U.S. asset managers worried Obama could confiscate gold

Anecdotal evidence suggests some major U.S. asset managers prefer to hold gold outside the U.S. for fear of confiscation in an echo of Roosevelt’s 1933 decree.

By Lawrence Williams Mineweb June 10, 2010

Speaking at the FT Silver conference in London yesterday, lead-off speaker John Levin, HSBC Bank’s Managing Director, Global Metals and Trading (HSBC is one of the world’s top precious metals traders and its vaults in the U.S. and Europe hold huge holdings of gold and silver bullion) recounted conversations with some of the U.S.’s top asset managers controlling massive amounts of capital asking if HSBC had the capacity in its vaults to store major gold purchases. On being told that the bank’s U.S. vaults had sufficient space available he was told that they did not want their gold stored in the U.S.A. but preferably in Europe because they feared that at some stage the U.S. Administration might follow the path set by Franklin D. Roosevelt in 1933 and confiscate all U.S. gold holdings as part of the country’s strategy in dealing with the nation’s economic problems.

While in Mineweb’s view such a move is unlikely, one needs to bear in mind that President Obama is a keen follower of Roosevelt’s views and policies and that the very fact that some asset managers controlling huge volumes of money feel that such a move is possible is a significant factor – and one that is perhaps heightened by the huge amounts of money flowing into gold at the moment in both ETFs and bullion.

As a reminder to readers – Section 2 of Roosevelt’s Act read as follows: All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:…

(b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having recognized special value to collectors of rare and unusual coins…. Read full article here.

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