October 6, 2009

October 6, 2009 – Gold and silver recorded unexpectedly strong gains on Tuesday, and some investors satisfied their appetites for safe-haven assets by purchasing those same precious metals and taking physical delivery. Gold and silver bullion are sometimes used to build a wall between cash accounts and inflation, and rare coin investments add privacy and guaranteed liquidity to one’s portfolio. Long-term hyperinflation and stagflation is a fear for some economists, but the immediate threat of the dollar’s insolvency is a cause for great concern amongst many gold and silver bullion holders. 

Global outcry to replace the dollar as the price base for commodities like oil and food worries some gold investors, because our government has been known to…well…do whatever they want. If the forces within the smoke-filled rooms in Washington decide that our dollar needs immediate backing, they may resort to confiscating precious metals from private citizens. This happened once before within our nation, in 1933. President Franklin Roosevelt concluded that the United States was in the middle of a financial crisis. He prohibited the hoarding of gold bullion by US citizens, which was deemed punishable by 10 years in prison. The more than 131 million ounces that were recovered between 1933 and 1973 boosted the dollar’s value tremendously, and the success of that plan is one of the main reasons why so many investors fear a second confiscation. Individuals and corporations who would like to prevent their gold from being confiscated should be aware that Congress can, and has radified major laws in less than three hours, but there are types of gold that presently may not be confiscated by our lawmakers. 

Coins that carry a market value of 15% or more above their underlying precious metal content may not be subject to gold confiscation, as well as coins with an actual market value of less than $100. Investors sometimes buy Mint State condition gold and silver coins that have been graded by the Professional Coin Grading Service(PCGS) or the Numismatic Guaranty Corporation(NGC). These coins not only provide investors with a beautiful, liquid asset, but the privacy and potential growth that these coins could provide is desirable and logical for many Americans during this distressing economic time.

Shannon King

Senior Staff Writer –

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