http://www.commodityonline.com/news/Will-America-confiscate-gold-and-ban-COMEX-20328-3-1.html By Julian Phillips If the United States' government decides to confiscate gold in the future, what impact might that have on the gold price, gold mining stocks, and the Comex gold futures market.
We assure you, this is not a fatuous question. Is it possible, you may well ask, under what circumstances this could happen as it did in 1933...? That year, the US government banned the ownership of gold by US citizens and purchased all but rare Gold Coins from the US public on pain of a $10,000 fine or imprisonment. Washington did this at $20 an ounce. Two years later they had revalued gold to $35 an ounce, thus knocking the forced sellers some 43% lower against the metal in terms of their newly devalued dollars. So there is a precedent!
In a later part of this series, we will examine the reasons behind this first confiscation and compare these with today to see if we can expect the same in the months to come? But for now, let's imagine that a confiscation could take place. Further assume that the rare Gold Coins (those trading at a large premium to the Gold Price) are again excluded. This means that high caratage gold bars and coins trading at close to the Gold Price will have to be handed over to the Fed and sent to a place like Fort Knox.
The likely impact on asset values? First, producer shares.
