#TinFoilTuesday – The 1933 US Gold Confiscation Under Executive Order 6102: Could it happen again?

In 1933, the US government, by mere executive order of President Franklin Delano Roosevelt, seized all US gold bullion coins from its citizens (well– all that weren’t illegally stowed away or moved overseas) and made it illegal to “hoard” gold currency. Specifically, Executive Order 6102 said:

“I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of this order…”

The order goes on to require all Americans to turn in their gold coin and currency to the Federal Reserve Bank in exchange for $20.67 an ounce. After the seizure, the Treasury inflated the money supply by pegging the US dollar to gold at a rate of $35 per troy ounce, a major loss for those who turned in their gold for the $20.67. It wouldn’t be legal for Americans to hold gold coins again until the presidency of Gerald Ford. Question is: Could this scenario happen again?

The answer is: Probably not.

At Silver-Investor.com, Rick Mills argues that government seized gold back in 1933 because the dollar was still tied to gold. Every printed dollar was backed by some amount of hard specie. In order to print more money to engage in a Keynesian-style monetary expansion and thereby “stimulate” the struggling economy, the Federal Reserve legally needed more gold, so the government seized a bunch. For over 40 years now, the US dollar has not been tied to gold, but floats on an exchange rate with foreign currencies. Its value is a function of the ability of the US government and its powerful military hegemony to continue bullying the rest of the world into using it, driving up demand for it artificially, and thereby endowing it with artificial value. The Federal Reserve is no longer bound to back up newly-created money with gold. It just creates as much of it as it wants. It doesn’t even print most of it anymore– just adds it to an accountant’s ledger and a few electronic zeros to an account.

So the same set of historical conditions that precipitated the gold seizure of 1933 just no longer exist. Furthermore, Mills writes that the fear of confiscation is often used as a scam to sell unwitting buyers over-priced collectors’ coins:

“So the next time you read an article about how your government is going to confiscate your gold – all of it except rare collector numismatic coins – track it back to its original source. Too many times you will find that it has, as its originator, a gold numismatics merchant. The patter is always the same – ‘Your gold is going to be confiscated, buy rare collector coins because they won’t be confiscated.’”

All too often, these “collector coins” are just regular bullion coins dishonestly marked up. Even if they bear actual collector value, the fear of confiscation is overblown and if a buyer is just looking for a safe store of inflation-proof value, they’re getting ripped off. CMI Gold and Silver also writes:

‘The myth that specific types of gold coins are “not confiscateable” stems from the Executive Order that President Roosevelt issued in 1933 calling in gold. The Executive Order exempted “gold coins having a recognized special value to collectors of rare and unusual coins,” but it did not define special value or collector, and certainly not collectibles. Nevertheless, telemarketers promoting old U.S. gold coins perpetuate this myth because it makes easier the selling of high-priced coins.

Just because Roosevelt exempted “gold coins having a recognized special value” does not mean that any future call-in would exempt collectibles. Roosevelt’s Executive Order would have no legal binding on another gold call-in. Besides, on December 31, 1974, with Executive Order 11825, President Gerald Ford repealed the Executive Order that Roosevelt used to call in gold in 1933. This was necessary because on the same day Congress restored Americans’ right to own gold. Furthermore, in 1977 Congress removed the president’s authority to regulate gold transactions during a period of national emergency other than war.

Even if a law did exempt certain coins from future confiscation, the government could change that law. Sadly, the government often simply ignores laws. Dealers who say they sell “non-confiscateable” gold have no basis for making such claims.’

So don’t take fears of another confiscation too seriously, especially if they’re coming from someone who wants to sell you collectable coins priced far above the spot price of the precious metal you’re wanting to obtain. All that extra money you’re spending above the spot price doesn’t get you any extra precious metal– just cheap tinfoil. Then again, don’t ever take the government too seriously either nor expect it to behave rationally, fairly, or honestly.

And don’t forget to visit our official website to learn more about the Silver Circle Movie: http://SilverCircleMovie.com