The Gold Confiscation Act of April 5, 1933
"I,
Franklin D. Roosevelt, President of the United States of America, do declare
that said national emergency still continues to exist."
Q. To
whom was the gold delivered - the Treasury Office? Nope. Surprise, surprise,
it was delivered to the privately-owned Federal Reserve Bank; the same bank Ben
Bernanke faults for causing the national emergency in the first place! (see:
Bernanke Speech).
"Section
2. All persons are hereby required to deliver on or before May 1, 1933, to a
Federal Reserve bank or a branch or agency thereof or to any member bank of the
Federal Reserve System all gold coin, gold bullion, and gold certificates now
owned by them or coming into their ownership."
Q. Who
was responsible for delivering the gold? Individuals, partnerships, associations and
corporations; also ALL member banks of the FDIC. For those storing gold in bank
vaults, take warning.
"Section
5. Member banks shall deliver all gold coin, gold bullion, and gold
certificates owned or received by them (other than as exempted under the
provisions of Section 2) to the Federal reserve banks of their respective
districts and receive credit or payment thereof."
Q. Who
pays for the safe delivery and transport of the gold - The Federal Reserve? Of course not. You do.
"Section
6. The Secretary of the Treasury, out of the sum made available to the
President . . . will in all proper cases pay the reasonable costs of
transportation of gold coin, gold bullion, and gold certificates delivered to a
member bank or Federal reserve bank in accordance with Sections 2, 3, or 5
hereof, including the cost of insurance, protection, and such other incidental
costs."
Q. What if I do not cooperate? Resistance is futile.
"Section
9. Whoever willfully violates any provision of this Executive Order or these
regulation or of any rule, regulation or license issued there under may be
fined not more than $10,000 (ed note: in 1933, that was a fortune), or, if a
natural person may be imprisoned for not more than ten years or both; and any officer,
director, or agent of any corporation who knowingly participates in any such
violation may be punished by a like fine, imprisonment, or both."
So is gold a good investment? Well, by definition, gold is not an investment. Gold is money. Gold does not create new value; it is a store of wealth, a safe haven in rising and falling markets.
Nevertheless,
I do believe it is imperative to buy and hold gold in your possession. During
inflationary times gold is a hedge against rising prices, and in a deflationary
environment it appreciates against all other commodities due its intrinsic
monetary qualities. But we must hold gold with a certain measure of awareness.
If and when a similar measure is enforced, akin to the Act of 1933, it will be
time to shift your wealth into alternative assets or to silver bullion, which
as yet has never been confiscated. (And, by the way, if you think storing your
gold bullion overseas provides greater protection, think again. Foreign
exchange controls are coming, along with the potential for repatriation of
overseas monetary assets. Even now, the law states that you must report the
existence of all "foreign bank, securities or "other' financial accounts" if
the aggregate value of those accounts exceeded US$10,000 at any time during the
preceding year.)
In the coming
weeks I will further examine foreign exchange controls along with alternatives
for protecting your assets overseas. If confiscation is coming, it is time to
begin planning your next move.
Til next time,
that's my Saab Story.
