For thousands of years, gold and silver have served this purpose. They remain the best long-term protection I know against the erosion of fiat currency value. But before purchasing gold, it is essential to remember that no investment is risk-free.

In this essay, I will address the three real risks of owning gold: theft, government action, and price volatility. And I will show why understanding these risks actually strengthens the case for owning gold, rather than weakening it.

1. The Risk of Theft — and How to Minimize It

Gold is physical. This is both its strength and one of its few vulnerabilities.
Unlike digital assets or bank accounts, gold cannot be hacked or inflated. But this also means you must store it responsibly.

For small investors, this is simple. A modest amount of bullion or coins can be stored discreetly in a locked drawer at home—or in a small safe. As holdings grow, your precautions should grow as well. Safe deposit boxes at reputable banks work well for moderate amounts. Bonded and insured depositories—such as the Texas Bullion Depository near Austin—offer Fort Knox–level security for larger holdings. There are at least a dozen major private vaults in the United States, all with insured and audited systems and limited access protocols.

The truth is, actual losses from theft by professional depositories are extremely rare. With basic prudence and a bit of common sense, theft becomes more of an inconvenience than a genuine financial threat.

Digital assets, on the other hand, face an entirely different danger: counterparty risk—the risk of fraud, cyber theft, or institutional failure. Physical gold avoids all of this. It exists outside the financial system, immune to bank collapses or data breaches.

So yes, gold can be stolen—but with proper storage, the practical risk is very low.

2. The Risk of Government Confiscation — Why It Is Highly Unlikely Today

This is the question I receive more than any other:

“Could the government take back our gold?”

It is a fair question. After all, it has happened before—under President Franklin D. Roosevelt in 1933.

That year, through Executive Order 6102, Americans were ordered to surrender their gold coins, bullion, and certificates to the Federal Reserve in exchange for $20.67 per ounce. Non-compliance could mean ten years in prison and a $10,000 fine, approximately $240,000 in today’s money.

The legal justification came from the 1911 Trading with the Enemy Act, amended by the Emergency Banking Act, granting the president broad powers during a declared national emergency.

In 1934, the Gold Reserve Act went further: it required the Federal Reserve to transfer its gold to the U.S. Treasury and prohibited private ownership of bullion.

Importantly, this was not outright theft—citizens were paid for their gold.
But a year later, the official price was raised to $35 per ounce, devaluing the dollar and defaulting on the U.S. government’s fixed-price promise.

From 1933 to 1974, private ownership of gold bullion in the United States remained illegal. But eventually, the situation changed.

The Restoration of Gold Ownership

• 1971: President Nixon ended the convertibility of dollars into gold for foreign governments, severing the last link between the dollar and the metal.
• 1974: President Ford revoked FDR’s ban. Congress passed Public Law 93-373, legalizing private gold ownership with an overwhelming bipartisan majority (381–33 in the House).
• 1977: Public Law 95-147 removed the president’s authority to regulate gold except in declared war.
• 1985: The Gold Bullion Coin Act authorized the minting of American Gold Eagles—the first legal U.S. investment coins in over fifty years.

(For details, watch the video below.)
These laws did not merely re-legalize gold ownership—they codified it as a permanent property right. Reversing this today would be politically suicidal and economically catastrophic.

Why Modern Confiscation Is Unlikely

• Legal obstacles: Gold ownership is now protected by law, not by mere executive order.
• State-level resistance:
  46 states have removed sales tax on bullion.
  13 have declared gold and silver legal tender.
  States like Texas, Utah, and Wyoming actively promote gold reserves and reject central bank digital currencies.
• Public sentiment: Gold ownership today is mainstream and bipartisan. Any attempt to outlaw it would face massive legal and political resistance.

Could confiscation technically happen again? In theory, yes. But it would require a declared war and a level of overreach well beyond modern precedent. In practice, the government has far simpler ways to erode your wealth through inflation, taxation, and fiscal policy.

3. The Risk of Price Volatility

The third major risk of gold is the most obvious: price fluctuations.

Like any asset, gold can rise or fall sharply in dollar terms. Buy at a short-term peak and you may lose value if forced to sell shortly after. But over the long term, gold’s record is one of remarkable resilience.

Since 1971, the “post-gold” era, gold and the S&P 500 have both produced strong returns—but at different times. This non-correlation is gold’s great advantage: when stocks crash, gold often holds steady—or rises. When inflation increases, gold tends to grow.
And when both decline together, gold mitigates losses.

The Thirty-Year Test

From 1995–2025, I modeled three portfolios:

• 100% gold, earning 3% annual interest paid in gold (available today through select leasing programs).
• 100% S&P 500, with dividends reinvested.
• A 50/50 mix of both.

(Please see the attached video for detailed analysis.)

The results were nearly identical in total return, around 11% annualized—but the mixed portfolio experienced much lower volatility.

• During the dot-com crash (2000-2002), stocks declined 38% while gold rose 3%.
• During the financial crisis (2008), stocks fell 37% while gold rose 19%.
• In 2022 (when both declined), gold’s losses were about half those of stocks.

A recent article in the Financial Times confirms my experiment. Combining stocks and gold offered smoother growth with less stress.

“Looking at the last six instances when the S&P 500 fell 15% or more, gold also initially declined. But when the S&P bottomed out, gold had outperformed by an average of 40 percentage points.”
— Financial Times, October 22, 2025

When panic arrives, gold may swing temporarily—but it does not break.

The Risks You Don’t Take by Owning Gold

Every investment carries risk. Gold is unique in the risks it does not take.

“What makes gold compelling,” wrote Michael Weeks of Edelweiss Holdings, “are the risks we do not take by owning it.” No predictions or guesswork required. The risks we do not take by owning gold could fill volumes. With gold, there is no duration risk, credit risk, or liquidity risk. The metal is not moved by financial instability nor threatened by national insolvency or chaos in foreign exchange markets. There are no margin calls and no refinancing risk. There is no risk of technological obsolescence, depletion, depreciation, or decay, nor does it require low-cost energy, low-cost credit, or low-cost trade to remain viable. It does not care about your national energy policy or from whom you buy gas or how many pipelines are operating. You do not have to keep the lights on or even keep it warm. There are no financial statements to ponder, no balance sheets to blow up, no dwindling cash flow, no stale inventory, and no margin pressure in tough times. There are no key man or supplier risks, no competitive risks, no management to squander your future. Gold does not depend on anyone’s character, skill, or enthusiasm. It does not require the faith or goodwill of others. It does not require you to trust anyone at all.”

As investor James Aitken once said, there are three choices in markets: buy, sell, or do nothing. During periods of financial stress, gold allows that third option—the freedom to wait.

This is why I encourage every saver to own some physical gold. Store it securely. Forget it exists. And rest easier knowing that no politician or policy can make it vanish. If a severe financial storm arrives, it is there for your use.

Most people will not, but I believe many will wish they had.

Beyond Storage: Earning Interest on Gold

Today, through companies like Monetary Metals & Co., it is possible to earn interest on gold paid in gold. Structured leasing and bonds offer an annual yield of approximately 4% while keeping your holdings fully allocated and physical.

Full disclosure: I serve on the board of Monetary Metals and am both an investor and a client. But even if I were not, I would still use them. The ability to grow your gold without converting to fiat is, in my view, one of the most promising financial innovations of this century.

If you understand the three real risks of owning gold—theft, government, and price volatility—you can plan intelligently around them.

Gold’s risks are different, not greater than those of stocks and bonds. Because they move independently, gold actually reduces your overall exposure to systemic risk.

So yes—own gold. But do so wisely, with eyes open and mind calm.

The goal is not to get rich overnight; it is to remain solvent, sane, and sovereign in a world that has forgotten what money truly is.