Truth: Executive Order 6102, an Executive Order signed on April 5, 1933 by U.S. President Franklin D. Roosevelt "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States" required U.S. Citizens to on or before May 1, 1933, all but a small amount of gold coin, gold bullion and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per ounce, which was the official price of gold at the time. In other words, it was not confiscated. It was purchased.

The reason FDR decided to take this drastic measure was compelling: gold was fleeing from the U.S. While the U.S. maintained a fixed gold price of $20.67, the currencies of Europe, which were allowed to float freely against gold, each other, and the dollar. This resulted in a pronounced imbalance in exchange rates. Thus, gold could be purchased in the U.S., taken to Europe, and sold for currency worth much more than the $20.67 official price of gold in the U.S. Once that currency was exchanged back into dollars and the handsome profit pocketed, gold buyers could repeat the process. This caused the gold reserves of the U.S. to deplete at an alarming rate. So, FDR signed the executive order. After repurchasing more than 500 tons of gold, the U.S. Treasury raised the price of gold for international transactions to $35 per ounce, where it remained fixed for several decades while the world operated under the Bretton Woods agreement.

In the 1950's and 1960's, as the dollar became once again "increasingly overvalued in terms of hard money currencies and gold, European governments began more and more to exercise that option [of purchasing gold at $35 per ounce]. The gold standard check was coming into use; hence gold flowed steadily out of the United States for two decades after the early 1950s, until the United States gold stock dwindled over this period from over $20 billion to $9 billion. As dollars kept inflating upon a dwindling gold base, how could the United States keep redeeming foreign dollars in gold—the cornerstone of the Bretton Woods system? These problems did not slow down continued United States inflation of dollars and prices, or the United States policy of “benign neglect,” which resulted by the late 1960s in an accelerated pileup of no less than $80 billion in unwanted dollars in Europe (known as Eurodollars). To try to stop European redemption of dollars into gold, the United States exerted intense political pressure on the European governments, similar but on a far larger scale to the British cajoling of France not to redeem its heavy ster- ling balances until 1931. But economic law has a way, at long last, of catching up with governments, and this is what happened to the inflation-happy United States government by the end of the 1960s. The gold-exchange system of Bretton Woods—hailed by the United States political and economic Establishment as permanent and impregnable— began to unravel rapidly in 1968." (Source: Murray Rothbard, "What Has Government Done to Our Money")

This eventually led to the removal of the U.S. Dollar from the gold standard in 1971, which removed the reason for FDR's famous executive order, and stopped the flight of gold out of the U.S., and ended with the repeal of the limitation on gold ownership in the U.S. by means of an Act of Congress signed into law by President Gerald Ford which went into effect December 31, 1974.

We believe that an executive order to confiscate or repurchase gold is highly unlikely to happen again, for the following reasons:

1. Echoing the views of other well known precious metals analysts like the late Howard Katz, Jason Hommel, and Jerry Western, economist Alasdair Macleod says that while the possibility exists, gold policies similar to those enacted by Franklin Roosevelt during the great depression are improbable because of the way gold is used today and the sheer complexity of taking such an action in today’s globally driven gold marketplace:

"…the situation today is very different from that of 78 years ago. At that time, gold was the primary currency, the dollar being tied to it at $20.67 per ounce. But today, the Fed and European central banks strongly deny that gold has any monetary role at all, and argue instead that it’s just a hangover from the past: “that barbarous relic” as Keynes called it. Its confiscation would be an embarrassing admission that gold, after all, is money.

"Nevertheless, as paper currencies continue to lose credibility, the temptation for any government to seize its citizens’ gold to enhance official holdings must be growing. Americans today, however, are unlikely to meekly accept confiscation the way they did under Roosevelt. And nowadays, you may be American, but your gold is not necessarily held at an American bank: it is just as likely to be in London, Zurich or Hong Kong.

"The wording of a compulsory order is all-important. Confiscation requires the gold itself to be surrendered, which presumably would be the objective if a government is to add to official holdings. If gold ownership is merely banned, it is a different matter. A bullion bank holding gold in an unallocated account would almost certainly be unable to deliver physical gold if required to do so by the American government, but it would be able to close out the account for cash. And there is the thorny question of derivatives, which hardly existed in the 1930s. All futures and options trading would cease, and contracts for forward delivery would be cancelled, possibly with serious financial consequences.

"The international nature of gold would probably require all G10 or even G20 members to agree to similar actions against their own citizens. It seems unlikely that all governments would agree to this, unless they all had their backs hard against the wall." (Source: FinanceAndEconomics.org)

2. Howard Katz, well respected for his economic analysis, made a similar argument for why the government coming after your gold is not a very likely scenario:

"Quite frankly, it is unlikely that a modern government would do the same thing for the simple reason that they do not need to. We are already off the gold standard. Remember that paper money is theft. There is always a group (the paper aristocracy) who wants to steal wealth from the people by arranging things so that they are the beneficiaries of the printing of money. Now the paper money system is well established and firmly in place. There is no need for measures which will alarm the general public. At the present time, it is only the gold bugs who realize the evil of paper money and who are acting to protect themselves. But we gold bugs are only a small minority. (Notice that the one time that both prices and pro-gold sentiment were increasing sharply, 1979, the establishment turned off the money spigot and suffered through a period of tight money and credit (1979-81) in order to prevent the gold bugs from becoming more popular.)

"So you do not need to worry about the Government stealing your gold. They don’t need to. They already steal the wealth of the naive (anti-gold) majority. This majority believes their lie that the Government is robbing from the rich to give to them. They keep getting poorer and poorer, and they can’t figure out why. And they keep re-electing the politicians who victimize them." (Source: shtfplan.com)

THE SCAM (Adapted from an article by Richard Mills, dated March 6, 2011, published on mineweb.com)

Now you know what happened back in 1933, and that the reasons for the government's actions back then don't exist today. So the next time you read an article about how your government is going to confiscate your gold - all of it except rare collector numismatic coins - track it back to its original source. Too many times you will find that it has, as its originator, a gold numismatics merchant. The pattern is always the same - "Your gold is going to be confiscated, buy rare collector coins because they won't be confiscated."

Order 6102 specifically exempted "customary use in industry, profession or art." The same paragraph also exempted "gold coins having recognized special value to collectors of rare and unusual coins."

The US Constitution's Eminent Domain Clause says - "nor shall private property be taken for public use, without just compensation." When gold bullion was confiscated compensation payment at the official gold price of $20.67 an oz was considered just, after all, that was the price of an ounce of gold. But the confiscation of rare gold coins, called numismatics, would have been stealing private property. Legally just compensation would have had to been paid but for that to happen each gold numismatic would have had to been individually graded and priced - a huge and expensive time consuming task the government was unwilling to take considering the small amount of gold that would have been recovered.

So let's revisit - "Your gold is going to be confiscated, buy rare collector coins because they won't be confiscated." We know the reasons Americans' gold bullion coins were confiscated but gold numismatics weren't. For today's gold buyers, who still fear confiscation, the problem is: are the coins some gold dealers want to sell you actually gold numismatics and for a gold bullion investor - versus a coin collector - are they worth buying? Unfortunately the answers are maybe not and no.

Gold numismatics are rare collectors gold coins that trade at high premiums to their intrinsic gold content value. These coins are extremely rare, or one-of-a-kind, that collectors (there's that qualification again) purchase for their historical and aesthetic qualities. Gold merchants can sell rare gold coins for a healthy markup, sometimes as much as 25 percent and more. The fierce competition in the gold bullion coin market often limits profit margins to maybe 3% over the spot price of gold.

Privately minted rounds and bars, such as the items AGR sells, are examples of gold bullion. Their value is derived entirely from their gold content. They are universally recognized and the value of bullion is easily verifiable. The reality is that too many coins sold as "numismatic" or "collectible" are ordinary gold bullion coins sold at high mark-ups to make fear mongering dealers extra profits. (Source: mineweb.com)

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We invite you to suggest any other myths you would like us to investigate. Click here to access