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Thursday, May 22, 2008

The Unconfiscatable Gold Myth

In 1933, President Roosevelt demanded that US citizens turn over all their gold coins and gold bullion for worthless unbacked paper. Strictly interpreting the US Constitution, this seizure of gold was illegal, but the US Supreme Court ruled otherwise.

The gold recall order had an exception for "collectible" gold coins. If you owned a collectible gold coin, it was exempt from the recall order. Naturally, politically connected insiders knew about this exemption in advance. Politically connected insiders who bought collectible gold coins before the seizure profited immensely.

From 1933 to 1975, it was illegal for US citizens to own gold, *EXCEPT* for jewelry or collectible gold coins. After the gold standard was abandoned, it was declared legal for US citizens to own gold. By that time, people had become accustomed to trading with unbacked paper money instead of gold. If gold ownership was never outlawed, people would have merely boycotted Federal Reserve Points and used gold instead.

People say "The dollar is declining in value. The government may confiscate gold again. Buy collectible gold coins to protect yourself." There are several flaws with this reasoning.

The exemption for collectible gold coins allowed insiders to profit. There is no guarantee that another gold confiscation will contain such an exemption.

The US dollar is no longer backed by gold. The US dollar is backed by debt and violence. The Compound Interest Paradox guarantees that there will always be more debts than money. Government violence enforces this illegitimate debt contract. Also, the US government demands that income taxes be paid in Federal Reserve Points. The income tax creates an artificial demand for Federal Reserve Points. Nobody in the USA can legally work without paying income taxes.

The US dollar is backed by violence. It is much more likely that the US government would attempt a gun confiscation, instead of a gold confiscation. There is no need to confiscate gold anymore. Taxes and regulations make it impractical for people to use sound money instead of Federal Reserve Points.

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