold could be levied on Americans no matter where in the world they live.

There’s precedence for this, too. In 1980 the Congress passed the Crude Oil Windfall Profit Tax Act, which taxed up to 70% of what they deemed to be “windfall profits” of domestic oil producers.

If gold were to explode to the upside (another way of saying the dollar crashes), we shouldn’t be surprised to see a bill like the Fair Share Gold Windfall Profit Tax Act get passed, which would levy a 80%, 90%, or higher tax on gold.

Fortunately, there are some practical steps you can take to protect yourself from a windfall profits tax on gold, which I believe is the most likely form of future confiscation.

Keep Your Hands Off of My Gold!

One way you can avoid a windfall profits tax on gold is to become a resident of Puerto Rico - read more on that here. You could also preemptively divorce the US government by renouncing your citizenship.

But these are drastic measures and out of reach of most people.

There’s a far easier solution that can be done from your living room and without having to turn in your US passport. It’s to own gold in a Roth IRA, preferably offshore gold.

A Roth IRA is like a tax-free zone. It’s funded with after-tax savings, and any future capital gains or income derived from investments in a Roth IRA are not taxable—if you wait until the age of retirement to withdraw.

While we can never know 100% for sure what the US government will do, it would be unlikely that gold placed in the tax-free zone of a Roth IRA would be affected by a future tax increase. That is, of course, unless the politicians start monkeying with the IRA rules. But that would produce a lot of screaming from tens of millions of people, most of whom are voters. If I were a politician, I would stay away from IRAs.

This is not to say that the US government doesn’t have its eyes on the juicy target of retirement accounts. As we’ve seen with the myRA scam, they most certainly do.

However, if and when an executive order is issued to convert a portion of your retirement savings into unwanted Treasury securities, it will likely apply only to the most susceptible retirement assets—those being accounts with the large, traditional IRA custodians. These assets are soft targets for the government. They could be frozen, confiscated, or nationalized at the flip of a switch.

Physical gold held offshore in a Roth IRA would represent a significantly more complex challenge for them to confiscate. It probably wouldn’t be worth their effort either, as only a very tiny percentage of Americans hold their retirement assets in physical gold overseas. It makes much more sense that they’d go for the sitting ducks at the large custodians.

In short, a Roth IRA with gold held offshore is the most practical way to protect yourself from the most likely forms of future confiscation—a windfall profits tax on gold and a forced conversion of retirement savings to Treasuries. It’s the ultimate retirement insurance policy and makes you a hard target.

It used to be very time consuming and difficult to own gold offshore in an IRA. For a lot of people, it simply wasn’t worth the effort.

Fortunately, that’s no longer the case—this solution is within reach of almost anyone.

All it takes is about 10 minutes to get set up, and it can all be done online without having to leave your living room. More details can be found here.

Comments

[sam site]

In 1933 the government outlawed citizen gold ownership and redemptions and didn't want citizens redeeming their gold certificates at banks because of the gold standard.  While confiscation brought some government income, the real reason was to dismantle the gold standard from citizens so the Fed could counterfeit.  Few realize that by 1945 only 17% of dollars were gold backed. 

That's how much printing was done from 1913 thru 1945 and in 1913 they only had to back 40% of dollars, so that 40% went to 17% by 1945 thanks to our allowing the Jesuits and their Rothschild banker agent Fed counterfeiters to take over our money.  You may ask if that's how much counterfeiting was done, where did the dollars go?  Probably to Hitler because America was starved for cash from 1930-1941 and House Banking chairman Louis Mcfadden called for the arrest of the Fed for shipping America's gold to Europe in 1934 before the Jesuit-controlled Fed assassinated him.

Louis Mcfadden

http://home.hiwaay.net/~becraft/mcfadden.html 

The Fed left the gold standard intact between nations and it took until 1971 for other countries to realize the Jesuit-controlled Fed defrauded them too when Nixon closed the Gold Redemption Window for foreign countries. 

So it's not hard to see that between 1913 and 1971, it was a slow dismantling of the gold standard, like the slow boiling frog, where we were all defrauded by our hidden Jesuit rulers and their Rothschild benker agents.

This article doesn't distinguish between gold held in an IRA and at home which I believe would be much harder to windfall tax after having withdrawn it and paid income taxes on it.  Are SWAT teams going to torture homeowners to extract the hiding place of their gold?

Also why would a Roth IRA be sacred just because income taxes have been prepaid.  Windfall taxes have not been prepaid so it's vulnerable.  If the government knows how much you have and where it is - it's vulnerable - case closed. 

[Dre4dwolf]

Exactly, and then people tout that the gold standard failed, meanwhile we were never actually on a gold standard, the banks were violating the standard and counterfeiting notes since the beginning, something that wont happen to such a large extent with modern technology and tracking that could be implemented.

Every ounce of Gold could be Tag'd with serial numbers and QC Codes / RFID identification and every note printed could be associated to a specific ounce or batch of ounces.

Or

You could just use Bitcoin as the currency and avoid the entire tracking problem altogether.

How many US Dollars in bank accounts right now actually even have a serial number? probably only around 2%.

The entire point of placing serial numbers, and anti-counterfeiting strips in notes has become completely pointless due to fractional reserve banking, people are marking bills with markers to check if they are real, meanwhile . . .  the bank right around the corner has millions of counterfeit notes on ledger and no one bats an eye..... ;p

[Farmer Joe in B...]

...or just skip the shiny metal entirely and focus on buying arable farmland (here and abroad).  Think it's a much better bet if shit gets so ugly that uncle sam starts seizing financial assets.

[bluskyes]

Arable farmland ties you to a physical location, and is registered, and taxed yearly. It can also be expropriated as easily as any financial asset. Besides, it isn't the 30's. This time around, there is no agricultural know-how among 99% of the population, and 99% of those 99% wouldn't have the physical, and mental fortitude to make the transition to an agricultural life.

The best assets are those that nobody can see.

[Jumbie]

Any remaining asset class that has value can be confiscated by bankers. In 1933, stocks and homes were devalued or confiscated by banks, so they had to turn to gold. The only question is, what in today's America is a widely owned but easily grabbed asset?

Everything denominated in dollars.

With a press of a button or "sale" of a treasury the Fed's member banks can confiscate as much as they think they can get away with. When dollars were backed by widely held gold, that wasn't possible. That particular difficulty has been fixed.