Wednesday, September 9, 2009


As the times get tougher, the financial mess bigger, and the US dollar steadily continues to lose its value, politicians and financial decision makers might get desperate. What type of regulations do we have to expect? And how might that affect gold? Here are some possibilities, they seem far fetched, but they are all in the realm of possibilties:
  • Confiscating the gold: The government decides that you have to hand in all your gold at a price conveniently fixed by the government.
  • Making the sale of gold illegal: For example, in the past gold possession and gold panning was legal in Zimbabwe, but, by the Gold Trade Act, the Reserve Bank of Zimbabwe had a monopoly on purchasing and exporting of all gold and silver produced in the country. 
  • Making the possession of gold illegal: Zimbabwe then strengthened their Gold Trade Act making also the possession of gold by regular people illegal. Any gold found will be confiscated by the state.
  • Making Smelting of Jewelery illegal: See Zimbabwe's Gold Trade Act.
  • Artificially fixing the gold price: The government or IMF can set the gold price. This has also been done in Zimbabwe where they have tried about everything for some period of time. In 2007 the price was set to $64 per ounce (today's value on the London exchange is $1000). The conclusion was that all mines stopped working and that all gold disappeared from the market. Nobody wanted to sell gold at this price.  

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