Can private gold (and/or silver) be confiscated?

 

 

Can private gold (and/or silver) be confiscated?

 

With the price of gold seeking higher ground and silver awaiting the end of its manipulation, commentators are finally beginning to wonder about confiscation of those two metals. Indeed, recently one metals guru stupidly wrote that “gold in the hands of the American public has never been confiscated, never can be, and never will be.”

Oh?

Obviously, he or she knows nothing about the government’s confiscation of private gold in the early days of the New Deal (see below).

Or the connection between private gold (silver, too) and inflation.

“Inflation” is “an increase in the supply of currency . . . relative to the availability of goods and services, resulting in higher prices and a decrease in the purchasing power of money” (Encarta Dictionary; my emphasis.)

According to Webster’s Dictionary of the American Language, inflation is “an increase in the amount of money in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices.” (My emphasis.)

Ultimately, there is only one actor who can increase “the supply of currency” or “the amount of money” and only one way it can be done: When a government, which possesses a monopoly on the “creation” of money, literally prints more paper currency and moves it into the stream of commerce. Literally!

This is Economics 101: If on Monday the money supply is X, and if on Tuesday the government doubles the amount in circulation, Monday’s and Tuesday's money is worth one-half of X.

 Even Powell and Yellen know that.

Historical examples of runaway inflation abound: The German mark after World War I, when postage stamps cost millions; the Chinese currency during the civil war in the 1940s, when it literally took a wheelbarrow full of paper money to buy a loaf of bread. Also, back in the Day when the once-prosperous Zimbabwe, where the Mugabe government printed so much money that it was literally worth less than the paper it was printed on.

The late classical economist Ludwig von Mises wrote in On the Manipulation of Money and Credit that “[i]nflationism, however, is not an isolated phenomenon. It is only one piece in the total framework of politico-economic and socio-philosophical ideas of our time. Just as the sound money policy of gold standard advocates went hand in hand with [classical] liberalism, free trade, capitalism and peace, so is inflationism part and parcel of imperialism, militarism, protectionism, statism and socialism.”

We can start our inquiry by remembering the politically and economically impotent President James Earl Carter, Jr., affectionately known as “Jimmy,” and his double-digit inflation.

Later, the credulousness of the “compassionate conservative” president, George W, Bush and a compliant if not complicit Congress handed nearly a trillion taxpayer dollars to the lame-duck, unelected treasury secretary with unchecked power to dispense it any way he wished.

Then came the advent of the Obama Administration with its own grandiose plans to spend trillions more trying to spend its way out of its recession and win over the Iranians with planeloads of cash.

During that time, America faced serious, nearly devastating, inflation, because there was only one way the collectivists could get that kind of “money”: By printing it! Then injecting its toxicity into the economic bloodstream of America.

There is no need for me to describe the current and likely continuing delusional spending of Joe Biden and a compliant Congress, and the outrageous inflation it has already caused and will probably become worse.

Typically, some believe the one way for individuals and others to hedge rampant inflation, perhaps the only way, is through ownership of gold and/or silver, either physically or through enforceable claims on gold (and silver), such as stocks like PSLV.

Gold and the gold standard (and silver) has long been maligned by the supporters of fiat money because it is an existential threat to government- induced inflation. Indeed, at present, even its current quasi-free-market price reflects serious concern about inflation.

In the real world today, all is not well with gold, especially physical gold ownership.

Unfortunately, many Americas are under the illusion that they have a God-given and/or constitutional right to own gold. They are mistaken. America’s history proves that our government has exercised omnipotent power over monetary affairs, one major consequence being that private ownership of gold has never been a right, and remains today a mere privilege revocable at will.

For a thorough historical discussion, see my seminal 1973 Brooklyn Law Review article “How Americans Lost the Right to Own Gold, and Became Criminals in the Process”  (https://www.amazon.com/Americans-criminals-Monograph-Committee-Education/dp/B0006Y1DU6.)  

See also “Government’s Money Monopoly” (https://www.amazon.com/Governments-Money-Monopoly-Henry-Holzer/dp/0595139663), and . . .

 “The Gold Clause (https://www.amazon.com/Gold-Clause-What-How-Profitably/dp/0595139671)

Both by Henry Mark Holzer.