Can the Government Seize Your Gold and Silver?

One rising concern around the world is whether or not governments will allow gold and silver to continue to compete with paper currencies. Fiat money has been steadily declining in value, while the precious metals markets have been heating up. There’s no way the control freaks in government haven’t noticed. The question is, what can they really do about it?

From the past, we know that one tactic is to make it illegal for private citizens to own gold and silver. This happened in the U.S. in 1933. While modern writers like to remember this as the time the government confiscated private gold supplies, the reality was that precious metals were nationalized. It’s a small but important distinction. No one went door to door seizing precious metals supplies – they were voluntarily traded for market value at gold windows and banks. The rules governing this exchange and the rules protecting pre-1933 as exempt collectibles were voided when Nixon closed the gold windows in 1971.

Fast forwarding to the present day, we have looming a looming currency crisis on our hands. To make ends meet, the governments of the world will be resorting to desperate measures. Knowing nationalization happened in the past, could modern governments take things one step further and come seize your gold and silver to make ends meet?

An Issue of Obedience

First and foremost, any attempt by the government to outlaw gold and silver or force precious metals owners to give up their holdings is going to meet a basic issue of obedience. Very few people are going to go along with this. We can all see that our dollars, pounds, and euros are declining, and we’re not interested in playing along.

In 1933, millions of American’s didn’t comply with the government’s orders. They put their gold in their pianos or melted their silver into paperweights. That was back in a time when the public was more obedient overall and public forums to spread information like Twitter and Facebook didn’t exist.

Now we have people occupying Wall Street and libertarian ideals are widely celebrated. You think that realistically the mainstream would go for an asset seizure? Not likely! We’d hide our gold and silver, say it was lost or stolen, and move underground with trading systems. The government could try to track down individual coins and bars, but given the success of the music industry in stopping downloads that happen in the much more easily monitored online world, the offline hoarders of gold and silver will probably get away scott-free.

An Issue of Logistics

The next major hurdle in any government attempt to seize private gold and silver would be the logistics of collecting it. If we don’t voluntarily give it up – and we won’t – how are they going to get it? Short on employees and federal agents, the government would probably turn to local police to get the job done. That’s the same enforcement system that allows 40 percent of the American public to regularly use recreational drugs and millions of illegal aliens to walk right across our borders.

There would be very public wins for the government, since big players would make easy targets. Wall Street-supported gold and silver ETF’s would be toast, and the gold storage systems of the major New York banks would likely be raided. After that, police would be forced to go door to door to try and uncover and seize assets. This would mean needing to research who has gold and silver, get a warrant, organize transport, get over there, and find it. It would be time consuming and expensive, meaning that small players (you and me) aren’t going to be worth their time.

Then there’s the communication side. Twitter already tells you where there are speed traps on the highway, and there are apps for smartphones that track police bands. We’ve created technologies that allow ourselves to be more easily monitored by our governments, but the watching eyes can go two ways. We can see them coming and plan accordingly.

An Issue of Image

Last but not least, there’s the issue of image. America and Europe still like to think of themselves as wealthy, successful nations. Who wants to be the first one to crack and admit they’re dead broke? Which government wants to go viral on YouTube kicking in citizen’s doors to rob them?

Can you imagine the nightly news, full of crying retirees weeping over being robbed by the government? Our Chinese creditors would certainly take note of our desperate poverty and come calling. No government in the world wants to trigger that phone call, and almost every major government in the world is in hock to the Chinese.

This isn’t to say that the governments of the world won’t make it harder to purchase or sell gold and silver in the public markets. That’s already started in both Europe and the United States, but smart buyers are working around it. For governments, the trouble is that the modern world is a bit more complicated than the world in 1933. We have more options available to work outside traditional bank networks and more leverage in being off the grid. Try though they might to take back control of commerce, the governments of the world will face issues of obedience, logistics, and image if they try to come after private gold and silver. It’s doubtful that any one of them is ready to risk it … yet.