FDR forcibly purchased American investors’ bullion during the Great Depression. After Cyprus, could confiscations catch on again?
By virtue of the authority vested in me by … an Act to provide relief in the existing national emergency in banking, and for other purposes … I, Franklin D Roosevelt … do declare that said national emergency still continues to exist and … do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations …”
These are the opening phrases of Executive Order 6102, issued by FDR 80 years ago on Friday. The order has become notorious among gold investors. Some fear something similar could happen again, that their government might seek to take their gold away as part of some trumped up “solution” to a “national economic emergency”.
Events in Cyprus, where at one point it seemed that the state was going to levy a 6.75pc tax on “insured” deposits below €100,000, have served only to heighten fears that private wealth can, under certain circumstances, simply be appropriated.
Governments change laws from time to time, and yes, it’s possible that under the right circumstances some governments might try to confiscate their citizens’ gold. But the motivation for confiscating gold that existed for FDR in 1933 has largely disappeared. Back then the US was still on the gold standard (Britain had been forced off 18 months earlier). Gold was the foundation of the US currency and economy; at the time of FDR’s order, the dollar’s value was tied to gold at $20.67 an ounce.
Read the complete article at The Telegraph here.
Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.