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Is Silver A Good Hedge Against Inflation

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Personally, if I were thinking the same as you, I would consider investing in a silver mining company rather than the metal itself. You could find a company that could experience higher growth rates than the metal itself as the silver price increases, and skip the VAT. Riskier but you only live once B)

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is silver a good hedge against inflation even with the vat on original purchase

If you don't mind a gamble, you could try buying a bit of silver. Here's a recent bit of metal ramping (click on the MP3 to the left):

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/11/27_John_Embry.html

When I say 'gamble' I really mean it.

Fawkandles's idea also seems reasonable if you know how to pick equities and you are up for a bit of risk.

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Although it is impossible to be certain, I would edge quite a long way towards the "Yes" side of the argument, even with the VAT issue. Although the VAT percentage is outrageous (and is designed to be passed to the EU, but that's another thread), Silver in a high-inflation environment should do well.

Industrial users tend to use tiny amounts of silver in each product, giving an industrial consumption base that is price-inelastic, i.e., the users don't care what the price is, as long as they can secure supplies. The investment input should (and has) risen on any suspicion that inflation is destroying the value of the currency. Both make a bullish case for investment in silver.

Although one cannot extrapolate the past into the future, my own silver has left the loss due to VAT far behind, the product has made a handsome return. It would have been a damn sight faster without the VAT, though. The main reason VAT is levied, is that gold is bought by the French and German and Austrian PTB to protect their own wealth, and has very little industrial purpose. Politicians always protect their own nests first, which is why the VAT vanished from investment gold. Silver is far more industrial, so they couldn't wait to get their fat little hands on the VAT. Same for Palladium and Platinum.

+1 to the purchase of mining stocks, though. You can also nip over to Guernsey and ask them to hold your silver VAT-free, and there is of course Goldmoney and Bullionvault, who will do the same, but you can't get the physical in your hands as easily with them.

One more piece of evidence. 12 troy ounces of sterling (92.5%) silver (one pound sterling) used to be the definition of a pound Sterling. 12 troy ounces will now cost you, very roughly, £204 (not including VAT). I haven't worked out if this actually has kept pace with inflation, but it clearly would have helped defray the results of the debasement of the currency.

[Edited due to a stupid error or wishful thinking about the size of a Troy LB.]

Edited by Old Nis

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One more piece of evidence. 14 troy ounces of sterling (92.5%) silver (one pound sterling) used to be the definition of a pound Sterling. 14 troy ounces will now cost you, very roughly, £238 (not including VAT). I haven't worked out if this actually has kept pace with inflation, but it clearly would have helped defray the results of the debasement of the currency.

12 Toz to a Toz pound .

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Just went through some of my boxes and found the 1981 Royal wedding collection of coins .

I have the original invoices .

As an example of inflation protection the original purchase price from Spink 0n 23.09.81 was £25.00 plus £3.75 vat (at 15%) total £28.75 .

I paid £7.94 each (16 in set) in early 2008 .

Edit to add:

Per the inflation calculator at My link they should have cost me £90.85 each to keep up with inflation .

Edited by Dead Spider

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12 Toz to a Toz pound .

Yes of course it is. Sorry, my error. I will correct my posting and leave this one announcing my sins as a penance. Thank you for spotting it, I wish I could have said it was anything other than a stupid mistake. I bought a Troy LB coin recently, which makes my absent-mindedness even worse.

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Just went through some of my boxes and found the 1981 Royal wedding collection of coins .

I have the original invoices .

As an example of inflation protection the original purchase price from Spink 0n 23.09.81 was £25.00 plus £3.75 vat (at 15%) total £28.75 .

I paid £7.94 each (16 in set) in early 2008 .

Edit to add:

Per the inflation calculator at My link they should have cost me £90.85 each to keep up with inflation .

Just got hold of another price for a 33.3g sterling medal (part of a 36 medal collection) originally sold new in Oct 1973 for £5.00 but bought in early 2008 for £8.50 .

So , according to the inflation calculator :

£5 in 1973 would be worth £48.55 in 2008 yet was sold for £8.50 .

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Just got hold of another price for a 33.3g sterling medal (part of a 36 medal collection) originally sold new in Oct 1973 for £5.00 but bought in early 2008 for £8.50 .

So , according to the inflation calculator :

£5 in 1973 would be worth £48.55 in 2008 yet was sold for £8.50 .

As David Morgan says, you can either get angry about the price manipulation or look at it as a marvellous buying opportunity. One day, the manipulation will end and the price will rebound all the higher. I am seeing a few small signs of the PTB being unable to bash the silver market down quite as easily as they have done in the past.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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