Hoarding Gold Can Cost Your Life In Iran
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Hoarding Gold Can Cost Your Life In Iran

Everett Millman
By Everett Millman
Published November 15, 2018

There is passionate niche within the gold-investing community that consistently warns about the possibility of governments confiscating privately owned gold.

It's worth pointing out that this is exactly what happened in the United States during the Great Depression. It's still happening, albeit through less direct schemes, in India to this day.

However, no state or authority has gone as far to discourage private gold ownership as Iran did earlier this week.

King of Gold Coin

The international news wires all picked up the story of a major gold dealer operating in Iran named Vahid Mazloumin. He was nicknamed the "King" or "Sultan of Gold Coin" by locals for his prominent role in the domestic gold trade.

Mazloumin and his associate, Mohammad Esmaeil Ghasemi, began buying up as many gold coins as he could find. The pair, who also speculated in the foreign currency markets, accumulated two metric tons of gold coins. They well on their way to essentially cornering the Iranian gold coin market.

Then the Iranian Revolutionary Court intervened.

Barbarism Over the "Barbarous Relic"

The court claimed that the high volume of gold hoarding and currency speculation, which it deemed "illegal trading activity," was disrupting Iran's economy. It makes sense that the "Sultan of Gold Coin" would stockpile gold given Iran's recent currency crisis: the Iranian rial at one point had lost 70% of its value against the dollar this year after the U.S. withdrew from the Iran nuclear agreement and reimposed economic sanctions on the Islamic Republic.

The men were also accused of smuggling gold coins in and out of the country.

However, the authorities didn't simply fine or imprison Mazloumin and Ghasemi. They hanged them in a public execution.

It was a gruesome form of corporeal punishment to say the least.

Life Or Death

Among other international outlets, the events were reported by Bloomberg News and the Financial Times.

There are laws within Islam that restrict how money can ethically be invested. The Koran forbids purely speculative investing and considers most forms of charging interest to be usury. In 2016, financial institutions began developing and introducing Sharia-compliant gold investment products to better service the gold demand in the Muslim world.

Physical gold is nonetheless still king in Islamic-majority markets such as Iran, Saudi Arabia, and Turkey.

This is the first time in recent memory that "hoarding" gold has been met with a death sentence rather than mere confiscation, however. In essence, if you live in Iran and try to stockpile too much gold, you can literally incur state violence.

Anyone who believes (non-lethal) gold confiscation is far-fetched and will never happen in a Western country should take note.

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

Everett Millman

Everett Millman

Analyst, Commodities and Finance | Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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