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What Would Stop Gold Seizure?
By Patrick A. Heller
September 10, 2013



Since about 1990, I have warned my readers that there were a number of technical and privacy problems using a precious metals Individual Retirement Account as a means to own physical precious metals.

Initially my greatest concern was that it was a waste of tax planning to use a tax-deferred account to acquire assets that are tax-deferred until they are sold. Retirement accounts are better suited holding assets that generate what would otherwise be currently taxable income.

I have close to 10 reasons to avoid the use of precious metals IRAs. One of my original concerns was that the US government would someday seize private retirement account assets because the combined value of these accounts was too large, and therefore tempting.

The likelihood of the U.S. government seizing private retirement accounts, including precious metals IRAs, is growing closer. Argentina nationalized private retirement accounts in 2008. Bulgaria, France, Ireland and Poland seized some private retirement assets in 2009.

In 2010, France then forced some retirement plans to purchase more government bonds in place of other assets. Also in 2010 and repeated in 2012, Ireland took significant bites out of private retirement assets to bail out its failing banks.

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In 2011, Hungary and then Portugal seized private retirement account assets. Last year, the Dominican Republic did likewise. Earlier this year, a significant amount of private retirement funds in banks in Cyprus were seized by that nation’s government in order for the government to receive a bailout from the European Union.

Last Wednesday, the Polish government announced that it was again seizing a wide swath of private retirement assets immediately, with the balance of them to be taken in the next few years. While it was announced that the balances owed to account holders would become the liability of the national government, the seized assets are being used to promptly repay debts of the Polish government.

In 2008, a House Committee held hearings on seizing all assets in private retirement accounts and replacing them with U.S. Treasury debt. Further hearings in 2010 laid out the groundwork for the U.S. government to convert private retirement accounts into annuities upon retirement, with any remaining asset balances being kept by the federal government upon the death of the retiree.

U.S. government officials have already stated that they intend to copy the plans of the European Union and Canada to seize parts of privately held bank accounts if needed to bail out a failing bank. How long do you think it will be before the U.S. government goes forward with its developing plans to seize all assets in private retirement plans, including those held in precious metals IRAs?

Note to coin and precious metals dealers: There are several companies that, to maximize the profits to the dealer, have for years urged their customers to establish precious metals IRAs. Do you really want to face the customer backlash (“Why didn’t you warn me?”) when the U.S. government takes away those assets?



Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He owns Liberty Coin Service 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 http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com and http://www.coininfo.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). 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 and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.




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Comments
On September 11, 2013 Michael Arvizu said
Hi Mr. Heller,

Your article was again a good reminder of the history of recent confiscations.  I do have two questions however.

What are the the other "close to 10 reasons to avoid the use of precious metals IRAs"?

Also, maybe it was implied, but I'm not sure you actually answered your own question "What Would Stop Gold Seizure?".

Again thanks for your insights into holding PM's.

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