Jump to content
  • The above Banner is a Sponsored Banner.

    Upgrade to Premium Membership to remove this Banner & All Google Ads. For full list of Premium Member benefits Click HERE.

  • Join The Silver Forum

    The Silver Forum is one of the largest and best loved silver and gold precious metals forums in the world, established since 2014. Join today for FREE! Browse the sponsor's topics (hidden to guests) for special deals and offers, check out the bargains in the members trade section and join in with our community reacting and commenting on topic posts. If you have any questions whatsoever about precious metals collecting and investing please join and start a topic and we will be here to help with our knowledge :) happy stacking/collecting. 21,000+ forum members and 1 million+ forum posts. For the latest up to date stats please see the stats in the right sidebar when browsing from desktop. Sign up for FREE to view the forum with reduced ads. 

Why are people stacking Silver over Gold when there is a VAT on silver?


Recommended Posts

  

3 hours ago, Bimetallic said:

...

But there's no point stacking in the UK since you lot aren't willing to get your VAT on investment precious metals abolished. A 20% hit is too large to reliably overcome for the typical investor. Silver doesn't move around enough to eat a 20% loss upfront – you'd have to be a genius with exclusive access to extraordinary data to be able to time silver purchases well enough to reliably profit in the end. You'd need hedge fund resources, drones flying over silver mines, hacks into mining companies and bank traders' computers, etc. Otherwise you'll very likely lose money on silver, given the VAT.

...

Taking @Bimetallic's comment, I want to look into the subconsciousness of the silver stacking community...

The UK, Germany, and most of Europe raise a 20+/-% VAT on silver, but not on gold.

So why are we not more aware of VAT? Should the silver section of this largely European forum come with a disclaimer? Should we be on The Gold Forum ?

Why is there even a private silver market in the UK (or Germany - my insight - for that matter)?

Are people stacking silver because of a large American presence in Youtube silver stacking? Are we a herd of sheep in our own way that way?

Or would we think that everyone stacking silver is a Maloney follower and is stacking for the large breakout when the gold:silver ratio shoots up to 15:1?

 

I began stacking silver in 2010/2011 because seemingly everyone stacked silver. Also the expressed silver community seemed somehow friendlier than the expressed gold community - the lower entry cost had more small everyday stackers with more comparable achievements to me as a Mr. Small investor. In Germany, VAT looked negligible with the lower VAT of 7% on silver (I bought bars at 19% though). Wanting to own a multitude of 'hot' collectibles  (Lunars, Pandas) was more affordable in silver. I decided on a ratio of 1 ounce of gold to one kilogram of silver back then.

Fast forward to 2020/2021 I'm tending more to gold, with an occasional tube of silver thrown in. While that largely has to do with a better financial background on my side, I am feeling that the combined weight of VAT plus premiums on silver is brutal (all silver is on the higher VAT of 19% in Germany these days). And the more I'm thinking, the more I the facts are being hit over head the more silver is becoming a no no for me. I'm still thinking about buying silver collectibles - I'm feeling it's less of a gamble in silver, and that feeling is correct on the total worth aspect, but wrong on the relative return aspect.

 

So, what are we doing here? Are you stacking silver under VAT? Have your silver stacking habits changed?

Link to comment
Share on other sites

Hi @KevinFlynn

I think quite a number of people have ramped down their silver purchases post Brexit and with the reduction in silver price.

Essentially, buying silver with 20% VAT in the UK means you will be 'underwater' for some time.

Gold has always been my primary area or purchase - simply because there is no VAT on Gold in the UK and the premiums on Sovereigns are reasonable. Sorry to hear that people in the Gold community were not as friendly as silver people - I have been lucky enough not to encounter that myself.

In terms of what I would purchase now (other than gold) it is pretty much limited to Morgan Dollars in MS / UNC grade and even then just the odd one or two.

Best

Dicker

Not my circus, not my monkeys

Link to comment
Share on other sites

I want to paraphrase something Maloney said in one of his videos on the History of Money. He asked a room full of children which was the odd one out - when shown a picture of US dollars, Monopoly money and a $20 gold coin. They said something along the lines of 'the gold is money because its valuable, the others are just paper'.

Young children are less conversant in the doublethink of modern society and less articulate with repeating semi-truths or even non truths. There is no filter, they just say it as they see it, with little recourse to how their friends/society might always view them.

Now whilst I don't claim to be a Maloney follower in the sense that gold/silver are going to the moon, the anecdote resonated with me.

I've always loved history, and I first became interested in coins as a young child. I blame my gran who was frugal and taught me to save for a rainy day. So yeah I developed a love of money both current and historic. My dad had previously collected coins, mostly farthings, but had some 1887 silver coins too. He gave them me, c.1989/1990. Well that was it, I took a keen interest.

Even as a young kid though I quickly took a shine to gold and silver. He asked me if I want to collect copper/bronze coins and was met with a flat refusal.

In my head the distinction was clear, there's good - quality money, and there's base metal junk. I even looked down my nose at 50% silver as if it was some kind of con trick.

I don't know where this sense or attitude came from but it felt natural, that gold and silver were inherently precious (maybe I'd watched too many Indiana Jones/Goonies type films).

So why do I collect silver? Simply because I always have. I believe silver to be pretty, intrinsically valuable and historically interesting and I like the way it feels.

So why not gold? I can't afford it, is the simple answer. I could (and did) when it was sub $350 an oz. But I sold off what I'd bought in around 2009/2010 just before the peak of the market, made a nice profit too. I haven't bought any since as it's out of my price range.

As for VAT... Buy eight, tenth or twenty-sixth hand silver.

All my silver is over 50 years old.

Link to comment
Share on other sites

I bought a lot of silver from Germany when coins were rated at 7% VAT before rising to 19%.
Then I switched all my purchases to GS.be and some other German dealers that were operating the very low "differential VAT" scheme.
Also I started buying some silver and platinum from Estonia - The European Mint - who were totally VAT free.

You are very fortunate that you still can buy from these two suppliers and avoid the penalties of full VAT.

Link to comment
Share on other sites

So why are we not more aware of VAT? Should the silver section of this largely European forum come with a disclaimer? Should we be on The Gold Forum ?

Depends on how you see your end game, much the same as gold, to sell on the second hand market all that is needed is to undercut the dealers by a percentage. Let's face it VAT isn't going away. 

 

Why is there even a private silver market in the UK (or Germany - my insight - for that matter)? 

Germany is where I purchased my first coins. It seems to be more of a thing there as you can buy it in the banks, and numerous bullion shops, I worked in Germany for a number of years and all my left over expenses went on silver. Here in the UK it's not big at all. If I asked everyone in my town who owns bullion, I think I probably would be the only one.

 

Are people stacking silver because of a large American presence in Youtube silver stacking? Are we a herd of sheep in our own way that way?

beginners yes, to be honest it does make sense when you listen to them but to be able to filter the b/s is a art not many people hold. I think they call it the cocktail party effect, when somebody homes in in one piece of information and blocks out the rest, there are a few on the forum guilty of that one.

Or would we think that everyone stacking silver is a Maloney follower and is stacking for the large breakout when the gold:silver ratio shoots up to 15:1?

I was over my mother's a little while ago sorting out her loft, I found a newspaper from the day I was born. There was a big double page advertising this exact sales technique. This idea has been pushed by the dealers for years and in my opinion when it was 15:1 for years it was the only evidence it was manipulated. 

Link to comment
Share on other sites

5 hours ago, SidS said:

I want to paraphrase something Maloney said in one of his videos on the History of Money. He asked a room full of children which was the odd one out - when shown a picture of US dollars, Monopoly money and a $20 gold coin. They said something along the lines of 'the gold is money because its valuable, the others are just paper'.

mike maloney should have done the same experiment pre 1971(1968) with fully gold backed US dollars.

my guess is the outcome would be the same. physical appearance is all that mattered to the children.

two pieces of paper versus a shiny thing. the fact that pre 1971, one of those pieces of paper is equal to

a shiny thing is beyond the children's comprehension. kids do funny things for seemingly random reasons.

 

@KevinFlynn imo you are asking all the wrong questions.

1. if stacking is the process of converting currency into metals then what is your purpose for stacking?

(answering this leads to what quantity to stack? and which metal ratio is best for that purpose?)

 

changing vat figures doesn't change the purpose of why people stack. it does however change the

figures and ratios that would best fit their purpose for stacking. many of your questions is about the

perception of stacking and other peoples opinion(including those such as mike maloney who have

much to gain from encouraging more buying of metals/silver). few on the forum actually do the maths

for their risk to reward ratio of what they are stacking. using historic averages/probabilities and doing

the maths using your personal figures will tell you what ratio is likely best.

 

my current ratio is weighted towards gold because the maths says it's likely favourable to do so.

updating the likely return on investment is always handy when the figures change.

 

HH

Edited by HawkHybrid
Link to comment
Share on other sites

Beats me why anyone would stack silver with no VAT loophole any more. I've moved more to gold which is a pity as the GSR would still be a really good silver buy right now. But yeah... VAT. The only possible factor to make me want to swallow the VAT (and it doesn't) is that you effectively sell the 20% back to the buyer when the time comes. Look at all silver being sold either here or eBay, the 20% is clearly added to the price, whether that's the VAT or not.

 

But it's time I paid more love to gold now anyway, this VAT has just nudged me in the right direction finally.

Edited by bluemoon
Link to comment
Share on other sites

I buy silver on a whim - i have no strategy other than owning it. I can't afford to buy gold in the same way.

Now tax-free silver is virtually unavailable to UK buyers then spot + 20% should really be the base price for silver.  If the time comes to sell my silver it will be advertised at a few percent under whatever the market value is at that time (the spot price will be irrelevant) if i want a quick sale.

I also remember when i could buy sovereigns from the mint at £60 each, to me that was not so long ago. Similarly i remember when silver was selling for over £35 an ounce everywhere. I have not yet managed to reconcile my gut feelings for the value of gold and silver with todays reality.

Link to comment
Share on other sites

IMO: People stack silver due to the pumpers telling them they can become rich. I find on the forum people start stacking silver and after some time realise their losses and change to stacking gold.

I think normal people thinking silver can go to $100 or whatever the made up number is gives them a bit of hope. However, none of these people offer sound financial advice and when people lose the pumpers are not held accountable. 

Any investment that you start in the hole at -20% and then even further minus due to premium should be a red flag for most. 

Link to comment
Share on other sites

i am in Spain - i have not bought from GS.be or elsewhere on the Continent whilst i have been in Spain - i see GS.be advertising Britannias at 22.67€ (£19.41)- technically they should add VAT on since 1st July 2021 but go to checkout it says 0.00€ tax. i very much doubt any tax would be levied by Spanish customs if i ordered, not for a package coming from the EU. If i were buying a good lot, i could take a trip to GS.be and just pick it up.

i still buy silver but in England and have it stored in England. i am addicted and so i still buy silver and will keep buying silver. I get nearly all of it off the Silver Forum. No-one is charging VAT here - so there is no VAT. They are charging a price that i could turn the silver round at and sell again on TSF. So what is the issue?

People pay a price on TSF. Unless they have overpaid or the silver price dropped hard they could sell it again at that price. It doesn't matter if there is VAT in the price or not if you can sell it at that price. People talk as if they buy all their silver from dealers and then sell it back to dealers at under spot and so lose all the VAT and premium they paid. Who is doing that? Please step forwards and then explain why you are doing that. i accept if you are in a mad hurry to sell then you can get a quick turnaround but otherwise i don't understand all this talk about VAT. There is no reason to be 'underwater', unless you are Marine Boy.

Very recently i have bought a lot of silver. i buy it on Kinesis. i don't pay VAT - there is no VAT. i can sell the silver - i can sell it for crypto, EUR USD, GBP and KAU (gold). i even get a yield on the silver i hold and the first yield should be paid out next week.

i believe silver will appreciate a lot - a hell of a lot in the coming years - but i am probably well known for that belief. i can get more silver for my money with Kinesis. It is about £16.70 on the Exchange, although i always buy in USD.

For me i could buy like the pre-Brexit times from GS.be, i do buy at good prices on TSF and i also buy at trade prices on the Kinesis Exchange.
i keep buying silver - Silver will go to the Moon. It is not a matter of if, it is simply a matter of when.

Edited by sixgun

Always cast your vote - Spoil your ballot slip. Put 'Spoilt Ballot - I do not consent.' These votes are counted. If you do not do this you are consenting to the tyranny. None of them are fit for purpose. 
A tyranny relies on propaganda and force. Once the propaganda fails all that's left is force.

COVID-19 is a cover story for the collapsing economy. Green Energy isn't Green and it isn't Renewable.

Link to comment
Share on other sites

2 hours ago, sixgun said:

People talk as if they buy all their silver from dealers and then sell it back to dealers at under spot and so lose all the VAT and premium they paid. Who is doing that? Please step forwards and then explain why you are doing that.

Exactly this.

All the negativity around VAT is on the assumption that you will sell at spot price rather than market value. It's nonsense.

 

Link to comment
Share on other sites

To be fair to the silver boys, silver has/could've been a good investment. The problem was me.

When I first started buying silver (2014-2015) it was cheap compared to today, in fact just like gold I could've doubled my investment. Maples, Phillies and Brits were £12-15 and the Perth stuff was a little more.

Had I kept them, I could've realised £24 on the former and £30 on the latter without too much trouble (actually my kooks and koalas sold for this, my lunars for a bit more). As it happens, most of my silver stack sold on here a few years ago, the special year brits and pandas and libs sold easily.

I did well on my beasts too, picking them up for under £30 at times, perhaps £40 as an average?

Wait...my silver stacking has been a good investment! *

(just my gold has been better 😊)

 

*coins, not bars. They suck.

Technically, alcohol is a solution..

'It [socialism] poses a growing threat, however unintentional, to the freedom of this country, for there is no freedom where the State totally controls the economy. Personal freedom and economic freedom are indivisible. You can’t have one without the other. You can’t lose one without losing the other.'

"There is no such thing as public money, there is only taxpayers' money"

Let not England forget her precedence of teaching nations how to live.

Link to comment
Share on other sites

Yes tax on silver, as on the average working man. As silver being the main metal of the commoner in exchange for goods and services, as opposed to gold as sovereigns. Just realize the "tax paid"  is always inherent in it's value when held in the hand.

Link to comment
Share on other sites

6 hours ago, FlorinCollector said:

IMO: People stack silver due to the pumpers telling them they can become rich. I find on the forum people start stacking silver and after some time realise their losses and change to stacking gold.

I think normal people thinking silver can go to $100 or whatever the made up number is gives them a bit of hope. However, none of these people offer sound financial advice and when people lose the pumpers are not held accountable. 

Any investment that you start in the hole at -20% and then even further minus due to premium should be a red flag for most. 

Again - what's with the -20% hole?
i am scouring my memory cells for when i paid VAT on silver. i remember once i got stung by customs for a medallion from China except the people at customs didn't know its worth and pitched the VAT at a fraction of what it should have been.
If you buy at a price you could turn around and sell at there is no hole to dig yourself out of. 
For years we had VAT free silver. Members who have been around for more than a year should have filled their boots. i know i did when the buy price was in the low teens. 
When we have the forum to sell on, why go running to a dealer and get fleeced like an amateur who knows no better.

In any case i never sold an ounce that was my own so what do i care. 

Always cast your vote - Spoil your ballot slip. Put 'Spoilt Ballot - I do not consent.' These votes are counted. If you do not do this you are consenting to the tyranny. None of them are fit for purpose. 
A tyranny relies on propaganda and force. Once the propaganda fails all that's left is force.

COVID-19 is a cover story for the collapsing economy. Green Energy isn't Green and it isn't Renewable.

Link to comment
Share on other sites

It looks like the 20% hole can be avoided, but only if you buy from individuals or used or something. The Brit comments about dealers might have revealed a different premise on my part. In the US the best prices and selection are at online dealers, especially SD Bullion and Silver.com / JM Bullion. They're much cheaper than local shops, and shipping is usually free. It's probably the size of the US market, and the cheap shipping options. (You can't get the same efficient shipping in Mexico, for example – their postal service is even worse than ours, and everything else will be expensive.)

Most states don't tax bullion, and it can be avoided by shipping elsewhere. So it's close to a free market.

But I think the bigger issue in the UK is that stackers will die out – there won't be any replenishment from younger generations. This means the market will shrink over time, and that will make it harder to do anything with silver. This is an issue in the US too, but less so because of the market size and lack of VAT.

It looks like stacking sort of picked up steam around the 1980s when various national mints returned to making bullion. For decades there was virtually nothing produced, say since WWII. In the 1970s it was just Krugs, and I think some erratic Sovereign production. Then Canada, the US, and others got into it, Mexico ramped up its production, etc. There's been lots of stacking since then, especially compared to the 1940s - 1980s period. But now it's clear that young people don't know or care about bullion. The example from that crackpot Maloney with the kids just reminded me that young people are not getting into bullion. His experiment is simply an artifact of choosing very young children – try it with teens and see what happens...

This implies that the future of silver is industrial, which might inform one's strategies.

Link to comment
Share on other sites

Also the 2 most undervalued commodities right now are silver and uranium. The latter would be very difficult physically stack unless you want to be like the glowing ready break kid!

Edited by HerefordBullyun

Central bankers are politicians disguised as economists or bankers. They’re either incompetent or liars. So, either way, you’re never going to get a valid answer.” - Peter Schiff

Sound money is not a guarantee of a free society, but a free society is impossible without sound money. We are currently a society enslaved by debt.
 
If you are a new member and want to know why we stack PMs look at this link https://www.thesilverforum.com/topic/56131-videos-of-significance/#comment-381454
 
Link to comment
Share on other sites

Image

Always cast your vote - Spoil your ballot slip. Put 'Spoilt Ballot - I do not consent.' These votes are counted. If you do not do this you are consenting to the tyranny. None of them are fit for purpose. 
A tyranny relies on propaganda and force. Once the propaganda fails all that's left is force.

COVID-19 is a cover story for the collapsing economy. Green Energy isn't Green and it isn't Renewable.

Link to comment
Share on other sites

I'm not much of a silver stacker but do collect a few series. As far as investment purposes are concerned or my end game; I'm avoiding silver at all costs...here in the UK specifically.

It is incredibly difficult to get a decent return on your silver IMO. However, if you are stacking old british silver coins and old silver jewellery/ornaments then yes you will have a higher chance of getting a better return compared to purchasing brand new silver coins from any bullion firm or shop with the VAT slap on it. For a pure silver stacker enthusiast you have to shop much harder to go around the VAT trap.

Each to their own. If you like silver and you enjoy stacking it then by all means continue but I personally don't see it as a wise investment long term. A mix of both yellow and white shinies are the way to go but more yellow. 😜

Link to comment
Share on other sites

On 03/10/2021 at 10:42, HerefordBullyun said:

Also the 2 most undervalued commodities right now are silver and uranium. The latter would be very difficult physically stack unless you want to be like the glowing ready break kid!

Uranium has been performing really well past few months. Stock indicator "uuuu" energy fuels. 

Link to comment
Share on other sites

7 minutes ago, ksingh said:

Uranium has been performing really well past few months. Stock indicator "uuuu" energy fuels. 

There is already a thread on uranium
https://www.thesilverforum.com/topic/38178-uranium-talk-to-me-people/

Always cast your vote - Spoil your ballot slip. Put 'Spoilt Ballot - I do not consent.' These votes are counted. If you do not do this you are consenting to the tyranny. None of them are fit for purpose. 
A tyranny relies on propaganda and force. Once the propaganda fails all that's left is force.

COVID-19 is a cover story for the collapsing economy. Green Energy isn't Green and it isn't Renewable.

Link to comment
Share on other sites

16 minutes ago, sixgun said:

Thats in members section hes not a member ;)

Central bankers are politicians disguised as economists or bankers. They’re either incompetent or liars. So, either way, you’re never going to get a valid answer.” - Peter Schiff

Sound money is not a guarantee of a free society, but a free society is impossible without sound money. We are currently a society enslaved by debt.
 
If you are a new member and want to know why we stack PMs look at this link https://www.thesilverforum.com/topic/56131-videos-of-significance/#comment-381454
 
Link to comment
Share on other sites

23 minutes ago, HerefordBullyun said:

Thats in members section he's not a member ;)

Then he should be.

Always cast your vote - Spoil your ballot slip. Put 'Spoilt Ballot - I do not consent.' These votes are counted. If you do not do this you are consenting to the tyranny. None of them are fit for purpose. 
A tyranny relies on propaganda and force. Once the propaganda fails all that's left is force.

COVID-19 is a cover story for the collapsing economy. Green Energy isn't Green and it isn't Renewable.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Cookies & terms of service

We have placed cookies on your device to help make this website better. By continuing to use this site you consent to the use of cookies and to our Privacy Policy & Terms of Use