goldThe gold confiscation act in 1933 prohibited the holding of gold in the USA. Misconduct was threatened by prison.
What could trigger such a gold confiscation act in Europe? Are there any warning signs that should be watched? Should the current financial crisis be a warning to invest in something other than gold to avoid having to deal with gold confiscation if the worst case should happen?
The US implemented those measures to enable it to devalue the dollar and stay on the gold standard. Since no European country is on the gold standard, they have no reason to implement similar measures.
What could encourage such a measure?
First, you’d need a collective act of madness and economic illiteracy on behalf of a currency area’s management to plunge its economy into two decades of depression by reverting to the gold standard.
You’d then need some sign from gold-holders that they intended to disrupt the already-dysfunctional “market” for the new economy.
At that point, you’d see a gold confiscation act.
However, the very reversion to a gold standard would be a gold-plated (!) sign that the economy was a basket-case anyway, so a gold-confiscation act would be the least of your problems.
There are several reasons that could prompt such an action by any government. Most of them are either acts of evil intent or in response to acts of evil intent.
A despotic leader seizes control and seeks to cement his control by amassing a fortune and removing the power that wealth provides from others. While I find it highly unlikely in the near term it has happened many times across the world in the past.
A Socialist/Communist/Far Left/Far Right/(Insert your least favorite political movement here) government takes power and decides that it will redistribute/reapportion/consolidate the wealth currently in the hands of the population. This sounds a lot like the first option, but the difference here is it more likely a populist movement rather than the act of a single maniacal tyrant.
Wealth is being hoarded in gold and used to illegally manipulate the markets. It theoretically possible that someone could amass such a fortune in gold and leverage that to manipulate the market. It would be difficult to hide such a scheme and upon detection a government may step in and preempt such a maneuver. I think there are more effective ways to do this than through gold but I am not a crazy meglomaniac seeking to cause anarchy though economic chaos…
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