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ChrisSilver Asked: Is now the time to start buying more silver? What do you think of Silver at these prices?


LawrenceChard

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In the recent post "SPOT Price Bar", Chris asked: Is now the time to start buying more silver? What do you think of Silver at these prices?, but there appeared to be no way to directly respond, and recent posts did not seem to cover it, hence a new topic. Hope that's OK.

Answer, yes, and to back that up, we just bought £1/4 million worth today.

We missed the short dip below £10 per ounce, but still think it's a bargain.

As usual, we will be paying for this immediately, even though with current and developing shipping situations, we do not know when we will get delivery.

We can't get them shipped direct from the Royal Mint, because we don't source within the UK, in fact over 90% of our new UK / Royal Mint products come from outside the UK, and believe it or not, almost always have to be physically shipped outside the UK, then back in again, because of VAT rules.

Greta Thunberg would be appalled. We think it is stupid, and very ungreen, but we do understand.

There is a work-round. Our suppliers could register for VAT in the UK, but most do not want the extra admin work, and in any case the UK is still a very small market compared with Germany, USA, and the rest of the world.

We did ask a UK dealer, who is a direct Royal Mint bullion distributor, and one of our major competitors, but they said they had no silver to trade.

On a previous occasion, some years ago now, we bought (from memory) 10,000 UK silver Britannias from a U.S. broker. These were immediately shipped direct to us from the Royal Mint. When we informed the U.S. broker we had received them, it exposed a problem. The U.S. broker could not reclaim the VAT charged on them as it had no UK VAT registration; I think they had expected the RM to wait for shipping instructions. They could not provide us with a VAT invoice for the same reason. We asked could the Mint invoice them to us, and pay a "commission" to the U.S. broker. The answer was no. We asked, including asking HMRC, if there was any way the consignment could be vrtually exported and virtually re-imported, with appropriate documentation, to avoid the stupid and unnecessary air miles. Again the answer was no. We also offered to pay the VAT direct to HMRC, and again, you will have guessed, the answer was no. Instead a carrier had to call and pick up the consignment, which we had already opened and started to use, ship it to the nearest or most convenient non-UK location, which if I remember correctly was Geneva Airport, then ship it back to us.

I naively thought that the virtual export/import idea would have been possible and beneficial, and that possibly UK membership of the EU might have helped the situation, but no.

I do not know what the best answer would be, but the current VAT rules are most certainly not the best solution.

In the current situation, with COVID-19 shutdowns starting to affect shipments, the virtual export/import idea would still be a neat, clean, solution, but it is extremely unlikely to happen.

We cannot be the only UK company to whom similar arrangements apply, and I am not just thinking about coins, but the entire range of commerce and industry.

 

 

Chards

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Very interesting behind the scenes insight

Bonkers they're happy for you to avoid VAT buying from a third party but insist on wasting carbon emissions shipping it out of the country and back

 

 

Help thread for members new to silver/gold stacking/collecting

The Money Printing Myth the Fed can't and don't money print - Deflation ahead, not inflation 

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Superb info thanks @LawrenceChard - that shows, IMHO, that it is "Lunatics " running the asylum! 

You can, no doubt see and are probably aware that TSF via @BackyardBullion have been doing similar by group bulk buying outside UK 

just to avoid the damn VAT! 

Where's the "VALUE" in shipping back and forth! ?

Gawd help us 

sorry bugs bunny GIF by Looney Tunes World of Mayhem

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12 hours ago, Melon said:

Cool, sell us some close to spot? 😄

Thanks,

We would love to sell them close to spot, but the Treasury-owned Royal Mint have a monopoly on the production of all British coins, which are the main GCT exempt ones, so they know they can charge more for them than most of the other bullon mints, and Brits will still buy them.

We do only aim to make about £1 profit on our replacement price for singles and small quantities, and less for tubes, monster boxes, and other quantity sales.

There's nothing much we can do about the VAT either, except we can offer VAT free delivery to Guernsey. We also offer secure storage in Guernsey, roughly half price compared with the Royal Mint.

Until about a week ago, we were offering palladium coins and bars from as little as 1% premium including VAT on special second-hand scheme.When palladium prices hit £2,200+, we decided to dump our remainng stocks (just over 54 troy ounces). For various reasons, we did not get then sold for 3 days, by which time palladium was under £1,900; which cost us about £18,000!, but we are happy we got out when we did. Palladium is currently about £1,290, so we saved ourselves over £32,000 compared with hanging on to it.

At its peak, a month or so ago, our palladium stock was about 110 to 120 ounces, because people kept selling to us as prices rose, although we probably sold about 2/3 to 3/4 of it before it peaked, and we hit the "sell" button.

The whole time palladium was climbing, I kept  thinking I would rather have our money in silver, platinum, or gold. Looks like my "gut instinct" was right.

Chards

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11 hours ago, 5huggy said:

Superb info thanks @LawrenceChard - that shows, IMHO, that it is "Lunatics " running the asylum! 

You can, no doubt see and are probably aware that TSF via @BackyardBullion have been doing similar by group bulk buying outside UK 

just to avoid the damn VAT! 

Where's the "VALUE" in shipping back and forth! ?

Gawd help us 

Yes, I was aware, but had forgotten.

I am happy that you are getting your silver VAT free.

I guess you all know that all started because the German government stopped the old 7% special VAT rate on silver coins, a few years ago, so they now have to pay their standard rate of 19%. The German silver market was huge. Some enterprising German dealers devised the scheme that TSF and BYB are using. 

When we learnt about it, we gave it some consideration, but were advised that it was possibly illegal, and that Customs, in Germany or any other EU country, might act retrospectively to reclaim the lost VAT from the dealers operating the scheme, or possibly individuals benefitting from it.

That left us 3 main options, operate it, reject it, or try and get expert legal and tax advice about the legality and risks. My guess is that the expert advice would have been along the lines of, "It may be legal, but...". We decided to forget about it, or at least put it to the back of our minds. We did, and still do, have other projects on the go, including the complete update of our main Chards website, and, more or less in parallel with it, our stock, invoicing, purchasing, warehousing systems. This is all still "work in progress", but we have brought them into the current millennium, instead of the previous one.

The value in shipping back and forth. Well I guess the Royal Mint, and their distributor buddies, rather like it, as it helps to give them a competitive edge, even though it is actually anti-competitive.

 

Chards

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4 minutes ago, LawrenceChard said:

When we learnt about it, we gave it some consideration, but were advised that it was possibly illegal, and that Customs, in Germany or any other EU country, might act retrospectively to reclaim the lost VAT from the dealers operating the scheme, or possibly individuals benefitting from it.

🤣🤣🤣🤣🤣

Not laughing at your good info @LawrenceChard-but what Im just about to type - !

When "THEY" come after me for it back  - "I sold it ALL to guy down the pub! - never thought to get a receipt! Doh! 🤣🤣🤣🤣

 

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9 hours ago, 5huggy said:

Bullion dealers in UK are starting to warn of DELAYS to shipping! 

So spot going down - PHYSICAL being scooped up! 👌

Even in "normal" times, there is hardly a week goes by without some kind of shipping delay, particularly with international or cross-border transactions.

We experienced a few last week, but still can't be certain whether these were "normal" delays, or COVID-19 related.

We believe that precious metal prices getting hammered at a time when intuition would expect them to rise, was probably caused by some big players, banks, hedge funds, or investors and speculators dumping them to be able to finance margin calls on shares, or simply to go extra liquid into cash.

So, the drops were counter-intuitive, but similar happened during the 2008 crises, I might ask our tame economists to dig out some data, but from memory, it was short-lived, then P.M.s went up, and mainly stayed up.

COVID is bound to create or exacerbate delays with shipping. Our team radio tells me that a few UK dealers have already stopped outgoing shipments, but I don't know why. We intend to keep shipping as long as we can stay healthy. Our working space is quite good, in that everyone can be a metre or two away from colleagues, our visitor space is quite generous, and we do not get supermarket levels of personal buyers. We also have a publicly available toilet and hand washing facility for visitors, hand sanitisers on the counters and desks. Juliana and Ian are both qualified pharmacists, Juliana was a hospital pharmacist, so we have plenty of experience and health advice about infection control. This does not mean we are "immune", just lower risk than many other businesses. Perhaps we should have sourced a batch of HazMat outfits weeks ago.

When you mention "PHYSICAL" (Is that the Olivia Newton John or the Dua Lipa version?), it could mean at least two slightly different things:

1) As opposed to "paper", or:

2) Actual personal possession.

(I am a self-proclaimed pedantic, and semantic; and proud of it).

The first, I am entirely in agreement of and support for. It is a large part of our business.

The second part is open to more debate.

Sure, for modest quantities it makes sense, providing you have somewhere reasonably secure to store it. For higher values, it is worth thinking about secure storage.

If you choose storage, it is worth thinking about how safe the storage is going to be. How secure is "secure"? Is it fully insured?

I suspect a lot of the storage now being offered is not much more secure than the Hatton Garden Safe Deposit Company, if that.

I do see and hear a lot of posts from people apparently paranoid that if they buy online, especially in advance, that they might not get their goods, or that they may be delayed. My guess is that these folk are worried that the vendors might be dodgy, insufficiently financed, go into liquidation, or disappear overnight. This is not an unreasonable cause for concern, but I reckon there is no need for paranoia (even if they are all out to get you), just take a few minutes to do some elementary checks. 

Start out by looking for the full contact details of your intended supplier. Check how easy it is to find this information on their website. If their "About" page is full of self-important bullshit and hype, but short on hard facts, give them a miss.

Anybody noticed I hardly ever give short answers?

I'm going to stop now, because I need another cup of tea, then maybe some lunch.

 

 

Chards

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4 minutes ago, LawrenceChard said:

When you mention "PHYSICAL" (Is that the Olivia Newton John or the Dua Lipa version?), it could mean at least two slightly different things:

well she was referred to as "NEUTRON BOMB"  - think thats where we are headed -in the financial world! 🤣🤣🤣

6 minutes ago, LawrenceChard said:

Anybody noticed I hardly ever give short answers?

Yes but they are well thought out and more than worthy of note - so thank you 

Oh and enjoy your tea!😉

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