The Myth of Gold Confiscation

Recently I have seen a few articles speculating whether President Obama would decree the confiscation of private gold holdings from US citizens. This is seen as a counter against the perceived inflation surge that many believe will wash over America and the world in years to come as a result of the huge debt load that the credit crunch has instigated. In fact, I have even seen speculations about mining companies being nationalized – even silver mining companies!

Gold confiscation is a subject that divides gold investors. Some say it won’t happen again and others say it will happen again. The one thing they tend to agree on is that they don’t want it to happen again. I wrote on this subject three years and I just want to reiterate one myth about the previous Roosevelt confiscation that needs to be buried lest anyone think a government seizure would leave you bereft of gold.

Roosevelt issued executive order 6102 in April 1933 ordering in all gold coin, bullion and certificates. One contention is that most people did not bother obeying such a directive. In my opinion, the following statement by the Roosevelt government was not bluster but largely true:

“White House Statement on Returning Gold to Federal Reserve Banks.

April 5, 1933

In the past weeks the country has given a remarkable demonstration of confidence. With the reopening of a majority of the banks of the country, currency in excess of $1,200,000,000, of which more than $600,000,000 was in the form of gold and gold certificates, has been returned to the Federal Reserve Banks.

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