Would the same government that sold you Gold Eagle coins ever force you to sell them back at bargain rates?

November 19, 2010 – Would the same government that sold you Gold Eagle coins ever force you to sell them back at bargain rates? That is a distinct possibility under a provision hidden away in the Patient Protection and Affordable Care Act.

The wording – if not the intent – of Section 9006 requires independents and small businesses to report all gold transactions greater than $600 in aggregate over an entire year, starting in 2012. That includes each and every one of us investors in gold coins.

In the interim there will surely be a surge as people rush to buy Gold Eagle coins before the deadline, driving gold to $2500 by the end of 2011 by one estimate. But the ability of the government to track even the smallest gold transactions has renewed concerns over possible future confiscation.

Such an executive order has legal basis in the Trading With the Enemy Act, which is still in effect. And there is no law that specifically gives the public the right to hold gold – that is merely a privilege granted by the repeal of prohibition against it. With federal gold reserves now at just 40% of what they were in 1950, there will be strong temptation to raid public holdings if the continued dilution of the dollar leads foreign nations to block further loans.

While the new law presents great short term opportunity for gold coin investment, it also sets the stage for catastrophe. The official Treasury price of gold is only $42 – a minute percentage of its actual worth that could well be the basis of compensation for any government confiscation.

Leaving that law on the books is simply too great a gamble. It is up to every gold coin investor to ensure that Congress repeals the provision before it takes effect.

Kevin Johnson

Senior Staff Writer – GoldCoin.net