Back in January, I warned Greek citizens to take money out of Greek banks. I also warned not put it in safe deposit boxes. Both comments were dead-on accurate.

Greece Safety Box Controls

Please consider Greeks Cannot Tap Cash in Safe Deposit Boxes Under Capital Controls.

Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place, a deputy finance minister told Greek television on Sunday.

Greece’s government shut banks and imposed capital controls a week ago to prevent the country’s banks from collapsing under the weight of mass withdrawals.

Deputy Finance Minister Nadia Valavani told Alpha TV that, as part of those measures, the government and banks had agreed at the time that people would also not be allowed to withdraw cash from safe deposit boxes.

Shades of Roosevelt

Anyone recall Roosevelt’s Executive Order 6102 outlawing gold?

Executive Order 6102 is a United States presidential executive order signed on April 5, 1933, by President Franklin D. Roosevelt “forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States”. The effect of the order, in conjunction with the statute under which it was issued, was to criminalize the possession of monetary gold by any individual, partnership, association or corporation.

According to a hoax, Roosevelt ordered all the safe deposit boxes in the country seized and searched for gold by an I.R.S. official.

In fact, safe deposit boxes held by individuals were not forcibly searched or seized under the order and the few prosecutions that occurred in the 1930s for gold “hoarding” were executed under different statutes. One of the few such cases occurred in 1936, when a safe deposit box containing over 10,000 troy ounces (310 kg) of gold belonging to Zelik Josefowitz, who was not a U.S. citizen, was seized with a search warrant as part of a tax evasion prosecution.

In Australia, part IV of the Banking Act 1959 allows the Commonwealth government to seize private citizens’ gold in return for paper money where the Governor-General “is satisfied that it is expedient so to do, for the protection of the currency or of the public credit of the Commonwealth.” On January 30, 1976, this part’s operation was “suspended”.

Cash in Hand is King

Safe deposit boxes were not forcibly opened by Roosevelt, but who knows what is coming in Greece?

Regardless, cash in hand is one thing, cash in a safe deposit box under capital controls is another.

Gold Confiscation

I receive questions quite frequently asking if gold or silver will be physically confiscated or outlawed as it was under Roosevelt.

My short answer is no. And I am quite confident of that answer. Confiscation via a high tax rate on gold sales is more likely.

Mike “Mish” Shedlock