In Jim Cook's Archive


When the U.S. government under Franklin Roosevelt confiscated the gold owned by its citizens it was an act of desperation.  The dollar was sinking under the full force of a depression.  This new gold that poured into the Treasury in 1934 propped up the dollar and halted a collapse.  By most measurements we have far more critical economic issues today.  The ultimate crisis we face will likely be more devastating than the great depression.  We have seen that a desperate government will do desperate things.  Could they confiscate gold and silver in the future?

If gold were revalued to $10,000 an ounce or more it could backstop the dollar and perform the same role as it did in the thirties.  There is enough gold in Fort Knox to do this for awhile.  Confiscating individual citizens’ gold wouldn’t add that much and the resistance and public uproar would be a barrier to government confiscation.  However one source of gold and silver that could ultimately prove to be too tempting to numerous governments would be the hoards held by the exchange traded funds (ETFs).  In the worst of all worlds governments will do almost anything short of murder (although in the last century governments murdered 100 million people).  To think that in a full-fledged financial panic the government would not seize these precious metals hoards that might forestall economic Armageddon is naïve.

When bureaucratic careers are jeopardized and politicians are threatened by historic events you can throw away the rule of law.  The silver in the ETF could go bye-bye and the compensation for it come much later, if at all.  It’s hard to know how close we are to the end of our fiat money experiment and our inevitable national bankruptcy.  The machinations of money creation, government borrowing and deficit spending can last a long time but the end comes fast.  In a matter of days the crisis reaches a crescendo and all is lost.  That’s why you must have tangible assets in your possession.  You must keep gold and preferably silver close at hand.  Two ends are served with this strategy.  You preserve your wealth and with a small percentage of it you buy the goods you need.

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