Tuesday, January 17, 2012

What Happens if They Start Screening for Gold?

It may not even be safe up your butt.

FOX news reports:
South Korean customs officials say they have arrested eight men over a scheme to allegedly smuggle gold out of the country by hiding it in their rectums.

The Korea Customs Service said Monday the men allegedly transformed $260,000 in gold bars into small beads and smuggled them in their rectums to Japan two times in 2010 to avoid import taxes.
Bob Murphy sent along the above news clip.

Earlier this week, I has a phone conversation with Bob about gold. In coming up with a worst case scenario, I posed the following to him.

What if price inflation gets really bad and President Obama makes it illegal to own gold coins?

My back up for this question goes like this:

FDR already once made it illegal to own gold bullion, and the U.S. wasn't even in a period of high price inflation at the time. What's to stop Obama from eliminating such a metal that is a competitor to the dollar?

Now here is where things get real dark for gold. This is not the 1930s, a period without metal detectors.You could safely smuggle gold coins without much detection. Not the case anymore.

Quite a few years back I went through an airport screening (pre-911) with some gold coins. I had 20 coins in one coat pocket and 10 in the other. To my amazement, the agent who waved a wand over me said, "OKay, you have 10 gold coins in that pocket and 20 in the other." He knew by the sound the wand made what was in pockets and and the quantity. I emphasize, this was before 9-11. Long before the screenings we go through now.

In other words, if gold becomes illegal, you are not going to be able to carry your gold coins on a plane. With anti-terrorist teams sporadically at subway stops and bus stops, you are going to be playing Russian roulette by carrying them on  your person, when you use any type of public transportation. On the highways, there will be more and more VIPR teams. The Z Portal scanner in use at the San Ysidro, Calif., border crossing uses high energy X-ray radiation to probe the interior of vehicles.

Like I said, we are surrounded.

I am not sure how Americans would react to a ban on gold. Are there enough around to raise hell? Maybe, maybe not. A ban would most assuredly come with much propaganda about the evils of gold and how it is destroying the economy. But given the metal detection methods available today, a ban on gold would make it very difficult to use it as a daily alternative method of exchange if the dollar begins to hyperinflate.


  1. Simple.

    Coat the coins with silver paint and throw them in the coin bin with other odd change and your keys before you walk through the metal detector.

    No need to stuff them up your butt.

    If you have an epic pile of gold coins, simply mail them to a foreign address ahead of your arrival. Bury them in some hardware package or something.

    Keeping gold in or out of the country is about as futile as keeping drugs or guns out of the country.

  2. We are closer than you realize

    NYPD looks to scan people on the street for guns, Police Commissioner Raymond Kelly says

    Read more: http://www.nydailynews.com/news/crime/nypd-scan-people-street-guns-police-commissioner-raymond-kelly-article-1.1007456#ixzz1jkXfWw4z


  3. If we look at the inflation in France caused by John Law, we may get a feeling for what will happen. If they ban gold coins, people will melt them down and make jewelery out of it. If they ban gold jewelery, people will turn to silver coins. If they ban silver coins, people will start using silver kitchenware. If they ban all silver, people will start using whatever is next on the list as valuable. Industrial companies that use metals for industrial uses could start investment schemes where you basically invest in their inventories. It is probably possible for farmers to start selling "futures" to common people, meaning you invest in this years harvest and get a claim on it. But we're pretty far down the economic collapse ladder at this point.

    But that is what I think will occur, if they try something like that. Storing 200 cans of gasoline? Why not? Buying a share in a used-car lot? Hell, only the imagination sets limits here. And as long as you can trade the receipts/claims for these things they are going to be very busy banning, well, everything.

    In Sweden, when they for a very brief period raised taxes so high that it was unprofitable to even work, there was actually an invented currency called "byts" (translates to "trades"), where people traded labour hours on pieces of paper. They actually tried to outlaw barter as a response - a law which was probably not respected one single time in its brief existance.

    People tend to get creative as oppression grows, and unless they want to do soviet-style public executions, all their shenenigans will fail.

    Obviously, the economy may still reach some sort of "higher third world status", but at least people will be alive, most will be fed and housed, and everyone will hate the government.

  4. Hmmm...bitcoin doesn't sound so bad after all...

    1. Sure, there's something they can't track.

  5. Every time I go to visit my sister in Canada(drive across the border) I bring some coinage with me.

    Not enough to declare, but not chump change either. I've never once had a problem or a search, the niagra crossing I use is quite busy.

    In fact, I accidently left a loaded handgun in a hiking bag of mine when I crossed once. I about crapped my pants when I found it once I unpacked @ my sisters place...but it all worked out ok as I crossed back over without any issues either.

    One interesting thing, the Canadian guard on going over made a comment to be about how the US was "going crazy" in response to some paperwork issues I had when crossing...it was in that context she said her concern was whether the US would let me back in or not. lol...she let's me in without all the "t"'s crossed and her concern is about my crazy homeland not letting me back in.

    Everything is truly Orwellian anymore.

  6. I find your account difficult to believe. If you had 30 gold coins in your pockets, why did you even try to go through the metal detector? Surely you knew it would stop you? You were wearing your coat? I have to take my coat off and put it on the belt to the x ray machine. Did you declare carrying over $10K in cash? Long before 9/11 the US required travelers to indicate the amount of money they were carrying if over $10K, and even 12 years ago 30 oz of gold was over 10K. How did they react to a person carrying so much in cash? I always thought that if I casually reported carry, say, $25,000 in cash they would take me aside for a talk. At any time did they have your gold coins in their sole possession? I mean did they take the gold in their hands? If so how far did they get away from you? In airport lines passengers are very limited where they can go while security can move about freely. Were you worried that the security guard with your gold would move out of your reach/sight and there was nothing you could do about it? I know that you said it was pre 9/11 but even before then there were areas for the public and of course more areas for security.

    1. He said pre-911! Meaning before 9/11/2001. Maybe you don't remember what is was like to travel before this country when all 1984 but I do. In the 90's you had to go through a metal detector and sometimes they would use the detector wand on you if they got busy or got a reading on the walk through detector. No x-ray machines pre 2001 my friend. And you didn't have to take off your coat or your shoes. Oh and BTW if you just do bit of checking, you will be reminded that gold was trading in 2001 at around $300 per oz. Simple math says thats $9000 not $10,000. Try reading the original article again.

    2. I'd also like to add that we don't know what gold coins Bob was carrying. However, for the sake of argument, let's say that he was carrying 30 1-ounce gold eagles. Well, I don't know what your gold eagles say on them, but mine say $50. So, at most Bob was carrying $1500 in cash.

      Your argument soon becomes absurd if we look at other assets. For instance, if I was traveling with my microphone case and two of those microphones were Telefunkens (u47 and u48), would you say that I am traveling with over $10,000 in cash?

    3. Oh, and just to add another thing, do you remember when friends/family could meet you at the gate? I do, and I am only 32. I also remember taking a flight that had zero security checkpoints. Sure, it was a small airport, but you sure can't do that anymore.

      I did take a flight in the late 90s, and all you had to do was put your carry-on through the 3D x-ray and walk through a metal detector. It is pretty disturbing what you must go through now, especially considering that the weapons used on 9/11 were purchased after the screening process. Further, the current screening process has not proven to be effective against certain weapons, even those that could have been found by older processes (guns, knives, explosives still can and do get through).

      If I owned an airport gate and/or the airline, I would try to economize to find the balance between the highest security while offering the least inconvenience to the customer. Essentially, each of my gates would have a 3D x-ray machine for carry-on luggage, a metal detector for persons, a bomb-sniffing dog, and all of my flight/gate personnel would be armed and trained in close-quarters combat (if I only owned the gate and not the airline, then this would be a condition of the contract).

      Of course, FAA regulations preclude this, thus putting at risk ALL passengers.

  7. Hmmm...bitcoin doesn't sound so bad after all!

  8. Yes, bitcoin is better than buttcoin...

  9. "In other words, if gold becomes illegal, you are not going to be able to carry your gold coins on a plane."

    No worries. Just carry diamonds.

    By weight and size, they are the most compact method of transporting large sums of wealth.

    See e.g. http://www.thehallofinfamy.org/inductees.php?action=detail&artist=martin_frankel

  10. "Bitcoin of 2012" has more of the properties of "Gold of 1910" than the "Gold of 2012".

    Governments cannot control it. It can travel with you just by memorizing a Password, or carrying a USB stick.
    They cannot seize it.
    They cannot exclude anyone from doing business with it. They cannot issue a financial blockade like on Wikileaks. The Net interprets censorship as damage and routes around it. This applies to money as well.

    So Bitcoin may become the Gold of the new millennium. I reserved my share already.

  11. If they ban it , it is time to fight

  12. You assume that people are going to cross the border by the standard means. The Mexicans cross the border with ease by going around these standard ports of entry. Gold can easily be smuggled across the desert areas for example. Gold can be shipped in the mail. There is so much mail that only a fraction can be checked. Let us get a little creative here in evading any fruitless gold ban. There is also the black market more powerful than any government can ever dream of. Bitcoins are a joke. They depend on computers, the internet and electricity. Also should people not be able to afford computers, internet service and electricity, how would that bode for bitcoins? If you can't hold it, you don't own it, end of line.

  13. @ Anonymous Jan 19, 2012 12:25 AM:

    An internet connection is not necessary:

  14. @ Anonymous Jan 19, 2012 12:25 AM:

    Yes, even though you don't need internet connectivity for bitcoin to work it is still wise to have local stores of value that you can trade with and live off of. If the internet goes down we will have bigger problems than worrying about our offshore bank accounts or our bitcoin holdings. The likelihood of the entire internet going down is slim to none though. This means that, for transferring value across space and time, bitcoin has a lot of potential.