Back when gold ownership was legalized in the United States on Dec. 31, 1974, there was a lingering fear that the coins that had been illegal to own since 1933 would once again become illegal to own.
Advisors told gold buyers to stick to coins like the standard U.S. gold coins struck before 1933 as well as world coins like British sovereigns and French 20 francs of similar vintage.
This seemed to be an unnecessary precaution as the age of the convenient one-ounce bullion coins was dawning.
The fear that gold would once again be called in by the government in a manner similar to what was done by President Franklin D. Roosevelt in 1933 shows up from time to time in the writings in the blogosphere.
Can it happen again? Sure, the legal underpinnings for a recall still exist.
Will it happen? Probably not.
But if you happen to believe the government is cooking statistics to understate inflation and overstate employment, manipulating the gold market, hiding the fact that it has secretly sold all of the gold in Fort Knox (which is a rumor that has existed all the way back to when Ike was President) – if you believe all of this, why would you believe that the government would let you keep your gold if the worst does indeed happen to the economy?
If the American government would default on its debt after not doing so for 221 years through the Civil War, Depression and World War II, would not political pressure in Washington be so intense as not to allow profits to be taken by those owning gold?
In a dollar collapse, would not the authorities be rooting out gold owners with the same zeal as the IRS presently is chasing tax dodgers with Swiss bank accounts?
Would coin collectors get a pass as they did in 1933 because the Treasury secretary was a coin collector and the President was a stamp collector?
In their darkest thoughts, perhaps gold owners are not thinking darkly enough.