War on Precious Metals: Has the Eurozone been Gradually Restricting Individual Gold Purchases?

Yes says Marc Slavo of SHTF Plan

A couple of weeks ago our report that some Austrian banks had begun restricting the sale of gold and silver to 15,000 Euro (~$20,000 USD) reportedly because of money laundering issues was met with disbelief by many readers of financial news and information web sites. As we mentioned in that commentary, it is our view that governments, namely in Western nations, are making it more difficult for individuals to make gold purchases, as well as to do so anonymously.

It looks like this trend of restricting the peoples’ ability to acquire assets of real monetary value is expanding. If a recent report from France is accurate, and based on the French governments official web site it looks like it is, then as of September 1, 2011, anyone attempting to sell or purchase ferrous or non-ferrous metals, which includes gold and silver, will be required to pay for their purchase via a credit card or bank wire transfer if it exceeds 450€ (~ $600 USD):

“Here is the applicable French law via www.legifrance.gouv.fr and translated into English by Google Translate:

“Article L112-6
Amended by Law n ° 2011-900 of July 29, 2011 – art. 51 (V)

“I. Can be made in cash payment of a debt greater than an amount fixed by decree, taking into account the place of tax residence of the debtor and the professional purpose of the operation or not.

“In addition a monthly fixed by decree, the payment of salaries and wages is subject to the prohibition contained in the preceding paragraph and shall be made by check or by transfer to a bank or postal account or account held by a payment institution.

“Any transaction on the retail purchase of ferrous and non ferrous is made by crossed check, bank or postal transfer or by credit card, not the total amount of the transaction may not exceed a ceiling set by decree. Failure to comply with this requirement is punishable by a ticket for the fifth class.

“II.-I Notwithstanding, the costs of the department conceded that exceed the sum of 450 euros must be paid by bank transfer. (bold highlights original-Prudent Investor)

“III.-The preceding provisions shall not apply:

“a) For payments made by persons who are incapable of binding themselves by a check or other payment, as well as those who have no deposit account;

“b) For payments made between individuals not acting for business purposes;

“c) paying the expenses of the state and other public figures.

According to independent reports the law was passed to curb the illegal sale of stolen metals like copper, steel, etc. Given the rampant rise in thefts of these metals from telephone poles, construction sites and businesses here in the United States, we can certainly see this as a reasonable assessment for why the French passed this law.

When governments see their political privileges being eroded as a result of their own policies, the next set of actions would be to destroy any competitive threats on their monopoly franchise of money by restricting the ownership of metals.

I am reminded by the wisdom of the great F. A. Hayek who once wrote in Choice in Currency, (bold emphasis mine)

There could be no more effective check against the abuse of money by the government than if people were free to refuse any money they distrusted and to prefer money in which they had confidence. Nor could there be a stronger inducement to governments to ensure the stability of their money than the knowledge that, so long as they kept the supply below the demand for it, that demand would tend to grow. Therefore, let us deprive governments (or their monetary authorities) of all power to protect their money against competition: if they can no longer conceal that their money is becoming bad, they will have to restrict the issue…

…This was observed many times during the great inflations when even the most severe penalties threatened by governments could not prevent people from using other kinds of money; even commodities like cigarettes and bottles of brandy rather than the government money—which clearly meant that the good money was driving out the bad…

…But the malpractices of government would show themselves much more rapidly if prices rose only in terms of the money issued by it, and people would soon learn to hold the government responsible for the value of the money in which they were paid. Electronic calculators, which in seconds would give the equivalent of any price in any currency at the current rate, would soon be used everywhere. But, unless the national government all too badly mismanaged the currency it issued, it would probably be continued to be used in everyday retail transactions. What would be affected mostly would be not so much the use of money in daily payments as the willingness to hold different kinds of money. It would mainly be the tendency of all business and capital transactions rapidly to switch to a more reliable standard (and to base calculations and accounting on it) which would keep national monetary policy on the right path.

Legislative restrictions will not prevent people from switching to good money.