Many people around the world seem to think that owning gold is illegal. That is far from the case, as any such restrictions were lifted decades ago. There are some regions where gold can be seized by the government, however.
Owning Gold in the Western World
Looking back through history, there have been numerous questions regarding owning gold as an individual. It is legal today in all Western countries, although that situation used to be very different not all that long ago.
In the United Kingdom, owning gold has never been deemed illegal. However, it has been subject to confiscation during a war. Gold has always been a great way to fuel war efforts around the globe, as it is a universally accepted exchange of value. During those times, private ownership of gold may have been questionable, but never officially deemed illegal.
The commandeering of privately owned gold has always been frowned upon. While war efforts may have warranted such an approach, it is not acceptable in this modern age. Mussolini, for example, tried to get rather creative. Back in 1935, he asked for “voluntary bullion donations” to fund the Italian war effort.
Nationalizing Gold in the US
Perhaps one of the reasons why the confusion arose regarding this topic dates back to 1933. On April 5th of this year, the US decided to nationalize gold. It was an effort conducted by former US President Franklin D. Roosevelt. Following the Great Depression, some sort of relief effort had to be created.
Given how the US Dollar was pegged to the gold standard, there were very few options available. Backing up to 40% of every US Dollar by government-owned bullion was no longer sustainable. At the time, the US simply lacked the necessary precious metal reserves.
To counter this problem, the Enemy Act of 1917 was leveraged. This ensured the US government could compel the purchase of the entire nation’s supply of gold bars and coins. The buyback scheme was problematic for those owning gold, as only a handful of items were exempt from this measure.
Failure to comply with this measure resulted in jail sentences of 10 years. Citizens were not given a choice nor say in this matter whatsoever. Eventually, the Federal Reserve tripled its gold holdings, and made a lot of profit in the process. Manually changing the price from $20.67 per ounce to $35 an ounce was a deplorable act.
Confiscating Bullion in 2020 and Beyond
Contrary to what most people want to believe, governments can still confiscate bullion. Even though owning gold is perfectly legal, there are regions where government seizures are normal. India, for example, has a very colorful history when it comes to legislating this precious metal.
In fact, a new law introduced in 1965 made private ownership of gold illegal in the country. All bullion had to be converted to jewelry and declared to the right authorities. This never curbed gold hoarding in the country, however. By 1990, the law was abandoned, allowing India to flourish as a gold trading nation.