Saturday, June 18, 2011

The U.S. Government Attack on Gold

On Friday, I detailed how part of the Dodd-Frank Act may ultimately lead to the tracking of gold coins,  The Bastards Want to Track Our Gold!. Now comes word that provisions of the Dodd-Frank Act will result in some commodity dealers halting some of their gold trading operations. has sent this letter to its clients (Via Lew Rockwell and Zero Hedge):

Date: Fri, Jun 17, 2011 at 6:11 PM
Subject: Important Account Notice Re: Metals Trading
To: xxx

Important Account Notice Re: Metals Trading

We wanted to make you aware of some upcoming changes to’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.

In conjunction with this new regulation, must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.

We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated.

We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team.

The Team at
It is unclear exactly what in Dodd-Frank is triggering this move by I hope to have more on Monday, but these events should not be viewed in isolation. There is a clear bias in the Dodd-Frank legislation to slow and monitor activity in gold. All holders of gold should be alarmed. I expect more developments along these lines. In my view it is an attempt to gain control over how, when and where gold can be used. There would be too much uproar in the country if gold was confiscated in the manner FDR did in 1933, so this time it needs do be done incrementally, but it sure looks like this is going on.

How long after the Dodd-Frank regulations kick in, before it is discovered that a terrorist cell financed its operations using gold coins and that even more monitoring of gold is going to be required? The stage certainly appears set for further government attacks on gold.


  1. Here is a post from last August that seems to have known this was coming by reading the legislation.

  2. The Frankendodd provisions specifically talk about OTC commodities, yet Forex is only going to close their PM service? Doesn't make sense. I think something else is going on over at Forex. No one else seems to be announcing OTC trading closures aside from this (that I've seen). Best to wait it out and see what else might be pushing this.

  3. There are those who say the real reason for the US/UN/NATO invasions of Iraq and Libya was Saddam Hussein and Muammar Gaddafi were both working to create a gold dinar currency to compete with the dollar. Given Mrs. Clinton's recent first-time-ever-Secretary of State speech to the African Union - Gadddafi is the immediate past president of this group - and her push to become the next president of the World Bank, this is making more and more sense.

  4. Indeed, has a number of legal issues on its plate. I would not be surprised if some other side effect of Frank-Dodd exacerbates the problems they already have, which forces them to shut down their OTC gold trading for reasons that are not clear to us on the outside. I would take any statement from FOREX with a grain or two of salt.

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