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DurhamBorn

Credit deflation and the reflation cycle to come.

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30 minutes ago, Banned said:

If DB is correct itll be a short recession followed by printy printy to kick the can into the future again.

If DB is correct it'll be short recession, followed by printy printy and years and years of stagflation as they try to work out why printing doesn't work any more.

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I bought gold and silver back in 2005, still stored on bullionvault. Unfortunately, I’ve since moved to the states and discovered that when I sell it I won’t pay regular capital gains, but “collectibles” capital gains at a higher rate... :(

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3 hours ago, DurhamBorn said:

I had a tryst with a girl in the sand dunes at Redcar (met her in Boro).When i got home i was covered in a fine grey dust that took a long shower to remove.Not sure if it was from the steel works smoke or from the nuclear power station yon side of the river.Laying in those dunes with all the lights on the steel works and chemical plants reminded my of Blade Runner O.o

be from the steelworks, you can't see the co2 or tritium escaping from the power station

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4 hours ago, DurhamBorn said:

I like physical coins as well and get them from here VAT free.(maybe not much longer when we are out of the EU)

https://www.coininvest.com/en/silver-coins/britannia/1-oz-britannia-silver-2018/

Im going to get myself some of these as well.Love them.

https://www.coininvest.com/en/silver-coins/krugerrand/1-oz-krugerrand-silver-coin-2018/

Like you say the premium on them will probably shoot up in a silver bull.£14 each for Britannia's at the moment.I reckon £150 each at some point in the next silver bull.Very happy to buy at that price and if they hit £8 even happier to buy.

 

DB the sale price of those silver coins is £14.26 and buy back price £10.91, that's a huge spread, is that normal, is the spread a set amount or a percentage would be bad if the coin runs up to 150 and the spread is 30 quid not 3quid

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55 minutes ago, null; said:

I'll add another question for those who have silver - how do you stop it from tarnishing? Does it have to be stored in a special way?

 

My britannias I bought in the last low in 2015  are in sealed tubes, but they still tarnish. Could get the Silvo out, but it could affect the weight so best left as is. 

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39 minutes ago, Talking Monkey said:

DB the sale price of those silver coins is £14.26 and buy back price £10.91, that's a huge spread, is that normal, is the spread a set amount or a percentage would be bad if the coin runs up to 150 and the spread is 30 quid not 3quid

If it runs up to £150 an ounce and the spread is £30 who cares? That would still make the sell price £120 an ounce.

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1 hour ago, null; said:

I'll add another question for those who have silver - how do you stop it from tarnishing? Does it have to be stored in a special way?

 

Tarnished silver doesn't lose value. I once had libertads in a rotten old paper roll, the metal blackened. Sold for top dollar. The coins can turn interesting bluish colours. If you want to keep them shiny, don't open the mint tube or keep them in airtite capsules. If you handle them once, they'll tarnish. I'm not into numismatic value but afaik cleaning them reduces value.

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1 hour ago, dgul said:

There isn't really such a thing as 'VAT free' for silver coins in the UK (or EU).  What it actually means is that new coins are bought outside the EU and the importer pays VAT at the country's rate on import.  But, unlike a normal transaction (where they'd claim the VAT back and then charge VAT on the retail purchase), they sell the coins on as 'second hand', in which case the VAT is on the margin, not the whole value of the sale.

This is made more complex by certain countries seemingly allowing (or glossing over, or whatever) imports of coins to be considered numismatic*, even for new coins.  This then attracts VAT at 7% or so.  I've no idea why this is allowed, because it isn't actually following the rules of VAT and silver coins set by the UK, but I guess it's just a loophole being exploited until they close it.

So, you get the strange this where:

  • UK companies can only import silver by paying 20% VAT on the input cost, claiming it back and then charging 20% vat to the retail customer.
  • German companies can import silver coins from some countries and claim it is a numismatic purchase with VAT at 7%, even if a UK company couldn't get away with this.
  • If they did the normal thing of 'claiming back the 7%' input costs and then selling on as normal, then the customer would see a 20% VAT charge on their purchase.
  • But they are allowed to swallow the 7% by declaring the coins 'second hand' (I've no idea how they do this -- perhaps different subsidiaries  in the UK selling to one another, perhaps with overseas subsidiaries to make then 'second hand' outside of the UK, or maybe they just 'declare it to be so').  
  • As the coins are 'second hand', the normal VAT on sale rules don't apply -- VAT is paid on the margin (cut) on second hand goods, with the presumption (knowledge) that VAT was paid on the original purchase in the EU.
  • Therefore, VAT free silver coins, even though VAT at 7% + 20% of their cut must actually be paid / applied at some point to the transaction, even if you don't see it on your receipt.
  • I think this is why you don't see VAT free silver bars -- as they can never be declared 'numismatic' then they can never attract the numismatic premium.

[Note also that all the silver coins you buy second hand will have had some VAT paid on the original purchase, presuming it was issued post 1971.  Again, you might not see it on the receipt, but someone somewhere will have paid it.  The only way you can buy silver 'at spot' in the UK is if someone has swallowed the VAT at some point.]

I suppose 7% tax on silver isn't so bad, and if it explodes in price then it'll be irrelevant.

[* the normal rules for numismatic will be that the value exceeds the 'new equivalent cost' by some ill defined amount.  But, whatever that amount is, if the value of the coins is pretty-much equal to the metal content in the coin, then it won't be numismatic (from the legal point of view) but investment-bullion.  Somehow the Germans (and others) are redefining investment bullion as numismatic.]

YEAH, this VAT thing on silver is confusing, just checked this site out:

https://www.physicalgold.com/shop/buy-vat-free-silver/5-kilo-silver-bar/

Called them and they say NO VAT as these bars as they are: 'COIN BARS'

Just look at the spread when selling - current buying price: £2,196.70 

SELLING  -> £1,682.96 ...yikes!!!

Still a 5 KG block would make a nice door STOP!O.o

 

 

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1 hour ago, Castlevania said:

@dgulthat’s not quite correct. Estonia have a zero VAT rate on silver. So buy from Estonia and import into the UK, and whilst we’re still in the EU you won’t pay VAT :)

I looked up the prices from bullion/coin dealers in Estonia on their websites a few years ago. Their zero rated VAT prices were far higher than Coininvest!

Let me know if there are any you know of with good prices. 

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1 hour ago, Errol said:

If it runs up to £150 an ounce and the spread is £30 who cares? That would still make the sell price £120 an ounce.

If they run up that much sell them on eBay. Personal accounts should get £1 selling offer days regularly, if you don't open a new account (I found this out when they banned me, old account never got these offers, new one* does every month). Sure you'll still pay Paypal their cut but I bet coins will still be selling and from what I've seen, at retail or better... the mad gainz crew will be all over it like a rash (if they are not still under water from their BTL repos).

If it runs I'll start selling a few of my coins each month this way to balance out my holdings. I don't mind having a mix of years or different coins as it will allow me to sell them easier on eBay (£1 offer only applies to single items, so you can't list say QTY 20. Multiple listings of a 2018 Britannia would get removed under the multiple listing rules).

You could also shop around, there are plenty of places that buy silver.

 

* Technically my girlfriends account :)

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I'm starting to think that from around April next year things will get started and thats when the pressure will start on BOE and the government to take action. The trigger being the one fundamental thing that seems to be changing significantly - energy costs. No crystal ball and I'm no expert so just my guesses, but I'll give my reasons:

- Energy prices are high (Gas and Oil), unless they drop considerably, this will be a big inflationary pressure that will be feeding through the system and in full force

- A big unknown - a cold prolonged winter will put pressure on energy costs and also reduce consumers spare cash - a mild warm winter having the opposite effect

- Weak pound and strong dollar - extra downward pressure on the pound from Brexit and the dollar getting boosted by Trumps policies

- BOE forced to make a rate rise due to rising inflation

- Consumers maxed out and unwilling/unable to take further credit

- Businesses holding back investment until Brexit outcome known

- Continued stagnant wages, especially for the lower paid

 

I can't stress enough this is just my uneducated guess but thought I would share my thoughts, happy for them to be picked apart.

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18 minutes ago, Cosmic Apple said:

If they run up that much sell them on eBay. Personal accounts should get £1 selling offer days regularly, if you don't open a new account (I found this out when they banned me, old account never got these offers, new one* does every month). Sure you'll still pay Paypal their cut but I bet coins will still be selling and from what I've seen, at retail or better... the mad gainz crew will be all over it like a rash (if they are not still under water from their BTL repos).

If it runs I'll start selling a few of my coins each month this way to balance out my holdings. I don't mind having a mix of years or different coins as it will allow me to sell them easier on eBay (£1 offer only applies to single items, so you can't list say QTY 20. Multiple listings of a 2018 Britannia would get removed under the multiple listing rules).

You could also shop around, there are plenty of places that buy silver.

 

* Technically my girlfriends account :)

The problem with that is you're going to be dealing with scammers and a whole host of potential problems eg paypal, delivery companies.

Is it really only worth holding physical for SHTF moments or numismatic reasons? Seems like BullionVault, Goldmoney or ETC's really provide the best middle ground for buying and selling. Each to their own though, not knocking anyone. I just can't bring myself to buy physical coins atm because of the spread and hassle of selling.

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1 hour ago, sleepwello'nights said:

I looked up the prices from bullion/coin dealers in Estonia on their websites a few years ago. Their zero rated VAT prices were far higher than Coininvest!

Let me know if there are any you know of with good prices. 

The EU is crazy.  There are zero rated for VAT things, and they're well defined.  Everything else has to be at least 5%, no matter what it is.   So how come the UK has to suffer from the bonkers tampon tax thing -- tampons aren't on the exemption list so therefore retailers have to charge VAT on them -- but Estonia decides that silver coins are VAT free and no-one does anything to stop them?

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1 hour ago, sleepwello'nights said:

I looked up the prices from bullion/coin dealers in Estonia on their websites a few years ago. Their zero rated VAT prices were far higher than Coininvest!

Let me know if there are any you know of with good prices. 

Goldcore, but they sell by the 25 coin tube only. Their premium over spot is ~20%.

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33 minutes ago, Admiral Pepe said:

The problem with that is you're going to be dealing with scammers and a whole host of potential problems eg paypal, delivery companies.

Is it really only worth holding physical for SHTF moments or numismatic reasons? Seems like BullionVault, Goldmoney or ETC's really provide the best middle ground for buying and selling. Each to their own though, not knocking anyone. I just can't bring myself to buy physical coins atm because of the spread and hassle of selling.

eBay if you deal in niche areas is fine. I agree with you though, that an ETC is better.

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3 hours ago, Sideysid said:

My britannias I bought in the last low in 2015  are in sealed tubes, but they still tarnish. Could get the Silvo out, but it could affect the weight so best left as is. 

I recently discovered the same with some sealed tubes I bought years ago. Never opened or touched them. Any new tubes I buy now I am putting in a ziplock placcy bag together with one of those little silica gel bag things. Then I am putting all that inside another ziplock bag. No idea if it will work but seems worth a try.

Apparently you can remove tarnish by puuting the coins in hot water with some tin foil and baking powder. I havent tried it and maybe its not worth the bother. Tarnish doesnt affect the weight or value AFAIK.

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1 hour ago, Admiral Pepe said:

The problem with that is you're going to be dealing with scammers and a whole host of potential problems eg paypal, delivery companies.

Is it really only worth holding physical for SHTF moments or numismatic reasons? Seems like BullionVault, Goldmoney or ETC's really provide the best middle ground for buying and selling. Each to their own though, not knocking anyone. I just can't bring myself to buy physical coins atm because of the spread and hassle of selling.

I've got a reasonable amount of experience selling on eBay, though not in this sector, and in my experience the idiots and problems can be avoided... mostly. Its a risk I'd take if the spread where high enough.

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5 hours ago, Talking Monkey said:

DB the sale price of those silver coins is £14.26 and buy back price £10.91, that's a huge spread, is that normal, is the spread a set amount or a percentage would be bad if the coin runs up to 150 and the spread is 30 quid not 3quid

Yes,i wouldnt be selling them to them.They are VAT free and in the UK VAT is added,you can even sell them on Ebay for £19.75 minus fees and postage.

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1 hour ago, BadAlchemy said:

I recently discovered the same with some sealed tubes I bought years ago. Never opened or touched them. Any new tubes I buy now I am putting in a ziplock placcy bag together with one of those little silica gel bag things. Then I am putting all that inside another ziplock bag. No idea if it will work but seems worth a try.

Apparently you can remove tarnish by puuting the coins in hot water with some tin foil and baking powder. I havent tried it and maybe its not worth the bother. Tarnish doesnt affect the weight or value AFAIK.

I use baking powder and also olive oil when cleaning my coins from metal detecting.Thats sorts out a 2000 year old roman coin xD 

 

2 hours ago, Democorruptcy said:

Re Bullionvault, anybody used them for Gold in a SIPP?

https://www.bullionvault.com/info/gold-sipp-pension-plan#

 

I havent but i have meant to really look into it a few times.Buying with 20% (or 40%) off at these prices seems a fantastic idea.

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12 hours ago, Sound Money said:

I bought gold and silver back in 2005, still stored on bullionvault. Unfortunately, I’ve since moved to the states and discovered that when I sell it I won’t pay regular capital gains, but “collectibles” capital gains at a higher rate... :(

why not gift them to a non-US person you trust?  

 

Then they can sell them without your knowledge

 

Then in a year when your income is low they can gift you a lump sum for being a good mate

 

B|

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19 hours ago, sleepwello'nights said:

Strangely enough I never seemed to suffer in the recessions we had. In the 1990 to 1993 recession I worked in subsidiaries of a couple of organisations that were slimming their operations down. I'm always amazed at how convoluted some finance departments make their processes. When the organisation wants to sell something off they have to sort out the accounts ready for due diligence.

I was fairly middle level so often had to dig down into the nitty gritty to get the accounts to reflect reality. Something the qualified auditors working for one or other of the big 6 at the time never seemed to grasp. Of course as a "temp" I was paid by the hours I attended, and most of the time stuff had to be completed to meet deadlines. 

What I vividly remember was the number of employees around the 50 year old mark being made redundant. It really struck me that these people, often in senior positions, had worked really hard to get where they were and then were left high and dry. From then on I realised my primary responsibility was to myself and despite working conscientiously I wouldn't be reliant on an employer. Their priorities were different to their employees, understandably, but it meant that in the final analysis the organisations survival outweighed their loyalty to their employees.  

The workplace changed so much, flexible employment insecure lives.

This was a step change in Japan, where the `job for life,` /paternalistic employer/eemployee relationship was challenged twenty years ago...it really had a societal impact.

As for YRS mention of previously experienced recessions, I think the one we have coming none of us would have experienced the like of iregardless of our age, it's just a matter of whether they will be able to kick the can down the road a little longer this time or whether they have run out of options.

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