American Gold Coin Value and the Likelihood of Government Confiscation

If you’ve visited a few gold selling websites, you might be under the impression that the most imminent threat to the few remaining Americans interested in saving and investing is gold confiscation.

Are You Concerned About Losing American Gold Value, Because of Confiscation by the Government? Here are the facts.

I’ve been told that people who collect and hold gold are fanatics. I don’t consider myself fanatical, only prudent. I will try to present the relevant facts from an unbiased viewpoint.

In 1933, President Roosevelt issued Executive Order 6102, prohibiting the private holding of gold. It required US citizens to turn their gold bullion over to the Federal Government, or face a $10,000 fine. That’s close to a million dollars today, or 10 years imprisonment.

rare american coins

Finest known example of this coin

For private citizens, the order listed the following exemption: Gold coins in an amount not exceeding in the sum of $100, which was about 5 troy ounces per person. Also included were gold coins having rare and unusual value.

True numismatic coins are very rare coins that collectors purchase for their historical and aesthetic qualities. These coins might retail for $100,000 or much more, while only containing $1,400 worth of gold. Even if the value of the gold in the coin changes, the gold content is only a tiny fraction of the coin’s actual worth.

If your purpose for buying gold is to protect yourself in an economic collapse, you should buy bullion, not numismatics. If however, you appreciate the coin’s numismatic qualities, you should pay the premium for it, knowing it will also lose more of its value in really bad times.

American Gold Coin Value

Very similar bullion type coins

Is gold likely to be confiscated again?

In 1933, the United States was still on a gold standard, meaning every 20.67 paper dollars could have been “redeemed by the bearer on demand” for a troy ounce of gold.

Since Roosevelt had many public works projects to finance, he confiscated gold, and then devalued the currency so the exchange rate became $35/oz. Americans immediately saw a 40% drop in value in their money. 

During this time, foreign governments holding US banknotes were also exchanging them for actual gold, because we were under a gold standard. Gold at that time was commonly owned by Americans.

If Roosevelt had devalued the dollar without first confiscating American citizens’ gold, then whatever savings people had in physical gold would have been immune from this deceptive act. 

American gold coin value

$20 gold proof coin

After Nixon eliminated the gold standard in 1971, gold is no longer considered a currency. The printed paper dollar has been the only legal tender for over 40 years, so it must be accepted for payment of all debts.

Unlike having a standard, non-inflatable value for our currency as in Roosevelt’s time, the US president no longer needs to confiscate gold to devalue the dollar. Now, money is simply printed to finance excessive government spending.

If the federal government decided to default and needed gold to pay off its creditors, it already holds most of the gold available in this country. Raiding private gold holdings would certainly be a very last resort. If Washington for some reason were to choose the confiscation route, we’d already be in complete chaos. The entire free market economy would have quit functioning. 

The best protection in this case would be to have your gold stored safely at home or off shore, not in a safe deposit box at a bank. It would be too easily seized when stored in a bank, should we ever reach that level of dysfunction. 

Even in the heat of Roosevelt’s confiscation plan, government troops didn’t ever break into people’s houses. All the gold collected by the Treasury was willfully surrendered in misguided acts of patriotism.

In the end, you should just buy the gold you like, and store it prudently. Learn from our collective past mistakes, and never, ever give it to the government.

If you are interested in investing in silver or gold products, check out, or                               

If you are interested in buying gold or silver bullion at the lowest price, check out BullionVault.

If you are interested in learning more about rare American coin, or foreign coin collecting and investing see NumisMaster from Krause Publications.

If you would like to buy interesting modern, or old rare gold and silver coins take a look at either NewYorkMint or GovMint.

This entry was posted in Investing in Gold and Silver, US Monetary System. Bookmark the permalink.

2 Responses to American Gold Coin Value and the Likelihood of Government Confiscation

  1. Thank you Randy for your insight. The tax potential hadn’t even occured to me. Since gold and silver ownership isn’t tracked by the government yet, it would be difficult for them to know who owns how much. When gold registration starts being discussed, it’s time to hide the stash.

  2. Randy Camper says:

    As with many others, I consider the likelihood of another gold confiscation to be exceedingly small. What I AM concerned with, however, wasn’t even on my horizon prior to the current administration!
    With the many insidious wealth redistribution efforts currently taking place, I am concerned about a windfall profits tax being imposed. So those of us who had the foresight to invest in precious metals, who gave up current consumption in favor of future profits could be told some version of, “What about those on Welfare or Food Stamps or SSDI who didn’t have your “advantages”? We need to take care of them, too! So we are imposing a 90% windfall profits tax upon the sale of your gold & silver!”
    Fortunately, I think we would see something like this coming down the pipeline and be able to get out from in front of it.
    Too, there are other aspects of gold ownership that would make this type of tax difficult to impose. Still, food for thought!

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