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“Red Alert”: A.D. 2011 Gold Confiscation?

19 Feb

2010 IMF-WORLD BANK SPRING MEETINGS

Image by International Monetary Fund via Flickr

Roger Weigand is a widely-respected authority on precious metals production and markets.  He’s recently released a “Red Alert” (text below) that warns that according to several “impeccable” “high-level” sources, the US government may try to confiscate the American people’s gold this year.  This possible confiscation is said to be proposed as part of an International Monetary Fund (“IMF”) plan to create a new global currency that will: 1) replace the dollar; and 2) be at least partially backed by gold.

Mr. Weigand describes this proposed confiscation as a “potential”–not a done deal.  Maybe the IMF will create a new global currency; maybe not.  Maybe gov-co will try to confiscate; maybe not.  But the “potential” for confiscation is reportedly greater this year than ever before.

Here’s the “Red Alert”:

“RED ALERT
“Editor: There is a plan to use the IMF (AKA US Treasury and Wall Street) to be the front man for the new world order and one currency. We also got disturbing news yesterday from an impeccable source that when gold touches $2,000 it’s confiscated in the USA for about $200. Then it’s to be reissued by the Treasury for $10,000 per ounce to back the new IMF world currency using SDRS in 2011.  Large physical gold is being moved to Canada.  money.cnn.com/2011/02/10/markets/dollar/index.htm

I’m publishing this “Red Alert,” not necessarily because I believe it’s true.  In fact, as I’ll explain below, I have serious doubt that the “Red Alert” is wholly coherent or rational.

Yes, there could be a confiscation of American gold to support the US government and/or support a revived US dollar that’s backed in whole or in part by gold.  But the idea that the US gov-co might attempt to confiscate all American gold in order to support a new global currency fostered by the IMF strikes me a politically absurd.

If the IMF wants a new international currency, it had better cause the confiscation of all gold, from all nations, throughout the world.  From a political perspective, the American people would never knowingly cooperate with a gov-co attempt to confiscate only American gold in order to support an international currency–while other nations were allowed to keep their gold.  Thus, I have serious doubts about this “Red Alert”.

Nevertheless, just because underlying purpose for the “Red Alert” (American gold will be confiscated to support a new international currency) or some associated facts may be false or politically untenable doesn’t mean that confiscation, itself, is inconceivable.  It’s still possible that our government might try to confiscate all American gold to reduce the national debt and/or replace the fiat US dollar with a gold-backed US dollar.  It’s a long-shot, but some Americans might be willing to surrender their gold for the benefit of America–but they will not surrender their gold for the benefit of the IMF or “global trade” or some such.

But even confiscation for the seeming benefit of “America” strikes me as improbable.  Gold is no longer deemed to be “money” by the government.  Gold, under the existing law, is a mere commodity like corn or pork bellies.  Under what authority would government claim to “own” all of our gold?  If gov-co attempts to confiscate all American gold, there has to be a legal or at least political rationale that the American people will accept as worthy.  What could that rationale be?  That gov-co has screwed things up so badly, that in order to keep funding our politicians’ pensions, the gov-co need to rob the American people of their gold?   The fact that government wants your gold is absolute evidence that you’d be a fool to surrender it.

Nevertheless, even though I’m skeptical of any prediction that gold might be confiscated, I believe one of the best ways to reduce the “potential” for gold confiscation is to simply convey advance warning.  Advance warning will give people opportunity to adjust their own mindset to choose to cooperate–or resist–if gov-co orders a confiscation.  If enough people decide to resist confiscation by moving their gold to safer venues (Canada, perhaps) or merely hiding their gold, the gov-co will know in advance that that their confiscation efforts will prove fruitless and therefore reject any plans to confiscate.

I.e., government is already so vulnerable and weakened that it cannot easily afford to take any stand that it can’t enforce.  If government orders all gold be surrendered and no one complies, our already vulnerable government will be shown to be less powerful, somewhat impotent, and ridiculous.  In order to maintain whatever remains of the illusion of power, government must not attempt to exercise power and be seen by the public to have failed in in that attempt.  A failure by government to complete an attempt to confiscate America’s gold would expose the fact that his country is not being run by the “Great and Powerful Oz!” but rather by the “little man behind the curtain”.

More, I’m publishing this “Red Alert” in part to dissect it and present reasons why rumors of confiscation are improbable.

For example, if this “Red Alert’s” allegations are roughly correct, the people’s financial motivation to resist government confiscation orders is almost perfectly irresistible:

1.  According to the Red Alert, the gov-co will order confiscation this year when the price of gold reaches $2,000 an ounce.  That price is about 45% higher than today’s price.  If the confiscation were to take place this year at the price level alleged by the Red Alert, gold would have to experience it’s best year ever.  If the price of gold increased 45% this year, what’ll it do next year?  Who, pray tell, would voluntarily surrender his gold when the price of gold is skyrocketing?  Damn few.

2.  Even more improbable is the “Red Alert’s” claim that gov-co will pay only $200 an ounce for the gold it confiscates.  Who th’ hell would voluntarily sell gold currently valued at $2,000 an ounce to the gov-co for just $200 an ounce?  Crazy people, maybe.  Maybe.  But the chances of finding sane people willing to sell their $2,000/ounce gold for $200/ounce would be virtually zero.

3.  The Red Alert alleges that once all the gold is confiscated, the government will raise the price of gold to $10,000 per ounce.  Assuming confiscation takes place, I guarantee that once gov-co has all the gold, gov-co will absolutely raise the price of its gold to some lofty level.  But, if the American knew that the price of gold was going to hit $10,000 an ounce within the next 12 to 24 months, who wouldn’t buy a few ounces for $1,450 each and squirrel ‘em away in anticipation of seeing them suddenly valued at $10,000 an ounce?

Yes, in the event of a government confiscation, it would be somewhat difficult to trade your hidden gold for necessities.  If you were caught with gold, there’d be some penalty–just as there is for being caught with other “controlled substances” like heroin or marijuana.

So what?  The government’s “war on drugs” has continued for 40 years and there are more drugs in this country today than ever.  Drug smugglers are bringing drugs in by submarine.  If anything, government’s “war on drugs” has only caused drugs to be more profitable and therefore more profuse.

The same principles would apply with a government attempt to confiscate/outlaw gold.  Criminalizing the possession of gold would only increase the price of gold.  If the possession of gold were criminalized, the price might go to $20,000 an ounce.

More, there will always a black market for gold.  So long as you have gold, you’ll be able to sell gold.  You may have to become as shifty as a crack dealer, but no gov-co regulations or decrees will destroy your ability to spend gold.  So who would voluntarily surrender their gold to gov-co based on some damn law?  Knowing gold’s price could rise to $10,000, or even $20,000 an ounce, virtually everyone would hold onto their gold as long as possible.  Any attempt to confiscate the people’s gold would therefore fail.

Therefore, I’m extremely skeptical of any allegations of a coming gold confiscation.

Nevertheless, as I first wrote, Roger Weigand is a widely-respected authority on precious metals.  I don’t know who his “impeccable sources” are, but I’m inclined to think that Roger’s motivations for releasing this “Red Alert” are honorable.  He may be mistaken–but I doubt that he’s lying and intending to deceive.

But that doesn’t mean that Roger’s “impeccable sources” (or their “impeccable sources”) might not be lying.  In the internet age, any conspiracy theory can go viral in minutes and precipitate significant events (and sudden profits).

The real purpose behind this “Red Alert” may be to cause people to begin to buy more gold in anticipation of higher prices.

Alternatively, if people feared that their gold would be confiscated, they might sensibly trade their gold for silver since there’s no “Red Alert” (yet) on gov-co plans to also confiscate silver.  (What do I care if they confiscate all the gold, but my wealth is stored in silver?)   More, if the price of gold is going to skyrocket, silver will also skyrocket.  Thus, if the Red Alert reduced the demand for gold but increased the demand for silver, that Red Alert’s real purpose might be to artificially depress the price of gold and artificially increase the price of silver.

So, who knows?  Is the Red Alert truthful?  Mistaken?  Intentionally deceptive?  I don’t know.  All I know is that I have regarded Roger Weigand is a credible source (but in this case, he may have screwed up).

Make of it what you will.

And here’s a video of Roger being interviewed about this Red Alert.  The video is 8 minutes long.  The first six minutes are simply info about Roger and his newsletter.  The commentary on the Red Alert begins at the 6 minute mark:

http://www.youtube.com/watch?v=15ZcUefb78I&feature=player_embedded

Take it all with salt.  You don’t have to believe it, but you can nevertheless learn from it.

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5 responses to ““Red Alert”: A.D. 2011 Gold Confiscation?

  1. Bob

    February 19, 2011 at 3:38 PM

    Hi Al,

    Look at what is happening in Washington State:

    A bill proposed in the State of Washington (House Bill 1716), by representatives Asay, Hurst, Klippert, Pearson, and Miloscia, whose alleged purpose is to regulate secondhand gold dealers, seeks to capture “the name, date of birth, sex, height, weight, race, and address and telephone number of the person with whom the transaction is made” or said otherwise, of every purchaser of gold in the state of Washington. Furthermore, if passed, Bill 1716 will record “a complete description of the property pledged, bought, or consigned, including the brand name, serial number, model number or name, any initials or engraving, size, pattern, and color or stone or stones” and of course price. But the kicker: if a transaction is mode for an amount over $100, which means one tenth of an ounce of golds, also required will be a “signature, photo, and fingerprint of the person with whom the transaction is made.”

    http://www.zerohedge.com/article/prepare-give-all-private-data-any-gold-purchase-over-100?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

     
  2. Chase

    July 20, 2011 at 1:43 PM

    The Gold Confiscation of 1933 is the single most draconian economic act in the history of the United States!

     
    • Savage Nation

      December 14, 2011 at 12:21 AM

      Except the Federal Reserve Act of 1913…

       

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