Why Did The U.S. Government Confiscate Gold In 1933 And Can It Happen Again?

By Julian D. W. Phillips, GoldSeek

In this the second part of this series we look at the big global picture when President Roosevelt’s Administration confiscated the gold of U.S. citizens. Based on this part, in the next part we contemplate whether it can happen again.

From May 1st 1933 until 1971, U.S. citizens could no longer hold gold as a protection against paper money, which also lost its gold backing at the same time. Foreign central banks could continue to exchange the U.S. dollars that came into their possession [known as Eurodollars for decades] for gold and did so particularly when the $ was devalued and then floated against the gold price in 1971.

Why?
The ‘why’ of it all, is critical to our understanding of the global monetary system now! There were two distinct phases to the process that began in 1933.

1. The economic time period was as the great depression was coming to an end in the world. It was a time when Hitler came to power in Germany and that country turned on the growth taps with its war machine driving Germany out of its depression into a resurgence of that country ahead of the Second World War. It became clear to all that monetary turmoil was to continue. More money was needed to start and to fuel growth in the U.S. despite the fact that the traditional way of growing money [against real growth in the economy] would hold the world back for a considerable period of years still. With money tied to gold and the U.S. needing to fuel its money supply it appeared reasonable to increase the government’s stock of gold forcefully and dramatically. The first step was this order confiscating gold. All but rare gold coins were handed over to the government under the threat of a $10,000 fine or 10 years in prison. These threats were persuasive enough. U.S. citizens complied in full.