What The Next Gold Confiscation Will Look Like (And How To Protect Yourself)

Tyler Durden's picture

Submitted by Nick Giambruno via InternationalMan.com,

On April 5, 1933, under the pretext of a national emergency, President Franklin D. Roosevelt issued Executive Order 6102, making it illegal for U.S. citizens to own gold.

The decree forced Americans to sell their gold at an artificially low “official price.” If they refused, the government could hit them with stiff penalties: a $10,000 fine (equivalent to $180,000 today) and/or up to 10 years in prison.

The government blatantly stole wealth from the American people.

Many worry the U.S. government might confiscate gold again if it becomes desperate enough. I don’t think those fears are unfounded. The U.S. government’s abysmal financial situation is only getting worse.

But would it really do a 1933-style grab again?

I don’t think it will. However, there is another growing threat to your gold.

More Likely Than Outright Confiscation

Today, only a tiny fraction of the U.S. population owns gold. Heck, I’d bet most Americans have never even seen a gold coin, much less appreciate its value.

This wasn’t the case in 1933, when the U.S. was still on a variation of the gold standard. That’s why the government probably won’t repeat the 1933 rip-off. It’s simply not worth the effort.

If the government wants to confiscate wealth, it’s far more likely to go for the easy option… steadily debasing the currency by printing money. It’s a stealthy way to confiscate from savers.

That doesn’t mean gold owners are in the clear.

I think the government will try a new scam: taxing windfall profits on gold. This would make it much easier for the government to accomplish something similar to its 1933 heist.

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

What the heck is a windfall profit anyway?

As far as I can tell, it’s whatever politicians decide it is. It’s completely arbitrary. There are no objective measures to define it.

In short, a windfall profit is simply a profit politicians don’t like. The whole concept is a scam—a word trick to camouflage and sanitize legalized theft.

If the price of gold explodes, I wouldn’t be surprised if Congress passes a Fair Share Gold Windfall Profit Tax Act levying a tax of 80%, 90%, or more on gold profits.

Fortunately, there are some practical steps you can take to protect yourself from this form of politically motivated expropriation.

What to Do

One way you can avoid a windfall-profits tax on gold is to renounce your U.S. citizenship. But that’s a drastic step. It’s just not realistic for most people.

Thankfully, there’s a far more practical option. You can do it from your living room. And you don’t have to turn in your passport.

The solution is to own gold stocks in a Roth IRA.

A Roth IRA is a tax-free zone. You fund it with after-tax savings, and any future capital gains or income derived from investments in your Roth IRA are not taxable. While you can never be 100% sure what the U.S. government will do, it’s far less likely a future tax increase, even a windfall-profits tax, would affect investments in a Roth IRA. A Roth IRA is the most practical way to protect yourself from the most likely form of future gold confiscation—a windfall-profits tax. It makes you a hard target. All the details are in Doug’s latest video, which you can watch by clicking here.

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greenskeeper carl's picture

Better get on with that cash ban then, only way that idea works. Still a dumb article. A gold ban in the US isn't far fetched, but they won't be going door to door kicking them in. They will nationalize the mines, ETFs, bank holdings, etc.

MANvsMACHINE's picture

They will have to nationalize all lake bottoms too!

Four chan's picture

americans neither own nor want gold. they are asleep.

never has there been a trading opportunity like this, against that trend.



Stuck on Zero's picture

I believe that the government would most likely place currency restrictions, including gold, at all borders and airports and then declare that all gold transactions would need to be through the local post office at fixed government prices. Your only choice then would be black market dealings.

JohnG's picture

It's my only choice for a lot of things right now.

And I'm always looking to build those markets.

Fuck leviathan.

El Dorado's picture

I'm a strong beleiver in the saying "if you can't hold it in your hand you don't own it", that said what is everyones take on GoldMoney/BitGold? They recently acquired SchiffGold but I'm still skeptical of the concept. 


I'd be more partial to opening a goldmoney account and storing my gold overseas before placing it in a Roth IRA.  Maybe i'm to cynical but I have a tough time beleiving the Feds will never touch Roth IRA's.  The tax advantage they represent today is simply to lucrative for a bankrupt government not to touch.  

eforce's picture

Rough value of gold = M2 money x national reserves.

wildbad's picture

never happen.  international demand will still be high and the methods for accessing those markets more available than ever.  if you can't arbitrage into a different currency you are the idiot.

DownWithYogaPants's picture

Black market may be the only real option anyway!

People should be using CASH as exclusively as they can.  They should bartering.   

Oh well shoulda coulda woulda 

How depressing. :0(

MsCreant's picture

This is easy. They will "nationalize IRAs 501Ks, anything in a "pension plan" all of it, and promise to give it back to you at retirement time because they are "responsible to manage it for us. Capitalists can't be trusted after all. Too important to leave to the open market ya know. Gotta protect Americans (and spend their money because US gov is bankrupt).

Keep as much of it out of their accounting systems as you can.

Bad Attitude's picture

I too expect them to nationalize 401Ks. It is a big fat pile of money just sitting there begging to be taken.

Personally, I'm investing in tangible assets like lead and brass.

Forward (over the cliff)!

TheVillageIdiot's picture

They already restict it. Have been for years. $10000 limitin or out per person.

greenskeeper carl's picture

Correct, and that 10k in value, not face value. It doesn't matter what the face dollar value of a gold eagle is, a little over 7 oz worth at today's price puts you over that threshold, regardless of what the coin says.

Al Bendova's picture

Some states already force you into a black, or at least, gray market now.  None of this concerns me.  My gold was sold off to pay crushing debt and then I lost the rest in the casino.  Nope.  No gold or silver here.

August's picture

That'll work, unless the feds use the usual rule of an imputed value and transaction for those who cannot document a disposition, or acquisition.

In other words, if your position is questioned by The Authorities, bottom-of-the-lake stories won't work (unless you there's a police report to back it up). 

Lo siento mucho.....

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Stuck on Zero Aug 11, 2016 9:50 PM

Sell my gold to some idiot at the fucking post office? No thanks. That would force me to the badlands.

August's picture

"They" won't be going from door to door, looking to seize anything. Unless an individual makes himself a target.

Whether it's guns or gold, TPTB will just rely on the self-interest of various community members ("snitches") to pass the word.  Enforcement will be selective, and a widely publicized event. 

A black market will of course exist, but knowing your counterparty very, very well will be mandatory for those wishing to avoid the evening news, and the two-minute hates.......

blue51's picture

Who is this mythical " They" ? Boogeyman talk , at the campfire .


Hope you didn't drop your gold at the bottom of Lake Mead!! That shit is almost dry. 

Frito's picture

Could be profitable past time, walking around the dry edge of Lake Mead with a metal detector looking for upturned dinghy's.

FireBrander's picture

Put your gold into the Federal Bank System using a ROTH IRA


BRILLIANT! Why didn't I think of that!


My pappy always said "never take advice from someone standing to profit from you taking their advice".

illuminatus's picture

Exactly! Gold isn't safe to hold, but Roth Iras are.   Good one!

August's picture

In defense of the seemingly-lame Roth IRA:  it all depends on your individual situation.

A Roth (under current law) can be structured so that it may hold physical metal offshore or, for that matter, onshore in the USA, typically via your American IRS-compliant custodian, and your own LLC.  Depending on your personally-envisioned scenario, this could prove to be very advantageous if onshore gold were confiscated.   Generally, this would only be of substantial advantage to a US citizen who is living outside the USA, but such creatures (in their millions, actually) do exist.

FWIW I'm a US citizen living in the Free World (a.k.a. outside the Homeland, for those of you in Rio Linda) and I haven't done the offshore Roth IRA thing due to the K.I.S.S. principle.

Croesus's picture

Bullshit fear porn...

1. Most individuals do not have sizable holdings to the point that it's worthwhile for DotGov to come knocking. 

2. Why bother with individuals (where you risk being shot at), when you can just nationalize the mines, ETF's, bank holdings (like Greenskeeper Carl said)?

3. A windfall-profits tax, would simply create a black market where most gold holders would exchange for cash/goods privately. 

4. Gold is money, and Gold is insurance. Putting it in a place you can't access 24-7-365 defeats the purpose. (Shit's hitting the fan?? Hang-on, let me get on the next flight to Singapore, because there's no chance that a travel restriction would be put in place). 

5. What do banks in NYC, London, Singapore, Germany, Switzerland ALL have in common? THEY'RE FUCKING BANKS. They're all in bed with each other, tied into the same systems, and all exposed to risk. Given the history of banks (extortion, stealing, money laundering), it is amazing to me, that seemingly intelligent people would buy into the idea that a bank in Singapore is somehow "more honest" than a bank in any other place. The industry model is a fucking ponzi scheme. 



FireBrander's picture

"3. A windfall-profits tax, would simply create" a need for a bounty on "gold Horders".

$5000 reward leading to the arrest of anyone possessing gold; who you gonna trust?

Even if the global price of gold is $50,000 an ounce, your Government can make your gold useless/worthless to you...even physically dangerous.

greenskeeper carl's picture

Correct. Might as well plow it all into stocks then, right? Or lend it to the government for 30 years?

TheRideNeverEnds's picture

Yea and also they could confiscate all the gold in the world, still won't cover their liabilities.

Seriously, all the gold ever mined in human history is not enough to cover the notional liabilities of just the United States at current prices let alone the rest of the world.

Hard money doesn't work in the current system, that's why it was disbanded decades ago. It is literally a relic of a bygone era.

greenskeeper carl's picture

"At current prices" is the key word. It would have to be repriced upwards, massively, but it's always a possibility. The current dollar value is irrelevant in that scenario, it would be what the government says it is. Confiscate all they can via the methods I listed above, then revalue you it like was done last time.

Not that this is a real solution, and what the proverbial loaf of bread would cost after such an event is anyone's guess, but if that looks like the best way to preserve the status quo a little longer, it will most definitely be considered. Desperate people do desperate, and often stupid, things.

Dr. Spin's picture

Using the 350 loaves/oz. model:

Gold $10,000 Bread $28.57

Gold $50,000 Bread $142.85


Shemp 4 Victory's picture


Bullshit fear porn...

Yep, 100% pure. (BTW, agreed on your 1 through 5 above.)

The solution is to own gold stocks in a Roth IRA.

Made me laugh. If They® get to the point that a windfall tax is imposed, they might as well impose a breaking wind tax as well, since at that point it will have the same effect as farting in a puddle. What does Nick Giambiololo believe would prevent a seizure (oh, sure, lawful of course) of Roth IRA accounts?

My guess is that the solution will be the deliberate and criminal evasion of taxes. At that point, Vichy DC's role as nothing more than an entrenched organized crime mob will be clear to all but the most helplessly brainwashed. Any rule of law that remains will be at the county level. The term "law abiding citizen", at least as it applies to laws from Vichy, will be strongly synonymous with the term "victim".

Neo Anderson's picture

I am so fucking sick and tired of these bullshit gold and silver "IRA" or "holding center scams".

<start sarcasm> Wait, so you are telling me we should all put our gold and silver in a single area and TRUST that the company will be alright. <end sarcasm>

The just ruined their own case with the entire first part of their presentation. If you want to go after the gold and silver, wouldn't they go for the institutions that hold a large amount of it. Wouldn't they demand record keeping and record filing. So they will basically know who has what, at how much, and if the increase or decrease their posititions.

If you can't hold it, it's not secure.

Vlad the Inhaler's picture

If they do go go door to door, they will start with the list of people who have a Zero Hedge login.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Vlad the Inhaler Aug 11, 2016 9:53 PM

At least someone is conscious. That is a more likely scenario unless the good folks running ZH wipe the hard drives. Or, preferably, blow them up.

FireBrander's picture

Confiscation is way too difficult; making ownership a crime is much easier...and prosecuting you for ownership...now you're talking...the "Criminal Justice" system is ravenous for fresh meat.

Al Bendova's picture

Yep.  Criminal justice system is getting bored, sitting around twiddling their thumbs.

Freddie's picture

They will nationalize the mines, ETFs, bank holdings, etc.

ETFs have about as much real gold as the Comex.  I think Sprot's funds and a few others have real gold.

Miss Informed's picture

Sometimes it is hard to tell the difference between articles and advertising on Zero Hedge

Commodore Decker's picture

They didn't nationalize the mines back in the 1930's. Homestake Mining's stock went up over 600% during the depression.

The Navigator's picture

I like any thing that goes up 600%


How many mines have gone BK since the depression? How do you pick 1 that will be around in 2050 and up 600%

I don't have the answer, just askin'

Like, how many top DOW or S&P companies are around since the great (1929) Depression?

I'm kinda too old to be fucking around in any casino, so phys (at the bottom of the lake of course) is my play.

PlayMoney's picture

gold jewelry? slip that necklace on for the ireland flight? 

e_goldstein's picture

So everything will be okay if you hang on to it for me, huh Nick?

(I may have been born at night, but it wasn't last night.)

greenskeeper carl's picture

Ya every time I hear anything from these people, I think of how great their Argentina property investments have to be doing. Going galt in the socialist, hyper inflating paradise of Argentina. I'll pass. Not that the US isn't looking increasingly worse, but theirs is hardly a viable solution.

e_goldstein's picture

Agreed, I'm sure the property values are working out the same as the value of their watch collections--skyrocketing (in pesos).

But the real money is in Alpaca hair.

Or am I confusing International Man with Soverign Man?

All these dudes trying to con me out of my coins makes me confused sometimes.

CheapBastard's picture

Makes sense. Sounds like something Soweto Obama or the Hildebeast would do.

Payne's picture

gold is already under confiscation.  The government back paper assets in a quasi legal manner to control the vaule of the dollar in gold terms.  same thing.

Until we have real accounting standards everything is steath confiscation under the banner of inflation.




skinwalker's picture

A couple of points:


First, I was under the impression only a small minority of people actually turned in their gold. Many simply sat on it until the legal situation improved.


Secondly, the way to avoid a windfall profits tax is to simply not sell your gold. Trade it with people you trust. It is very difficult for them to track you trading a fractional gold coin for a bunch of goats.


Thirdly, I find it likely that if the situation deteriorated to the point where they needed to specially tax gold, dollars wouldn't be worth too much anyway.


Fourthly, is there anyone alive today who doesn't do something they want to do simply on the grounds that it is illegal?

The Navigator's picture

That;s actually a couple of couple of points

But, all true.

Civil Disobedience - fuck those thieves who have been ripping us all off via inflation, ZIRP, NIRP, banker

balilouts, taxes to the moon, FUCK YOU.

Aubiekong's picture

If real gold goes to the moon your paper filled roth IRA will go down in flames.