I was a banker....

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meambobbo replied on Mon, Oct 20 2008 10:27 AM

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Matthew:

You would be correct if the coins were government or legal tender issued both domestically or foreign. I'm not talking about purchasing legal tender but privately refined gold. The fact that its shaped like a coin doesn't make it a coin. It's only government money if its issued under the currency act. Will they confiscate gold dust too?- would think not. Legal tender is easy to recall, tracking down other forms of gold is not practical even for government. This information is available on this site if you'll spend the time digging.

Matt, maybe I'm missing something here.  Yes, by buying directly from the Mint or one of their main dealers, it may be more easily tracked to the buyer.  But I don't see why the government couldn't force any private institution from revealing who they have sold gold to, such as the ones who sell non-coin rounds, etc. And what if you are buying the government coins from a different source, like individuals on ebay, for example?  I feel there is no real means that the government could track down all the gold and confiscate it.  Doing so would be an expensive and trouble-some endeavor when it has much more important things to do.

And even if they tracked it down to you, you could make numerous arguments that would prevent confiscation, such as simply saying you sold it for cash for no profit or you lost it, etc.

If people are buying $900 gold coins and the government decides to recall those at their $50 legal tender value, do you think anyone would comply without some form of struggle?!

I'm just not buying it.  If there's any reason to buy non-government-minted gold over legal tender coins, it's that the non-minted gold is cheaper.

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Matthew replied on Wed, Oct 22 2008 8:59 PM

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Hi meambobbo,

There are a couple of points I didn't clarify due to not wanting to bore readers with too much details etc.

Firstly, if a gold coin is legal tender and the government reacalls their gold you would be breaking the law by not handing it in, which is an obvious statement but some people still feel uncomfprtable about the idea of that.

Secondly, the government cannot force private refiners outside their own borders to reveal who owns what gold and where which is why I suggested the best way to own gold is outside your own country - except for what you believe will get you by in a crises. Even better a country that doesn't necessarily comply with government pressure such as a lichenstein, panama, new jersey etc. just a question of international diversification which history has proven is important.

Lastly, the only gold not subject to the gold confiscation act was gold with cultural or religous significance including religous medalions. This is really the type of gold I am talking about. In this case you are protected by law - ofcourse this could change but I doubt it because the impractical nature of ripping gold  from religous sites and buildings wouldn't be worth the governments time for the headaches it would bring.

You are right with what you say about ebay but would add so long as the gold wasn't legal tender as one would still be officially breaking the law. Previously those who didn't hand in gold within 30 days of gold confiscation act being invoked were given prison time - don't think that would happen next time around and as you suggested if gold was at $900 and the government was offering $50, people wouldn't be going without a fight. But the reality is they purchased a legal tender coin worth $50 and thats all they will get for it if they handed it in to the government - thats the plan and thats why governments all over the world do it this way. A way to debase the currency, allow gold to run  up then call it all back for a fraction of what its worth and start all over again.I personally think owning any amount of gold in any form will be beneficial in the days ahead but would suggest diversifying ones gold holdings to be protected by the law as it stands at the moment would be a prudent thing to do.

Cheers,

Matt