87 years ago, Americans were forced to turn in all their gold.
It was called ‘Executive Order 6102’ issued by Franklin Roosevelt, and it said that anybody who had any amount of gold now had to give it up to the Federal Reserve. Back then, the exchange rate was roughly $20 per ounce ($400 per ounce in today’s dollars).
This executive order was no joke. It said that if you were caught with gold after May 1st, 1933, you could be fined, face up to 10 years of prison, or potentially both.
How did such a crazy order come to be? The decision to buy up gold from citizens was done in part to stimulate the economy. At the time, America was coming out of the Great Depression, and this was a way for regulators to give Americans cash that they could easily spend, in replacement of gold bars that they couldn’t spend.
So in order to get out of the depression, the government banned citizens from holding a safe haven asset. And if caught, the punishment would be severe. This is incredibly disturbing to look back on.
People have a long history of searching for safe places to store money, and the last thing they expect is for their own government to seize their assets. But it’s also true that governments have a long history of seizing gold from citizens. It may seem like a long time ago, but it happened right here in America too.
And there were people who tried to get their money out of the system, one notable example is a man named Frederick Barber Campbell.
Frederick had over 5,000oz of gold stored at the Chase National Bank, a sum that would be worth over $8.5 million today. But when he tried to withdraw his gold in response to this order, he was refused. Then he was indicted, and the authorities eventually seized all of his gold.
While this sounds like it could never happen today, history has shown it can.
Not Your Keys, Not Your Coins
Bitcoiners who have left their coins on sketchy exchanges know this all too well. After enough instances of stolen Bitcoins, people began to adopt the phrase “Not your keys, not your coins”. It’s become a rallying cry for Bitcoiners to avoid trusting third-parties, and take their wealth and financial security into their own hands.
In the 1930s, it was almost impossible to keep your money if the government didn’t want you to keep it. Governments could easily confiscate gold, and easily print fiat at will.
But now we have Bitcoin, a treasure that can’t be confiscated (when you own your keys).
And the time to hold on to Bitcoin is before you need it. In the midst of a global recession, countries all over the world are suffering just as much as their citizens. It’s not crazy to think they might try to enforce capital controls and limit how people hold and store their wealth.
And while Bitcoin is a tool to evade these controls, by the time such controls are in place it’s too late. The time to own Bitcoin is before governments try to seize people’s financial assets, it’s much more expensive afterwards.