Pre-1934 Gold Coins are Legal Tender and are Exempt From Confiscation

The Confiscation Issue In the past six months three people have emailed me a link to a web site which presents a discussion from a particular U.S. precious metals dealer attempting to debunk the myth that United States, pre-1934 gold coins are confiscatable. The site is saying that there is no such thing as pre-1934 U.S. gold coins being exempted from a possible gold confiscation, and then the discussion went on to give some arguments which allegedly supported that claim. Without getting into a huge debate about the confiscation issue I will attempt to point out some far deeper issues I found with the honesty of the entire web site which obviously exposes the intent and direction of the discussion about this issue.

The old saying, “Consider the source,” is certainly appropriate regarding the discussion on confiscation of gold coins. I won’t give the name of the company involved, for it is not my intent to bad mouth anybody just to make myself look good. But if you are going to promote a certain product it behooves one to present that product in an honest, objective manner, giving the pros and cons of that product as opposed to your competition’s. And if you present that in an objective way you should be able to present a more logical case for your product and the reasons for suggesting it as opposed to other products that someone else is recommending. The keys here are honesty and objectivity.

That said, on its face the discussion about the non-confiscatability of the pre-1934 U.S. gold coins did have some seemingly logical arguments. Upon a closer examination, however, the site’s ulterior motives emerged so blatantly that they completely drowned out anything legitimate that the site might have had to say about the confiscation issue. Let me explain. As you know, everyone has an agenda, and this gold coin company is no exception. I went over their entire website very carefully, and a number of red flags rose and a number of false, misleading statements and outright lies surfaced. I won’t attempt to cover all of them but just a few for illustration.

First, this precious metals dealer is obviously a bullion dealer, and as a bullion dealer it is to their advantage to degrade the competition's products in order to promote their own. That is why they attack the U.S. numismatic and semi-numismatic coins, saying that the non-confiscation issue is a myth. If this company is such a crusader for truth and honesty then why are many things on their site far from either honesty or integrity? First, the name of their company is an acronym, which is fine. Almost every company presents their company’s name in acronym form. But, unless I completely overlooked the obvious, nowhere on the entire website did it ever spell out in words what the acronym stood for - - very strange indeed.

Another mystery materialized upon a closer look. Nowhere on the website did it state who owns the company. It did say that a certain gentleman "headed" the company from its inception, but never said who owns it. It did make mention of the company’s original founder, “who was a long time resident (of that particular state) with mining interests,” but never gave the name of the founder either. I am not really trying to be paranoid, but knowing the coin industry as a nest of not-so-honest people, it does engender more than a little skepticism when "small" details like this are missing.

As I mentioned, the company is a bullion dealer, and the main product the company promotes or sells is the U.S. bullion coin, the American Eagle Gold coin. Right below the center on the main product page, the bold heading reads: "American Gold Eagle Coins: Legal Tender Gold Coins." Of course, you know when you use certain punctuation in writing, the colon equals an ( =) sign. Simply put: American Gold Eagle = Legal Tender. Herein is the big lie upon which the entire company is based, that the American Gold Eagle bullion coin is a United States legal tender gold coin. American Gold Eagles have never been, and are not legal tender in the United States. They are strictly a bullion coin like the Canadian Maple Leaf or the Austrian Philharmonic, or any number of coins of the realm from various countries around the world.

What is the definition of coins that are legal tender? - - coins that once were, or are presently in general circulation in a country, facilitating commerce. What is the motive then to concoct such a bold lie about American Eagles being legal tender? This company is obviously preying on the publics’ naiveté by making a statement like that in order to deceive them into buying American Eagle gold coins, the product they want to sell or promote. What is the truth about legal tender coins in the United States? Obviously, the coins we use today when we buy products from businesses or companies are considered legal tender, coins like the dimes, quarters, half dollars, and dollar coins. But there is something else that is true about legal tender coins.

An interesting piece of information that you might not know is that the old U.S. gold coins minted prior to 1934 are still, according to the US Constitution, the only legal tender in our country. That is why there is such a strong argument about those coins being exempt from a future confiscation. As you know, in 1933, when Roosevelt called in all the gold coins, he gave everyone paper money in exchange. Even though he did that, and that paper money has become the “medium of exchange” in our country ever since, the government never changed the Constitutional status of these pre-1934 United States gold coins. They are still considered legal tender in the United States, even though we don’t presently use them in commerce.

But then the lies on the web site expand. Once you make up a big lie you have to make up bigger ones to cover the first big one. Continuing right under the bold heading about the American Eagle gold coins it states: "American Gold Eagle coins are legal tender coins, but their face values are symbolic: therefore, American Gold Eagle coins do not sell at their legal tender values: they sell at prices that reflect the value of their gold content plus small premiums for being coins."

Then the text continues, stating that the face value of the one ounce American Eagle gold coin is $50. What the site specifically, and glaringly, omits to say is that the reason the $50 face value is there is not because it is “symbolic,” but because that is the official "repatriated value," or confiscatable value of that coin. That $50 face value of the one ounce American Gold Eagle coin was established by the US government when they started minting them in 1985. And when the government calls them in, guess what? They will give you face value, $50, in paper money, for each ounce they take from you. That is the real truth about that $50 face value. That $50 stamped-on-the-face value is not “symbolic,” as the site would lead the reader to believe.

Now I admit that there are some debatable arguments about the confiscation issue in the future, but going back to our U.S. Constitution is the only reliable place to look for something true or concrete about what is true money and what might or might not be confiscated. Most of the arguments that this particular web site presents about the commonality or total population of these US semi-numismatic coins are grossly inaccurate. There are not tens of millions of these coins as they stated. They are obviously stretching the truth to sanction their own products. From what I have heard and read over the years from different reliable sources in the business, is that if all these old US semi-numismatic coins that are left remaining in the world today were to be distributed to Americans, only one in 25 people could even own one. That does make them a little rare and unusual.

I will mention a few other red flags I picked up on the site. They recommend gold and silver IRAs, which are one of the worst and most dangerous things you can do with your IRA. First, as I mentioned on my web site, by converting your regular IRA into a gold and silver IRA you lose the liquidity of your regular IRA. In other words, you can get out of your regular IRA very fast if you need to. Just make a phone call and in a few days you have the money. In contrast, it takes about three weeks of paperwork to redeem a gold of silver IRA, and that is assuming that all the different institutions cooperate properly with each other. In stress times, forget it. You'll never see the gold, your silver, or your money. And furthermore, considering what these notorious scam companies do by churning and burning their clients who have gold and silver IRAs, that is the last place to recommend putting your client’s money.

Second, with a gold or silver IRA all you can buy are gold American Eagles, silver American Eagles, gold bars or silver bars. Furthermore, you cannot take physical possession of a gold and silver IRA. It is stored in a depository in Delaware or the HSBC bank in New York, or is a bank in Houston. Also, you cannot even personally go there and view the gold or silver. You don't actually even know if it exits. There is no way to prove it exists other than to take the word of the custodian who holds it, and they are many times complicit with the gold coin companies doing their dastardly deeds behind the customer’s back.

In addition, bullion gold and silver is subject to confiscation, and the payback is $50 an ounce for gold and $1 an ounce for silver. So when the government decides to confiscate gold and silver, they don't have to come to your door to get it. All they need to do it tell their fine feathered banker friends to give it to them. But this precious metals dealer knows all about the risks involved with gold and silver IRAs, yet they still promote them. One can only question what their ultimate motive is in doing so.

Then the web site exposes the scam of slabbed or certified American Eagles and American Buffalos, warning the reader not to buy them. But then, later on in a different place on their site they recommend buying certified American Gold Buffalo coins in some situations. They warn people about buying certain high premium, foreign gold coins, but then they promote multitudes of other foreign gold coins that somehow are all right. The biggest argument about buying foreign gold coins is because most of them have inscriptions that are not written in English. Granted, that is a logical argument. The rationale is that, in an exchange situation, people in this country won’t accept these coins because they are written in a foreign language and have strange inscriptions or insignias on them.

However, when one looks at the bullion coins this precious metals dealer recommends on their site, most of their preferred selection of foreign gold coins are not written in English either. So, what can we conclude at this point? Bottom line is: how can you trust a company when they won’t give their real name, or tell who owns the company? And, more importantly, how can you believe anything they say about anything after catching them in so many outright lies and misrepresentations of their own products? We must all “Consider the source” in order to become wise buyers.

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