Editor’s Note: Today we have something special to share with you. In place of our usual market commentary, we have a recent essay from Nick Giambruno, editor of International Man.
In this essay, Nick talks about the time the U.S. government stole gold from everyday Americans, and why something similar could happen today. The good news is that you can protect yourself. Nick shares a simple, yet effective way to keep your gold out of the government’s hands.
We also have an incredible offer on gold to tell you about at the end of this essay. If you’re thinking of buying gold anytime soon, you need to read this first…
On April 5, 1933, under the pretext of a national emergency, President Franklin D. Roosevelt issued Executive Order 6102, making it illegal for U.S. citizens to own gold.
The decree forced Americans to sell their gold at an artificially low “official price.” If they refused, the government could hit them with stiff penalties: a $10,000 fine (equivalent to $180,000 today) and/or up to 10 years in prison.
The government blatantly stole wealth from the American people.
Many worry the U.S. government might confiscate gold again if it becomes desperate enough. I don’t think those fears are unfounded. The U.S. government’s abysmal financial situation is only getting worse.
But would it really do a 1933-style grab again?
I don’t think it will. However, there is another growing threat to your gold.
More Likely Than Outright Confiscation
Today, only a tiny fraction of the U.S. population owns gold. Heck, I’d bet most Americans have never even seen a gold coin, much less appreciate its value.
This wasn’t the case in 1933, when the U.S. was still on a variation of the gold standard. That’s why the government probably won’t repeat the 1933 rip-off. It’s simply not worth the effort.
If the government wants to confiscate wealth, it’s far more likely to go for the easy option… steadily debasing the currency by printing money. It’s a stealthy way to confiscate from savers.
That doesn’t mean gold owners are in the clear.
I think the government will try a new scam: taxing windfall profits on gold. This would make it much easier for the government to accomplish something similar to its 1933 heist.
There’s precedence for it, too. In 1980, Congress passed the Crude Oil Windfall Profit Tax Act, which taxed up to 70% of “windfall profits” of domestic oil producers.
What the heck is a windfall profit anyway?
As far as I can tell, it’s whatever politicians decide it is. It’s completely arbitrary. There are no objective measures to define it.
In short, a windfall profit is simply a profit politicians don’t like. The whole concept is a scam—a word trick to camouflage and sanitize legalized theft.
If the price of gold explodes, I wouldn’t be surprised if Congress passes a Fair Share Gold Windfall Profit Tax Act levying a tax of 80%, 90%, or more on gold profits.
Fortunately, there are some practical steps you can take to protect yourself from this form of politically motivated expropriation.
What to Do
One way you can avoid a windfall-profits tax on gold is to renounce your U.S. citizenship. But that’s a drastic step. It’s just not realistic for most people.
Thankfully, there’s a far more practical option. You can do it from your living room. And you don’t have to turn in your passport.
The solution is to own gold in a Roth IRA.
A Roth IRA is a tax-free zone. You fund it with after-tax savings, and any future capital gains or income derived from investments in your Roth IRA are not taxable.
While you can never be 100% sure what the U.S. government will do, it’s far less likely a future tax increase, even a windfall-profits tax, would affect investments in a Roth IRA.
A Roth IRA is the most practical way to protect yourself from the most likely form of future gold confiscation—a windfall-profits tax. It makes you a hard target.
Editor’s Note: Speaking of gold, E.B. Tucker, editor of The Casey Report, recently discovered a “loophole” in the gold market.
In short, E.B. found some of the best prices on physical gold we’ve ever seen. Most mints, gold dealers, and online merchants can’t come close to these prices.
This special offer could last another year or just a couple more months. There’s no way to know. That’s why we encourage you to take advantage of it while you still can. Click here to learn more.
Tom and Teeka: How to Make Money in Today's Market
Today, in place of our usual “Chart of the Day,” we're sharing expert commentary from our friends at the Palm Beach Research Group, Tom Dyson and Teeka Tiwari.
In the short interview below, Tom discusses the simple thing he looks for in a trade. It's a valuable lesson for every investor looking to profit in today's market…
Tom Dyson: People in power treat the economy and the markets like they’re a bunch of levers and knobs that you twist and get everything just right and everything will work. But it doesn’t work like that at all.
It’s based on humans making decisions about stuff. About money. Which they really don’t want to lose, and so they act a little crazy, and things never turn out as the people who manage things want or expect.
Teeka Tiwari: And how do you mine that for opportunities?
Tom: Well, you be a cynic and you just watch for people doing stupid things and try not to get carried away with it.
Brexit is a perfect example.
It’s just a big story that comes out. And people don’t really understand it and make snap decisions around it, and it’s very political.
The market fell, like 10%, and then two days later it recovered like nothing had happened. So if you can just stand back and just look at the big picture and understand really what’s happening, it’s very easy to make some cool, hard decisions to benefit from people just being a little crazy.
On the day of Brexit, the S&P was below 2,000. But it was some vote by a bunch of people 4,000 miles away on whether they should remain part of the European Union. Who knows what happens down the line with that decision?
So why would it cause all these American or global corporations to lose 10% of their value? The two things are unrelated, to me anyway. This is what it’s about.
Teeka: Yeah. I would say one of the things I’ve learned from you is you are an excellent trader of sentiment. You know when sentiment’s too bearish or where sentiment is too bullish.
I remember you calling me late last year and saying, “Yep, these internet stocks are too high, I’m going short the whole internet market.” I said, “I agree with you.”
Tom: That trade worked out really well. I think we did six positions and all six of them made money. Some of them went up 100%. It was really good. And it was lucky too. And maybe it might not the next time.
Teeka: But you did the same call with the dollar. Everybody and their mother was negative on the dollar a few years ago. And you said, “Nope, sentiment’s too bearish, time to go long the dollar.”
Tom: Yeah, well, there was a really long period where the dollar went into a bear market. I think 2000–2001 was the top of the dollar market.
At the time, everyone was bullish on the dollar. And I went bearish.
That lasted for a few years until everyone got bearish on the dollar, and I changed my mind and went bullish on it.
And that’s just a good illustration of what I look for. When everyone’s saying one thing, you just do the other.
Editor's note: Tom and Teeka recently came across a HUGE opportunity in the gold market…the “gold multiplier.”
As Tom explains, early investors who use this “powerful force” could make 10 or even 20 times their money in the coming months. There’s a real opportunity to turn $5,000 into $100,000… And that’s only if gold hits its most recent high of $1,837. If gold goes higher, you could potentially make 38 times your money.
Opportunities like this are extremely rare, so we encourage you to take action today. To learn more, click here. You’ll also learn about a very special offer that expires at midnight tonight. This short video tells you everything you need to know.