Is Marc Faber’s Fear of Gold Confiscation Unwarranted?

 

Marc Faber, author of the Gloom, Boom and Doom Report, came out today on King World News and repeated his mantra about how our government may some day confiscate gold. I like Marc Faber and have quoted him on my site a few times. However, when it comes to his comments about potential confiscation and what the government may or may not do in relation to people’s gold investments, I view it as fear mongering and utter nonsense.

I have written a few articles on the subject which you can view by clicking the title below.

Gold Confiscation Nonsense; How Some Gold Dealers Rip You Off

and

Gold Confiscation Won’t Happen Here – Silver Confiscation Analysis Added

Gold Dealers Love To Scare You With Claims of Potential Confiscation

You won’t find too many gold dealers addressing this issue of confiscation because they use it as a way to sell their clients what they call “private gold” at much higher commissions than what they could sell bullion gold for. In reality the sell you numismatic gold or European gold coins like the British Sovereign or Swiss Franc with much higher commissions of 15%, 30% or more. They go so far as to call bullion gold, like the American Eagle gold coins, “government gold” and imply that you have to report it to the government when you buy that type of gold whereas the numismatic or European coins you don’t have to report. Nothing could be further from the truth.

The only reporting that is required with gold coins is when you sell them you are obligated to tell the IRS that you had a profit on them and complete a 1099. The only other reporting is for cash transactions of $10,000 or more which my company, Buy Gold and Silver Safely, refuses to do.

I have explained all these tactics that gold dealers use in Chapter 8 of my book, Buy Gold and Silver Safely.  In fact, the office of former Congressman Anthony Weiner told me in September of 2010 that people needed to hear what I had to say in that chapter as I sent it to his office when they were investigating the industry.

At the same time, Peter Goodman, who was working for the NY Times had interviewed me as collectively, the NY Times and it seemed Weiner’s office wanted to disgrace Glenn Beck who had a relationship with a certain gold dealer that was accused of ripping off their clients.

Interestingly enough (or rather revealing) both the NY Times and Congress decided against using anything I had to say and the gold hearings of September, 2010 went on without any real challenge to the gold dealers involved. Why? Well, the main gold dealer involved hired themselves a lobbying firm. This is the only thing I can see as a reason why there was silence on the issue all of a sudden. Peter Goodman went on to work for another organization and Anthony Weiner went on to get forced out of office for inappropriate behavior. But before Weiner’s office folded, they did forward my name to the Santa Monica city attorney’s office.

Santa Monica city attorney Adam Radinski and his fellow attorney’s met with me a couple times in establishing a case against the gold dealer in question at the gold hearings in Congress, Goldline International. The interesting fact that came out of those meetings is that Goldline agreed to a cash settlement of $4.5 million, an $800,000 fund set up for refunds and a monitor of their operations. But the most revealing fact that the city accomplished for future investors in gold and silver, is that Goldline can no longer use the word “confiscate” in soliciting business.

The Truth About Confiscation

The government isn’t going to go around like census takers and knock on everyone’s door and ask them, “do you have any gold?” Think about not only the manpower needed to do it, but also the enforcement probability and the cost. Also think about the majority of people who own gold also believe in the 2nd amendment.

But the comeback by the diehard gold dealer sales reps who like to separate you from your hard earned money will be regarding confiscation of gold, “they did it before and they’ll do it again.” This seems to be Marc Fabers take on it too. He has been advocating getting your gold out of the country for this reason practically every single year.  Maybe there is a hidden agenda there because he lives in Singapore, maybe not. The fact is, you shouldn’t be buying gold and worrying about whether our government is going to come and take it from you.

If anything, the government can do what Richard Russell, writer of the Dow Theory Letters the last 40 years, says could happen;

The US owns the world’s greatest hoard of gold. Here’s what I think the authorities have to do.They should unilaterally, overnight raise the price of gold to a high value, maybe around$10,000 an ounce. Thus, each dollar would be worth one ten-thousandth of an ounce of gold.This would allow our enormous debt to be paid off with vastly devalued dollars.This would be inflationary, since everyone who owned gold would own a pile of devalueddollars. The huge increase in the number of dollars would drive prices up, and that wouldwork against the current forces of deflation.

Investing and Worrying About Confiscation of Your Gold

Look, if the government wanted to confiscate something to better themselves or bailout the Fed, would they risk revolution and go after the People’s gold or simply with an Executive Order, in times of economic turmoil, and with the stroke of a pen, change the rules to everyone’s IRA’s, 401k’s and pension plans? Doesn’t the government have more control and ease of confiscation of wealth this way through their partnership with the IRS?

What would you do if you ran the government and needed to raise capital quickly? Would you risk fight or tax? The only other way out is through the inflation that Richard Russell speaks of when he says “inflate or die.” Congress is afraid to raise taxes (at least Republicans are as the Democrats think taxing the rich more will actually raise revenue…it’ won’t as I point out in What the Data Really Tells Us and How It Will Affect Gold and Stocks).

Would there be a revolution or fight if the government came after your 401k’s and IRA’s? You can bet the other arm of the government, the mainstream media, will be there to calm everyone’s fears. That’s why you haven’t heard one word about the wars of late, because all the media wants to keep our dirty little fighting on the hush, hush during this election year. Only one mention by the Republicans during the convention about the war when they have been the party of war? Really? And both the liberal and conservative media say nothing? Only Clint Eastwood mentioned Afghanistan. Wonder how our soldiers, who are already killing themselves at record pace, feel about this. The verdict is still out on the Democratic convention at the time of this writing.

The Bottom Line On Potential Confiscation of Gold

So what’s the bottom line on any potential confiscation of gold? It ain’t gonna happen. It’s such a small amount that confiscating it and raising the price of gold artificially like they did in the early 30’s wouldn’t make a dent in the governments debt problems, let alone future debt problems. Gold isn’t the problem here. Government spending is. The more the government buries us in the sea of debt, the more the gold life boats look attractive. Last but not least, if you are concerned, like Marc Faber is, about the confiscation of gold, buy silver. Silver was never confiscated. Some people may point to some old newspaper article claiming such, but it’s just not true. Silver was money until the government took our dimes and quarters and turned them into something else after 1964. Dimes and quarters have lost their purchasing power ever since.

Governments can’t do anything to gold and silver like they have in the past. They’ve already burned that bridge. But they can easily come after what they do have control of, and do so without worrying about their employees getting shot.

Note:

We here at Buy Gold and Silver Safely offer gold and silver bullion IRA’s where you can take control of your wealth by owning physical gold and silver. This can be done with your IRA or even set up as an option with your plan administrator for 401ks. Call a representative today and ask how by dialing 888-604-6534. Our fees are the lowest in the nation at only 1% over dealer cost.