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Is it technically legal for Americans to own gold?

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8 replies to this topic

#1
Jake_Ellison

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The precedent established in Pike and Brouwer remains the law of the land at least in the Ninth Circuit at the present time. No other court of comparable jurisdiction has ruled otherwise on the validity of the criminal sanctions against Americans who own gold. As things stand now, an American who owns gold is courting a felony conviction. Moreover, under the Gold Reserve Act, all the gold he owns is subject to forfeit while he, himself, is subject to a penalty double in amount to the value of the gold.

[Note: Ninth Circuit, of Southern California]

The above is from How Americans Lost Their Right To Own Gold And Became Criminals in the Process
By
Henry Mark Holzer

He of course practiced constitutional and appellate law, used to teach constitutional law and appellate advocacy at Brooklyn Law School, wrote books and articles, and knew and worked with Ayn Rand (as her lawyer).
Here's his blog (I discovered thanks to Grames linking to it in another thread).

I have no opinion on the subject beyond what I read in the article, so I expect others to enlighten me and recommend further reading. (preferably nice short links rather than books-I'm not really ready to delve into constitutional and precedence law on a book scale)

Edited by Jake_Ellison, 04 March 2009 - 05:49 PM.


#2
softwareNerd

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In 1974, the law allowed the owning of gold. Even before that, jewelery and "collectors" coins were legal. After 1974, owning gold bars became legal as well.

I've never heard of Holzer before today, but the fact that his article does not explain why the 1965 decision trumps the 1974 law is puzzling (at least).

Added: Of course, the law can change on a dime and say you have to turn in your gold, as was done in the Great Depression. Don't expect the SCOTUS to stand in the way.

Edited by softwareNerd, 04 March 2009 - 06:53 PM.

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#3
Zip

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It's legal here apparently, though I always thought it was illegal.

http://www.bordergol...n...ge&Itemid=1

Want to by a kilo?

:) I wish.
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#4
John McVey

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Gold ownership is legal in Australia, btw - though use as a medium of exchange is expressly forbidden under section 22 of the Currency Act (Cth) 1965.

Want to by a kilo?

Ughh, I had a vision of smirking cops cruisin up to the precinct with a handcuffed guy in a suit in tow, telling the desk sergeant that they caught the perp with a coupla kee's on him; and they had also done some skimming for their "retirement funds"...

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#5
Steve D'Ippolito

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It's possible it could be made illegal again, sure. But the motivation for making it illegal the first time was so that the government could devalue the dollar, which was tied to gold at (IIRC) $20.65/troy ounce. The devaluation set it to $35/oz.

Since the dollar now has nothing whatsoever to do with either gold or silver, the specific motivation isn't there. If the government just wants to steal your valuables, there are a million more lucrative ways for it to do so. (And the first of those are in the new tax bill.)

In other words I consider a gold confiscation relatively unlikely.
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#6
Scott_Connery

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If trading good/services for gold became widespread, I think the government would act to stop it. They can't tolerate competition with their fiat system.

#7
Paul Hsieh

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It is completely legal for Americans to own gold, and there have been numerous stories in the news lately about private citizens purchasing record numbers of gold coins recently as a hedge against inflation or other economic problems. Here is just one typical example:

"Why Investors Are Hoarding Gold", Newsweek 3/7/2009
http://www.newsweek.com/id/188138

With respect to the legality, here is a brief summary from one commercial gold bullion seller:

http://www.universal...ican_eagle.html

In 1933, President Franklin Roosevelt signed the Gold Confiscation Act, which made it illegal for Americans to own legal tender gold. In the early 1970's, during President Richard Nixon's presidency, the right to own gold was restored. However, it was not until 1986, when President Ronald Reagan authorized the Gold American Eagle program that the Federal Government once again began minting non-commemorative legal tender gold coins for private ownership.

I personally don't think it's wise to cash in your 401(k) and convert it into precious metals. On the other hand, investment advisors have often advised having some percentage (perhaps 5-10%) of your net worth in PMs as part of prudent diversification. It may be reasonable to have an even larger percentage in the form of PMs, depending on how pessimistic vs. optimistic one is about the long-term future of the American economy.

If the paper dollar collapses (an event I consider unlikely but not impossible), having some assets in the form of PMs may save one's life. Or at least make the difference between a semi-decent standard of living vs. poverty. But it would also mean that this country was in bad enough shape that there would undoubtedly be other very serious problems to contend with.

#8
prosperity

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In 1933, President Franklin Roosevelt signed the Gold Confiscation Act, which made it illegal for Americans to own legal tender gold. In the early 1970's, during President Richard Nixon's presidency, the right to own gold was restored. However, it was not until 1986, when President Ronald Reagan authorized the Gold American Eagle program that the Federal Government once again began minting non-commemorative legal tender gold coins for private ownership.

I personally don't think it's wise to cash in your 401(k) and convert it into precious metals. On the other hand, investment advisors have often advised having some percentage (perhaps 5-10%) of your net worth in PMs as part of prudent diversification. It may be reasonable to have an even larger percentage in the form of PMs, depending on how pessimistic vs. optimistic one is about the long-term future of the American economy.



What baffles me was he was so blatant about it. "Gold Confiscation Act". I mean, how do you make it illegal to own property???????


As for the 401ks, they're not safe either. Remember these are trust accounts held for the benefit of you and your beneficiaries. They can very easily change the rules on those again. Who knows. We may end up with the accumulation penalty again - or some entirely new and creative rule or penalty - to try to recoup funds for paying for any number of debts "we" are racking up.

Edited by prosperity, 09 March 2009 - 08:40 AM.

David C. Lewis, RFC
A Revolution In Financial Planning

#9
softwareNerd

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What baffles me was he was so blatant about it. "Gold Confiscation Act". I mean, how do you make it illegal to own property???????

If one has enough public support, and the SCOTUS goes along, anything is possible. According to one history of the period, the SCOTUS was not happy about this, but decided that it could not buck public opinion. They actually did not go along with all gold-suspension laws of the time, but put up some token resistance by turning down a minor component. As the rationalization: the constitution allows the government to have some control over legal tender. Like the commerce clause, give them a little opening and it can be rationalized into all sorts of things.

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