88 Years Ago Today, FDR Banned Gold. Will A Bitcoin Ban Be Next?

Today is the 88th anniversary of Executive Order 6102, signedby President Franklin Delano Roosevelt, “forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.” The order was one of the several disastrous responses to the Great Depression that succeed in escalating the financial crisis. Later in the year, the US Congress would pass a resolution retroactively supporting the legislation, however, it was the determined autocratic leadership of FDR that gave way for these unprecedented measures.

It would be a crime for Americans to hold gold for over forty years when President Gerald Ford reversed the order in 1974. 

This episode has several lessons for the current financial environment, particularly given the acceleration of tyranny-by-expert rule that has taken over much of the worst this past year.

The underlying legislation that evoked by FDR’s Executive Order was the Trading with the Enemy Act of 1917 – a byproduct of WWI – despite the fact US was in no way in a period of war in 1932. Similarly, we have seen War on Terror-inspired financial legislation increasingly be used against American citizens. For example, in the name of “fighting terrorism” the US Patriot Act significantly increased Know Your Customer laws, empowering Federal regulators to use the traditional banking system to better track the economic behavior of American citizens.

In the eyes of the Federal government, “anti-terrorism” legislation was quickly expanded to include additional missions – such as stopping money laundering and drug crimes. Increasingly, these boogeymen have used by policymakers around the world to erode financial privacy assets – such as cash and secret Swiss bank accounts.

On the domestic side, we have increasingly seen US corporate actors demonstrate their loyalty to the progressive political zeitgeist by pro-actively cracking down on various dissident political figures and conservative action groups. Bank of America, for example, has de-banked various gun manufacturers and also turned over client data following the January 6th protests at the US Capitol. These moves could prove useful if BoA needs another federal bailout from a Biden-Harris administration, but highlights the degree to which the modern financial system can easily be weaponized against a state’s political enemies.

The same playbook is being increasingly used to target Bitcoin and other cryptocurrencies that are beyond the reach of the state.