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Terrorizing Gold Buyers?
By Patrick A. Heller
January 03, 2012

On Dec. 31, 2011, President Barack Obama signed the National Defense Authorization Act into law. Most of this law deals with annual military appropriations. However, Sections 1031-1033 deal with the repeal of American citizens’ rights under the 4th Amendment to the U.S. Constitution.

I could have put a more shocking headline that read something like President Obama declares martial law in the U.S., but I chose the more moderate one used as the headline by the American Civil Liberties Union news release about this development (link is


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Under provisions of this law, the U.S. military is authorized to seize anyone (including Americans) anywhere in the world (including in the United States) and detain them indefinitely without being charged and without being put on trial under the pretext that the person might be a threat to the security of the United States or any of its “partner nations.” Theoretically, that could even mean that readers and the author of this particular column could now be arrested and held without trial because this essay does not approve of the provisions of Section 1031-1033 of the NDAA.

The political maneuvering in Washington to get this provision into law shows politicians at their worst behavior. Sen. Carl Levin, D-Mich., is the main sponsor of the bill as he was chair of the committee that considered the bill in that chamber. The original bill did not contain the provisions repealing rights under the 4th Amendment. However, Sen. Levin has publicly stated for the record, as have multiple other senators, that the provisions were added because a communication received from the White House insisted that they be added – under the threat that President Obama would veto the entire bill if these provisions were not added.

After the bill passed the U.S. Senate with near unanimous support, there was some public outcry. The White House stated that Obama would not sign the bill unless these provisions were removed. Yet, when signing the bill containing these offensive provisions into law, Obama stated that he was signing the bill despite his personal objection to Sections 1031-1033, but put the blame squarely on the U.S. Senate for adding these provisions.

It doesn’t take much imagination to see how NDAA Sections 1031-1033 could have a major impact on the rights of American’s to buy and sell precious metals. Here are just a few possible examples.

• A decline in the value of the U.S. dollar could put the security of the United States at greater risk. Therefore, anyone who discusses the U.S. government’s inflation of the money supply could theoretically be arrested for being a terrorist.

• Anyone who seeks to protect their financial wealth from the risk of further declines in the value of the U.S. dollar (among other potential calamities) through the acquisition of physical gold and silver – the very assets that the U.S. government could not control through shutting down and regulating financial markets – could also theoretically be arrested for being a terrorist.

• Anyone who objects to U.S. government actions and policies that 1) result in the decline in the value of the U.S. dollar or 2) interfere with the rights of Americans to buy and sell physical gold and silver could, you guessed it, theoretically be arrested for being a terrorist.

• Should the U.S. government expand reporting requirements on ownership or transactions of precious metals, anyone objecting to compliance with this increased paperwork could theoretically be arrested for being a terrorist. The possibility of such expansion of reporting requirements is not farfetched. Starting this month, the Japanese government has expanded the required reporting of purchases and sales of physical gold and silver.

To some reading this, it may seem an extreme reach to think that any of these possibilities might come to pass. I can only hope that is true. However, in 2011 President Obama declared that the U.S. government had the authority to assassinate U.S. citizens without first pressing charges, or holding a trial to determine guilt or innocence. The provisions of Section 1031-1033 are just a slight extension of the violation of the rights of U.S. citizens from the adoption of this assassination policy.

There are others who might state that those who are innocent have nothing to fear. Tell that to all the innocent people that various government agencies openly admit lost their life, liberty, or property as a result of the enforcement of U.S. drug laws.

I would not be surprised if the signing into law of the NDAA containing Sections 1031-1033 ends up persuading a certain percentage of the population to quickly acquire physical gold and silver before doing so might be labeled a terrorist act.

Despite the obvious efforts of the U.S. government, its trading partners and allies, to manipulate financial markets around the world in 2011, it did not prevent the price of gold from rising for a 12th consecutive year. The price of silver did end 2011 lower than it ended 2010, only the third annual decline over the past 12 years.

To get a better handle of just how various financial assets have performed, here is how selected ones performed during the year 2011 and also since the world did not come to an end from catastrophic computer breakdowns at the start of the new millennium.

The U.S. Dollar Index performed comparatively well in 2011. However, that masks a continuing long-term decline of the value of the U.S. dollar. Here is how the dollar has performed over the past 12 years against several major currencies.

As you can see, only the U.S. dollar’s performance versus the British pound was significantly better. Against the other what used to be called major trading currencies used to calculate the Dollar Index, the dollar declined. Several other currencies against which the dollar appreciated are also shown.


























Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at Other commentaries are available at CoinUpdate ( also writes a bi-monthly column on collectibles for The Greater Lansing Business Monthly ( His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at

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