You ought to own some gold but don’t store it in the U.S., the Fed will take it away from you one day.
My reaction to this statement by Faber, otherwise known as Dr. Doom, is just short of incredulity. He’s been right, albeit early, about a number of predictions, including that the US is already in a recession and that gold will eventually hit $10,000 or higher as the currency debauchery continues and accelerates with the Fed’s new QE3 program.
But coming to take it away from us? Why would they do that?
Gary North is full of reactions to Faber’s statement:
- The Fed doesn’t have the authority.
- It doesn’t have the police power.
- Such a move would further sully its already grievously damaged credibility.
- It would admit that it has been playing with monopoly money all along.
- Why bring attention to gold? Everyone knows it’s a relic from the dark ages.
- There would be lawsuits.
- How could such a decree be enforced? Who would actually come to the door and demand your gold?
- In the 1930’s when FDR confiscated gold coins from the people, the people were a lot more trusting of government than they are now.
- Faber says to hold gold outside the US. Why? In order to do that a citizen will leave all sorts of tracks that would lead confiscators to the gold.
I have some further thoughts on the matter. If the president (Obama, Romney, Biden, Ryan…take your pick) were to issue an executive order, who would enforce it? Would that be Treasury agents swarming all over the countryside? IRS agents? BATF agents? And while they’re at it, how about guns and ammo: “While we’re here we might as well pick these nasty items up as well.” Who’s going to go along with that?
Such an announcement or decree would be extremely costly to enforce. Where would the money come from? Wouldn’t the House of Representatives, where all spending bills start, begin to hear howls of outrage from you and me?
How would they “know” that we have a cache of coins, anyway? If we have been buying them for cash over the past many years, where is the paper trail?
I think North is right. Here is what he said about Faber’s statement:
When I hear that the federal government is going to confiscate all of our gold coins, I am amused. When I hear the Federal Reserve is going to do this, I am amazed that anybody who knows anything about gold owners of the United States would believe this is probable, let alone inevitable.