Precious metals confiscation. Could it happen again?

Good Sunday morning! 😎🍁☕️

For those owning physical precious metals, 2024 thus far has been quite the year as gold, silver and platinum spot prices have appreciated substantially in an era of high infation which we all know is well over 10% and not the manipulated government CPI. Just last week, StatsCan reported that inflation is down to 1.6% but I know when I buy groceries, gas, a meal out, and everyday items that it's way higher.

So far in 2024, the spot prices of the precious metals are up: Gold (+15%); Silver (+22%); Platinum (+10%). This compares very favourably to the S&P 500 which is up 24% and the TSX which is only up 2% in 2024. The metals are doing exactly what they're designed to do and have been doing for thousands of years - acting as a store of wealth and maintaining purchasing power. Can you say that about fiat dollars?

As precious metals prices rise with ever-growing government debt, geo-political instability and money printing, they are starting to become news in MSM. Heck, they're even being sold at Costco!. As word gets outs and more people acquire a few ounces, this will only help to push prices even higher in addition to the thousand of ounces which centrals banks have been and continue to purchase at record-levels, plus BRICS indicating that its new currency will be 40% gold-backed.

Did you know that in the U.S. up until 1974 it was illegal for citizens to own precious metals? That wasn't that long ago. Could it happen again? Could it happen here in Canada?

In 1933, the U.S. government executed a bold move that would have lasting implications: the confiscation of privately-owned gold. Under Executive Order 6102, President Franklin D. Roosevelt required all Americans to turn in their gold coins, gold bullion, and gold certificates to the Federal Reserve. The goal was to stabilize the economy during the Great Depression by boosting the money supply and devaluing the dollar. At the time, the government believed hoarding gold was preventing economic recovery, as gold was the basis for currency. In exchange for their gold, Americans were given cash at the rate of $20.67 per ounce—a rate that would soon be raised to $35, significantly devaluing the dollar and incentivizing government-held gold reserves.

The confiscation involved a combination of legal measures and financial incentives to ensure compliance, though enforcement was uneven. While most Americans complied, many found ways to hold onto their gold discreetly. The order remained in effect until 1974, when President Gerald Ford signed legislation to re-legalize private gold ownership.

Could it happen again today?

Fast forward to today, and while the likelihood of another direct confiscation seems remote in my opinion, governments around the world, though their central banks, are amassing precious metals reserves, especially gold, at a rapid pace. This accumulation has led to speculation that gold and silver prices will continue to rise, possibly out of reach for average investors. In this sense, we may be facing a new kind of confiscation—one where the average person is priced out of owning these valuable assets due to skyrocketing costs.

If precious metals become unaffordable for the everyday investor, it could limit personal financial security and privacy, as these metals are traditionally seen as hedges against inflation and economic instability. In a time where economic uncertainty is on the rise, the need for financial protection has never been more pertinent. While governments may not actively seize gold and silver from citizens again, their actions could still influence who has access to these assets in the future.

Owning even a small amount of precious metals can be a step toward diversifying and safeguarding your wealth. By acting sooner rather than later, people can position themselves to benefit from precious metals without being at the mercy of fluctuating markets and governmental actions.

Have a golden Sunday!

David

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• Are you looking to preserve your savings, even retirement, and purchasing power from inflation?

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