Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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