Could President Obama ban U.S citizens from holding gold?

Back in 1933, at a time of economic crisis, President Roosevelt forced U.S. Citizens to sell their gold at $20 an ounce - and then subsequently revalued the metal to $35. Could President Obama, a Roosevelt disciple, have similar plans in mind.

LONDON - 

Whether one believes in the GATA premise that the gold price is being held down by a gigantic conspiracy between the World's Central Banks, Governments and some major banking institutions or not, there is little doubt that governmental-initiated currency manipulation does occur, and if one looks at gold as money then it is logical that some degree of manipulation here also takes place at Central Bank level.  Whether one can call this a global conspiracy, or part of the general process of stabilising currencies and exchange rates, depends perhaps on which side of the fence you are sitting.  In a way this is similar to the terrorist/freedom fighter debate!

But, history does tell us that the US government, in the days of a fixed gold price, did intervene in a very direct manner with President F.D. Roosevelt  banning the "hoarding of gold coin, gold bullion, and gold certificates" and thus forcing US citizens to sell to Federal Reserve at $20 an ounce. Subsequently the Fed raised the price of gold to $35 an ounce.

President Obama is known to be a Roosevelt disciple and he must be well aware of what was done at the time, given the parallels of the U.S economy between the present time and the 1930s.  There must be a temptation to try the same tactic, and then raise the gold price dramatically in a move which would certainly support reserves within those nations which still have major gold holdings.

Indeed, if monetary authorities worldwide sees the gold price really start to take off, this kind of process has to become even more of a temptation as a big global move into gold  could exacerbate the global financial crisis in that it would show that people no longer have faith in the economic status quo (it can be argued that already they don't) and the the current crisis of confidence could be severely worsened by such a rush.

In an article published late last year, Mark Mahaffey of Hinde Capital, argued that such a possibility existed and pointed out that "the fear for anyone who is in credit is that the financial system could become geared towards negating debt which, in turn, would destroy the value of their assets. One way of bypassing this threat is to buy gold.  However a general shift to gold would undermine the power of central banks and their influence on the economy."

Of course the monetary situation nowadays is completely different and the banning of gold holdings, and subsequent revaluation would be much harder to accomplish domestically - and even more so globally.  Back in 1933 the dollar was on the gold standard which meant that, in theory at least, each dollar could be exchanged for the same value in gold.  Nowadays all currencies are effectively fiat money with no solid backing (except perhaps of a fiat dollar), and to revert to a gold standard would require an upward revaluation of the gold price beyond belief.

But, there is a precedent out there and while we think the idea is unlikely, it might appeal to someone who is prepared to try radical means to stabilise the economy if all other measures fail.

And - consider this thought - are shortages of gold coins from national mints due to a total underestimation of demand, or part of government policies to control gold flows into private hands.  We think the former, but the conspiracy theorists no doubt have other views.

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responses to this article

GOLD CONFISCATION HMMM I HAVE THE EXECUTIVE ORDER RIGHT HERE IN MY HANDS. LET'S SEE THEY DIDN'T CONFISCATE ANY RARE GOLD COINS ALL WERE DEEMED COLLECTIBLE. THEY DIDN'T CONFISCATE ANY GOLD UNDER A $100. THE ORDER STATES THEY WERE AFTER THE GOLD CERTIFICATE'S NOT THE . .more GOLD COINS THEMSELVES SINCE THEY WERE ALL DEEMED COLLECTIBLE. THERE WERE NO BULLION COINS. AFTER 25 YEARS OF THE MINT SELLING COINS TO THE PUBLIC THERE WOULD BE RIOTS BEYOND YOUR IMAGINATION IF OBAMA EVEN THOUGHT TO TAKE OUR GODL. STOP WITH THE SCARE MONGERING. . .less by BRIAN on May 20 2009, 07:21 Find this comment inappropriate? Report it

Private Gold Ownnership ? Any measure which variously bans or confiscates private gold holdings ion the USA would severely discredit the dollar worldwide , but only increase the global appeal of bullion Ala the ill conceived prohibition of alcoholic beverages, the . .more results might be counterproductive .....The communist Empire strictlly banned private ownership of "Valuta" (hard currency).. The fiat national currencies were cadavers. Nevertheless- anything is possible .The blunders of desperate governments past will often be repeated in the future . .less by bocacassidy on May 20 2009, 07:46 Find this comment inappropriate? Report it

gold Can`t eat gold, so food is a better bet by Curious Orange on May 20 2009, 08:10 Find this comment inappropriate? Report it

banning gold ownership Hi, Lawrence: Thanks for your article here. The definitive treatment of the U.S. Treasury Department's position on private gold ownership may be found here: http://www.gata.org/node/5606 cp by Chris Powell, Secretary/Treasurer, GATA on May 20 2009, 09:31 Find this comment inappropriate? Report it

The case for nationalization of the gold hoard My friends, I would like to point out that at no other time in history has it been more incumbent upon our citizens as patriots to be willing to contribute to the stability of our country's financial system than today. While it is our earnest hope . .more that private gold nationalization will not be necessary, we need to call on all Americans to do their part to ensure the continuity of our nations solvency. Thanks You and May God Bless the United States of America. . .less by Tim on May 20 2009, 17:21 Find this comment inappropriate? Report it

And while we're on the subject... Continue reading some of "The Great Myths of The Great Depression": http://tinyurl.com/p5au99 by Freemarketman on May 21 2009, 07:52 Find this comment inappropriate? Report it

Alternatives to the banning of physical gold in the USA There are too many ways to hold an investment in gold i.e. ETFs, Mutual Funds, stocks, and indices. Should the President proclaim physical gold taboo in the US, residents can still find an outlet to invest in this commodity. In my view, such . .more action will have little impact on financial markets except for the financial analysts who will have the time of their lives writing about this absurd action. . .less by Rich on May 21 2009, 07:54 Find this comment inappropriate? Report it

Fearmongering The Obama scares are all over the place - driving up gun sales, ammunition sales and now gold? Come on.... I say it's just fearmongering. by Kristin on May 21 2009, 09:11 Find this comment inappropriate? Report it

Just give it to me. I dont want to force americans to give up their gold. Just kindly give it to me since I am a stealth libertarian and gold bug and I want all of it. All I say! all all all. by Sir A Greenspan on May 21 2009, 10:08 Find this comment inappropriate? Report it

If you own a gun made from gold... I have it on good authority that neither gold or guns will be confiscated, but if you own a gun made of gold, you are in big trouble... Look out Goldfinger, Obama is coming for you! by Bill on May 21 2009, 11:00 Find this comment inappropriate? Report it

Only fools are now holding the dollar. Anyone that has any significant dollar holdings that have not seen the light to convert them to hard assets shall be far less wealthy very very soon. Hope you have stored food. by Brett on May 21 2009, 16:23 Find this comment inappropriate? Report it

Go ahead... something has to start the revolution. by jb on May 22 2009, 12:21 Find this comment inappropriate? Report it

Gold? What gold? No gold here! In the 1930's, most people held at least some gold, because it was legal tender and it was a durable savings vehicle. When FDR demanded the gold, the weak hands obediently turned it in. However, an analysis of the outstanding gold versus the . .more recovered gold shows that about half of the known gold was still outstanding. It disappeared, either into underground caches or overseas. The strong hands never turned it in, and the government eventually gave up on finding it. Now, most of the gold is held in strong hands, meaning people who know the intrinsic value and who will not meekly roll over. I can foresee black markets springing up where gold is traded for food and other goods, running under the radar of the inept government. They may get some gold turned in, but I predict that about 95 percent will simply vanish into the ether. And, although you cannot eat gold, you certainly trade it for food or clothes, or a car, or whatever. And don't forget to accumulate some silver in the form of old US coins... "junk" silver... which is legal tender as well as a precious metal. . .less by David on May 22 2009, 22:38 Find this comment inappropriate? Report it

1930 vs 2009 How can someone compare the two. Grow up guys and stop dreaming. by Jan on May 23 2009, 01:17 Find this comment inappropriate? Report it

"can't eat it"... gold Can`t eat gold, so food is a better bet Sheeeesh...how many more of you are there?? Guess what Herr Brainiac...you can't eat your car, or gas, or other petroleum products either...so sell them and buy food. And oh, btw, . .more you can't eat your house or your clothes either...or your TV or your chairs...or your bed or your soap...so sell those too while you're at it and buy food. And then take your food that you just bought and store in a safe in the ground, and then have a food party 6-months later with all your brilliant same-thinking friends...I've heard that 6-month aged fresh produce is an absolute treat. Chow down. In the meantime, I think I'll go buy some gas with my gold/silver, put it in my paid for car, and go buy some fresh produce with my gold/silver and invite your starving guests over to our fest...or maybe we'll sell it to them...for gold/silver, of course. BTW, not a bad idea to buy storable food, dried foods, etc, for a bad day, but those too will run out along with the fuel and water it takes to prepare them, so you'd better save some of that 6-month old food to barter for fuel and water. But I've heard you won't get much for 6-month old wilted lettuce. . .less by jt on May 25 2009, 13:00 Find this comment inappropriate? Report it

why was my post deleted?? I should post nice-nice? la la la la la...la la la la la ...la la la la la la la la laaaaaa...doo n doo doo n doooo....ahahahahahah ...lovin' you...is easy cuz yore beautifuuuuulll... who cares what it says?...it's . .more nice, huh? . .less by jt on May 25 2009, 13:50 Find this comment inappropriate? Report it

Gold and China I think we should sell off all of our reserve gold and Pay off our debt to China, tell them to kiss our A** and not allow any more of their poison C*** to enter the US. Also quit buying any overseas oil and expand our own resorces. Let's keep our . .more own money and let them all pay dearly for our food. I think we should treat Iran just as we did Iraq. . .less by Donald Hanson on February 10 2010, 16:21 Find this comment inappropriate? Report it

World Affairs Just as stated above and lot's more issues to discuss. I wish I were boss for one week and all of these anti American bastards would be on a one way ticket of their choice and money to get them a new start not in the USA. email me anytime to . .more discuss dhanson@woh.rr.com . .less by Donald Hanson on February 10 2010, 16:25 Find this comment inappropriate? Report it

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