Is Silver Confiscation Possible?

Silver is known as both an industrial and an investment grade metal. And for that specific reason, it is much hard to seize than gold. Also bear in mind, there are millions of older U.S. mint coins which are made of silver. That would make it much harder for the U.S. government to seize silver.

However, there may be ways that the government can "choke" silver owners in ways that would make it a virtual confiscation. In fact, the U.S. government has started with the 1099 law, which goes into effect on January 1, 2012. That law states that all bullion dealers must submit a 1099 form for any bullion purchase over $600. That includes silver.

Here are some more ways, the government can launch a virtual confiscation of silver:

Extra Taxes

There is already a 28% collectable tax on silver. The government, which will need to find new ways to raise money, can increase that tax. Also, state and local governments may decide to levy their own, "Precious Metals Tax."

Limited Silver Availability from the U.S. Mint

In the past few years, the U.S. Mint has been "sold out" of their supply of silver. Congress can easily order the mint to stop sales or severely limit the amount of silver made available to the general public. 

Limit Precious Metals Shipment Values to $10,000

You are probably familiar with the law that you can't fly with more than $10,000 in cash without declaring it. This can easily happen with silver and gold coins through the U.S. mail. The government can make up an excuse that they need to protect America from drug money laundering and terrorism. But this is another way the government can severely limit the free flow of precious metals.

Limit coins sales and coin dealers

It is so easy to buy and sell coins that we almost take it for granted. Just about every city has a coin expo at some hotel where you can walk in and buy as much silver as you want. And just about every neighborhood has a pawn shop which has some amount of silver. However, the government can require that all dealers in precious coins have a license or some other certification. The government can use the excuse that they want to "Protect" the public from scam dealers. But, again, this is another way to "choke" off the free market in silver.

As the government becomes more and more involved in even the smallest aspects of business, commerce and the economy, it is important to find ways to protect your access to silver. Here are some steps.

• Know as many legitimate silver dealers as possible - If you want to buy $10,000 in silver and avoid a 1099 problem, find 10 dealers and buy from them over the course of two days.
• Stay on top of the news on gold and silver regulation - The government has a way of signaling its hand. If you hear about proposed laws on limiting the sale of silver, let your congressman hear about it. And begin to get the silver you need before the laws take effect. 
• Know private citizens who own silver - If you know five people who own a lot of silver, you can buy and sell within your own private market. 
• Own Silver Mining stocks - In a later article, I will talk about the possibility of mining Nationalization. But for now, owning silver mining stocks is a good alternative for people who want inflation protect with less worries about confiscation. 
• Avoid holding most of your silver in the silver ETFs - Silver ETFs like SLV are great for short term trades. However, these ETFs are some of the largest holders of silver on the planet. It is much easier for the government to seize their silver than to go house to house. Don't use the ETFs as your silver "safe." Remember this saying, "If you don't hold it, then you don't own it."

Summary

While Silver will be much harder to confiscate than gold, it can be tightly controlled. Be sure to know as many dealers and private citizen silver owners as possible. And stay on top of any news about any possible silver laws and regulations.