Gold Confiscation History Myths and Reality -- Mike Maloney

The Biggest Gold Heists In History...So Far -- Mike Maloney








Transcript : gold confiscation history myths and real 0:03 solutions written by Jeff Clark read by 0:07 mike maloney one concern of retail 0:09 precious metals investors is the 0:11 possibility of a gold confiscation 0:12 imagine having the forethought to buy 0:15 gold to shield your finances from an 0:17 economic or monetary crisis only to have 0:20 it taken away from you by your 0:22 government 0:23 you'd lose not just the protective 0:25 buffer you put in place but potentially 0:27 a chunk of your net worth gold 0:29 confiscation may sound preposterous to 0:31 investors used to securities a real 0:33 estate but it's happened in the past 0:35 enough times to make it a reasonable 0:37 concern for those uneasy about 0:40 unsolvable debt levels runaway 0:42 government spending and continual 0:44 central bank currency creation when a 0:47 grab is made for people savings 0:49 governments don't bother to confiscate 0:51 instruments like stocks and bonds and 0:52 savings accounts those can be wiped out 0:55 simply by devaluing the currency but 0:58 when times are really tough governments 1:00 have requested citizens turn over their 1:02 gold the one asset they have 1:04 historically been unable to control 1:06 since it's not someone elses liability 1:09 what a gold confiscation happens there 1:12 unfortunately aren't a lot of viable 1:15 solutions if your government declares it 1:17 illegal to own a meaningful amount of 1:19 boolean you'd have little choice but to 1:21 comply 1:22 either that or play the role of a 1:24 fugitive with the prospects of financial 1:26 penalties forcible confiscation of your 1:29 metal and even jail time waiting for you 1:32 many investors believe that gold won't 1:34 be confiscated today because it's not 1:36 part of the monetary system like it was 1:38 during the u.s nationalization in 1933 1:41 under Roosevelt while it's true we're 1:44 not on a gold standard today if the 1:47 crisis gets bad enough any and all 1:49 viable solutions could be on the table 1:51 debt in all developed countries is 1:54 unpayable especially when you add in 1:56 unfunded liabilities 1:58 where could the government get funds to 2:00 service at all one source could 2:02 definitely be gold the sober reality is 2:05 while lower than in the past the risk of 2:08 a gold confiscation is not zero the 2:11 world today can be an uncertain place 2:13 and what were once local issues can 2:16 rapidly escalate and have global 2:18 consequences 2:19 this does not mean however that we are 2:21 suggesting a gold confiscation is 2:23 imminent or even probable simply that it 2:26 could happen if one or a series of 2:28 events having significant worldwide 2:30 implications occurs without official 2:32 gold backing on most major currencies 2:34 today the specific motivation to 2:37 confiscate gold that existed during many 2:39 previous confiscations barely exists 2:42 today but as you'll see even that hasn't 2:45 stopped modern government's without a 2:47 gold standard from doing the same 2:48 ostensibly as a form of currency 2:51 controls to slow down market-driven 2:53 devaluation the solutions to 2:57 confiscation risk there's a lot of 2:59 speculation floating around the web 3:01 about what one might do if gold was 3:04 confiscated again unfortunately the 3:06 majority of the most common solutions 3:08 don't hold up too much scrutiny some 3:11 investors assume silver would be exempt 3:14 that's usually because past 3:16 confiscations mainly focused on gold 3:19 however what many investors don't know 3:21 is that a year after the 1933 3:24 confiscation order president roosevelt 3:26 signed executive order 6814 that 3:30 required the delivery of all silver 3:32 bullion to the United States government 3:34 for mending into coins many dealers 3:38 claim numismatic or collector coins 3:40 would be excluded since there was an 3:42 exemption made for rare coin collectors 3:45 in 1933 but as history will show during 3:49 past confiscations the onus was on the 3:51 investor to prove that they were a coin 3:53 collector and not a bullion buyer unless 3:57 you own a substantial amount of rare 3:59 coins you are automatically deemed a 4:01 boolean owner not a collector the 4:04 uncomfortable truth is no one knows 4:06 exactly what form a confiscation could 4:08 take or how new laws 4:10 be enforced and that's part of the 4:13 problem as i said in my book guide to 4:15 investing in gold and silver 4:17 confiscations all come down to this the 4:20 government makes the rules changes the 4:22 rules and enforces the rules though it 4:24 lacks the moral right it can create the 4:27 legal authority though it lacks the 4:29 constitutional empowerment it can turn a 4:31 blind eye to the Constitution the 4:33 Constitution did not stop the government 4:35 from taking the people's gold in 1933 4:38 political leaders can and will do 4:41 whatever they deem necessary at the time 4:43 in any way they see fit for as long as 4:46 they think it's needed when a gold 4:49 investor considers the number of ways 4:51 the confiscation could take place how 4:53 long it could last how easily the 4:55 government could change the rules and 4:57 how deeply it could reach all against 4:59 the backdrop of an economic or monetary 5:02 crisis it underscored the need to put a 5:04 viable strategy in place 5:07 what's really viable is a lesson best 5:09 learned by the mistakes and successes of 5:12 the past gold confiscation a 5:15 surprisingly common solution since 5:18 nineteen thirty-three there have been a 5:20 few notable gold confiscations around 5:22 the world the specific circumstances 5:25 buried but there was a common thread to 5:27 all of them they all arose out of a 5:29 financial crisis as government coffers 5:32 dwindled and reached emergency levels 5:34 politicians didn't hesitate to grab the 5:37 net worth of private citizens and in 5:39 many cases it was portrayed as patriotic 5:42 your country has threatened help save 5:44 your nation 5:46 here are some gold confiscation that 5:47 have occurred in the past 80 years 5:49 United States gold confiscation 1933 5:55 labeled executive order 6102 president 6:00 franklin roosevelt signed a law on april 6:02 fifth 1933 quote forbidding the hoarding 6:06 of gold coin gold bullion and gold 6:09 certificates within the continental 6:11 United States unquote now i want to 6:14 point out that if you save your wealth 6:15 in real money gold and silver 6:18 the government considers that hoarding 6:20 but if you heard their currency they 6:23 call that savings government's always 6:25 want you to save in their currency so 6:28 that they can confiscate your wealth 6:29 from you through inflation the executive 6:32 order basically meant that private 6:34 owners were requested to take their 6:36 coins bars and gold certificates to a 6:39 bank and exchange them for US dollars at 6:42 the prevailing rate of twenty dollars 6:44 and sixty-seven cents per ounce 6:46 why did he do this the US was on a gold 6:49 standard at the time so hoarding gold IE 6:52 real money was seen as a threat to the 6:55 stability of the country's financial 6:56 system remember how bad things got the 6:59 Great Depression was already four years 7:01 old and wasn't showing any sign of 7:04 abating banks were shut unemployment 7:06 soared bread lines formed civil unrest 7:09 grew and the government couldn't make 7:11 its debt payments Roosevelt thought he 7:13 needed to remove Gold's constraint on 7:16 the federal reserve that prevented it 7:17 from increasing the currency supply 7:19 within nine months after making gold 7:22 illegal to own the president raise the 7:24 official price to $35 4-ounce the 7:28 dollars those x gold owners received an 7:30 exchange had just been devalued by forty 7:33 percent it's actually a misconception 7:35 that FDR confiscated gold in 1933 more 7:39 accurately he nationalized it citizens 7:42 were compensated for what they turned 7:43 over in a true confiscation your assets 7:46 are essentially seized with no 7:48 compensation in a severe national crisis 7:51 it's certainly possible the government 7:53 wouldn't be able to afford to pay 7:55 investors to full value of their boolean 7:57 and the US government is serious about 7:59 you not hoarding gold as wikipedia 8:02 reports under the trading with the enemy 8:04 Act of 1917 as later amended by the 8:08 emergency Banking Act of march nine 1933 8:11 violation of the order was punishable by 8:14 fine up to ten thousand dollars and up 8:17 to 10 years in prison or both 8:20 numerous individuals and companies were 8:22 prosecuted worse the ban on the private 8:25 ownership of gold in America the home of 8:28 the free lasted over four decades 8:31 not until january first 1975 could u.s. 8:34 citizens on more than one hundred 8:36 dollars in gold again Australia gold 8:40 confiscation 1959 the Australian 8:44 Government similarly nationalized gold 8:46 the law part of the banking act in 1959 8:50 allowed gold Caesars of private citizens 8:53 if the government determined it was 8:55 expedient to do so for the protection of 8:58 the currency or the public credit of the 9:00 Commonwealth in other words they made it 9:03 legal to see is gold from private 9:04 citizens in exchange for paper currency 9:07 the country's treasurer stated in a 9:09 press release that followed all gold 9:12 other than rock gold and coins to a 9:14 limited extent had to be delivered to 9:16 the reserve bank of australia within one 9:18 month of its coming into a person's 9:20 possession 9:21 the law also said you weren't allowed to 9:23 sell gold except to the reserve bank of 9:26 australia their central bank 9:28 nor could you export any gold send it 9:31 outside the country without the bank's 9:33 permission 9:34 well it is unclear whether or not the 9:36 country moved ahead with active seizures 9:38 or just how many citizens complied the 9:42 law still destroyed the local private 9:44 gold market overnight like the usband 9:47 this rule wasn't short-lived either 9:49 reports indicate that the state on the 9:51 books until nineteen seventy-six a full 9:54 17 years before being suspended 9:57 great britain's gold band 1966 ever 10:02 since great britain went off the gold 10:04 standard in 1931 their currency had been 10:07 falling as the decline stretch from 10:09 years in two decades many investors 10:11 began to store gold overseas worried 10:14 their country might never recover 10:16 who could blame them their standard of 10:18 living with threatened 10:19 to stem the decline in the pound 10:21 sterling in 1966 the government banned 10:24 private citizens from owning more than 10:26 four precious metal coins it also 10:29 blocked imports of gold coins a common 10:31 move to keep currency from being 10:33 exported similar to modern-day tariffs 10:36 on gold imports in places like India the 10:38 only exemption to owning more than four 10:40 coins with to prove you are a collector 10:43 you are required to apply for a license 10:45 and then an officer from the bank of 10:47 england would determine if you were a 10:49 true collector or not if not we'll take 10:52 your boolean thank you very much 10:54 the important distinction about this 10:56 gold man is that it occurred when great 10:59 britain was not on a gold standard in 11:01 other words we have historical 11:03 precedence that gold was confiscated 11:05 without it being part of the monetary 11:07 system gold is not part of the monetary 11:10 system today either 11:12 like most confiscations this law lasted 11:15 a long time until nineteen seventy-nine 11:18 a full 13 years see any patterns here 11:21 these three gold confiscations have some 11:25 things in common they all won were 11:28 imposed by Western governments these 11:30 were advanced societies among the 11:31 richest countries on the planet and yet 11:34 they all confiscated gold to a rose out 11:38 of economic crisis each government had 11:40 abused its financial system so badly 11:42 that eventually nationalized 11:45 privately-held gold from citizens three 11:47 lasted for a long time of these 11:50 confiscations from advanced economies 11:52 the shortest was 13 years and four 11:56 completely forbid any type of hoarding 11:58 of volume only true collectors were 12:01 exempt and only those pieces that were 12:03 truly classified as rare and you had to 12:07 prove it 12:08 interestingly gold jewelry was not part 12:10 of any of these confiscations 12:12 unfortunately there are some nastier 12:15 gold confiscation from history these 12:17 involved the Brutes the bullies and the 12:20 dictators it won't surprise you that in 12:23 nations ruled by an oppressive regime 12:25 gold with a natural target to grab for 12:28 funds for the government 12:30 Italy's gold donation benito mussolini 12:35 Italy's Prime Minister turns dictator 12:38 tried to fight a nasty recession by 12:40 introducing the gold for the fatherland 12:42 initiative in 1935 he encouraged the 12:47 public to voluntarily donate their gold 12:50 rings necklaces and other forms of gold 12:52 to the government in exchange citizens 12:56 receive a steel wristband that board the 12:59 proud words translated gold for the 13:01 fatherland it said that even his wife 13:04 Rachel donated her own wedding ring in a 13:06 show of solidarity the gold was melted 13:09 down and made into bars then distributed 13:11 to the country's banks the government 13:14 netted 35 tons 1.23 million ounces from 13:19 citizen donations Germany confiscation 13:23 of check gold Hitler's Nazi Party pulled 13:27 a tricky scheme in 1939 after the 13:30 invasion of czechoslovakia the year 13:31 before the Bank of International 13:33 Settlements chaired by the bank of 13:35 england director auto niemeyer a German 13:38 no less instructed the bank of england 13:40 to transfer 5.6 million pounds sterling 13:43 of gold from the Czech national bank to 13:46 the German rice bank 13:48 even though the gold belong to the 13:50 checklist of akhiyan government and even 13:53 though English authorities had been 13:54 warned of the possible transfer it went 13:57 through without a hitch to mask the 13:59 theft Germany central bank understated 14:02 it's official reserves later that year 14:05 Saddam and Fidel the madman of Iraq and 14:09 the Communist oppressor of Cuba both 14:11 confiscated gold art and jewelry these 14:15 brutal dictators took whatever they 14:16 wanted at the point of a sword or a gun 14:19 as you might surmise citizens were not 14:22 compensated when their holdings received 14:24 unless you count remaining alive as 14:27 compensation Russia based on interviews 14:30 are conducted with two large gold 14:32 bullion dealers in Russia the old Soviet 14:35 Union had historically viewed gold and 14:38 silver as a matter of national security 14:41 therefore private ownership of gold in 14:43 any form except jewelry and numismatic 14:46 coins was strictly forbidden people went 14:49 to jail for owning gold bars and in 14:51 spite of the russian central bank being 14:53 one of the biggest buyers of gold since 14:55 2008 those old laws are still on the 14:58 books it's illegal to buy or sell 15:01 bullion bars except at a bank that has a 15:03 precious metals license and very few 15:06 have them it's a criminal offence to buy 15:08 or sell a gold bar from a friend or 15:10 relative transporting bars has strict 15:14 rules and can send you to prison if you 15:16 break them 15:17 it is illegal to take bullion bars out 15:19 of the country and buying and selling 15:20 foreign-made bars is also illegal these 15:25 laws are not strictly enforced today but 15:27 they remain on the books and thus could 15:29 easily be activated again 15:32 the difference in gold confiscation 15:34 between the plunderers versus those from 15:36 advanced economies is that the 15:38 plunderers were more oppressive about 15:40 the confiscation typically took more 15:43 than just gold and of course were more 15:45 brutal in carrying it out there's 15:48 another crucial distinction except 15:50 during times of active persecution there 15:53 is no historical precedence for gold 15:55 jewelry being confiscated if a nation 15:58 operated under the rule of law seizing 16:00 jewelry wasn't part of the government's 16:02 strategy 16:04 the reality is that in a crisis we could 16:06 potentially face a lethal combination a 16:09 desperate government with your assets 16:11 ready for the taking the point of all 16:13 this isn't predict there will be a gold 16:15 confiscation the idea is be aware of the 16:19 risks and have a viable plan in place to 16:21 combat one if it occurs but is there 16:24 really such a strategy on the surface it 16:27 would seem that short of renouncing your 16:29 citizenship and moving out of the 16:30 country there are precious few options 16:32 to protect against such a draconian act 16:35 that there are a couple of strategies 16:37 that have been historically effective in 16:39 combating gold confiscation proven 16:43 solutions out of jurisdiction starting 16:47 gold and silver where government is less 16:48 likely to be able to reach it quickly 16:50 and easily is a smart buffer to put in 16:52 place first as many of noted before 16:55 keeping it outside the banking system is 16:58 a good step many references site how 17:00 banks have been known to hypothecated 17:02 gold-ie lend it out to someone other 17:05 than its rightful owner 17:06 putting it at systemic risk just as 17:09 importantly during the modern balans 17:11 we've seen in debts tricking countries 17:13 thanks for often working hand-in-hand 17:15 with governments to seize assets long 17:18 before citizens found out what was 17:19 happening the threat of being cut off 17:22 from central bank liquidity is an 17:23 existential threat to banks and thus 17:26 they are not known for going to bat for 17:28 consumers in court to block over each 17:30 like an independent vault provider 17:32 hopefully would another step further 17:34 removed is storing overseas also 17:38 involved outside the banking system it 17:40 puts your assets one step further out of 17:42 reach less low-hanging fruit 17:45 as they would say without the ability to 17:47 take quick possession you have more time 17:50 and distance to fight such an order but 17:52 even this is not bulletproof a desperate 17:55 government could just as well declare 17:56 all personal gold holdings be 17:58 repatriated regardless of where they are 18:01 stored it be a spin-off of the old tax 18:04 joke how much gold do you on okay give 18:07 it to us if the company holding your 18:10 metal is a domestic entity they might be 18:12 forced to comply anyway at least in 18:15 reporting your holdings so they can be 18:17 taxed in lieu of surrender 18:19 some suggest you should instead do 18:21 business with a foreign company but that 18:23 adds a different risk and one that comes 18:25 with a dubious level of added protection 18:27 first you give up access to the local 18:30 rule of law if a vault in singapore 18:33 swears your gold is there what will you 18:35 do if it ends up not being the case when 18:38 dealing with a domestic company at least 18:40 you can turn to the court system second 18:43 a foreign company can be compelled to 18:45 cooperate with a big enough foreign 18:46 government like the US as investors 18:49 using private banking services in 18:51 Switzerland discovered in recent years 18:53 the threat of being cut off from banking 18:56 with the US will quickly convince a 18:58 company or its host government to comply 19:01 with the confiscation order at least by 19:03 reporting holdings even if it does not 19:05 relent to the pressure from abroad the 19:08 foreign entity would almost certainly 19:09 refuse to deliver buy or sell precious 19:13 metals in a jurisdiction where 19:14 authorities have issued a confiscation 19:16 order leaving you only with the option 19:19 to relocate elsewhere hardly better and 19:22 often much worse than using a domestic 19:24 provider you have real recourse against 19:27 bottom line while not risk-free private 19:30 for involved holdings whose 19:32 affordability surprises many precious 19:34 metals investors stewarded by a company 19:36 based in the nation with a historically 19:38 strong rule of law can be one of your 19:41 best lines of defense if confiscation is 19:43 a concern 19:44 the Elizabeth Taylor solution you 19:49 probably know that the queen of the 19:50 silver screen loved jewelry her 19:53 collection fetched over 150 six million 19:56 dollars after her death she even wrote a 19:59 book about her jewelry 20:01 indeed it's hard to find a picture of 20:03 her without gold diamonds or pearls 20:05 draped over her neck wrists 20:08 you may also know that Elizabeth Taylor 20:10 traveled a lot at various points in her 20:13 life she had homes in Beverly Hills 20:15 London and Switzerland among other 20:17 places she even traveled to around a few 20:20 years before the Iran hostage crisis and 20:23 here's an interesting fact about her 20:25 travels 20:26 she always took some jewelry with her 20:28 and walked right through customs with it 20:30 no messing with customs forms and no 20:32 requirement to declare a financial asset 20:34 this circumstance remains true today 20:37 you likely know that when crossing 20:39 borders travelers are often required to 20:42 complete customs paperwork and declare 20:44 large amount of currency and any other 20:46 financial instruments they are carrying 20:48 anything over ten thousand dollars to or 20:51 from the US for example the new rules 20:55 specifically mentioned gold and also 20:57 that the price of the gold determines if 20:59 you were at the reporting limit 21:00 not the face value on a coin that means 21:04 that seven ounces of gold would be the 21:05 maximum you can carry at 1,300 dollar 21:08 gold you'd be at risk with five coins 21:12 when goals reaches $2,000 since gold 21:15 jewelry is not considered a financial 21:17 asset under US law reporting it is not 21:20 required nor have we discovered any 21:22 country where it is handled differently 21:24 they'll always be sure to check the laws 21:27 along your itinerary you and your loved 21:29 ones can employ your own Elizabeth 21:31 Taylor solution consider the advantages 21:33 you possess if you wanted to transport 21:35 some gold outside the country it would 21:38 be a lot easier to hop on a plane 21:40 wearing a few necklaces or bracelets 21:41 been carrying a stack of gold coins or 21:44 bars consider the hassle you could avoid 21:47 passing through customs as well as a 21:49 threat of your gold bullion coins being 21:51 questioned or seized 21:53 but what about confiscation as history 21:56 has shown in the developed world gold 21:59 confiscations have targeted monetary 22:01 metals like coins and bars jewelry was 22:04 spared only in oppressive nations ruled 22:07 by dictators was a target in other words 22:10 the resident of a developed nation that 22:13 owns gold jewelry has an asset that is 22:15 far off the radar of appealing assets to 22:18 grab which is why we believe that 22:20 investment grade bully and jewelry is 22:22 one of the most unique and important 22:24 asset classes to own if confiscation is 22:27 a concern gold without borders gold 22:31 Silver's investment-grade boolean 22:33 jewelry 22:34 the problem with most gold jewelry sold 22:37 in the West is dilution it's often made 22:40 with cheaper hours that contain only a 22:42 fraction of gold and is very expensive 22:44 relative to the actual precious metals 22:47 content markups are easily two and three 22:50 times the gold value and it's not hard 22:53 to find it four or even five times 22:55 higher that takes school of jewelry far 22:58 from its roots when it was a form of 23:00 wearable wealth meant to keep assets 23:02 close at hand 23:04 traditionally in Europe and Asia gold 23:06 jewelry was a more portable alternative 23:08 to art heirloom furniture and land as an 23:11 outside of the bank assets that held its 23:14 value and was easily passed between 23:16 generations today in india china 23:19 thailand and elsewhere the tradition 23:21 remains the thai currency the bots for 23:24 example is even named after a common 23:27 jewelry style that predates it and 23:29 that's exactly what we've recreated with 23:31 our exclusive gold without borders 23:33 jewelry line these investment-grade 22 23:36 and 24 karat pieces that's 91.3 percent 23:40 gold the same as an american eagle coin 23:43 and 99.999 percent pure gold 23:46 respectively are an affordable 23:48 alternative to the mostly costume 23:50 jewelry you find in today's stores 23:52 classic designs that provide much more 23:55 bullion for your money and of course 23:57 they're beautiful 23:59 boolean jewelry is a real asset that is 24:01 both portable and practical 24:03 you can wear it transport it and a 24:05 confiscation order is likely to bypass 24:08 it discreet wearable wealth check out 24:11 the numerous pieces gold silver offers 24:13 in their new gold without borders line 24:16 of investment-grade jewelry it may just 24:18 offered the solution you've been looking 24:20 for