 US Gold confiscation again possible?
For those investors wondering how to allocate their gold investments between stocks, paper certificates, and physical gold and silver, you might want to read a short history of gold regulation in the US:
In 1933, President Roosevelt outlawed the ownership or possession of monetary gold by any US individual, partnership, association or corporation. Executive Order 6102 required all US citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce.
A year later, the Gold Reserve Act revalued the price of gold to $35.00 per ounce (effectively devaluing the US dollar). This was an immediate 69 % profit for foreign holders of gold, at the expense of U.S. citizens whose gold holdings had been confiscated.
In 1971, the US dollar had become increasingly overvalued. Nixon finally suspended the convertibility of the dollar into gold or other reserve assets at $35 an ounce, and gold rose to around $195.00 in 1974., while US investors still could not own gold bullion.
Effective 31 December 1974, near the peak of the market, it again became legal for US citizens to own gold. The price of gold then declined to $100.00 an ounce in 1976. It then rose to $850 an ounce in 1980.
From 1999 to 2002, England's Chancellor of the Exchequer Gordon Brown sold about half of England's gold reserves. This was done pretty close to the market bottom in the mid $200s an ounce. Worse, he announced the sales in advance, further lowering the price. The phrase "barbarous relic" was commonly used to refer to gold at that time.
It then rose to another peak of $1921.50 in September 2011.
I have no idea whether anything like these events will play out in the US or other countries in the near future, but it may be a good policy to consider spreading your precious metals investments among stocks, ETFs with physical holdings, and personal holdings. Paper futures, options and other derivative markets can have Black Swan events which result in defaults and market halts which make it impossible to to trade or access your investments, or to close out a bad (or very good) position, until prices change drastically, as happened in 1987 Black Monday with stock options and futures.
The UK, US, or other countries could even sell (or increase) their gold holdings. Anything is possible.
Remember why you buy precious metals in the first place!!
 Commenté il y a 2996 jours |
