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While the
familial infighting of free marketers continues to rage over inflation and
deflation - most of the time, about as intelligibly as a wet newspaper, I
might add - a more pressing issue with gold buyers is that of gold
confiscation. For bullion investors, the value of gold will matter little if
it is confiscated again.
So, will the government confiscate gold? It is probably more likely than
unlikely. BHO has shown himself to be the new FDR, and the present
administration is intent on socializing every facet of our country and our
government. Conveniently, our economic crisis almost perfectly mirrors the
Great Depression, giving newsworthy cause to the populus for
"change." It is no longer unthinkable that the Fed would repeat the
heist of 1933 with the POTUS as its puppet.
The Gold Confiscation Act of April 5, 1933
Q. What was the
pretext for the 1933 gold confiscation? A national emergency.
By now, we are all pretty familiar with that phrase. It is hardly unthinkable
that confiscating gold might be packaged by the national media as
"patriotic." The following introduction, beginning with the words,
"I, Barack H. Obama, . . . " are easily conceivable streaming
through today's "national teleprompter."
"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.
Tarek Saab
Guardian
Commodities
Tarek
Saab is the President of Guardian Commodities and a
former finalist on NBC's "The Apprentice" with Donald Trump. He is
an international speaker and syndicated author.
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