Is Gold a Safe Investment for Australians?

If Australians think it is safe to buy gold, think again!

Some background: Why would people even consider buying gold.
Given the bleak outlook on the economy from Europe, and the US, the stock market is falling. But the biggest reason for actually buying gold is the deliberate devaluation of currency, US, Euro, China and others. What they call Quantitative Easing is actually printing money. In the end, this means the value of the currency is decreased. If this keeps up, think about, hyperinflation as in Germany 1920's, Argentina 1980's, Zimbabwe recently.

So avoid the devaluation of your money, people suggest to buy gold. The reason is gold is the real money - it is hard asset and recognizable as the default money for thousands of years. While currency or paper money is hyperinflated, then if people have already changed them to gold, then they can still hold the real value of their assets.

There is only ONE problem. In the 1930s the US government confiscated the gold possessions of its citizens. This is blatant seizure of private property. (This is well known and can be googled to confirm). Yet this was done. Perhaps one reason is to increase the legitimacy of the new US paper money.

But Australians should be safe right? The government would never do something like that? Even so, how many Aussie gold investors know that it is written in Australian Law, that the government has the right to, if it chooses, to require its citizens to surrender their gold. This is part of the BANKING ACT 1959 Part IV. An excerpt is shown below:


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BANKING ACT 1959 - SECT 42

Delivery of gold
             (1)  Subject to this Part, a person who has any gold in the person's possession or under the person's control, not being:

                     (a)  gold coins the total value of the gold content of which does not exceed the prescribed amount; or

                     (b)  gold lawfully in the possession of that person for the purpose of being worked or used by that person in connexion with the person's profession or trade;

shall deliver the gold to the Reserve Bank, or as prescribed, within one month after the gold comes into the person's possession or under the person's control or, if the gold is in the person's possession or under the person's control on any date on which this Part comes into operation, within one month after that date.

          (1A)  A person is guilty of an offence if:

                     (a)  the person fails to comply with subsection (1); and

                     (c)  there is no instrument in force under section 48 exempting the person from the application of this subsection.