Rightly or wrongly, lots of Americans believe that there will come a time when the federal government decides to confiscate gold and silver. President Franklin D. Roosevelt forced Americans to sell their gold and silver bullion holdings in 1933 at the “official” price of US$20.67/ounce. In 1934, FDR devalued the U.S. dollar by redefining it as 1/35th of an ounce of gold. With gold at US$35/ounce, former owners of that gold lost out on a 69% profit--all the best interest of the people, of course. (For a previous blog entry describing this event in more detail, see http://nestmannblog.sovereignsociety.com/2008/02/keep-your-hands.html.)
In the event of a confiscation order by President Obama or one of his successors, precious metals held outside the United States would almost certainly be subject to seizure. However, they’d also be harder to find (although failing to find them might be illegal). And for that reason, many Americans are considering moving their precious metals holdings from the United States to other countries.
Unquestionably, the cleanest and safest way to do this is to sell the metals stateside and establish new holdings in other countries. You can buy the metals from an offshore bank and store them in a safety deposit box, or in an offshore private vault. Several precious metals certificates programs (e.g., Perth Mint) are also available.
However, if you have big gains in the metals and want to defer tax on those gains, you’ll need to physically transport the metals out of the United States. And that’s where it can get dicey.
To begin with, you’ll need to declare your holdings at the border if they have a market value more than US$10,000. If you’re moving U.S.-issued gold or silver coins, some advisors claim that you need to declare only the face value—US$50 for a one-ounce gold eagle, for instance—but I don’t recommend doing so. Your friendly Homeland Security Administration agent isn’t likely to be terribly sympathetic to this argument, and just might seize your coins if you make it. Also, when you arrive in whatever country you want to keep the metals in, you may face another customs gauntlet. However, if you declare the gold as “cash,” you’ll hopefully be permitted to proceed.
If you’re moving a large quantity of metals—over US$50,000 or so—it’s probably worthwhile to engage the services of a courier service. Until very recently, you could insure shipments of precious metals through either Fed Ex or the U.S. Postal Service (via registered mail). However, Fed Ex now limits coverage to US$500 and the U.S. Postal Service to a ridiculous US$45.51. Similar restrictions or outright prohibitions on transport of precious metals are in effect at DHL, UPS, and Purolator.
So, what’s the best courier service to use? I’ve found one that I believe may be reliable, and will report on my research in my next blog entry.
Copyright © 2008 by Mark Nestmann
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