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\u00a0 \u00a0 \u00a0 This is a one of the top questions asked by gold and silver investors.\u00a0 This question is largely asked because of what gold and silver investor have heard concerning Franklin D. Roosevelt\u2019s Executive Order in 1933.\u00a0 So the first thing we have to do is examine the reasons behind this confiscation.\u00a0 Executive Order No. 6102 issued by Franklin Delano Roosevelt outlawed the ownership of gold.\u00a0 The government bought back gold at $20.67 an ounce from the public in accordance with eminent domain law.\u00a0 There are a couple of important things to note about the confiscation.\u00a0 First, almost all the gold that was confiscated was voluntarily given up.\u00a0 All other gold that was confiscated was held at banks or by very large investors.\u00a0 So even this confiscation was not comprehensive or effective.<\/p>\n
\u00a0 \u00a0 \u00a0 However for us to truly answer this question we have to ask , \u201cWhy would a government choose to confiscate gold?\u201d\u00a0 There are two main reasons. \u00a0The first reason a government would confiscate gold is in order to gain additional funds in order to deal with fiscally hardship. \u00a0And the second reason would be in order to inflate the money supply.<\/p>\n
\u00a0 \u00a0 \u00a0 Most gold and silver investors believe confiscation is likely because they only are considering the first option.\u00a0\u00a0 Most investors in gold and silver believe that is why Roosevelt confiscated gold.\u00a0 However, this simply isn\u2019t true.\u00a0 In 1933, the United States was on the gold standard, which meant that every dollar in circulation was backed by physical gold.\u00a0 This meant that FDR could not simply print money in order to finance his massive spending and this is why FDR ended up confiscating gold.\u00a0 He could not inflate the dollar until he controlled the value of the gold.\u00a0 It is important to note here that the US government held 68.2% of the world\u2019s supply of gold at the time.\u00a0 Once Roosevelt made gold ownership illegal, he immediately raised the price of gold to $35 an ounce.\u00a0 This immediately devalued the dollar by 40% over night.\u00a0 This is truly the reason why Franklin Delano Roosevelt confiscated gold.\u00a0 Therefore FDR would not confiscate gold today because the Fed now has the ability to inflate the money supply without controlling the gold supply.<\/p>\n
\u00a0 \u00a0 \u00a0 The real question when it comes to confiscation is would the US government confiscate gold because they were in a fiscal straight.\u00a0 I think the answer is no.\u00a0 Gold holdings are very small in the US.\u00a0 At most we are talking about several billion dollars. \u00a0If the government was truly in need of funds there would be several larger and more obvious targets.\u00a0 The first and most obvious one is retirement accounts.\u00a0 According to the Investment Company Institute there was $7.835 trillion in IRA, 401K, 457, and 403b accounts in 2009. \u00a0All gold and silver holdings in the United States are a miniscule fraction of this huge source of wealth.\u00a0 There is also historical precedent for government confiscation of retirement accounts especially in socialistic and communistic countries.\u00a0 Even if the government attempted to confiscate gold, the task would be enormous.\u00a0 The logistics of attempting a house to house search for gold and silver would be massive and would hardly be worth the man power and money that would have to be used in order to confiscate it.\u00a0 In the end, the chance of the government confiscating gold and silver seems extremely small.<\/p>\n
Josh Renfr0<\/p>\n
President & Founder<\/p>\n
Lone Star Bullion<\/p>\n","protected":false},"excerpt":{"rendered":"
\u00a0 \u00a0 \u00a0\u00a0 Roosevelt Gold Confiscation: Executive Order 6102 \u00a0 \u00a0 \u00a0 This is a one of the top questions asked by gold and silver investors.\u00a0 This question is largely asked because of what gold and silver investor have heard … Continue reading