Can the government take my gold and silver?

When it comes to the government ‘taking’ gold and silver, we make a distinction between confiscating and nationalizing. Confiscating gold is seen as a drastic measure and used as a last resort, it is a clear signal that a revaluation of the currency is needed.
 

Confiscate and nationalize

First of all, it is important to distinguish between confiscating and nationalizing gold or silver. In confiscating, the state seizes the precious metal and there is no compensation for this, in nationalizing, the state also claims the gold but there is compensation for this.
Confiscation is a legal term that means the seizure by the government of goods from private individuals. Confiscation is also called "special confiscation" or "withdrawal from circulation".
Confiscation of gold simply means the government seizing gold objects. Confiscation of gold and silver is of course about preserving financial stability. Confiscation of gold is more likely than silver, after all, gold has been used as a gold standard for many years and this could be a major reason for confiscation. Silver would be a safer haven for this danger than gold.
 

Legislation and regulations

Under Article 26 of the Emergency Financial Transactions Act (25 May 1978), the Minister of Finance has the authority to requisition gold coins, fine gold, unprocessed gold or semi-finished products from residents of the Netherlands.
 

The practice

The confiscation or nationalization of gold or silver would be the last resort when complete confidence in the financial system is gone. Theoretically, it is possible that the Dutch state will claim the gold from the citizen. However, this does not mean that this chance is realistic in practice.
The confiscation of gold is difficult to implement. Gold is available in many different forms, there is no register of gold ownership and such an action will not be accepted without further ado by the Dutch citizen.
Confiscating savings, on the other hand, is much simpler, with Cyprus confiscating almost 10 billion euros in savings from its citizens in 2013 with a few clicks. For that reason, it remains to be seen what will be done if confiscation proves necessary.
 

Cyprus Confiscation in 2013

After the collapse of the largest Cypriot bank, the government also got into financial trouble. The European Union came up with a plan in which the main panacea was a one-off tax on savings. Many Cypriots saw a serious chunk of their savings go up in smoke (almost 10 billion euros). This confiscation was however necessary to save the country.
 

Nationalization 1933 - 1934

On April 5, 1933, U.S. President Franklin D. Roosevelt signed Executive Order 6102. This ordered all citizens to surrender their gold coins, gold bars, and gold certificates at a fixed rate of $20.67 per troy ounce. Failure to comply? Risked a fine of up to $10,000 or a prison sentence of up to 10 years.
In addition, less than a year after the nationalization of gold, President Roosevelt also nationalized silver. The reason was exactly the same as for the nationalization of gold: to create greater monetary inflation. The confiscation of silver in 1934 turned silver back into a monetary precious metal, whereas before that gold had reigned supreme.
 

Confiscation in the Netherlands

In the Netherlands, this confiscation or nationalization of gold has never happened. In addition, we as citizens are also inclined to think: this will never happen in the Netherlands. However, when we look around us, this happens more often than we think and also in other ways.
A contemporary example is the protesting farmers who stand up for their right to exist and property. By far the most valuable asset for a farmer is his land. On 17 June, the court in The Hague ruled against dairy farmer Gert Hogendoorn in a lawsuit against the municipality of Krimpenerwaard. Gert Hogendoorn is forced to sell his land to make way for a nature reserve. Last year, the municipality of Krimpenerwaard, South Holland, proceeded to expropriate the 26 hectares of land from farmer Hogendoorn, because his land is to become a nature reserve. Gert Hogendoorn did not accept this decision and went to court, but in vain. This seems to be the first land expropriation since the announcement of the nitrogen plans.
 

Conclusion

Let us first state that confiscation would be the last resort in the event of a revaluation of the currency. The question then of course is how this would look in Europe and how this would apply in each country. In addition, confiscation of gold is difficult to implement, because it is difficult to prove whether someone actually still owns gold. However, if you want more certainty, you can consider purchasing silver. Confiscation of gold is more likely than confiscation of silver, because gold has been used as a gold standard for years and the main reason for confiscation would be the revaluation of the currency.
If you are considering buying gold or silver for the first time, we recommend that you take a look at our gold guide and silver guide. These will provide you with all the information you need to make the right decision.
 
Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.