first majestic silver

Suppose The Government Takes My Gold?

October 12, 2001

I hear this on a continual basis: "Suppose I buy gold, and the government tells everyone to turn theirs in?" Or, "What if the government comes around and seizes my gold like they did in the 1930's?" Or, "Suppose they pass a law making owning gold illegal?" Or, "If gold is made illegal, how can I buy or sell mine?" Or, many variations of this.

During prohibition, making and distributing alcohol was made illegal, and even unconstitutional. Did it stop drinking? Did alcohol consumption decrease? As I say, in my 230 page book, "Consequences," (still available by e-mail only, and free. Ask me at [email protected]) Not only did alcohol consumption increase radically, but everyone had a lot more fun doing it. There were "speakeasies" by the hundreds, and everyone had a blast violating the law. Alcohol was proliferating like there was no tomorrow. Alcohol had become UNCONSTITUTIONAL! Bootleggers, moonshiners, and rum runners were getting rich by the thousands. Government was growing by leaps and bounds, and no effort was strong enough to wipe out those evil drinkers. Carey Nation was axing bars, and "demon rum" was on the lips of every WCTU (Women's Christian Temperance Union) member. Did it stop drinking? No, but it gave us far more alcoholics than ever…some of them are aged, and still with us today. The thrill of doing something illegal was irresistible.

When a brainless Congress decided that 55 MPH was all that was allowable, for some unknown reason, what happened? The radar detector was invented! We drove as fast as ever with the little devices attached to our windshields. They buzzed when a cop with a radar gun was near. Remember? Did the absurd 55MPH speed limit deter us from driving as we had been accustomed? Nope.

When drugs were made illegal, did it stop drug consumption or sales? Of course not. Rather, the thrill of ingesting mind-altering substances became the "in" thing to do. (No, I have never done any drugs, don't know what they look like or feel like, and don't want to.) Have all the incessant "drug busts" and seizures done anything to stop drug sales or use? No, and as a matter of fact, the more seized, the higher go the prices, due to shortages. The "drug war" continues to amaze me.

As an aside, the "War on Terrorism," replete with a terrorism czar to defend the "Homeland", will have the same results as the war on drugs: More government, and less freedom. It is impossible to stop an individual from committing a heinous crime who is willing to die for his cause, and as an extra bonus will get 70 virgins when he instantly goes to heaven. The way to stop it is to bring the troops home (after Bin Laden's assassination) and stop meddling in everyone else's business. See chapter on "Neutrality" in the same free e-mail book. Maybe the troops that are brought home should be stationed on the US-Mexican border. I'm sick of the illegals crossing with impunity, and staying.

There are countless other examples of pointless illegalities, such as the age-old laws against prostitution. Being a hooker is the world's oldest occupation. Laws have never even put a dent in that profession. How about gambling? The various states have made it "legal" with their lotteries, and cashed in, since they were unable to stop it any other way.

Gold and silver coins have no serial numbers. If your car gets stolen, it is easy to trace it by its VIN (Vehicle Identification Number). Even bicycles have serial numbers, which makes tracing them possible. If a gold coin has no serial numbers or VIN numbers, are they traceable? Saying that government is going to seize your gold, when they haven't the slightest idea of who has it, takes us back to the 1930's when FDR and his robot Congress robbed Americans of billions of dollars. First they raised the price of gold from $20.67 to $35 per ounce. Then they told everyone to turn in their gold. The $20 gold coin was redeemed for $20 in paper, but its gold content had been raised in dollar volume by 69%! Did everyone turn in their gold? Of course not. It is impossible to know who did, and didn't, but I estimate that less than half did. Would you have done it?

If everyone turned in their gold, there would be no numismatic industry now, which endlessly preys on the gullibility of the public. In the late 1970's, when gold was shooting up, and Krugerrands were selling as fast as South Africa could turn them out, Communist countries were turning out fake gold double eagles. Tens of thousands of them were smuggled into the US. They were made out of real gold, and were undetectable without a jeweler's loop. Tens of thousands of them are still around, with most not knowing the difference all these years later. Whey do you think there are so many "double eagles" for sale in coin shops, rather than "eagles?" The double eagle is $20, which were counterfeited, and the "eagle" is $10 which wasn't. Yes, the St. Gaudens were also counterfeited.

Government is unable to know who has the gold, because gold and silver coinage have no serial numbers. Ordering everyone to turn theirs in, is like telling everyone to stop doing drugs, prostitutes to stop plying their trade, everyone to stop driving over 55MPH, or stop drinking during prohibition. It is impossible. Making gold illegal would simply drive it underground, and drive prices through the roof. Would it be possible to buy and sell gold and silver if they were made illegal? Answer that for yourself by asking if it was possible to drink during prohibition, get drugs now, or find a hooker on Van Buren St. in Phoenix.

Government didn't "seize" the gold in the 1930's, but ordered everyone to exchange their gold for paper money. The fools did. The destitute probably did, as it had become illegal to use gold coins as tender. There was a 25% unemployment rate, but 75% still had jobs, and probably kept their gold. No one knows, of course. There was a fine if you didn't turn in your gold, but gold coins in a dresser drawer couldn't be fined upon.

Governments hate gold and silver. They hate them because it makes their piece of paper with ink on it look like what it is…nothing but a piece of paper with ink on it. Gold and silver are tangible, beautiful, historic money. In all my scribblings on this site and in my book, I absolutely refuse to call dollars and other pieces of paper with ink on them, "money." They are currencies, not money. The word "money" denotes value, and currencies have no value, other than legal tender laws. But just because governments hate gold and silver, and desperately manipulate them to save face, it doesn't mean they will attempt to confiscate them. If such ever were attempted, the outrage would be so stupendous as to be laughable. Such a "law" could never get out of committee, and no President would be so foolish as to issue an "executive order," ordering such. The Constitution does not authorize executive orders, and I cannot understand why they have not been struck down by the Supremes long ago.

Lots of things have become "illegal" of late, and the result of these things being made "illegal" are that such things command a premium price way out of line with their true vale. "The more of anything there is, the less they will be worth," remember? Conversely, "the less of anything there is, the more they will be worth." Try to buy Freon 22, or 6 gallon flush toilets. They can be had, but at huge prices, because they are "illegal." Make owning gold and silver "illegal," and it will be possible to buy and sell on any street corner at huge prices. Is it possible? Anything is possible. One has only to use their imagination to visualize possible future atrocities that can be committed by terrorists, or harassment by government.

Don't worry, you'll keep your gold and silver as long as you wish, and be able to sell it at your convenience, either through me or to anyone who values a tangible, glorious piece of historic wealth. Protect yourself and your family, because no one else will.


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