This is  very smart move, you dont ban it but in practice 99% people will not able buy it due restriction.

Maybe its a blessing in disguise,

Although there is a lot of costly hurdles to overcome now for such an enactment - postage, insurance, insurance and insurance - wont you know at least about your loss immediately when physically holding your coin, bar, trinket, or whatever - that when it is seized by decree in future (as happened in the 30's) and not when this whole, confidence in paper promises, circus collapses and nobody deliver on any promises anyhow?

Agreed.

It is like saying, OK we're seeing an astroid (a financial astroid in this case) is probably going to hit Hawaii, but hey - we don't accept payment of insurance premiums (/ leveraged metal currency trading) any more against this probable disaster if you're a small guy - you now need to sell your house in Hawaii and rebuy one on the mainland if you want insurance against this disaster - we do however still take corporate premiums.

And why the discrimination against small, man in the street, retail investors, wanting to protect the future and life savings of their families, in the most effective way against a national cataclysm on the scale that Portugal, Iceland, Ireland or Greece (PIIG's countries) have experienced lately?  But then they had the Eurozone absorbing the shock.  Who will absorb the cost for the US - the world? China? Other holders of US denominated script/currency/bonds/notes/stocks/options?

Someone will have to pay the price for a negative real interest rate (interest rate after inflation has been taken into account).  And big business do not seem to want to foot the bill.  Will retail leveraging of metal currency accelerate the inevitable downfall of the inflated USD, and maybe big business is not readily positioned for that yet?

If you have invest in any options/script/notes/currency/stocks/bonds/etc. denominated in USD you would like to hedge yourself against the failure of the USD by something that has been known for millenia to withstand inflationary pressures.  In a fractional reserve, leveraged economy you would experience difficulty to hedge a leverage position in options/script/shares/bonds/etc. denominated in USD if you can only hedge in an unleveraged way 1:1.

The law is simply preventing the "leveraged" purchase and sale of precious metals.

So you have a leveraged position by owning Citibank & Walmart stock options - both denominated in USD, you have a USD denominated bond leveraged because you only have a monthly downpayment based on the interest rate that may be hiked to protect a flailing USD.  But you can not leverage your hedge against a flailing USD?  It leaves you as average USD citizen pretty helpless in your current USD leveraged exposed position.

All leveraged trading on XAU/USD, XAG/USD, XAU/JPY or XAG/JPY is now criminalized for retail customer US citizens.

No, we're in this economic mess because it's reliant on a central organization in the first place, that can be hedged against.

In addition, the fact you believe man isn't entitled to trade his property as he pleases, disturbs me.

Isn't leveraged trading by definition trading of someone else's property that you have borrowed? Sure, we could say that banks and hedge funds may trade on leverage, and if they fail then so be it, they will pay the price. But I don't think it's that black and white when a failure by those entities can put most of the world into an economic recession.

For the record I think any institution that fails should be left to fail, because without that there is no incentive for institutions to act prudently. No bank is too big to fail, and no bank is so important that if it fails the country goes to shit. If banks exist that meet those criteria today, they should be dismantled immediately as threats to national security. BEFORE they fail again. They will fail again, because the same basic rules that caused them to fail before are still in place.

The financial collapse and ensuing recession from 2007-2009 can be blamed mostly due to deregulated markets being opened up in 2000 for the first time with the CFMA - fine libertarian incompetence at work!  http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

I'm glad to see that the government is starting to get tough on all of this wild forex garbage.

So, here's the plan: get a Dollar mortgage, pay off my current Euro mortgage, and wait for the US economy to give me a free house. How does that sound?