Hi Arabian Money. One commentator has noted that “If the [silver] price goes too high, it could provoke government interference. During the Great Depression, the government restricted gold ownership as it delinked the dollar from the gold standard. Of course, the purpose of that restriction was to prevent gold hoarding and to move our currency away from precious metals once and for all. Gold no longer backs our currency, but silver is a key industrial metal as well as a precious one. If silver prices rose high enough to restrict activity in sectors deemed crucial to national security an activist government might be tempted to interfere once again – this time in silver.”

Any thoughts on this? No doubt the situation will differ dramatically from region to region: I would assess the risk of US government interference to be higher than Middle East, for example.

Ed Note: silver is a small market but geographically dispersed so that would make US intervention difficult, if not impossible in practice. Making ownership illegal in the US might be possible but that would only push up the price of a global commodity.

by the time they get to confiscation, and i doubt they do, gold n silver will already be extremly high and will have been the best way to store assets for years.

what are they going to do,tear the drywall out of everyone’s house n dig up the backyards?

and alot of value in gold is a SMALL bundle….what are they going to frisk everyone going over the borders?….open every package?

it would never be worldwide….i can promise you mexico and the bahamas not going along w/it.

the warning on this will be nationalizing IRA’s n 401k’s into treasurys……they would do that first……it has already been explored as to legality.

@Comment by Bob – 04 August 2011

Government ‘confiscation’ of valuable resources is a low risk, however the ‘banning’ of private citizens from holding key assets (such as Gold and Silver), or the forced sale at a fixed price ‘in the nations interest’ – along with restrictions on the sale of precious metals ‘over the counter’ – are very high indeed.

There are real and serious concerns about holding on to any ‘private’ Gold and Siver during troubled times, however there are also many ways it can be done – so don’t worry unduly.

You should be able to find all the info (and reasurance) you need by seaching the internet.

@ Bob:

In this current environment (i.e. continued global financial turmoil) the precious metals will often rally in a falling stock market, beginning in the Far East (Hong Kong, China, etc.). However, as the stock markets in Europe & the US begin to open, governments will suppress the price of gold and silver, so as not to encourage the liquidity from stocks to leave and then flow into precious metals.

You asked if governments would interfere; in truth, they have been interfering significantly over the past 3 years . . . this is especially true of the UK and the USA, where their agents (for UK, it’s the LBMA & that gang; for the US, it’s JPM, GS, C, HSBC, CME, CFTC, CBOT, etc.). They are the ones that led a closely coordinated attack on silver in the wee-hours of 1 May 2011 (after 5 successive margin hikes for silver by the CME in the prior 2 weeks!), by shorting the silver futures prices.

That egregious set of actions, led primarily by the US FED and their agents, was unprecedented, and their actions today, 4 Aug are equally unprecedented. Don’t those actions count as “interference”?

One may possibly think of many ways the government could create laws to restrict or dictate anything it wants. It can even create laws to state the price of silver or gold is $X or $Y per oz etc.

However what happens when intervention kicks in is to create a grey/ black underground market and eventually market takes over when government intervention fails. In all hyperinflation historically, governments have created all sorts of law, but eventually, market forces will prevail ultimately. Zimbabwe was a recent case.

@ The Old Man.

Is “the forced sale at a fixed price ‘in the nations interest’” or “‘banning’ of private citizens from holding key assets” not pretty much the same thing as confiscation?

True, they can’t tear the drywall out of everyone’s house, but what you are then holding becomes something akin to cocaine: not something you can sell on ebay.

Seems to me, the risk of this is not trivial, at least in the US.

Gotta chime in here, regarding readers’ comments/ questions about gold confiscation, etc.

Confiscation, no; But Heavy Taxation, Yes:
I strongly doubt that the US government would dare to do that cowardly act of confiscation, as Roosevelt did in 1933; instead, today’s corrupt leaders will simply make gold ownership very onerous on the would-be buyers. And they will do that by taxing your gold capital appreciation at a much higher rate than other capital or income.

There are ways around this taxation, since it would occur only when one is selling it. If sold to a dealer, the dealer would be obligated to impose a “special tax” on the seller.

But if one really has to sell the gold, then it can be sold to private parties, which don’t report the “sale”. The best solution is not to sell it at all, but to pass the gold along to one’s family in a private transaction.

ebay is irrelevant,i can sell mine in the bahamas n so can anyone else…..

they don’t care what u take there……n people been flying back with moneybelts forever.

not even close to cocaine.

if someone wants to follow every rule, don’t roll thru stop signs and own APPL not gold.

i break every stupid rule there is if it costs me money.

back to APPL if you can’t tell what u can get away with n what u can’t.

ever go over the speed limit?

@ Comment by Bob – 05 August 2011

Don’t worry about this – historical precents show that these ‘restrictions’ never last more than a few years. It is just a case of sitting on what you have, keeping quiet, and waiting for the restrictrions to be lifted.

It has happened to many people in many countries over the centuries – and approx 3 times in the last century alone, with the US & China being the most widely known, but other ‘occupied’ countries during WW2 were hit with restrictions too.