Gold Ownership – Pro and Con Arguments

Executive Summary – We are going to discuss Gold as an investment vehicle. A lot of this will be focused on the USA but will also have applicability to many other countries.

Where is the USA at Today (09/10) with Gold – Well we do not know if there is any more Gold in Ft. Knox and in the Federal Reserve Bank vault in New York. These are the two large depositories in the USA. The gold may have been sold via secret executive order signed by the President. It may be there but pledged to other countries. It can be there only in part. We really have no idea. If all the gold that they say is in Ft. Knox is really there, it would back the dollars in circulation to the tune of $0.025 on the dollar. That is two and one half cents gold backing for each dollar. Ron Paul wants to audit the US Government gold holdings. The audit the Federal reserve Bank thing was a little different because it is a private entity. Auditing the government is not that hard for Congress. Why Ron Paul wants to do this by trying to get a law passed and signed by the President to do this is silly to me. A Congressional Investigative Committee can surely accomplish the same thing without the consent of the President. This is one of the reason I am suspicious about Ron Paul. Be barks a lot about the problems and “tries” to affect a solution but consistently fails. It is very possible to attract dissidents who get their hopes up with him but it never goes anywhere. Anyway the point is we do not know if the USA has any gold holdings anymore. They lie about almost everything today. If there are holding gold we have no idea how much is there.

Why Government Gold Holdings – Well the concept is to show the dollar is backed by something. Of course gold in Ft. Knox would not belong to the Federal Reserve Bank since it is a private corporation but few really understand this. The gold used to be a way to show that the government had something to back their money up with.

Roosevelt and Gold Ownership – In the 1930's President Roosevelt made gold ownership illegal. This applied to gold coins, gold bullion and gold certificates. The people were directed to turn such gold over to the Federal Reserve Bank, not the US Treasury. Whoops what an illegal act forcing people to sell gold to a private corporation at a price the government sets. Yes it happened. The executive order (there come those lousy executive orders again) was dated April 5, 1933 and gave the people roughly 30 days to turn the money over to the Federal reserve Bank nearest them. The redemption value was set at $20.00 an ounce. People turned their hard gold in for promissory notes fiat money from the corporation. The value of gold shot up to $35.00 an ounce almost immediately after the deadline. So the private bankers realized a profit of almost 100% in 30 days. Evil thing indeed and do not think this cannot happen again today. I think they have been planning a repeat performance for some time.

Gold Ownership Today in USA – The private investors of the USA own 2000 metric tons of Gold. Much of this is gold not held in the homes of the people. It is held in various ways. Some of the biggest ways to hold gold are to invest money with a foreign entity who then buys the gold and keeps it in a vault for you. The big ones to day are Viamat (NY, London, Switzerland), Bullion Vault ( same basic plan and locations as Viamat) and the Perth Mint in Australia. Problems folks, keep reading.

Gold Confiscation Mechanics - The gold is being to a large extent held in countries that require a lot of due diligence and know if the owner of the gold is a US person or not. Switzerland, UK and Australia work hand in hand with the USA on financial matters, especially tax matters. They can be relied on 100% to turn over gold holdings of US persons to the Federal Reserve Bank if a law is passed in USA. It can also be done by executive order. This is how it would play out. They would report the gold holdings of all US persons to the US government. At the same time you would be given notice that you have 14 days or so to sign an authorization allowing the gold holding company to transfer the gold ownership to the Federal Reserve Bank and they would send you the redemption value after the transfer was completed. Eventually the Federal Reserve would transfer the gold to their vaults in USA. If you do not comply they will just allow the Federal Reserve Bank to have the Gold and not pay you and you would be facing criminal charges and possibly lose any payment for the gold. See how it would work. If you hold gold physically in the USA and did not cash it in you would be a felon. If ever found with the gold you could go to jail and suffer massive fines, have gold confiscated etc. Selling the gold would be a felony for the buyer and seller and if anyone bought it prices would be seriously under market value. Smuggling the gold out of USA and selling it abroad at high prices would be the goal. The USA authorities would be vigilant to guard against gold being smuggled out. Those keeping the gold would have it but they would be severely hindered in being able to do anything with the gold. It would become contraband. The vast majority of people would sell. They would not be happy, they would grumble, they would threaten to sue, write their congressmen but they would turn over their gold.

How Governments Manipulate Gold Prices – Many people know that governments have been forcing gold prices down for years. They do not want people to be using gold as a security blanket. The idea is trust us, we are the US Government. Yeah liars, cheats, murderers and thieves and we should trust them. How they do it is easy. Let's say there is a war, oil spill or something that scares people. Gold demand rises and thus prices go up in tandem. Now the governments take their gold reserves and sell them at these higher prices. Now the supply exceeds demand and the prices decline. Next the governments buy back the amount of gold they sold at lower prices and they have avoided a rise in gold prices and turned a tidy profit. Nice trick huh. Your leaders at work. Why do they do this? Well for sure to get people to trust them not gold. Of course this isn't working too well but nothing they do ever works well. Of course this fits in with plans to confiscate (or have a forced sale at low prices) gold. They want the prices down so they can acquire cheap.

Why Would the Government Want to Acquire Gold – Well the answer is simple. It is a way to shore themselves and their fiat money up and keep their rotten game going for as long as possible. This gives them time to get an iron hand wrapped around the throats of those who see through them and to allow them to placate the sheeple. So let's say they buy Gold for $400 an ounce. They get the 2000 metric tons (or almost all of it) that US persons own domestically and abroad in storage facilities. This lets them increase their FRN inventory and turn it over to people for hard gold. One metric ton is 35,274 ounces. Two Thousand metric tons equates to 70,548,000 ounces. At $400 an ounce the buy back price would be about 30 billion dollars. Now if gold went to say $4000 an ounce which is maybe where it would be without their prices suppression where does that leave them? Their 30 billion dollar investment is now worth 300 billion. If they really do have the gold they are supposed to have in Ft. Knox then the valuation of $0.025 would rise to $0.25. So instead of two and a half cents on one FRN (federal reserve note) it would become 25 cents and this is an increase and weak move towards a partially gold backed currency. Now add in the gold from the confiscation program and it might even get to $0.30 on a FRN. If they get gold up to $5000 even better for them. Now Ft. Know is supposed to have 147,000,000 ounces of gold. Bear in mind there is other gold allegedly in the NY Federal reserve Bank vault. We do not know how much and if it is pledged or not. Ok so 147,000,000 ounces valued at $1250 is $183,750,000,000. If this gold increases in value by three or four fold they gain many billions of dollars for nothing ($300 to $500 billion). This would serve to shore up the currency nicely.

Currency Revaluation – To add confusion to the mix they might revalue the dollar. They have new FRN's printed and waiting. They can say turn five old ones in for a new one. They can have the new ones backed with a much higher ratio of gold to each dollar printed, maybe up to 50% or more backing. I doubt there will be a fully gold backed currency. This would prevent them from watering down the money supply in the future. One thing you can count on is that whatever they do, we the people will get the short end of the stick.

If you would like to see the new money awaiting circulation release go here:

http://www.newmoney.gov/media/resources.htm

Note they are using a lot of gold color in the new money. Coincidence or something else. They are saying the new money is for anti-counterfeiting. If so why wait so long to release it?

Analysis of Gold Confiscation – The fed is not your friend. Name one thing they have done favorably for you in past fifty years. Ok. They do not want to see gold go up and you make a nice gain on it. They want this gain for themselves. They are greedy. The people that support Obama would probably have no gold ownership to speak of. Employees of the federal government are not known to be hoarders of gold. Those on welfare, and other public support programs are not gold owners. Obamas support base is those dependent on the federal government. These people want obama to take from you and give it to them. This is running the republic as a democracy not as a republic. Obama is not going to hurt his supporters just those who already hate him. The political incentive is there. The economic incentive is there. Forget the legal they do not pay attention to any laws anymore.

Would this Work? - Yes it would with or without a currency revaluation. It would allow the fed to increase the money supply. They would tout all the high value gold they have as a means to justify the additional money being manufactured out of thin air. They will never go to a full gold backed dollar. This would tie their hands. They will go to partial fiat money again. So the FRN will have gold backing to the tune of 25% maybe 30%. Over time this will diminish down to 2% again. What they will do is print more money for the government to clear the toxic debts from the banks. They will give money to the banks to cover mortgages that are upside down. This will enable the bank to carry the loan as a solid loan with no more toxic debt. Thus the banks will be able to lend again. Houses will be bought, car loans will get easier, credit card companies will loosen up and we the sheeple will go into debt again. This will cause job creation, new housing starts and there will actually be a recovery for real. It will take time but there would be a lot of good things happening in time for the kenyan muslim without a birth certificate to get elected again. Yes the sheeple are that stupid. The doom and gloom this kenyan will unleash if he gets in for second term would be unimaginable.

Silver – Silver is a good deal. It is undervalued. It is used in industry. As soon as there is a recovery industry will crank up again and thus the demand for silver will increase. The prices should rise over the next decade. It does not appear that it will be used in a big way as a monetary instrument. The government may not bother will confiscating silver which is my guess. This leaves silver open as a good hard metal investment that should escape confiscation. Paying a premium to buy the 1964 and earlier us coins composed of 90% silver is one way but may not be necessary to incur additional expense. In 1964 one quarter bought a gallon of gas and that same quarter today is still worth enough to buy a gallon gas. Lot said there.

Copper - Here is a sleeper. Go to banks and get rolls of pennies. Sort out the pre 1982 pennies in that those are all copper. You will be getting two cents worth of copper for one cent. There is no premium in fact the opposite is true. If the economy recovers the copper will go up in value or at least it will maintain. Poor mans investment.

Gold Holding Solutions – To avoid the real risk of a repeat confiscation by executive order keep your gold in a country that does not cooperate with the US. A country that has no tax treaty is a good start. We like Hong Kong and Ecuador. It is easy to buy gold in your Hong kong corporate bank account. We suggest avoiding Australia, UK, USA, Switzerland, Singapore and the EU as places to store gold. These countries share tax information on bank accounts liberally and can be expected to turn your name over to the USA in the event of a confiscation as a gold holder. Hong Kong does not share tax information and does not get along with the USA. I doubt they would turn any names over to the USA since this would mean more gold for the USA at bargain prices. Anything is possible but I seriously doubt HK would do anything like this since any treaty calling for this is absent. Another way to do it is to get gold and have it placed in a safe deposit box in an appropriate country. A list of these would countries would be - Guatemala, Nicaragua, Ecuador. The bank has no idea what is in the vault box so how could they report.