Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19
Where is the Top for Natural Gas? - 7th Nov 19
Why Fractional Shares Don’t Make Sense - 7th Nov 19
The Fed Is Chasing Its Own Tail; It Doesn’t Care What You Think - 7th Nov 19
China’s path from World’s Factory to World Market - 7th Nov 19
Where Is That Confounded Recession? - 7th Nov 19
FREE eBook - The Investment Strategy that could change your future - 7th Nov 19
Is There a Stock Market Breakout Ahead? - 6th Nov 19
These Indicators Aren’t Putting to an Economic Resurgence - 6th Nov 19
Understanding the Different Types of Travel Insurance - 6th Nov 19
The Biggest Gold Story Of 2020 - 6th Nov 19
Best Money Saving FREE Bonfire Night Fire Works Show Sheffield 2019 - 5th Nov 19
Is the Run on the US Dollar Due to Panic or Greed? - 5th Nov 19
Reasons Why Madrid Attracts Young Professionals - 5th Nov 19
Larger Bullish Move in USD/JPY May Just Be Getting Started - 5th Nov 19
Constructive Action in Gold & Silver Stocks - 5th Nov 19
The Boring Industry That Hands +500% Gains - 5th Nov 19
Stock Market Chartology vs Fundamentals - 4th Nov 19
The Fed’s Policy Is Like Swatting Flies with Nuclear Weapons - 4th Nov 19
Stock Market Warning: US Credit Delinquencies To Skyrocket In Q4 - 4th Nov 19
Stock Market Intermediate Topping Process Continues - 4th Nov 19
Stock Market $SPY Expanded Flat, Déjà Vu All Over Again - 4th Nov 19
How To Buy Gold For $3 An Ounce - 4th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

All Along the Silver Demonetization Watchtower

Commodities / Gold and Silver 2014 May 23, 2014 - 12:05 PM GMT

By: Dr_Jeff_Lewis

Commodities

The particularly ruthless destruction of wealth that disproportionately have an effect on the poor and elderly is a process that slowly, then all at once, destroys the middle class - which has its roots in the debasement of money. 

This is as pervasive today as it was in the days of coin clipping. 


Monetary debasement is an ongoing and fluid process, although Greshem's law allows for some filtering. Yet monetization of monetary metals is alive and well.

Of all the barriers to entry a physical silver investor must face, perhaps none is more egregious as those that have evolved in the United Kingdom silver market. 

Manipulation and suppression continues, obviously, in the West but much more subtly and pervasive in the UK, where investors would naturally choose to invest in silver for myriad reasons. Many of these reasons point to ridiculously low prices and facing a massive psychological barrier in the form of the Value Added Tax (VAT). 

While the coming end to the 117 year-old London Price Fixing is about to be formally relegated to the news recycling, the irony is not lost on UK investors who want exposure to physical silver.  

The UK Silver Triple Witching 

UK silver investors must fork over an extra 20% on top of the total retail (with premium) value when buying physical silver. 

This is after income tax. And before capital gains. 

The fact that this doesn't apply to Gold Sovereign coins that come with no VAT (and no capital gains taxes) adds further insult to injury. 

It might as well be made illegal to invest in silver in the UK. 

Of course, there are various ways around this, but these are more obstacles for an investment that begins far outside of the mainstream collective. 

The psychological effect results in the rationalization that silver must be very cheap. 

And there is an even more egregious side to this. It conjures the real absurdity with the U.S. Student Loan debacle - they are non-dischargeable. The precious metals VAT are a European-wide phenomenon and legally cannot be reversed within the UK system. What's worse is that while other EU members suffer the same VAT, the amount is unevenly distributed. For example, Germans pay more than 75% less in their version of the VAT. 

If silver was re-monetized and freed from the shackles of VAT, the ups and downs of a mostly DEBT based BANKING system would surely have FAR LESS influence on the economic situations of the people. 

A full comprehension of the silver market, from just in time industrial delivery, real physical demand (including the surge in jewelry to the decades), and severe underpricing might provoke the question: What's 20% in a market undervalued by many 100’s of percentages?

Perhaps that is easy for current investors to swallow, but not so much for the investor who wants exposure to silver or to enable the ordinary people of Europe to once again own real and physical liquid asset.

Silver has been a scarce and severely under-priced commodity for decades. Stifling investment demand would certainly benefit the big silver users’ cartel.

Again, there are ways around it, but the thought and effort required can be an additional premium for a culture used to investing with the click of a mouse. 

Could we see a similar tax structure imposed in the U.S., in addition to the capital gains and dealer 1099 reporting requirements on non-legal tender coins and bullion?

Any official tax policy now in the context of the current unprecedented world financial situation would simply ignite awareness and interest. 

Witness the rise of smuggling in India as draconian import measures were imposed. Or the surge in firearms purchases in the wake of gun control discussion. 

Demand cannot be destroyed by manipulating the price covertly. 

An overt attack would merely fuel the fire. 

The VAT boils down to one other way of going about demonetization. It reflects the shortage that was developing more than 40 years ago, the same one that U.S. President Johnson spoke of in his speech to officially demonetize silver from currency circulation on July 23rd, 1965: 

“Now, all of you know these changes are necessary for a very simple reason--silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins."

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2014 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules