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Charliemouse

Silver Lining

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I blew most of my Gold on flying lessons in 1st quarter 08. Now I am (as most of us are) looking down the barrel of hyper inflation GBP.

I only buy physical so I thought I would buy a few kilos of Silver today, so I did.

Is this rush to assets justified and will the V.A.T. i paid on the Silver will be overwhelmed by the *soon to rocket price of assets like silver and gold?.

Im not totally loaded like some of you but never the less, even small people can position themselves favorably in what looks to be an *inflationary disaster economy. You got any better ideas?.

A few kilos of gold would be great yes (but out of my price range) but Silver will never be confiscated will it?, and i hear that Silver has a long way to go to catch up with its relative value in Gold kilo for kilo.

Im worried about all this QE and the disapointing results of it in the US and UK, Inflation seems inevitable when QE is a failure.

Any thaughts.... pointers....?

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You're not alone, I did a poll of HPC's earlier today:

Vote: To Gold or Not to Gold

Turns out that 70% of HPCers think having either a moderate chunk of liquid assets in gold (roughly 35%) or a more substantial chunk of liquid assets in gold (again 35%) is a good idea, things being as they are. 25% didn't and 5% were don't knows.

You can pretty much substitute gold for silver in that survey as where gold goes silver follows. It's also true that silver is currently below it's long term price multiple versus gold, so it has more upwards leverage in a precious metals boom. VAT is still a pig though, but what can you do?

Basically precious metals of one sort or other are the wise man's friend in the forthcoming sh1tstorm. You have learnt well Grasshopper, fear not.

EDIT: As for private wealth confiscation, they'll be going all out in the future I reckon, record levels of inheritance tax etc. to pay the national debt. Precious metal confiscation is a winner for the powers that be because so few people own them that it's an easy way to fill the govt. coffers without losing many votes. Keep your stash physical, secret, in your possession, and if questioned by the authorities say it was stolen and you were too embarrassed to report it because you thought you'd look like an idiot for being too stupid to secure it properly.

Edited by General Congreve

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You're not alone, I did a poll of HPC's earlier today:

Vote: To Gold or Not to Gold

Turns out that 70% of HPCers think having either a moderate chunk of liquid assets in gold (roughly 35%) or a more substantial chunk of liquid assets in gold (again 35%) is a good idea, things being as they are. 25% didn't and 5% were don't knows.

You can pretty much substitute gold for silver in that survey as where gold goes silver follows. It's also true that silver is currently below it's long term price multiple versus gold, so it has more upwards leverage in a precious metals boom. VAT is still a pig though, but what can you do?

Basically precious metals of one sort or other are the wise man's friend in the forthcoming sh1tstorm. You have learnt well Grasshopper, fear not.

EDIT: As for private wealth confiscation, they'll be going all out in the future I reckon, record levels of inheritance tax etc. to pay the national debt. Precious metal confiscation is a winner for the powers that be because so few people own them that it's an easy way to fill the govt. coffers without losing many votes. Keep your stash physical, secret, in your possession, and if questioned by the authorities say it was stolen and you were too embarrassed to report it because you thought you'd look like an idiot for being too stupid to secure it properly.

Thanks for the reply, Private wealth confiscation could include anything; Art, Houses, Food (worst case) or anything they choose.

The VAT is a bugger but it could be worth it in a couple of years so im going to sleep well tonight in the knowlage of my lovely new silver paperweights.

Security is an issue but iff it gets that bad i would be better off with a thousand tins of ham. Thanks.

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VAT is still a pig though, but what can you do?

For silver bullion bars the current and temporary 15% UK VAT rate is favorable against other EU countries. However, you can buy silver coins at 7% VAT rate if shipped to a mainland EU address.

Coininvestdirect prices (at time of this post)

Silver Dollar 2009 1 oz - £13.02 UK - £12.11 EU

Britannia 2009 1 oz - £14.39 UK - £13.39 EU

Maple Leaf 2009 1 oz - £13.27 UK - £12.35 EU

Edited by Take Me Back To London!

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I blew most of my Gold on flying lessons in 1st quarter 08. Now I am (as most of us are) looking down the barrel of hyper inflation GBP.

I only buy physical so I thought I would buy a few kilos of Silver today, so I did.

Is this rush to assets justified and will the V.A.T. i paid on the Silver will be overwhelmed by the *soon to rocket price of assets like silver and gold?.

Im not totally loaded like some of you but never the less, even small people can position themselves favorably in what looks to be an *inflationary disaster economy. You got any better ideas?.

A few kilos of gold would be great yes (but out of my price range) but Silver will never be confiscated will it?, and i hear that Silver has a long way to go to catch up with its relative value in Gold kilo for kilo.

Im worried about all this QE and the disapointing results of it in the US and UK, Inflation seems inevitable when QE is a failure.

Any thaughts.... pointers....?

Good luck with your silver but I suspect that you'll have to be patient to see a good return. My understanding is that silver is primarily an industrial metal and won't really take off until industrial demand rises above production levels - that could be many years away judging by current conditions. Gold, on the other hand, is money and will react immediately to devaluation of the dollar or pound or possibly just a loss of confidence in government.

I'm sure you're right about silver not being confiscated but I doubt that gold physically possessed will be either.

Regarding QE, you are entering the great deflation vs inflation debate. Best not to go there! I suspect that a dollar crisis will be more important in the forseeable future.

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Private wealth confiscation - I've been trying to find out info on this but can't seem to find anything clear cut. Can someone kind please explain this? (Pretend I'm a 5yr old kid here).

Ps. I realise this could be a noob question.

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Private wealth confiscation - I've been trying to find out info on this but can't seem to find anything clear cut. Can someone kind please explain this? (Pretend I'm a 5yr old kid here).

Ps. I realise this could be a noob question.

Good Evening Dr. Dick, I'm from the Government. According to your records you have gold and silver, which according to regulation 17b section 9 has to be turned in to the authorities. Now would you mind handing it over. I dont need to remind you of the penalties for evasion do I?...

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Good Evening Dr. Dick, I'm from the Government. According to your records you have gold and silver, which according to regulation 17b section 9 has to be turned in to the authorities. Now would you mind handing it over. I dont need to remind you of the penalties for evasion do I?...

My goodness me, is that your brains all over my cricket bat? I thought you were a burglar. Oh and to answer your question, I was moving my uninsured metal and it was stolen. I couldn't claim against my house policy, so you needn't ask them. And I was too embarrassed to report it to the police...

Also...

http://www.housepricecrash.co.uk/forum/ind...92200&st=15

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Lol, thanks.

Just reading the whole thread you posted, are there ways of beating the 15% VAT charged on say, 3kgs of silver? (legal or shady). Eg. Can you buy them on the continent minus VAT and just bring them back with you hoping they don't realise?

Edited by Doctor Dick

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There is another reason against gold theft, too.

Politicians are probably the most self-serving bunch on the face of the earth. They, too, have families and wealth to protect. It is at least fairly likely that they will not pass any laws that restrict themselves from owning gold. If not, then France beckons. The French and Germans know, all too well, that the possession of gold is an essential method of survival in a hyperinflationary situation.

And silver may well be too much of an industrial metal to prevent people from owning it, although I am sure the "licencing" route may be tempting. So we can at least own jewellery in silver and gold.

Then there's palladium and platinum, if the next few governments are as mendacious as the current one. They can't prevent people owning every precious metal, and therefore a market will spring up in a different metal if one is "forbidden".

Or we'll just do what the French do, and ignore the more stupid government edicts.

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Lol, thanks.

Just reading the whole thread you posted, are there ways of beating the 15% VAT charged on say, 3kgs of silver? (legal or shady). Eg. Can you buy them on the continent minus VAT and just bring them back with you hoping you don't realise?

The simplest legitimate way of avoiding VAT is to store the physical metal in bonded storage, of which the safest may be Guernsey at the Guernsey Mint. While it is there, it does not attract VAT. It can be sold again, in Guernsey, and VAT is irrelevant.

Smuggling is not a good idea, especially as most of the VAT element will be recouped on sale to the private market. What I mean by this, is that if you sell to a private buyer, he/she has a choice of buying yours (VAT free, secondhand) or new (VAT chargeable, new). As two bars, one new and one secondhand look exactly the same and are identical for all purposes, it really is unlikely that you will sell it any less than the market price - the price of the new bar inclusive of VAT.

All you have to do is sell it on eBay or similar to a private buyer, who cannot avoid the VAT on the new bars. The only difficulty the private seller has with VAT is that a dealer will use this as an excuse to push the price down if you sell to them. So don't.

My earliest gold coin purchases are already way ahead of the 15% required to nullify the VAT, if it had been charged. The same will apply to silver, even though the price suppression of silver is far worse than that of gold. When this ends, the VAT differential will be insignificant.

Provided the rate of increase is sufficient to make it a better investment / wealth preserver than holding shares in a SHTF scenario, then we are in the money. VAT should not be charged on investment silver (investment gold is already VAT-exempt) but this only factors in a delay, not dissimilar to the delay in overcoming the premium or buy/sell spread on any other investment.

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Private wealth confiscation - I've been trying to find out info on this but can't seem to find anything clear cut. Can someone kind please explain this? (Pretend I'm a 5yr old kid here).

Ps. I realise this could be a noob question.

Wealth confiscation is being openly discussed now but it is much easier to confiscate money in the bank than go around and search peoples houses. Some European countries already have a wealth tax so it seems almost a certainty here.

The so-called "care home tax" recently proposed is actually just a straight forward wealth confiscation. It wont pay for the accommodation portion of the care home so many elderly homeowners will still have to sell their homes to pay this and, in fact, some home owners will have to sell their homes to pay the suggested £20k tax even if they never need long term care.

It will only be levied on people with assets that can be targeted and is one reason to move to physical gold IMHO because, with a bit of care its could be difficult to trace and expensive for the authorities to target. Someone with a pension, house or savings in the bank will be a much softer target.

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I just searched for silver prices and found this;

silver_all_data_o_usd.png

over 34 years

I've heard of a gold rush (followed by silver) in the 70s but will this happen again? I see there wasn't much activity in the silver market in the last big house price crash of the late eighties.

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I just searched for silver prices and found this;

silver_all_data_o_usd.png

over 34 years

I've heard of a gold rush (followed by silver) in the 70s but will this happen again? I see there wasn't much activity in the silver market in the last big house price crash of the late eighties.

Chinese seem to like silver:

http://www.cctv.com/program/bizchina/20090723/101308.shtml

Check out Ted Butler`s latest post on why he believes silver isa much better play than gold right now:

http://news.silverseek.com/TedButler/1248708118.php

Edited by redprince

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The so-called "care home tax" recently proposed is actually just a straight forward wealth confiscation. It wont pay for the accommodation portion of the care home so many elderly homeowners will still have to sell their homes to pay this and, in fact, some home owners will have to sell their homes to pay the suggested £20k tax even if they never need long term care.

Someone going into care has no further need of money, they will stay there until they die and the money will go to the children. Thus we are not depriving them of the money, it is those that would receive the inheritance that are being deprived.

There is little justice in one man receiving an inheritance whilst another does not, simply because of who their parents were. Yet the tax payer is being asked to pay for that inheritance. It is the tax payer that would pay for the care so that the inheritor receives his inheritance. Yet I can see no reason that a man who will not receive an inheritance should pay extra tax to ensure another receives this gift. This would simply be a transfer of wealth from poor families to wealthy families in order to keep them rich.

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Someone going into care has no further need of money, they will stay there until they die and the money will go to the children. Thus we are not depriving them of the money, it is those that would receive the inheritance that are being deprived.

There is little justice in one man receiving an inheritance whilst another does not, simply because of who their parents were. Yet the tax payer is being asked to pay for that inheritance. It is the tax payer that would pay for the care so that the inheritor receives his inheritance. Yet I can see no reason that a man who will not receive an inheritance should pay extra tax to ensure another receives this gift. This would simply be a transfer of wealth from poor families to wealthy families in order to keep them rich.

But if your poor (never work, on dole etc.) then you pay no tax what so ever, so we (tax payers) have to look after you in young age / middle age & old age.

Lets get rid of welfare state, that will mix things up a little. Or have it points based depending on how much we put in to the system. Pay tax get care home, go on dole for whole life.... live on street.

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But if your poor (never work, on dole etc.) then you pay no tax what so ever, so we (tax payers) have to look after you in young age / middle age & old age.

Lets get rid of welfare state, that will mix things up a little. Or have it points based depending on how much we put in to the system. Pay tax get care home, go on dole for whole life.... live on street.

Or just abolish inheritance by imposing 100% inheritance tax. That would prevent these problems since the elderly would know they are going to lose it when they die and the inheritor would know it too. The funds raised from the sale of all those houses would allow us to cut out income tax. We would have a truly meritocratic system where everyone starts equally with nothing and to nothing they return instead of seeking to rig the game in favour of their own offspring.

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Or just abolish inheritance by imposing 100% inheritance tax. That would prevent these problems since the elderly would know they are going to lose it when they die and the inheritor would know it too. The funds raised from the sale of all those houses would allow us to cut out income tax. We would have a truly meritocratic system where everyone starts equally with nothing and to nothing they return instead of seeking to rig the game in favour of their own offspring.

The only problem with this is people will stop striving to some extent. If I knew I would have to give all mine away then I can assure you that there would be nothing left to inherit.

My suggestion was mostly tongue in cheek BTW, but I personally think the system is too much in favour of / allows people to financially add nothing to society, but still take out all the time.

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Or just abolish inheritance by imposing 100% inheritance tax. That would prevent these problems since the elderly would know they are going to lose it when they die and the inheritor would know it too. The funds raised from the sale of all those houses would allow us to cut out income tax. We would have a truly meritocratic system where everyone starts equally with nothing and to nothing they return instead of seeking to rig the game in favour of their own offspring.

Don't agree with you at all on this one! If you've worked all your life and paid all the taxes under the sun, then it is up to you what you do with the things you have EARNED!

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Or just abolish inheritance by imposing 100% inheritance tax. That would prevent these problems since the elderly would know they are going to lose it when they die and the inheritor would know it too. The funds raised from the sale of all those houses would allow us to cut out income tax. We would have a truly meritocratic system where everyone starts equally with nothing and to nothing they return instead of seeking to rig the game in favour of their own offspring.

That's pretty progressive - if you'd posted that on the main HPC page, you would have been hung drawn and quartered within minutes. FWIW I agree and cannot see a good philosophical argument against 100% IHT.

Don't agree with you at all on this one! If you've worked all your life and paid all the taxes under the sun, then it is up to you what you do with the things you have EARNED!

The trouble is you only focus on the scenario that most fits your case. A staggering % of inherited wealth did not come from the 'hard workers' of the past generation. It came from generations of landowners whose 'hard work' actually traces back to some sort of theft or act of colonialisation hundreds of years ago. The vast majority of people would be better off by a very high IHT with the proceeds being recycled back into public services.

Re: silver, I've been thinking of jumping on the ETF (PHAG eg) bandwagon if silver pulls back to 12.50 an ounce or so. But that graph scares the hell out of me. Someone putting in 20k in silver in 1976 would only have 55k or so in their pocket now. That's a pretty crap return, much worse than gold, houses, inflation or am I missing something?

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I just searched for silver prices and found this;

silver_all_data_o_usd.png

over 34 years

I've heard of a gold rush (followed by silver) in the 70s but will this happen again? I see there wasn't much activity in the silver market in the last big house price crash of the late eighties.

Just as we have been discussing a hpc for years and everyone else was saying it could never happen, so the silverbugs (count me as one) have been saying that "one day" the silver manipulation will end. When this happens, there will be a substantial uptick in the price of silver.

I expect this to occur in the near future (although what "near future" means is also open to huge argument) as three things have happened since Ted Butler and Jason Hommel first started posing this question.

1. The above ground stockpiles have vanished (been sold). There is no more than the fruits of mining endeavour now.

2. Recycling will become a more important source of supply, just as you currently see adverts for gold parties on TV. However, this will not be enough, particularly as a very significant proportion of silver use is in plating (electrical contacts, computers, cameras, cheap-end jewellery etc) and this is effectively unrecoverable. The other barrier to recycling is that most solid silverware has some sentimental or historic value, so it is unlikely to be for sale at any price, even the price of platinum in its' heyday.

3. Industrial users MUST have the metal for their business; if the price goes up to 2000 dollars and ounce (again see platinum) then so be it, the end-consumer will simply have to pay. Most industrial uses of silver have no effective substitute.

Read the results from Mr Google for more info, but the coming silver "accident" will make silver investors very happy indeed. Until then, if the manipulators push the price down, I will still be there, waiting in the queue to buy a little more. A few coins a month, a present or two here and there to encourage others along the paths of righteousness...

Sorry, the wife has just tipped me off my soapbox. I'll stop there for a while.

Edited by Old Nis

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I am not sure what I am looking at with the chart. The spike to $50 was the Hunt Bros attempt to corner the market so we know what caused that.

1. The above ground stockpiles have vanished (been sold). There is no more than the fruits of mining endeavour now.

It has never been hoarded the way gold has. The same argument could be made for iron though, it is not stock piled and mine production matches demand. The unique thing about silver is that is rarely mined, coming as a by-product of base metal extraction. Therefore silver supply, and hence price pressure, should be evaluated by seeing if copper and zinc mines are closing. Should the price rise, people may open dedicated silver mines. Of course silver prices are not dependant on supply and demand from mines and industry. Much of the silver price comes from shadowing gold in its investment role.

3. Industrial users MUST have the metal for their business; if the price goes up to 2000 dollars and ounce (again see platinum) then so be it, the end-consumer will simply have to pay. Most industrial uses of silver have no effective substitute

Yes they will pay, most devices use small quantities of PM and it does not have a significant effect on the end price of the product.

The only way silver, or anything else, can rise is price is if more demand is created or supply fails. I cannot see how supply is going to fail in a sudden spike, nor can I see industry suddenly demanding lots more. Thus the only off take that could raise the price is investor demand. If you see that happening due to economic conditions it will effect other PM too. As the silver price rises it will cease to be attractive. This is what currently happens, if gold is looking expensive people buy silver, should silver look expensive they will switch to gold. The correlation in price movements between the metals is convincing. This suggests it is investor demand that dominates the price and not industry.

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That's pretty progressive - if you'd posted that on the main HPC page, you would have been hung drawn and quartered within minutes. FWIW I agree and cannot see a good philosophical argument against 100% IHT.

The trouble is you only focus on the scenario that most fits your case. A staggering % of inherited wealth did not come from the 'hard workers' of the past generation. It came from generations of landowners whose 'hard work' actually traces back to some sort of theft or act of colonialisation hundreds of years ago. The vast majority of people would be better off by a very high IHT with the proceeds being recycled back into public services.

Re: silver, I've been thinking of jumping on the ETF (PHAG eg) bandwagon if silver pulls back to 12.50 an ounce or so. But that graph scares the hell out of me. Someone putting in 20k in silver in 1976 would only have 55k or so in their pocket now. That's a pretty crap return, much worse than gold, houses, inflation or am I missing something?

Whats in the past is in the past, why should the hardworking generation like my mother and father and me and my partner have to suffer due to theft and acts of colonisation conduted hundres of years ago as you say!

I've paid tax through my wages, council tax, stamp duty, etc etc and will continue to do so for the public purse, yet you want me to just give up all the things that i've worked my buttocks off to the state!!!

May I add, do you honestly think that all this extra money recieved from this 100% inhertiance tax you would like to introduce would actually go to help us public folk, or to the money grabbing MP'S/landowners who think they know how to spend our money better then we DO!!!!

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