U.S. asset managers worried Obama could confiscate gold

[phideaux]

U.S. asset managers worried Obama could confiscate gold

Anecdotal evidence suggests some major U.S. asset managers prefer to hold gold outside the U.S. for fear of confiscation in an echo of Roosevelt's 1933 decree.

Author: Lawrence Williams
Posted: Thursday , 10 Jun 2010

LONDON - Speaking at the FT Silver conference in London yesterday, lead-off speaker John Levin, HSBC Bank's Managing Director, Global Metals and Trading (HSBC is one of the world's top precious metals traders and its vaults in the U.S. and Europe hold huge holdings of gold and silver bullion) recounted conversations with some of the U.S.'s top asset managers controlling massive amounts of capital asking if HSBC had the capacity in its vaults to store major gold purchases. On being told that the bank's U.S. vaults had sufficient space available he was told that they did not want their gold stored in the U.S.A. but preferably in Europe because they feared that at some stage the U.S. Administration might follow the path set by Franklin D. Roosevelt in 1933 and confiscate all U.S. gold holdings as part of the country's strategy in dealing with the nation's economic problems.

While in Mineweb's view such a move is unlikely, one needs to bear in mind that President Obama is a keen follower of Roosevelt's views and policies and that the very fact that some asset managers controlling huge volumes of money feel that such a move is possible is a significant factor - and one that is perhaps heightened by the huge amounts of money flowing into gold at the moment in both ETFs and bullion.

As a reminder to readers - Section 2 of Roosevelt's Act read as follows: 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 on or before April 28, 1933, except the following:

(a) Such amount of gold as may be required for legitimate and customary use in industry, profession or art within a reasonable time, including gold prior to refining and stocks of gold in reasonable amounts for the usual trade requirements of owners mining and refining such gold.

(b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having recognized special value to collectors of rare and unusual coins.

(c) Gold coin and bullion earmarked or held in trust for a recognized foreign government or foreign central bank or the Bank for International Settlements.

(d) Gold coin and bullion licensed for the other proper transactions (not involving hoarding) including gold coin and gold bullion imported for the re-export or held pending action on applications for export license.

At that time of course, the dollar was exchangeable for gold at a set value ($20.67 an ounce) so compensation for such a move would have been easy to calculate. Roosevelt subsequently revalued gold to the $35 level which stood for over 30 years. Nowadays that kind of process would be a little more difficult, but perhaps not beyond the means of a government, already versed in printing large sums of money to try and re-stimulate the economy. Perhaps a figure of the average gold price over a 3 month period at a certain date would meet an initial compensation valuation, but in today's much more litigious society such a move might well fail anyway.

Indeed current economic analysis of the Roosevelt move suggests that it was not successful in helping drag the U.S. out of depression and indeed may have contributed to a recession within a depression - a pretty dire situation. It probably took World War II to end the Great Depression.

Levin's presentation - a trader's view from the coal-face as he put it - contained much anecdotal material of interest and was a refreshing change from the usual analysts' viewpoints. More of that in a subsequent article.

http://www.mineweb.com/mineweb/view/...6063&sn=Detail

[Treasure Searcher]

The way Uncle Sam is broke, they will be taking everything. Best to hold physical gold in your possession. Forget the vaults that store gold, they can be confiscated.

If Uncle Sam comes to the door, you "lost it in a boating accident". In my case, I would plead "Persion Gulf Syndrome, do not remember anything".

[SWRichmond]

molon labe, bitches.

[phideaux]

IMHO they won't come after gold held by private citizens, it wouldn't be worth their time and energy.

The simple "solution" would be to just nationalize GLD and all the other gold ETFs. GLD (allegedly) holds nearly 2000 tons.

Maybe Obama will do the world a favor and try to confiscate GLD's gold. When GLD's vaults are found to be empty, or the stuff in the vaults is actually leased out to other parties, the price of physical held in private hands will multiply by a factor of 10 or 100 overnight.

Goooooo Obama!

[gunDriller]

The way Uncle Sam is broke, they will be taking everything. Best to hold physical gold in your possession. Forget the vaults that store gold, they can be confiscated.

If Uncle Sam comes to the door, you "lost it in a boating accident". In my case, I would plead "Persion Gulf Syndrome, do not remember anything".

actually, a law that implements this confiscation has already been signed and it becomes active in 2012.

it was part of Obama-care.

any commercial transaction $600 or over - it's 1099 time. all of the articles about the law talk about a flood of literally billions of 1099's.

so, if gold is at $1500 at some point in 2012 and you sell a half-ounce frac (so you receive $750), for cash - by law the party receiving the money is required to file a 1099.

[electric-amish]

A Soverign US can not-------Because of the Current defacto World Wide Currency position.

If they did the Globe would dump dollars and collapse the planet. More than 50% of US Currency is outside of US. These holders would be telegraphed that the Currency is no longer able to hold up.

It would be a Global Goverenment only that would have the strength to do this-----------Oh thats Biblical by the way sort of////

There is a verse that says the Jews would be throwing their Gold and Silver in the streets. Only reason to do this would be if keeping it would be worse----subject to arrest etc.

E-A

[Ragnarok]

In addition to ETF holdings, I believe that precious-metal IRAs would also be low-hanging fruit in such a scenario.

2c, R.

[mk3hunter]

molon labe, bitches.

LEOs better think long and hard on if they are willing to die for this Govt....if that ever happens.

[SongSungAU]

The way Uncle Sam is broke, they will be taking everything.

Including 401k accounts. If China and other countries will no longer buy our debt instruments, it wouldn't surpirse me if the government required 401k accounts to hold some "for the good of the country" or a guaranteed IRA "for the good of the retirees" or something we can't even think up right now.

[SongSungAU]

actually, a law that implements this confiscation has already been signed and it becomes active in 2012. it was part of Obama-care. any commercial transaction $600 or over - it's 1099 time. all of the articles about the law talk about a flood of literally billions of 1099's. so, if gold is at $1500 at some point in 2012 and you sell a half-ounce frac (so you receive $750), for cash - by law the party receiving the money is required to file a 1099.

This will all but guarantee more people start using the barter system more than they do now. Lots of transactions will take place off the books without cash changing hands. When will the people of this land wake up and fire the idiots (politicians) creating this mess? Hopefully we won't wait until it's too late.

[Goldhedge]

The government (FEDERAL RESERVE) already owns everything already....

[Desert Diamond]

i lost my gold in the gulf of mexico. good luck finding my gold in that oil spill

[andial]

The only way the government is getting my Sacagawea Golden dollar coins is from my dead cold hands.

[SongSungAU]

The only way the government is getting my Sacagawea Golden dollar coins is from my dead cold hands.

LOL! Thanks, andial. I needed that.
:-)

[917601]

actually, a law that implements this confiscation has already been signed and it becomes active in 2012.

it was part of Obama-care.

any commercial transaction $600 or over - it's 1099 time. all of the articles about the law talk about a flood of literally billions of 1099's.

so, if gold is at $1500 at some point in 2012 and you sell a half-ounce frac (so you receive $750), for cash - by law the party receiving the money is required to file a 1099.

Wrong-US Silver and Gold Eagles are US legal tender worth only the amount printed on them-(already upheld in Federal IRS tax courts).Why do you think some people only buy US eagles? $50 and $1.

[Ragnarok]

Wrong-US Silver and Gold Eagles are US legal tender worth only the amount printed on them-(already upheld in Federal IRS tax courts).Why do you think some people only buy US eagles? $50 and $1.

Two words - Executive Order.

R.

[Green Light]

At the time of the "gold confiscation" in this country there were U.S. gold coins in circulation. The government called them all in.

This is not the case these days.

[Ragnarok]

Doesn't matter if there's anything in circulation. As far as execuitive orders go they can cite any reason - for example, regulation of PMs as "strategic" - or not. Executive orders are effectively "Constitutional Override" orders.

That said, I think they'd go for paper gold first.

R.

[artist]

That's why I like Silver. If they confiscated all the silver to one spot, it would start a black hole.

[GOLDZILLA]

Wrong-US Silver and Gold Eagles are US legal tender worth only the amount printed on them-(already upheld in Federal IRS tax courts).Why do you think some people only buy US eagles? $50 and $1.

This could be a double edged sword too, though, as they could compensate you with that legal tender amount of fiat when they steal--"confiscate" them from you.

[Ragnarok]

IMHO, an attempt to confiscate gold in the US, and not worldwide, will merely result in a repeat of what happened the last time - expatriation of a large portion of American gold overseas - which would also cause a LOT more boating accidents.

2c, R.

[Weatherman]

Green Light, I tried to thank your post, but it disappeared too quickly. I doubt that Washington will fight the battle to take our gold or silver, but I am confident that they will use the power of the IRS to steal value wherever they can find it. Since so few people have silver or gold, the politicians will be encouraged by the majority to act like robin hoods who take from the minority who have real savings, and give to the majority who did no planning to help themselves.

[AgBar]

That's why I like Silver. If they confiscated all the silver to one spot, it would start a black hole.

Nice.

[keepitlow]

actually, a law that implements this confiscation has already been signed and it becomes active in 2012.

it was part of Obama-care.

any commercial transaction $600 or over - it's 1099 time. all of the articles about the law talk about a flood of literally billions of 1099's.

so, if gold is at $1500 at some point in 2012 and you sell a half-ounce frac (so you receive $750), for cash - by law the party receiving the money is required to file a 1099.

Does that mean if you buy a gun for $1000 the store reports the guns buyer on a 1099? Or is it just when a private citizen gets over $600?

[keepitlow]

Doesn't matter if there's anything in circulation. As far as execuitive orders go they can cite any reason - for example, regulation of PMs as "strategic" - or not. Executive orders are effectively "Constitutional Override" orders.

That said, I think they'd go for paper gold first.

R.

Lets look at the various powers the government has through executive orders, with only the swish of the pen, from the president.

Here are just a few of them...

EXECUTIVE ORDER 10990 allows the government to take over all modes of transportation and control of highways and seaports.

EXECUTIVE ORDER 10995 allows the government to seize and control the communication media.

EXECUTIVE ORDER 10997 allows the government to take over all electrical power, gas, petroleum, fuels and minerals.

EXECUTIVE ORDER 10998 allows the government to take over all food resources and farms.

EXECUTIVE ORDER 11000 allows the government to mobilize civilians into work brigades under government supervision.

EXECUTIVE ORDER 11001 allows the government to take over all health, education and welfare functions.

EXECUTIVE ORDER 11002 designates the Postmaster General to operate a national registration of all persons.

EXECUTIVE ORDER 11003 allows the government to take over all airports and aircraft, including commercial aircraft.

EXECUTIVE ORDER 11004 allows the Housing and Finance Authority to relocate communities, build new housing with public funds, designate areas to be abandoned, and establish new locations for populations.

EXECUTIVE ORDER 11005 allows the government to take over railroads, inland waterways and public storage facilities.

http://sonic.net/sentinel/gvcon5.html

[keepitlow]

At the time of the "gold confiscation" in this country there were U.S. gold coins in circulation. The government called them all in.

This is not the case these days.

Yes, it was my understanding they confiscated the gold to make mandatory the acceptance of their paper $$. But was this when they switched from gold to silver certs? Back then they could not create $$ with a silicone chip as they do now. So they could not 'buy the depression away' as they did in '09.

[budfox]

If they come for the gold me thinks they will get lead.

[keepitlow]

This will all but guarantee more people start using the barter system more than they do now. Lots of transactions will take place off the books without cash changing hands. When will the people of this land wake up and fire the idiots (politicians) creating this mess? Hopefully we won't wait until it's too late.

No one to fire. All you can replace them with is another scumbag. Anyone that aspires to go in politics is ego based, greedy, power hungry and has a desire to control others.

No, whether it is a Dem or Rep, the verdict is the same...Lying Rhetorician. Voting for change is a very popular sales pitch that lying rhetoricians make when campaigning. You have to understand, our whole political system fights change. And if perchance some change does come about, it is quickly squelched every 4 years by the new incoming administration and we backslide.

This is the delusion that gets voters every time. The hope that they have of a 50% chance of making the right decision with whom they elect. When in reality, they have a 100% chance of getting another lying rhetorician no matter who gets in.

Remember how change was the buzzword for 2008 elections...vote for change!

Well, lets be honest...in politics substantive change is only paid lip service. Because citizens don't run the government, the rich run the government.

http://www.youtube.com/watch?v=eAaQNACwaLw

Remember what Obama ran on..."Let's spread the wealth!"

Then it was "Let's tax the rich 5% to pay for universal healthcare."

Then "Let's tax the fat cats of Wall Street to reign in some of those big bonuses."...and on and on with the lies.

What lying rhetoricians do is to float some popular headline to appease the public into thinking they will do something to fight whatever corruption is disturbing Joe Public

Then the ignorant public thinks something will get done. They relax, thinking their problems will be solved and lose track of the issue. And the lying rhetorician in has succeeded in fudging the public once again.

Now, let's say the filthy scumbags in office do pass some token policy to appease the citizens. What do they do with the legislation? They wont make it effective until 2 or 3 years down the road. That gives the hypocrites time to come up with more legislation to counteract the new laws or it gives time to the industry to maneuver around it.

And if all else fails, the corrupt politicians just wait until the next administration comes in to strike down the laws before they even take affect. It is all smoke and mirrors.

[Cajuncoin]

i lost my gold in the gulf of mexico. good luck finding my gold in that oil spill

Cajuncoin lost his too and the ROV off the rig doesn't go that deep. Who wants oily PMs anyhow!!

[Nickelless]

actually, a law that implements this confiscation has already been signed and it becomes active in 2012.

it was part of Obama-care.

any commercial transaction $600 or over - it's 1099 time. all of the articles about the law talk about a flood of literally billions of 1099's.

so, if gold is at $1500 at some point in 2012 and you sell a half-ounce frac (so you receive $750), for cash - by law the party receiving the money is required to file a 1099.

That war isn't over yet, by any means:

http://www.numismaster.com/ta/numis/...rticleId=11843

[Nickelless]

Lets look at the various powers the government has through executive orders, with only the swish of the pen, from the president.

Here are just a few of them...

EXECUTIVE ORDER 10990 allows the government to take over all modes of transportation and control of highways and seaports.

EXECUTIVE ORDER 10995 allows the government to seize and control the communication media.

EXECUTIVE ORDER 10997 allows the government to take over all electrical power, gas, petroleum, fuels and minerals.

EXECUTIVE ORDER 10998 allows the government to take over all food resources and farms.

EXECUTIVE ORDER 11000 allows the government to mobilize civilians into work brigades under government supervision.

EXECUTIVE ORDER 11001 allows the government to take over all health, education and welfare functions.

EXECUTIVE ORDER 11002 designates the Postmaster General to operate a national registration of all persons.

EXECUTIVE ORDER 11003 allows the government to take over all airports and aircraft, including commercial aircraft.

EXECUTIVE ORDER 11004 allows the Housing and Finance Authority to relocate communities, build new housing with public funds, designate areas to be abandoned, and establish new locations for populations.

EXECUTIVE ORDER 11005 allows the government to take over railroads, inland waterways and public storage facilities.

http://sonic.net/sentinel/gvcon5.html

That's all fine and dandy on paper, but if nobody else in the government or the military is willing to enforce these executive orders--this would become a de facto coup if they didn't enforce the orders--then what does it matter what's on paper? Think of the lawless regions along the Afghan/Pakistani border where bin Laden is thought to be hiding, or Somalia outside of its capital--if the government is scared enough of the people that it refuses to set foot in regions where the people are rebelling, it won't matter one rat's butt what executive orders are passed. Would you want to face down millions of angry people if it could result in your personal annihilation? Or would you rather save your life by leaving trouble alone? THAT is where our power is as We The People. SCREW executive orders--if enough people are ticked off about what the executive branch tries to cram down their throats by fiat, the executive branch will back down rather than commit de facto suicide. I've heard it said that the difference between modern-day Europe and the U.S. is that in Europe, the governments fear the people, but in the U.S., the people fear the government. I think that's one lesson we need to learn really quick and make the government fear the people, not vice versa.

[Gcubed]

That war isn't over yet, by any means:

http://www.numismaster.com/ta/numis/...rticleId=11843

[Ragnarok]

At any rate, if/when gold confiscation orders go out, Obama and cohorts will find out what the smarter part of the American public already knows:

There is no gold available.

And they'll have to accept paper receipts just like everyone else.

2c, R.

[ccjoe]

and is why I NOW have all small stuff and NO more 1000 oz bars.

[Pyramid]

The pertinent sentences from Nickeless link in post #30:

There’s a bill introduced by Rep. Dan Lungren (H.R. 5141), which has gathered over 80 members of Congress as co-sponsors to repeal this section. Evidently, however, the drafters of the provision think there is a $17 billion loophole that this plugs.

The Industry Council for Tangible Assets is alerting member dealers and the public at large in the hope that some sense of outrage will lead to a ready modification before the law becomes operational in 2012.

This doesn't sound overly promising, but I can't see big business being real pleased about this avalance of paperwork that will ensue for every stinkin' transaction over 600 FRN's. Oh wait, more accountant jobs, silly me.

[Gcubed]

Long story made short. First, ya ain't gonna get out of paying taxes. Second, this will greatly increase dealers cost of doing business thus widening spreads.

[Aurumag]

The only way the government is getting my Sacagawea Golden dollar coins is from my dead cold hands.

0.0509847 is the melt value for the 2000-2010 Sacagawea golden dollar on June 30, 2010.

[Ragnarok]

Evidently, however, the drafters of the provision think there is a $17 billion loophole that this plugs.

It's called the US sconomy. And yes, it will plug it if it's not axed. Even "small" money may find it advantageous to expatriate.

R.

[yunowu]

It is a good read..let buyer beware..
Treasury claims power to seize gold, silver -- and everything else
http://www.gata.org/node/8766

Because of recent inquiries to GATA about the possibility of an attempt by the U.S. Government to confiscate privately held gold and silver bullion and coins and shares in companies mining the precious metals, we're republishing here the correspondence between GATA and the U.S. Treasury Department on the subject in 2005.

The Treasury Department was surprisingly candid in that correspondence, asserting the U.S. Government's authority, in declared emergencies, to confiscate precious metals and to restrict ownership of mining shares -- and to confiscate and restrict every other financial asset as well. So perhaps precious metals investors shouldn't feel too paranoid.

January 20, 2005

Roberta K. McInerney
Assistant General Counsel / Banking and Finance
Department of the Treasury
Washington, D.C. 20220

Dear Ms. Mclnerney:

Michael Kirk of U.S. Rep. John B. Larson's office has forwarded to me your letter to him of December 17, which answered my e-mailed inquiry to him about forcible redemption by the Treasury Department of gold and silver coins held by private citizens. You replied that a statute empowering the Treasury Department to do that, 12 U.S.C. Section 248(n), had been repealed.

But since reading your letter I have learned of a similar statute: Title 12. Chapter 2, Subchapter IV, Section 95a, which provides in part:

"During the time of war, the president may, through any agency that he may designate, and under such rules and regulations as he may prescribe, by means of instructions, licenses, or otherwise -- (A) investigate, regulate, or prohibit any transactions in foreign exchange, transfers of credit or payments between, by, through, or to any banking institution, and the importing, exporting, hoarding, melting, or earmarking of gold or silver coin or bullion, currency or securities. ...".

[Nickelless]

It is a good read..let buyer beware..
Treasury claims power to seize gold, silver -- and everything else
http://www.gata.org/node/8766

And we all know how well this worked in 1933.

Other than the exertion of political brute force, what compelling reason could the government give for essentially calling in silver and gold? The market value of all existing silver and gold is just a fraction of both the budget and debt of the U.S. In terms of a per-dollar basis, it would make absolutely no sense at all. What could possibly be accomplished by such an action?

[Anakin]

And we all know how well this worked in 1933.

Other than the exertion of political brute force, what compelling reason could the government give for essentially calling in silver and gold? The market value of all existing silver and gold is just a fraction of both the budget and debt of the U.S. In terms of a per-dollar basis, it would make absolutely no sense at all. What could possibly be accomplished by such an action?

Putting a floor in the currency by reestablishing the gold standard, obviously at some higher conversion rate.

[Nickelless]

Putting a floor in the currency by reestablishing the gold standard, obviously at some higher conversion rate.

But given the level of distrust of the government now compared to 1933, I can't see any way in heck that the citizenry would just roll over and bow to D.C.'s demands. There would have to be a heck of an incentive not to just hide what silver or gold you have until the goons drop the prohibition on owning PMs.

[Ragnarok]

http://www.americanthinker.com/2010/...fe_in_oba.html

Snip - more at link:

"Obama's poorly coded message to investors is to take your money out of America and keep it out. Whether through excessive taxation, suffocating over-regulation, or thuggish confiscation, the lesson to be drawn by anyone with excess capital is to look for friendlier places to put it to work.


The list of friendlier places excludes North Korea, Venezuela, and Iran for the time being, but almost everywhere else qualifies. Russia's president spent several days in Silicon Valley recently looking for adventurous investors and came away with a $1B commitment from Cisco Systems. For Cisco, sitting on a cash hoard of $30B, with years of experience partnering with the burgeoning Russian venture capital industry, the decision was probably not a very tortured one. And what a perfect opportunity for Cisco's CEO John Chambers to keep his cash as far from Obama's collection agencies as possible.


President Medvedev promises Cisco a capital gains tax rate of zero; President Obama promises to retire the evil George Bush capital gains rate of 15% and increase it to 20% in 2011. Cisco is merely telecasting to anyone who wants to tune in that Russia is taking advantage of Obama's lurch towards socialism (or worse). While Russia is portraying itself as a stable bastion for capitalists, America is increasingly seen as the land that mauled Chrysler and GM bondholders. While erstwhile command economies are liberalizing, America under Obama is nationalizing. The lesson is clear: Don't leave cash within the American financial system, earning minimal returns, with the fear that at any moment your assets can be confiscated or redistributed by a lawless and capricious federal government. "
R.

[yunowu]

Government is an expert at confiscating wealth. When the masses are poor and hungry, they more susceptible (receptive) to the "king's" message.

And we all know how well this worked in 1933.

Other than the exertion of political brute force, what compelling reason could the government give for essentially calling in silver and gold? The market value of all existing silver and gold is just a fraction of both the budget and debt of the U.S. In terms of a per-dollar basis, it would make absolutely no sense at all. What could possibly be accomplished by such an action?

[GOLDZILLA]

They could confiscate it without even taking it away, much like they do with frns right now. All they would have to do is declare the dollar is backed by gold and fix the price of gold at a cheap value, then anyone who did not sell theirs before it happened would suffer great loss of value -- unless they could get it out of the country or keep it for a long time.