How Gold Is Smuggled Across Borders: Weird, Gross & Interesting Facts

Everybody loves gold, but the governments of the world feel the need to clamp down on the movement of gold from country to country. The United States used to be on what was referred to as the “gold standard.” That meant that all American currency had to be backed up by gold. When the bottom fell out of the international economies during the Great Depression of the 1930’s, the United States got off of the gold standard and changed the way American currency was valued.

The Gold Hoarding of 1933

Gold Hoarding

Image Courtesy of Marion Doss via Flickr

In 1933, the United States tried to strengthen its currency in the international market by hoarding gold. The government confiscated almost all of the gold from American citizens and stockpiled it. However, the gold hoarding didn’t work and it took World War II to get the United States out of the depression.

Clothes Smuggling

Smuggle Gold in Clothes

Image Courtesy of WordRidden via Flickr

In the African countries where gold is mined, people smuggle gold out of the country to avoid paying high government tariffs and taxes. Some of the more common places where smugglers hide their gold is by hiding it in their under garments such as socks and bras.

Sneaky Sheep

Gold Sheep

Image Courtesy of Hannah and Seamus Round the World via Flickr

Sometimes the most effective gold smuggling methods use things that you see every day. In the 1970’s, it was illegal for the people of Iraq to own gold. Just because it was illegal does not mean that people stopped buying gold. Resourceful smugglers would attach small gold bars to the sheep that were constantly being herded across the border between Syria and Iraq to get deliveries to their clients.

The Smuggler’s Network

Gold Network

Image Courtesy of woody1778a via Flickr

When gold smugglers need to convert their product to cash, they will often set up a complicated network of contacts. For example, in the old Soviet Union, there were some pieces of currency that were made of gold, but only the government was legally allowed to own gold. Smugglers used to bring gold into a neighboring country and then mint that gold into Soviet currency. Then the smugglers would sell the currency to Soviet citizens for United States dollars.

Better Than Food

Gold Food

Image Courtesy of Nickmard via Flickr

Here is an interesting fact to consider. In the 1970’s, it was illegal for the people of India to own gold. Thanks to enterprising smugglers, it was common for the average Indian family to have a small supply of gold on hand. Buying gold from smugglers is expensive, and this was in the years before the United States started outsourcing jobs to India, which created prosperity for many people. In the 1970’s, some Indian families decided to choose gold over food when it came to an important purchase.

Gold is a precious metal that people just cannot seem to get enough of. In the countries where it is illegal to own gold, you can rest assured that there is a network of smugglers set up to supply the demand of gold that the legal ban has created.

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