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Tuesday, June 21, 2011

Government Cracks Down On The Gold And Silver Trade

The crackdown begins on July 15, 2011.

This crackdown applies to U.S. residents.

Could this be the first step to making the private ownership of precious metals a crime?


  1. This comment has been removed by the author.

  2. Being of a conspiratorial mind, I wonder if Forex announced this interpretation to scare up more business during a top of the market lull.

    Creating the false impression that people won't be able to buy gold after July 15th is a sure way to attract a whole new herd of panicked buyers.

    Here's some perspective:



  3. From one of S.F Links:
    "Dillon’s Hanlon said Dodd-Frank regulations seek to impose new restrictions on leveraged gold and silver transactions as well as derivatives trades that fund managers typically make".

    From one of my earlier posts:
    "Only seven months too late, official Washington is starting to acknowledge flaws in the architecture of the Dodd-Frank law passed last July. Tuesday, for example, Federal Reserve Governor Daniel Tarullo admitted in testimony to the House Committee on Financial Services that by forcing much of the derivatives market through central counterparties, the government would now be creating new too-big-to-fail institutions and new potential sources of systemic financial risk".

    Derivatives will not be regulated, so I do not have much faith in what they are saying.

    P.S. Thanks AOW for the linky!

  4. I asked exactly the same questio. when the financial markets collapse the next time (maybe sooner than most people think) the world will likely turn to gold and silver. I, for one, do believe our government would resort to making private ownership of gold and silver illegal.

  5. I think there is a culture, a mindset in the government to make ALL citizens completely dependent on the government for ALL their needs. Call it Marxism, communism, fascism, socialism or whatever, the idea is thriving in bureaucratic circles that a Nanny state is needed and the only way to save the people from themselves. In this scenario, you cannot have private ownership of precious metals, because that means you can be independent of government handouts. The only person who will get to keep his gold is George (Goldfinger) Soros who owns eleven tons of it.

  6. Sounds strange, could be to scare up sales.

    We don't own gold, other than what jewelry I have.

    Dave Ramsey doesn't own gold either. He told listeners that the only gold he owned was the ring on his finger (and his wife's jewelry of course).

    Right Truth

  7. Under FDR:

    Following the privately held Federal Reserve Bank causing the Great Depression, in 1933, astonishingly FDR literally stole gold from citizens, ordering them to hand their gold to the privately held Federal Reserve Bank in exchange for pieces of paper....

    And THIS:

    ...one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold...

    - Howard Buffett (Warren Buffett’s father and former U.S. Congressman)

    I don't know how reliable the above information is.

  8. Didn't Hitler say, "Gold in the hands of the public is an enemy of the state"? I seem to recall reading that somewhere.

  9. FDR outlawed the ownership of gold by private citizens & they confiscated private citizens' gold. Not sure how many years the ban lasted. It is one more crucial step for the government to have total control. Wish we'd bought gold now instead of a family vacation--that would be hard to explain to my son, though. Sorry, we're not going on vaca, but look at this pretty oz. of gold.

  10. Scientifically speaking, Gold is a crummy metal;
    maleable, not much use.
    Now Platinum.....

  11. They could use FDR's gold laws as legal precedent. I would not put it past them at all.

  12. I don't know...

    I'm seeing projections for increases throughout the summer that seem to imply it's going to be around.

  13. It appears that Forex.com's interpretation of the law stems primarily from Section 742(a) of the Dodd-Frank act which "prohibits any person [which again includes companies]from entering into, or offering to enter into, a transaction in any commodity with a person that is not an eligible contract participant or an eligible commercial entity, on a leveraged or margined basis."

    Pretty sound analysis. Looks like this site got caught dealing in naked options.

    So all over the counter dealing is over? Where do you get your market info, AOW, Online Trading Academy?

    Over the counter gold and silver contracts are finished and the Journal or Barron's contains nothing? Please, don't be a sucker.

  14. FDR might have been able to get away with something like this in his day because of the near dictatorial power he enjoyed, with a liberal majority court as well as in Congress. Something like that wouldn't fly these days. But people do need to be careful. This gold business is looking like the next big bubble to me.

  15. BB-Idaho,
    Interesting that you mentioned platinum. The theft of catalytic converters is on the rise. Catalytic converters contain platinum.

  16. Duck,
    When Mr. AOW and I were in the coin business, which included dealing in gold and silver for both numismatic and bullion purposes, we never bought or sold on a leveraged or margined basis. We dealt in physical merchandise bought and sold with cash on the barrel head (no credit cards either).

    But government regulation of trading via a leveraged or marginal basis is notoriously ineffective as people always find a way around the regulation. Just look at the mess with the recent housing crash and all the electronic swapping around of mortgages to the point that home buyers didn't even know who exactly was holding the mortgage.

    Honestly, government regulation doesn't make the governed any smarter.

  17. Pagan Temple,
    But people do need to be careful. This gold business is looking like the next big bubble to me.

    Could be.

    The precious metals market can be volatile. Furthermore, it is, to a certain extent, manipulated by "the big boys."

  18. Looks to me like Forex is drumming up business. This won't stop people from buying or selling over the counter, and take actual physical possession of the metal/s. it's purpose is to regulate futures sales more tightly. Stay out of the futures market and you're fine.

  19. Black Sheep,
    Forex's statement could be trying to drum up business. Of course, many prefer physical merchandise to papers.

  20. I guess people need to start burying their gold again?

    Things are really getting out of control.

  21. Here's my conspiratorial take...

    Government seeks total control, which is easily obtained by creating total dependency. People that own precious metals have some "insulation" against dependency. So, the government seeks to end that ability to survive an economic collapse.

  22. I reommend we all invest in lead.

  23. Blogginator,
    It certainly is time for that investment.


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