Of Gold & Silver

Investing in gold can be a good bet if you can get in at the beginning of a commodities boom or if, as is believed right now, the economy is headed for down times with paper currency losing its value due to inflation.  You don’t want to risk losing your investment, though, if your government starts confiscating gold.

This has happened in various countries throughout history, and it happened not all that long ago in the U.S. For years after FDR outlawed the private ownership of gold it was actually illegal to hold gold in the United States, and if you had it in a safe deposit box (read more on why it’s not a good idea to hold gold in a bank safe deposit box), the bank could legally take it from you.

Will this happened again? No two currency crises are exactly alike, so it’s hard to say for sure, but there are financial experts (Peter Schiff from Crash Proof: How to Profit From the Coming Economic Collapse and Michael Maloney of Rich Dad’s Advisors: Guide to Investing In Gold and Silver who believe it’s a distinct possibility.

The safest way to protect your gold investment is to store only part of it in your home and none of it at the bank or a storage facility in your country.  Instead considering opening an account with an institute such as Goldmoney.com, which allows you to store your gold in the UK or Zurich, or buying and storing your gold at the Perth Mint in Australia (Australia has no history of confiscating gold).

For more on the history of government gold confiscation, you may also wish to read The Collapse of the Dollar and How to Profit from It: Make a Fortune by Investing in Gold and Other Hard Assets (the book has a chapter entitled The Confiscation Threat).