{"id":632,"date":"2011-03-07T19:18:30","date_gmt":"2011-03-07T23:18:30","guid":{"rendered":"http:\/\/www.silver-investor.com\/blog\/?p=632"},"modified":"2018-06-10T10:58:18","modified_gmt":"2018-06-10T10:58:18","slug":"no-reason-today-for-yesterdays-executive-order-6102","status":"publish","type":"post","link":"https:\/\/www.themorganreport.com\/blog\/no-reason-today-for-yesterdays-executive-order-6102\/","title":{"rendered":"No Reason Today for Yesterday\u2019s Executive Order 6102"},"content":{"rendered":"<p><strong>No Reason Today for Yesterday\u2019s Executive Order 6102<\/strong><br \/>\nBy Richard (Rick) Mills<br \/>\nAhead of the herd<br \/>\n<em>As a general rule, the most successful man in life is the man who has the best information<\/em><br \/>\nCurrent Federal Reserve System chairman Ben Bernanke believes a simple recession was turned into the Great Depression by the Federal Reserve of the day not doing enough while the money supply contracted 31 percent between 1929 and 1933.<br \/>\nThis reduction in the money supply was caused by no less than three bank runs between late 1930 and March 1933. Bank deposits formed 92 percent of the money in circulation at the time and 10,000 banks failed with the loss of $2 billion in deposits.<br \/>\n&#8220;<em>The Fed failed to inject enough money into the system to sustain the desired minimum level of monetary aggregates. Because it failed to do this, the public run on banks resulted in a contraction in the money supply, which caused the Great Depression<\/em>.&#8221; Milton Friedman<br \/>\nBernanke, a monetarist like Friedman, believes if the Fed had provided enough money to the large banks and bought US securities then these banks would never of fallen. Bernanke is, today, putting what he believes to be the fix for our current economic woes into practice:<\/p>\n<ul>\n<li>giving money to the banks<\/li>\n<li>cutting the prime interest rate the Fed charges commercial banks<\/li>\n<li>buying treasuries<\/li>\n<\/ul>\n<p>The Federal Reserve is providing liquidity and increasing the money supply.<br \/>\nSo why didn\u2019t the Feds of the time simply increase the money supply by turning on the printing presses much like <a href=\"http:\/\/www.aheadoftheherd.com\/Newsletter\/2010\/Obama%20Plus%20Bernanke%20Equals%20Higher%20Gold%20Price.htm\">Ben \u201chelicopter\u201d Bernanke<\/a> is doing today? Well, at that time the US was on the gold standard and the amount of credit the Federal Reserve could issue was limited by the Federal Reserve Act which required 40% gold backing of Federal Reserve Notes, paper money, issued. Back then if you had $10 in your pocket, you knew, that somewhere, there was $4 worth of gold backing that \u201cpromise to pay\u201d in your wallet.<br \/>\nBut the Fed\u2019s back was up against the wall, they were running out of room to issue more notes. They had almost hit their issue limit on credit that could be backed by the gold in their possession \u2013 they needed more gold to issue more credit.<br \/>\nTheir need was made worse because during the bank runs Federal Reserve paper money had been exchanged for Federal Reserve gold. Since the Federal Reserve was already hitting its limit on allowable credit, any reduction in gold in its vaults had to be accompanied by a greater reduction in credit. Something had to be done.<br \/>\nOn April 5, 1933, President Roosevelt signed Executive Order 6102 making the hoarding of gold certificates, coins and bullion illegal. This order, by confiscating Americans gold, increased the amount of Federal Reserve owned gold thereby making an increase in the availability of Federal Reserve Notes or credit possible.<br \/>\n<strong>The reason gold was confiscated back then doesn\u2019t exist today. <\/strong>Today no country is on the gold standard (the US cut the last ties to gold in 1971) and the US Federal Reserve\u2019s ability, or any countries ability, to create credit, print money, is no longer tied to how many ounces of gold a country has.<br \/>\nThe flip side of this unfettered creation of money is inflation &#8211; and this is of course exactly why someone might want to own gold and <a href=\"http:\/\/www.aheadoftheherd.com\/Newsletter\/Silver%20Two%20of%20Seven.htm\">silver<\/a>. But there is something potential gold buyers need to be aware of.<br \/>\n<strong>The Scam<\/strong><strong><\/strong><br \/>\nIts true gold was confiscated in 1933 \u2013 but now you know the why and you also know that the reason for confiscation back then doesn\u2019t exist today.<br \/>\nSo the next time you read an article about how your government is going to confiscate your gold \u2013 all of it except rare collector numismatic coins &#8211; track it back to its original source. Too many times you will find that it has, as its originator, a gold numismatics merchant. The patter is always the same \u2013 \u201c<em>Your gold is going to be confiscated, buy rare collector coins because they won\u2019t be confiscated<\/em>.\u201d<br \/>\nGold numismatics were not confiscated in 1933. Order 6102 specifically exempted &#8220;<em>customary use in industry, profession or art<\/em>.\u201d\u00a0 The same paragraph also exempted &#8220;<em>gold coins having recognized special value to <strong>collectors<\/strong> of rare and unusual coins<\/em>.&#8221;<br \/>\nThe US Constitution&#8217;s Eminent Domain Clause says &#8211; &#8220;<em>nor shall private property be taken for public use, without just compensation<\/em>.&#8221; When gold bullion was confiscated compensation payment at the official gold price of $20.67 an oz was considered just, after all, that was the price of an oz of gold.<br \/>\nBut the confiscation of rare gold coins, called numismatics, would have been stealing private property. Legally just compensation would have had to been paid but for that to happen each gold numismatic would have had to been individually graded and priced \u2013 a huge and expensive time consuming task the government was unwilling to take considering the small amount of gold that would have been recovered.<br \/>\nSo let\u2019s revisit &#8211; \u201c<em>Your gold is going to be confiscated, buy rare collector coins because they won\u2019t be confiscated<\/em>.\u201d We know the reasons Americans gold bullion coins were confiscated but gold numismatics weren\u2019t. For today\u2019s gold buyers, who still fear confiscation, the problem is: are the coins some gold dealers want to sell you actually gold numismatics and for a gold bullion investor \u2013 versus a coin collector \u2013 are they worth buying? Unfortunately the answers are maybe not and no.<br \/>\nGold numismatics are rare collectors gold coins that trade at high premiums to their intrinsic gold content value. These coins are extremely rare, or one-of-a-kind, that <strong>collectors<\/strong> (there\u2019s that qualification again) purchase for their historical and aesthetic qualities.<br \/>\nGold merchants can sell rare gold coins for a healthy markup, sometimes as much as 25 percent and more. The fierce competition in the gold bullion coin market often limits profit margins to maybe 3% over the spot price of gold.<br \/>\nAmerican Gold Eagles, the Canadian Maple Leaf and South Africa&#8217;s Krugerrand are all examples of gold bullion coins. Their value is derived entirely from their gold content. They are universally recognized and the value of these coins is easily verifiable. The reality is that too many coins sold as &#8220;numismatic&#8221; or &#8220;collectible&#8221; are ordinary gold bullion coins sold at high mark-ups to make fear mongering dealers extra profits.<br \/>\nIf you want to own gold, the safest way is to buy one, or a mix, of the three gold bullion coins listed above, pay the 3% above spot and quit worrying about confiscation. Gold numismatics are not a store of value nor a better safe haven in a meltdown situation than gold bullion. Think about all the money you\u2019ll save. Maybe you\u2019ll buy some silver!<br \/>\n<strong>Conclusion<\/strong><br \/>\nGold bullion coins are a better store of value then gold numismatics &#8211; if social order breaks down and a collector needs to trade one of his collectables he\u2019s going to receive the exact same amount of goods that I would receive using gold bullion. That\u2019s because the transaction will be valued based on gold content and purity, not historical and aesthetic qualities.<br \/>\nInvestors buy physical gold because it is a store of value &#8211; a way to protect your wealth from the relentless devaluation of fiat currencies \u2013 and a safe haven in times of turmoil. Your job as a retail investor, if you believe in gold and the ongoing devaluation of fiat currencies, is to buy as much potable, divisible gold with your dollars as you can. Buying gold numismatics is not the way to do this and buying gold numismatics that aren\u2019t\u2026well that\u2019s being taken advantage of, to put it politely. Is this con game on your radar screen?<br \/>\nIf it isn\u2019t, and you\u2019re a gold buyer, it should be.<br \/>\nRichard (Rick) Mills<br \/>\n<a href=\"mailto:rick.mills@aheadoftheherd.com\">rick.mills@aheadoftheherd.com<\/a><br \/>\n<a href=\"http:\/\/www.aheadoftheherd.com\">www.aheadoftheherd.com<\/a><br \/>\nIf you&#8217;re interested in learning more about the junior resource market please come and visit us at <a href=\"http:\/\/www.aheadoftheherd.com\">www.aheadoftheherd.com<\/a>.<br \/>\nMembership is free, no credit card or personal information is asked for.<br \/>\n\u00a0***<br \/>\nRichard is host of aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell.com, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold\/Energy Reports, Calgary Herald, Resource Investor and Financial Sense.<br \/>\n***<br \/>\nLegal Notice \/ Disclaimer\u00a0<br \/>\nThis document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.<br \/>\nRichard Mills does not own shares of any company mentioned in this report.<br \/>\nNo company mentioned in this report is an advertiser on his website aheadoftheherd.com.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>No Reason Today for Yesterday\u2019s Executive Order 6102 By Richard (Rick) Mills Ahead of the herd As a general rule, the most successful man in life is the man who has the best information Current Federal Reserve System chairman Ben Bernanke believes a simple recession was turned into the Great Depression by the Federal Reserve<span class=\"read-more\"><a href=\"https:\/\/www.themorganreport.com\/blog\/no-reason-today-for-yesterdays-executive-order-6102\/\" title=\"Read More\">More<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121,89],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>No Reason Today for Yesterday\u2019s Executive Order 6102<\/title>\n<meta name=\"description\" content=\"No Reason Today for Yesterday\u2019s Executive Order 6102\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.themorganreport.com\/blog\/no-reason-today-for-yesterdays-executive-order-6102\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"No Reason Today for Yesterday\u2019s Executive Order 6102\" \/>\n<meta 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