Italy’s Gold “Donation”
Benito Mussolini—Italy’s prime minister turned dictator—tried to fight a nasty recession by introducing the “Gold for the Fatherland” initiative in 1935. He “encouraged” the public to “voluntarily donate” their gold rings, necklaces, and other forms of gold to the government. In exchange, citizens received a steel wristband that bore the proud words, translated, “Gold for the Fatherland.” It’s said that even his wife Rachele donated her own wedding ring in a show of solidarity.
The gold was melted down and made into bars, then distributed to the country’s banks. The government netted 35 tonnes (1.23 million ounces) from citizen “donations.”
Germany’s Confiscation of Czech Gold
Hitler’s Nazi party pulled a tricky scheme in 1939… after the invasion of Czechoslovakia the year before, the Bank of International Settlements, chaired by Bank of England director Otto Niemeyer—a German no less—instructed the Bank of England to transfer £5.6 million of gold from the Czech national bank to the Reichsbank.
Even though the gold belonged to Czechoslovakian government, and even though English authorities had been warned of the possible transfer, it went through without a hitch. To mask the theft, Germany’s central bank understated its official reserves later that year.
Saddam and Fidel
The madman of Iraq and the communist oppressor of Cuba both confiscated gold, art, jewelry, etc. These brutal dictators took whatever they wanted, at the point of a sword or gun.
As you might surmise, citizens were not compensated when their holdings were seized—unless you count remaining alive as compensation.
Based on interviews I’ve conducted with two large gold bullion dealers in Russia, the old Soviet Union has historically viewed gold and silver as a matter of national security. Therefore, private ownership in any form—except jewelry and numismatic coins—was strictly forbidden. People went to jail for owning a gold bar.
And in spite of the Russian central bank being one of the biggest buyers of gold since 2008, those old laws are still on the books. It is illegal to buy or sell bullion bars except at a bank that has a precious metals license (and very few have them)… it is a criminal offense to buy or sell a gold bar from a friend or relative… transporting bars has strict rules and can send you to prison if you break them… it is illegal to take bullion bars out of the country… buying and selling foreign-made bars is also illegal.
These laws are not as strictly enforced today, but they remain on the books and thus could be easily activated again. You can buy gold coins, but they’re not abundant and are in poor quality.
The reality is that in a crisis, we could potentially face a lethal combination: a desperate government, with your assets ready for the taking.
The point to all this isn’t to predict that there will be a gold confiscation. The idea is be aware of the risks and to have a viable plan in place to combat one if it occurs.
But is there really such a strategy?
On the surface it would seem that short of renouncing your citizenship and moving out of the country, there are precious few options to protect against such a draconian act.
But there are a couple strategies that have historically been effective in combating a gold confiscation…
- Source, Mike Maloney