e-gold Under Attack by U.S. Govt., Could the U.S. Ban Gold Again?

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Did you see that the U.S. Department of Justice indicted on-line firm e-gold on charges of money laundering, conspiracy, and operating an un- licensed money transmitting business? The government claims e-gold’s easy-to- use private transaction service makes it easier for criminals to launder money. For good measure, the Fed’s added that a digital payments system in gold would be favoured by terrorists, child pornographers, and other real or imagined enemies of the Nation state and civil society.

Did it occur to the Fed’s that maybe people want to use gold as money because they have no confidence in the fraudulent, counterfeit product currently printed by the U.S. Treasury?

Governments fear gold because it competes with their own paper currency as a viable and preferred means of exchange AND a store of value. So, under the guise that only people with something to hide would use a digital payment system backed by gold, the U.S. government is hoping to obscure what the very existence of a company like e-gold signals: a growing lack of trust in the money of the American government.

As we mentioned yesterday, the huge bull market in resources and resource stocks is also a sign of U.S. dollar diversification. Investors and foreign governments are storing (and hoarding) their wealth in more tangible sources of value rather than U.S. currency or bonds. If anything, the Department of Justice’s attack on e-gold is a sign that officials in Washington are getting nervous. They don’t want any competition for the dollar. They have lawyers and jails and are willing to use both.

Incidentally, we asked a lawyer friend of ours who works for the DOJ what he thought of this case. Off the record he wrote, “I wonder how, with all that anonymity [in the creation of e-gold accounts], the government will show that the company knew that they were receiving money from these illicit sources. This is the crux of the case. Knowingly receiving stolen property is a crime and having any involvement with kiddie porn is probably enough for a jury to convict anyone, but I would venture a guess that every bank in the world, without exception, possesses proceeds from criminal gains. However, most depositors don’t inform the teller where the deposited money came from.”

The U.S. government has ruined American money. It is the biggest fraudster of them all. People are seeking alternatives like e-gold to protect themselves from the government’s monopolistic debasement of the currency. Trying to make alternatives to that money illegal or criminal doesn’t change the fact that the money is suspect. It just alerts the public that something is horribly wrong with America’s currency. This is good for gold, if you can keep it. Which brings us to an obvious question…

Can the U.S. government again make gold ownership illegal? Will the U.S. government again confiscate gold? Would the Australian government do the same? Let us know your thoughts by leaving a comment.

Dan Denning
The Daily Reckoning Australia

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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29 Comments on "e-gold Under Attack by U.S. Govt., Could the U.S. Ban Gold Again?"

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Chris. Fulker
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Someone a few days ago pointed out that they wouldn’t actually have to make gold ownership illegal. All they need do is prohibit the sale of gold. That seems to make a lot of sense and, if it does in fact come about, you can COUNT on every western government following suit.

William Pix
Guest

The Perth mint is owned by he WA Government. They could repossess gold in depository and pass off as in the “public Interest”. They do this with property all the time proving that property rights are an illusion.

Buy gold and stick it to the man!!

Aki
Guest
The value of all the gold owned by US citizens is minuet when projected against the US debt said to be approximate eighty trillion dollars. The US Gold Reserve is just over 8,000 tons which is about 6% of the total gold ever mined. It is worth about $100 billion depending on the current pog. Meanwhile the entire gold stock of the world including the privately held bulk is much less than one half of one percent of the underwritten risk in the global financial derivatives markets. Confiscating gold would be like trying to row a boat with a rope.
Dollar Falls. Gold Raises. E-Gold Targeted
Guest
Dollar Falls. Gold Raises. E-Gold Targeted

You haveto wonder at the sense of timing of the action. Why this action on e-gold could have taken place 2 years ago. It didn’t. It took place at the lowest ebb of the US Dollar. I know that correlation don’t necessarily mean causation. Nonetheless, you’d have to be blind not to see a strong positive correlation in this action. That’s enough even for the Secret Services to be convinced.

Matt
Guest

They’ve done it before. They’ll do it again. Once again those who are prudent, who have exchanged some of their dollars for gold, will get their property confiscated. It’s tyranny.

Bart Thesc
Guest
Two of the top four internet challenges: #2 Finding pictures of Pamela Anderson with her clothes “On”. #3 Finding someone who accepts e-gold payments who is not running a scam. The issue here doesn’t have to do with gold ownership (and there are serious questions as to whether the gold referenced by the company actually exists). The issue is that this money transfer system has been used by scammers and criminals for years and the company was well aware of it and benefited from it. The funny thing is that in a chat room that the scammers hang out in… Read more »
themusicgod1
Guest

Bart: I’ll accept e-Gold. I’m not running a scam; I write music, I sell CDs with my music on it.

eGold, as far as I’m aware, is the only online payment system that makes sense. Up until google checkout(which last I checked, requires both a credit card and US citizenship to use), it was either Paypal, e-gold, or some sketchy other platform; and if you consider e-gold’s record on privacy/users rights, and paypals, there is no competition–paypal is a disgrace, and e-gold is a legitimate business

The Daily Reckoning
Editor
Dan, As no government will tolerate threats to its power, and as all governments appear to be in a race to debase their money faster than others for the sake of encouraging exports, all any government needs is an excuse to eliminate potential monetary competition – in the case of money, that threat is precious metals, primarily gold and silver. Its easy enough to manufacture any number of such excuses. In Australia’s case, an article entitled “Native Title and the Royal Metals” published by the Australian Indigenous Law Reporter in 2001 provides just such a legal excuse. This article concluded,… Read more »
Murray S.
Guest

They will do it in a heartbeat. All it will take is a BIG crisis, and our gold will be gone.

The creatins that are our politicians know that they will lose very few votes.

Murray S.

TexN
Guest

The US Govt can certainly pass a “law” making gold illegal. This time, however, the folks are not so naive as to believe the lies from Washington. In the 1930s, the folks were civil. Today’s folks are rebellious and won’t tolerate such bureaucratic nonsense. In the 30s, the folks voluntarily gave-up their gold. That won’t happen today. There are always ways around dumb laws, and this would certainly be one of them.

Tex N.
Burnet, TX USA

Allan D.
Guest

G’day Dan,

Yes, like the US Government, the Australian Government would confiscate gold or indeed anything of any value but only if they were ordered to do so by the Money Lenders. Collectively, the pseudo-democratic lackeys supposedly running our respective countries could not muster an original thought between them … they merely do as they are told.

“Who pays the piper, calls the tune”. We all know it but we dare not say it.

Allan D.
Queensland

A.H. van Herp
Guest

I can agree with what Texn says.But I was in Holland when the Germans invaded. They demanded the surrender of radio’s and all non-ferrous metals. This was backed by a death penalty. It’s amazing what you will do in those circumstances.

A.H. van Herp
Gorokan NSW
Australia

Luke
Guest

I think one lesson in all this, is to make sure you hold your gold in coin and in very close physical proximity – and be very private about it.

Brad
Guest

So, if Gold is confiscated and people aren’t sheeple and decide to keep their Gold…How would this benefit them? How would they use it to buy anything used daily, like bread, soap, toilet paper, etc..

How would you sell it, take it out of the country? How would you get it out of the country in amounts sufficient to make the trip worthwhile?

I don’t understand how holding Gold/Silver can benefit anyone in a confiscation scenario.

What am I missing?

A.H. van Herp
Guest

Brad, you are missing the Black Market.
Even as late as 1973 when the Oil Producers boycotted the Western countries, and there were long waiting lines at the gas stations you would soon get to the front when showing silver or gold. And you would get a tank full when gas was rationed.
A.H. van Herp

Robert Kline
Guest

Govts everywhere will do anything that is necessary,to remain in power, cover their tracks, lie, cheat.etc
NB: Latest news , Australian TV operaters in Afganistan.
In Western Australia, the Govt, via the Real estate Board, seconded all the RE Trust accounts throughout the state, so that all the interest earned in those Trust accounts went to the Govt. In the first year they earned $3.6 million.
What an act of sheer bastardry.
There were a few screams & shouts, now nobody even mentions it.
So, would the Govt confiscate Gold & Silver…absolutely

GD
Guest
I have some e-silver in my e-gold account and think I had best withdraw it. Is it still possible or have those US bast**ds stolen my silver? I was considering withdrawal for a long time before this happened but as silver was going up (doubled my money) I decided to leave it, also the difficulty of withdrawal detered me. I was considering using goldmoney.com next but their fees are insane to buy in and the UK might do the same thing to them. I am going to have to go with a Hong Kong bank instead – in HK they… Read more »
GD
Guest
Looks like banning ways of investing in gold out of US control seems to be the order of the day. News on the Global Digital Currency Association website says Recently the US government released a report entitled the Money Laundering Threat Assessment The Global Digital Currencies Association is mentioned briefly in the MLTA report: “The Global Digital Currency Association (GDCA) is a trade association of digital currency dealers and exchangers pressing for self-regulation. The GDCA provides a public ranking of its membership and offers arbitration procedures. However, the GDCA constitution makes no mention of AML policies and procedures or of… Read more »
bill
Guest

i would not give up what i have.
yes,there would be a black market.
or,one could take a vacation to a
country where what you have to sell
is legal.
b

Timbakto
Guest
Hello In my view everything will be back but with some new terms and conditions All USDOJ did is allegations not final judgement so now case will be procced in routine and its hard for us gov as well to delcare all accounts misused. US govt cannot eat the whole bunch of money just by allegations. The account which will be guilty and found bad will be closed but they have no reason to freeze or seize money of exchangers which are operating outside USA. Out of states companies are out of jurisdiction of US courts. alot of questions will… Read more »
Robert
Guest

After selling gold coins to the public how would any government have the cheek to later confiscate them? I suspect most wouldn’t comply anyway (neither did they in 1930s either!) knowing full well most prisons are full already! Just in case, buy silver instead!

Robyn
Guest

I’m no expert at this but other internet services, banks make or have contact transactions for crimnals an don’t always know it. Like the hackers an scammers. If they have a service where someone investigates the indiviual by going by their license, address e.t.c before accepting their service. Why not have that for e-gold?

Fred Rabin
Guest

It is a great irony that for fiscal security in the future you must look to “Communist” China, or once basket case socialist countries like India.

Henry Cohen
Guest

Until your essay above, I was not planning to sell the gold coins, bought as recommended by many “gurus”, I own. I find myself wondering whether owning the stock GLD constitues owning gold. As a shareholder of an organization (albeit an ETF) that buys gold bullion, am I not a partial owner of this gold and as such have to sell it if the gov’t bans gold ownerwhip? What about gold mining stocks? This would be a perverse interpretation of such a ban, but we do live in “interesting” times. Can anyone help me with this?

Neil Sutton
Guest
In reply to comment from Murray S “They will do it in a heartbeat. All it will take is a BIG crisis, and our gold will be gone. The creatins that are our politicians know that they will lose very few votes” Due to the fact that the word “Greed” is fashionable at the moment, all they have to do is have a current affairs program to show a story on some prudent person who prepared for this financial downturn and hedged with gold or silver, making it clear that while everyone else is hurting (due to their credit card… Read more »
George
Guest

I just wanted to say that I love this site

Bernard
Guest

If the government dare to confiscate gold off their people. We need to rise up and fight for this. It is unbelievable how corrupt politicians can be, the only serve the rich and large corporation interest while rob the poor of the last penny they have. Politicians are the Biggest thieves and criminals there is!

ram
Guest

Last I checked, all modern electronics IC’s use gold in their manufacture, as do many other industrial goods – so it would be hard to ban the sale of gold in even a pseudo-capitalist economy.

As for gold as an investment or store of wealth, I highly recommend that people or companies take physical possession and store it on their own premises.

Justin
Guest
Unless the government decides to voluntarily give up its monopoly over the issue of ‘banknotes’, which I think it is safe to say is at best unlikely, then it is inevitable that the government will at some point confiscate, ban the sale of etc, precious metals. In fact, ‘Australian law already has a mechanism in place to require delivery of gold to the Reserve Bank of Australia (RBA) – Part IV of the Banking Act 1959’. (see goldchat.blogspot.com/2008/11/australian-gold-confiscation.html) I’m sure this will also include the nationalisation of gold mines, or a requirement that the mines sell first to the government,… Read more »
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