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I am often asked if I think gold will be confiscated again.  There are several ways to answer this question.  First, if gold was confiscated – and that is far from a certainty – you would realize a huge profit, albeit in dollars, that you would get for your gold when you turned it in.  Wouldn’t that be better than not making the profit because you never bought gold, fearing a future confiscation?

When gold was confiscated in 1933, the Dollar was on the Gold Standard and paper Dollars were backed by physical gold, owned by the US Treasury.  FDR needed to expand the money supply (Dollars) so he could try and spend his way out of the Depression.  In order to create more Dollars, the Government needed more gold.  That was the motivation to call in the citizen’s gold.

Today, the Dollar is not backed by gold.  It is backed by bonds (debt).  There is no need to increase gold holdings as a pre-requisite to printing more money.  It is as easy as a computer key stroke.

Further, the US citizens hold very little physical gold now so the motivation to confiscate is nil.  If there was a gold confiscation, it would be directed at the ETFs where most of it is held and where there would be a minimum of anger and rebellion by the citizens.

Richard Russell and Jim Sinclair are not worried about gold confiscation.  Our friend, Bill Murphy, proprietor of LeMetropole Café, also doubts that there will be a confiscation.  In a recent interview, he said:  In terms of the confiscation, the world has changed since then. I think the rest of the world now, with China and Russia as big gold producers, and their populace buying gold (especially in China and India), and with the dollar in such a precarious position with our fiscal policies and all that … the rest of the world would laugh at the United States and the price of gold would go berserk. Everybody would want it.

Second of all, the American public is almost totally not involved in gold. There’s very little interest yet. That’s how much of a bull move we have left. If I can do nothing else, I hope your readers will go and get to some sharp gold bulls and find out which of these little gold stocks to buy. It hasn’t even started. It’s like in the Internet in the first year when it was founded. That’s how much money is going to be made by those people who are willing to do their homework and look into this.

If you are worried about gold confiscation, buy some Platinum, Palladium and silver.  The threat of confiscation is another good reason to diversify your precious metals holdings.

You should focus on where gold is going rather than if you will be able to keep it.  We are still early in this generational bull market.  Just because it has been going on for 10 years do not draw the conclusion that it has almost played itself out.  Stop worrying and looking for reasons NOT to buy gold and jump aboard!

Check out the following chart, by the Aden Sisters, that overlays the current gold bull market with the last gold bull market in the 70s and the Nasdaq bull market in the 90s.