Could gold ever be banned again?

[glennds]

It was in May 1933 that the US Federal Government decided that it was in its interest to ban the ownership of gold and confiscate the same from the public.
When I say confiscate, they didn't just steal it, they paid the holder at a rate of $20.67/oz which thankfully was pretty much the trading market price at the time so in effect they just forced every gold investor to cash out. Of course shortly after this, the US set a new price of $35/oz for the purposes of international trade thus creating a tidy profit of 66% in a short period.

So the official rationale for doing this was that the gold standard required the Federal Reserve to retain a certain gold reserve in order to back the currency, and they needed more gold than they had so they could increase the money supply, so the solution was to take it from the public. And of course, increasing the money supply was necessary to stabilizing the economy so they did this for the greater good. That was the official rationale.

It was not until we fast forward to the Nixon years that the gold standard was abandoned and gold was allowed for ownership and trading again. It was around this time that Harry Browne became known for predicting inflation, currency devaluation, and advocating gold ownership which turned out to be a good bet.

So this brings us to the question. We are in unprecedented times in terms of government finance and Federal Reserve activism.
Could there be an argument to be made that public ownership and investment in gold is a threat to the US government, the Federal Reserve, or the US currency? If a case can be made for the answer to be yes, then it leads to the next question which is - could it be possible that gold could be banned again? And if that happened, does it destroy the Permanent Portfolio or does a PP investor then need to look to an alternate inflation/chaos hedge?

Of course, I realize the rationale from 1933 no longer exists where the Fed needs to hoard gold to support increasing the money supply. Because we now live in an age where they can create an infinite amount of money out of thin air. But I ask again if anyone can think of any other reason why private ownership of gold could be adverse to the government's interests?

[Smith1776]

I personally think that no matter how depraved and impossible you think an action is, there's always some way a government can find a way to justify it. There's no line they won't cross under the guise of "national security", "monetary stability", or some other such nonsense.

Who knows if another 6102 will come along? If it did I can promise you one thing: I would not obey it. Let the black helicopters of the state come after me.

[Libertarian666]

I personally think that no matter how depraved and impossible you think an action is, there's always some way a government can find a way to justify it. There's no line they won't cross under the guise of "national security", "monetary stability", or some other such nonsense.

Who knows if another 6102 will come along? If it did I can promise you one thing: I would not obey it. Let the black helicopters of the state come after me.

You're right about their ability to justify anything. It doesn't have to make much sense; many people will accede to it anyway.

HB wasn't kidding about geographical diversification.

As for black helicopters, they aren't quite as effective against a population with hundreds of millions of defensive tools.

[Kriegsspiel]

IMO, sure, but not banned; confiscated. Like a Mandibles situation, where the government confiscates gold to capitalize a currency. Or maybe a situation like in Germany after Versailles, where other countries expropriate real assets of all kinds. I'd think it would take pretty extraordinary circumstances for things like that to happen.

[Jim Burnham]

I have been pondering if allocating a certain percentage of one's portfolio to silver might be worthwhile. While I think gold is probably a superior hedge, it could be that silver might not be as likely to be confiscated - it wasn't confiscated in the 1930's.

[Libertarian666]

I have been pondering if allocating a certain percentage of one's portfolio to silver might be worthwhile. While I think gold is probably a superior hedge, it could be that silver might not be as likely to be confiscated - it wasn't confiscated in the 1930's.

Neither gold nor silver is currently used to back the currency, so I'm not sure how the 1930's experience is relevant to either one.

[Jim Burnham]

I have been pondering if allocating a certain percentage of one's portfolio to silver might be worthwhile. While I think gold is probably a superior hedge, it could be that silver might not be as likely to be confiscated - it wasn't confiscated in the 1930's.

Neither gold nor silver is currently used to back the currency, so I'm not sure how the 1930's experience is relevant to either one.

I suppose if the confiscation of gold in the 1930's was part of the plan to devalue the dollar (via resetting the price of gold to $35.00), then it probably is not relevant to either one now.

[I Shrugged]

Well they could decide to back the dollar with gold at a higher price than now. Say $5000. The good news is your gold is now worth $5000. The bad news is, turn it over in exchange for dollars, or else.

This would be a dollar devaluation scenario.

[Kbg]

My biggest argument for why gold won’t be banned...money has zero connection to gold anymore other than as a quote for it per oz. Not the case when there was an explicit connection between the two as in turn in the $20 bill get the equivalent in gold and vice versa.

[shekels]

Gold does not have to be Banned directly.
Gold can be manipulated out of existence from the masses.
Through Taxes,Propaganda, given enough time, Gold is bad mantra will drive most people to give up their Gold Willingly.

[Kbg]

Gold does not have to be Banned directly.
Gold can be manipulated out of existence from the masses.
Through Taxes,Propaganda, given enough time, Gold is bad mantra will drive most people to give up their Gold Willingly.

Sure, or it's a crappy form of money compared to more modern alternatives and that''s why it isn't money anymore.