If you’ve ever been interested in gold investment, your research has likely revealed cases where the government has confiscated gold. Although in the U.S. it has been some time since gold was confiscated, is it possible that it could happen again? We’ll be answering this question and debunking several myths to help you understand the truth about gold confiscation.
The History of Gold Confiscation
In the 1930s, the U.S. was in the middle of The Great Depression. Widely known as the worst economic downturn in history, it began after the stock market crashed in October 1929, sending Wall Street into a panic and wiping out millions of investors.
As savvy investors know, gold is a great hedge against economic collapse and could help shield you from severe economic downturns. The only thing is – the government knows this as well. In 1933, President Roosevelt’s administration issued an Executive Order calling in gold. This meant Americans were required to turn in their gold and bullion in exchange for $20.67 per troy ounce or face a penalty of $10,000 should they decide to disobey the order. The reasoning behind this? It was believed that the “hoarding” of gold during the depression was stalling economic growth and worsening the crisis.
The order lasted for over 30 years, ending on December 31, 1974, with Executive Order 11825.
Could Gold Confiscation Happen Again?
In short, yes.
Although there is no federal law that explicitly states that the government can call in your gold, during extreme crises the government has the means to seize it whether it comes in the form of an Executive Order or a law.
The fact that gold confiscation is a real (yet unlikely) possibility has sparked many rumors and myths as to how investors can avoid this – usually accompanied by telemarketers armed with solutions and questionable motives.
Debunking Gold Confiscation Myths
Here is the truth about a few popular gold confiscation myths to help you avoid falling victim to any investment scams.
Myth #1: Rare or Collectible Coins Cannot Be Confiscated
The myth that certain kinds of gold coins can’t be confiscated originated in Roosevelt’s Executive Order. This order exempted “gold coins having a recognized special value to collectors of rare and unusual coins.” But it did not define special value, collectors, or collectibles. Even so, telemarketers continue to perpetuate the myth that old U.S. gold coins won’t be confiscated to make selling expensive coins easier.
Myth #2: Non-Reportable Coins
Many promoters claim that the coins they sell are not subject to reporting. These statements imply that the government requires the reporting of gold transactions, which is not true. The government does not want gold reported, it wants the cash. The only case where someone would have to report the purchase of gold is in a transaction involving more than $10,000.
Myth #3: Old Foreign Gold Coins
Telemarketers also tend to promote European coins. They will usually claim that imported coins like British Sovereigns, Belgium Twenty Francs, and Dutch 10 Guilders cannot be confiscated. Unfortunately, this is also a myth.
If the government wanted to seize gold again, no coins would be safe except for those that are verifiably numismatic, truly exceptional coins.
Invest Wisely
Purchasing expensive old or collectible coins in the hopes of avoiding confiscation could lead to you paying unnecessarily high prices for gold. If you’re interested in gold investment, consider buying your gold coins and bullion from a trusted precious metal refiner like Manhattan Gold & Silver at fair prices.
FAQs
Unfortunately, this is also a myth. If the government wanted to seize gold again, no coins would be safe except for those that are verifiably numismatic, truly exceptional coins.
Could the government confiscate gold again? ›
Gold confiscation is a rare but real phenomenon that has occurred in the past and could happen again in the future. However, there are many factors that make it less likely today than it was before. Moreover, there are many steps investors can take to protect their gold from potential seizure.
What type of gold cannot be confiscated? ›
As collectibles, rare coins do not fall within the provisions permitting confiscation. No federal law or Treasury department regulation supports these contentions. The myth that specific types of gold coins are “not confiscateable” stems from the Executive Order that President Roosevelt issued in 1933 calling in gold.
Has silver ever been confiscated? ›
The best Financial Markets Analysis, Articles and anyone who follows the gold market knows that President Franklin D Roosevelt confiscated gold in 1933 with Executive order 6102. What seems to have been forgotten is that silver was effectively confiscated as well.
When could US citizens own gold again? ›
The limitation on gold ownership in the United States was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars, and certificates by an Act of Congress, codified in Pub. L. Tooltip Public Law (United States) 93–373, which went into effect December 31, 1974.
Can the government take your gold coins? ›
Although there is no federal law that explicitly states that the government can call in your gold, during extreme crises the government has the means to seize it whether it comes in the form of an Executive Order or a law.
Will the government ban gold ownership? ›
Today, there are no specific limits on how much gold a person can own in the U.S. Whether it's bullion, coins, or jewelry, you can buy, own, and possess as much gold as you like. The only restrictions may come from reporting requirements if you simultaneously buy or sell large amounts of gold.
How much gold is illegal to own? ›
There is no legal limit on how much gold a person can own. Gold is a valuable asset and a popular form of investment, and individuals are free to buy and own as much gold as they can afford.
What gold coins are illegal to own? ›
It's illegal to own a $20 gold coin from 1933 because the U.S. government never officially released these coins into circulation. They were minted but then recalled and destroyed due to changes in currency laws during the Great Depression.
Is it illegal to sell gold you found? ›
If you own the mineral rights, you can explore, extract, and sell the gold on your property. First, however, it's essential to comply with local, state, and federal regulations, including obtaining the necessary permits before beginning mining operations.
To estimate how long the unmined silver reserves may remain, we need to consider the amount of known reserves and the current production rate. This suggests that at the current rate of production, and assuming no new silver is discovered, the silver reserves will last for just under 22 years.
Does the government have the right to take your gold? ›
The Constitution did not stop the government from taking people's gold in 1933.” Political leaders can and will do whatever they deem necessary at the time. In any way they see fit. For as long as they think it's needed.
Why is it illegal to own gold bars? ›
When the stock market crashed in 1929, the well-to-do rushed to convert their bank funds to more reliable gold bullion. This left the government without enough gold to back newly printed money. Therefore, President Franklin Roosevelt used his executive powers to make it illegal to own gold coins or bars.
How to avoid gold confiscation? ›
If you want protection from your government, don't buy or store your gold in their country. Offshore gold storage offers maximum security for your assets – it's a no-brainer. Your future self will thank you for it.
Is the US Stockpiling gold? ›
Key Takeaways. Although money is no longer backed by gold, governments still store vast amounts of bullion to protect against hyperinflation or other economic shocks. The United States holds the world's largest stockpile of gold reserves by a considerable margin of over 8,100 tons.
What president got rid of gold? ›
Richard Nixon's decision to delink the dollar from gold, announced without warning in August 1971, remade the global monetary system in an instant.
How to avoid gold confiscation in America? ›
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.
Does the government know when you buy gold? ›
Purchasing 25 or more 1 ounce Gold Maple Leafs, 1 oz Mexican Onzas, and 1 oz Krugerrands sets off the trigger. No matter how much is involved, anything involving fractional ounces — including American Gold Eagle coins — is not subject to reporting requirements.
Which president confiscated gold? ›
December 7, 1941 will forever be remembered as, in the words of Franklin Delano Roosevelt, “a date that will live in infamy.” Another infamous date is April 5, 1933—the day that FDR ordered the seizure of the private gold holdings of the American people.
