September 27, 2010

Good Morning:

Gold Confiscation?, Our September 23 Gold Hold/Sell Survey

Gold Confiscation?

The question of whether the U.S. Government would ever confiscate physical gold as it did in 1933 is a topic that periodically 'rears its ugly head'. My own view is that while anything is possible, I think for at least the following three reasons such a thing is far less likely in the current environment than it was in the 1933 environment:

·first, in 1933 the price of gold was government dictated, and the U.S. government was able to confiscate gold at $20 per ounce, and immediately reprice it at $35 per ounce - resulting in an immediate devaluation of its debt where that devaluation was meaningful to the U.S. in 'quantum terms';

·second, currently the open market gold price (subject of course, to the 'manipulation theorists' view of things) is something neither the U.S. or any other government can unilaterally dictate; and,

·third, there isn't enough space available in U.S. Jails to incarcerate (which was threatened in 1933 for those who 'did not turn their gold in') all those who commit heinous crimes, let alone (for example) an acquaintance of mine who lives in the Southern U.S. who told me a few months ago he had bought 'Canadian Gold' in the form of Canadian Maple Leafs because he thought the U.S. Government could not confiscate 'Canadian Gold'

Smile #1. To be doubly sure his gold could not be confiscated by his government, he told me he had it buried where only he could find it.

Smile #2: think of that in circumstances where he also told me he always carried a loaded gun with him when he walked his dog because "you never know who you are going to meet when you are out walking in the woods", and think of his "poor" or "poorer" wife in the context of his 'buried bullion', if he is out with his dog and gets shot and killed.

Our September 23 'Gold Hold/Sell Survey' Results

I found our September 23 'Gold Hold/Sell Survey' results quite interesting - as of this morning there were 79 Respondents.

First, 72% of those Respondents actually own physical gold, which is higher than I thought it would be.

Second, 92% of respondents were over 45 years of age, and 57% of that Group were over 60 years of age. I did not find that particularly surprising.

Third, 67% of respondents were either self-employed or retired, with retirees making up about 2/3rds of that Group. Once again I did not find that particularly surprising, although I do find it interesting on one hand that so many retirees own physical gold in circumstances where it gives them no interest income on their holding.

This may result in me sending another short survey next week asking what % of Respondents 'investment portfolios' are represented by physical gold.

What I did find surprising was the number of respondents who would continue to hold their physical gold and not sell any of it at a U.S.$1,300 price per ounce, the prices at which they would consider selling, and the length of time some of them had owned physical gold as reflected in the answers to the question with respect to the average cost of their respective holdings.

Best Regards,

Ian R. Campbell

President

StockResearchPortal