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December 2, 2010 Why Governments Will Buy Silver

What if there is no tomorrow? - There wasn't one today!
Groundhog Day, the Movie

Will governments buy silver?

Over the last several months we have been pondering if governments will come into the silver market. Before we get into that, it is important to note that governments are very different animals and there are over two hundred of them out there. Therefore, it is a very liberal generalization to lump them all together as if their needs, objectives and agendas were the same, thus expecting them all to act in the same fashion for the same reasons, is a big stretch. That said, it's the stigma, the psychological effect, the sentiment and the message it would send to markets that prompts us to group them together in investors' minds as a market force.

This same topic has been argued in the gold space for several years and now it has come to pass that central banks worldwide have thrown in the towel and became net buyers of gold. Should it be different for silver? By the way, did you notice, how silver silently became mainstream again and more and more headlines now read "Gold and Silver..." whereas only a couple of years ago silver was nowhere in sight of anyone except the dreaded silver bugs.

Much has been made about "manipulation" in gold and, particularly of late, in the silver market. Scores of articles have been written on the subject, and things got as far Washington , DC where CFTC held hearings on the subject. We don't subscribe to the theory, or, more precisely, we don't share the conspiracy context of it. After all, few seem to care about governments' involvement in industry, stock market, banking system, housing, etc. All of that is being done openly and has been for a decades, albeit at a grander scale lately, so why is it a big deal in the silver market?

We prefer the term "managed". Markets are managed as are currencies. Silver (as gold) happens to be money, so if all other "monies" are managed, why not silver? It would be native, to say the least, to expect anything different. If something is important to your livelihood chances are you're going to pay attention to it. Well, we are here to tell you that silver is important to governments, has always been, and is about to get VERY important going forward. Government did not decide that silver is money. People - you and your ancestors - did. So why is it a revelation that governments would be involved in the silver market? Didn't you appoint them to manage the monetary system? We're not saying whether it's good or bad. It just is.

Silver - The Versatile Metal

If you are interested in silver at all, you probably know that silver is faulted for being an industrial metal, a "mere" commodity, like..., you guessed it, pork bellies! Others, more generous in their assessment, will tell you that it's both: industrial AND monetary metal. Usually, in that order. We touched on silver's monetary role. Here is short list of what else it is:

Energy metal . One of the series of crises we'll have to confront in the coming years is an energy crisis. There is plenty of energy out there (in nature), but most of it is in a form that we haven't yet mastered to use. Worldwide energy needs will be growing exponentially, while energy infrastructure has been deteriorating and energy resources we have come to rely on have been largely depleted, especially at a price we've become accustomed to. We will have to rebuild our entire energy infrastructure in the next generation or two and silver will be a big part of it. HUGE. (Applications: from energy generation to storage to consumption.)
Technology metal . It will be technology that will determine how fast we're going to tackle the monumental problems we face in the coming years and silver is as important for technological progress as any other metal you can think of. We mean both the low and especially high tech in commercial and industrial applications. Quickly count how many electronic gadgets you have. We have about a dozen, and we don't even own an iPod or a Wii system. We replace most of them every 3-5 years. How about you?
Consumer metal. If you are serious about this silver thing, you have to read the "Silver Bonanza" book to truly appreciate how ubiquitous silver really is, and how many times a day you use common household items that have silver in them that you couldn't have guessed if you tried. An average person of western lifestyle will count a few dozen items from the time s/he gets up in the morning to the time they get to work. This is the 'quality of life' factor that Michael Berry andFrank Holmes , among others, talk about so eloquently.
Water metal. Yes, water. The smart money has been investing in water for years and this area one of these days will burst into headlines big time. There is a serious shortage of fresh drinkable water in many parts of the world and the situation is getting worse. For now, it is a regional issue that is slowly evolving into a geopolitical and survival issue in some places. Solving this problem will require many different resources, but silver will be an integral part of whatever solutions will come forth. You can find more on water related issues at these links.
The Scale of the Water Problem
World Water Wars
Water Issues Around the World
Healthcare metal. In the last century or so silver has given way to "modern" medicine and presently doesn't play a big role in this area; although in the last couple of decades it has made somewhat of a comeback. Our thinking in this respect employs reverse logic: going forward you won't have enough clean water, energy, food and so on; on average , general living conditions will deteriorate, the population is aging (in industrialized countries) and the world is getting increasingly interconnected making it so much easier for diseases to spread while they - the diseases - are getting more resistant to "solutions" coming from the conventional healthcare business. Silver is credited with saving much of the elite when plague hit Europe because they used silverware, while the poor people used other metal and wooden cutlery. Silver kills single cell organisms, i.e. bacteria. Samsung has been selling silver coated appliances for about 5 years now.
War metal. The recently unfolding saga in the rare earth metals space is a prelude of what is to come for all of the so-called strategic metals. We have long maintained that silver is a strategic metal due to its role in high tech devices used in weapons and as such, will be sought after, protected and/or stockpiled for military purposes. Silver is one of essential metals for these purposes due to its physical characteristics. Tom Vulcan at HardAssetInvestor.com has done a terrific job highlighting and cataloging strategic metals. We just want to add that silver necessarily belongs on that list.

As good as gold

A number of governments around the word mint silver (and gold) coins. That list has been growing in the last decade both in number of governments following suit and number of different types of coins offered. One may view this as governments jumping on the bandwagon trying to cash in on the premiums they charge (some don't). Regardless of the motives, large stockpiles of government held silver have (for those that had them) has been used up and, for most part, governments don't mine silver. If they want to continue their silver coin programs, they have to buy it in the market. And if you are like the Chinese government, which has been encouraging its people to buy silver coins, you better have some for sale.

Why have central banks from China to Mauritius been buying gold in recent months and years? Not to help your mining shares. You decided that currencies were not doing their job and the central banks concurred. We predict that the same thing will happen in silver. It may not be the central banks doing the buying, - it could be sovereign funds, state owned/controlled companies, government backed agencies/institutions, etc. The flavor of the entity and the form such buying may take will differ from country to country - however, the essence will remain same.

Much of the recent action in the silver price should be attributed to the action in the gold price. Many would be gold buyers at current prices are priced out of the gold market. We don't know where they got this idea, but they turned to silver. Likewise, smaller countries with limited finances will at some point be priced out of the gold market and be forced to turn to silver.

Let us recap: Governments have historically been very active in silver, especially back in the day when it was used in day-to-day coinage. It's a monetary metal nevertheless, so one has to assume governments are interested in it. They are minting coins and the demand is getting greater every year with no signs of decline any time soon, particularly against the backdrop of currency issues. They don't mine any. There is a whole host of issues coming up which governments will have to contend with to varying degrees depending on what they have to work with. If you have a lot of oil, securing silver may not be a problem, but if it is tourism your economy relies upon, you're going to have to scale some pretty tough hurdles to get your silver. And we haven't even discussed the wild wide world of currencies, which by the looks of it, will end up completely losingcredibility sooner rather than later. And while individuals are subject to using currencies, at some point inter-national trade will have to be settled in something tangible...

Last but not least is protectionism, aka trade wars, of which currency wars (all over the media nowadays) are the opening round. It is virtually inevitable, and governments will step up and stand behind their companies and industries to help secure supplies of strategic metals be it for economic, military or other reasons. We also refer you to an article on resource nationalization which is yet to play out in a domino effect fashion in the latter part of this cycle.

Winston Churchill is credited with saying "America will always do the right thing, but only after exhausting all other options." On numerous occasions we heard a paraphrased version stating "Governments will always do the right thing, but only after exhausting all other options." For all the reasons discussed above and many that didn't get coverage, we think the question should not be "Will they?" but "When will governments buy silver?".

December 1, 2010
Sean Rakhimov
Editor, http://SilverStrategies.com
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Information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. It is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed herein are those of the author and are subject to change without notice. The information herein may become outdated and there is no obligation to update any such information. The author, entities in which he has an interest, family and associates may from time to time have positions in the securities or commodities discussed. No part of this publication can be reproduced without the written consent of the author. © Copyright 2010 by Sean Rakhimov.

December 2, 2010 Top Story: India to consider hike in import duty on gold, silver

Top Story: India to consider hike in import duty on gold, silver

As prices of the two precious metals continue their upward trajectory, the Indian government is considering a larger customs duty

Author: Shivom Seth
Posted: Tuesday , 30 Nov 2010

MUMBAI -

There is a buzz in the market and it is not going away. Traders in Mumbai say they are expecting the Finance Ministry to bring out a revised tariff for gold and silver imports in the near term.

Silver for immediate delivery fell 0.3% to $26.64 an ounce on Monday, after losing 3.2% on November 26. The $29.36 an ounce price reached on November 9, was the highest level since March 1980.

The world's largest silver-backed exchange traded fund, iShares Silver Trust , said its holdings slipped to 10,711.23 tonne by November 26, from an all-time high of 10,893.68 tonne on November 23.

Analysts said the precious yellow metal is also likely to remain highly volatile. They have pointed to the tensions on the Korean peninsula, which have driven the dollar to a two-month high, eroding demand for the yellow metal.

In London on Friday, silver moved down sharply losing 3% from the previous day. The founder of Hong-Kong based Puru Saxena Wealth Management told a news agency that China needed to be watched, to understand the price movement of both gold and silver, and that silver was over-extended.

Not so in India, where with gold still hovering near record prices, several consumers switched to silver for their jewellery needs, helping the demand for the white metal.

An earlier World Gold Council statement had said that retailers in Gujarat had purchased more than 100 tonnes of silver in the beginning of October 2010, to meet the demand for the festive season.

Of the total sale of gold and silver, which include bars and jewellery, during Diwali, the Indian festival of lights, around 80% accounts for the yellow metal.

The World Gold Council world demand trends report had highlighted the strength in gold jewellery demand. The backdrop of low interest rates, currency instability, sovereign debt and inflation fears is gold positive, the report had said.

``Silver has been moving in tandem with gold, despite its weak fundamentals. As and when a correction takes place, silver will fall rather sharply,'' said Manikbhai Zaverimal, a bullion trader in Mumbai.

According to a poll conducted by the All India Gems and Jewellery Federation (GJF), almost 53% of GJF members said business was up 25-45% in value terms as compared to the previous year, while 25% said business was the same as earlier.

Vinod Hayagriv, Federation chairman said that although a quarter of the business houses (in the poll) lost between 15% and 25% in quantity terms, as compared to earlier years due to higher gold prices, silver was a major sell-out.

An official of the Gem & Jewellery Trade Council of India, said that there has been a sizeable shift from gold to silver due to high prices of gold. "People are buying less quantity of gold and more silver bars as they have started considering silver as one of the instruments of investments,'' the official said.

Silver is getting used to the levels above the key 25 support zone, he added. Moreover, the elevated prices of bullion have set the government thinking about hiking the import duty on the precious metals.

For some time now, a strong case for an upward revision in Customs duty on imported gold has been emerging. The Government Exchequer is expected to mop up an additional revenue of Rs 8 000 000 000 ($173.8m) on the import of gold alone, traders said.

In the last eight months, gold prices have spurted by over 30%, given the firm international prices. At the time of the last Union Budget, gold prices were around Rs 16,500 per 10 gram (up from Rs 14,000 a year earlier). As a result, Customs duty on gold was raised to Rs 300 per 10 gram from the earlier Rs 200 per 10 gram.

After weak protests by a section of traders - essentially speculators on the bourses - the issue did die down. Both traders and consumers accepted the new reality of a slightly higher duty. Is it time for a hike again?

ends-

http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=115951&sn=Detail&pid=92730

November 23, 2010 VAT on Silver...why?

The increase of the Value Added Tax in the UK to 20% from January 2011 has been a one of the most vexed issues the Coalition government has had to contend with since coming to power in May of 2010. Many have condemned the increase as an additional burden on the poor. Others claim it is a proportional tax, the cost of which adds a large chunk to the price of goods & services bought by those who can afford more expensive goods. There is one sure thing everyone can agree upon: it‘s a measure which is mostly unwelcome & has little to no support.

For those looking to protect their wealth in uncertain economic times, the issue of VAT is a pressing one indeed. Fearful of paper instruments as stock markets plunge & interest accrued in savings accounts gets eaten away by creeping inflation, many turn to precious metals - particularly gold & silver - in order to protect what precious wealth they may still have. As the price of gold soars, potential investors are put off by what they perceive as a ‘bad deal’, getting smaller & smaller amounts of the yellow metal in return for their currency. Looking to silver, they see better value, but are wary of a heavy VAT burden already set at 17.5%. For someone hoping to squirrel away perhaps £1000, VAT can seem a big fee to charge an ordinary person who is simply trying to protect themselves from profligate governments & greedy bankers.

When silver was finally demonetised in the UK in 1947, the white metal struggled to find a new role in the brave new world. It had been part of the monetary system for hundreds of years, indeed been money for hundreds of years. Very few ask the question “a pound of what” when we think of the pound in our pocket: in fact it was originally a pound of silver, which was sub-divided equally into 240 ‘pence’. As time passed & money was debased to pay for the follies & wars of various monarchs, the people began to abstract away from the idea of a pound as weight, to accepting the new idea of the pound as only ‘currency’, with neither the word - used in that new monetary context - nor its denoted value, having any relationship to weights & measures.

In the post WW2 world, silver’s cause was taken up by industry, whether by fabrication into jewellery & silverware or by high tech use in both military & commercial applications. In this scenario, taxing the metal was a simple thing to do: debased of its monetary function, it was nothing more than a commodity to be bought, sold & used wherever it might be seen fit. There were still many who bought silver for investment & savings purposes in the form of bullion bars & coins, produced both by private as well as government authorised mints, but their numbers were minimal by comparison. Now that investment interest has surged to record levels, challenging industrial users’ percentage of the pie, the unfinished business between silver-as-money & the usurping fiat currencies has taken centre stage once again.

This brings to mind the particular issue of legal tender silver coins. Many countries (especially Commonwealth ones) issue silver coins on an annual basis, usually of denominations lower than the metal value. So for example the Australian Kookaburra, although being a one ounce coin made of .999 fine silver, will have a face value of 1 Australian dollar. Similarly the Austrian Philharmonic, another one ounce fine silver coin, has a face value of 1 euro & 50 cents. Now you would be a fool if you went to a shop in Adelaide or Vienna & used these coins to pay for goods or services to the value of 1 dollar or a euro-fifty, but that is not the point. The point is that your payment could not be refused, as the coins are good for the settlement of debts as defined by governments around the world, in the same way as paper currency is.

As far as I can find (EU law being so labyrinthine), there is no directive requiring tax on the importation of legal tender within the European Union. If I arrive at the Customs desk at Heathrow Airport with 1000 paper currency Euros in my pocket, no one demands that I pay 17.5% in order to bring it into the country. But if I turned up with 1000 paper currency Euros worth of Philharmonics that I’d bought in say Germany, where I’d paid 7% VAT rather than 20% in Austria - go figure - an overzealous Customs officer might still expect me to pay a UK VAT rate on top if I wasn’t able to explain myself rather sharpish.

What is wrong with this picture? Absolutely everything. The law is an utter mess & makes no sense whatsoever. Different countries have different rates, all done seemingly at the whim of national governments, with no co-ordination between them. Directives on VAT rates come from Brussels, which allows nation states to operate 3 bands: a 0% rate, a standard rate (5-8%) & a higher rate (up to 25% so far). It’s left to the discretion of the member states to decide which goods & services fall into which rate. We in the UK also have the anomaly of being able to purchase items from the Channel Islands VAT free as long as they’re under a certain price. How this exemption fits into EU law is uncertain.

Contrast all this with the orderly way investment in gold is handled. Across the board (except in very limited circumstances), all gold products 22 karat & above are VAT free. As an added bonus, buyers of sovereigns & Gold Britannia’s do not pay Capital Gains Tax upon selling their coins. Silver Britannia’s are CGT free too, but you have to pay VAT to buy them, even if you get them direct from The Royal Mint!

Whilst the concession of no Capital Gains Tax on Silver Britannia’s is welcome, the Government needs to look again at the issue of VAT on silver. On all fabricated items, whether coins or not, for sure: but it’s on this particular question of legal tender laws as they relate to silver coins where the position is most contradictory. Nothing stops the government of the day from moving silver out of the higher rate VAT bracket to the medium or even to the zero rate. But whilst pressure should be put on the UK government to act, it’s at the European level where we might have the most impact. If the British government were to change the VAT rate on silver, even to the zero rate, it would be conditional & on the whim of any political party who could change it back to a higher rate at any time. This is not the sort of gift governments should be allowed to have.

What is needed is an effective challenge mounted at the EU level to give silver the same status as gold & to allow silver to be what it wants to be: an effective means of savings & investment for the vast majority of people who can no longer afford gold. Silver should be an instrument the ordinary person could put in their ISA just like stocks & bonds. In these uncertain times, a government that is serious about looking after the interests of its people should have little trouble in finding the end of VAT on silver throughout Europe a cause worthy of joining.

http://www.silverpetition.com/ is a website set up to help make that happen. It’s a simple proposition: “Removing the VAT on fine silver bullion, (to bring physical investment silver bullion into the same VAT free status as investment gold / savings accounts / ISA's / bonds / stocks and all other monetary investment vehicles), will enable the ordinary people of Europe to once again own real silver as a liquid asset.”

It’s a powerful idea: one which, especially in these uncertain times, would enable everyone to save & invest in an instrument of real worth. At the very least, it is clear (& the EU should make it even clearer) that no VAT should be paid on silver legal tender coins whether they’re from Austria, Australia or anywhere else in the world.

Despite overwhelming odds, silver has still been an excellent choice for many small investors. If you’d bought 12 months ago you’d be looking at gains of around 55% to date. And with increased demand in both the industrial & investment sectors, diminishing above ground supply & with 50 year long price suppression seemingly coming to an end there may well be spectacular gains ahead.

But silver - all silver- is, like gold, money & has been for thousands of years. We took the last of the white metal out of our coinage in 1947: it’s about time it returned. That would be the very best & simplest way around the laughably ridiculous situation we currently find ourselves in.

Tony Auguste

November 21, 2010 Why German Customers at Austrian Banks Are Suddenly Silver Bulls

It has become rare under ever tightening money transfer laws - allegedly because this helps fight "terrorism" - to be able to issue an alert that may help those cautious Germans who survived the market's tsunami of 2008 to repatriate money from tax-friendly Austria back home.

Legions of German savers with money deposits at Austrian banks appear to have turned into silver bulls.

Top quality German weekly "Spiegel" on Saturday revealed a legal loophole in German and EU laws that allows Germans to repatriate 6-digit funds in a most discreet, but still legal way from Austria to their home country.

This makes me understand the delighting record profits at the Austrian Mint in 2008 with a high degree of chance that 2009 will end with a still bigger income figure as sales have already exceeded last year's numbers.

I let Spiegel tell in its own words (emphasis mine) before adding a few interesting details on Austria's long term silver obligations:

The object of desire is 37 millimetres in diameter and made of .999 fine silver. On one side, the coin shows an organ, its country of origin ("The Republic of Austria") and its face value: €1.50 ($2.12). On the flipside: "Vienna Philharmonic Silver" and a few musical instruments from the world famous orchestra.

The coin, known to numismatics as the "Silver Philharmonic," could well drive Germany's already harassed Finance Minister Peer Steinbrück over the edge. Because the ounce of silver is a hot tip among German investors -- and a means of discretely transferring untaxed funds back home.

Austria issued the new coin in early 2008, wisely anticipating the consequences of the bank collapse, the stock crash and the rising value of precious metals. The coin was explicitly intended for purposes of investment, not collection. Bernhard Urban, marketing spokesman of the Austrian Mint, modestly calls it "unique" in Europe. The story of its success has to do with a funny little contradiction: As a means of payment with a value of €1.50, the coin can be used to buy a beer. But nobody in his right mind will take it to the pub in the first place because the exclusive silver piece is worth -- depending on the price of silver --somewhere between €11 ($16) and €14 ($20), and costs that much at the teller's window.

Austrian Mint 1st Euro member to Issue a Legal Tender Silver Coin

It's this difference between the face and market values of the coin that makes it so attractive in the context of international money transfers. The coin manages -- astonishingly -- to circumvent currency import regulations. A person travelling from Austria to Germany is allowed to bring €10,000 ($14,000) into the country without having to declare it at customs. So that person can bring more than 6,000 Philharmonic coins over the border and in doing so, bring home, with each trip, more than €110,000 ($156,000) of his hidden Austrian treasure.

It's common knowledge that many Germans make use of the discrete accounts in Austrian banks. But it's equally clear that the days of strict banking confidentiality are numbered. Bavarian customs officers claim not to have noticed anything yet. But in Austria, the Philharmonics are already "an absolute hit," as coin expert Urban proudly proclaims, especially among the Germans.

6,000 Philharmonics Equal €110k Paper Money

Like the entrepreneur from Munich who picked up the nifty little tip from his friends at the yacht club. Since then, the coin trick has been doing the rounds among wealthy Bavarians who stash their money next door. Because the coin collectors are exchanging tax evasion tips galore in chatrooms, the Bundesbank (Germany's central bank) is not anxious to draw attention to the matter. But senior bankers are abundantly aware of the problem.

The German Finance Ministry has responded by warning inventive investors not to get too comfortable. Customs officers suspicious about coins can forward these concerns. But they can only confiscate the silver pieces if they exceed the face value of €10,000 ($14,000).

"We want to fill a vacuum"

Meanwhile, the Austrian Mint can hardly keep up. It's a four-week wait for the coin at the Oberbank in Salzburg. There's no question that the Philharmonics are reaching well beyond traditional coin collector circles. In February 2008, the mint was anticipating sales of three or at most, five million coins; by the end of the year, almost eight million were in circulation. And already in 2009, nearly five million pieces have been bought or ordered

Of course, Urban denies that the Philharmonic is making life easier for tax evaders. That certainly wasn't the coin's purpose, he says. It was obvious that investors would go for precious metals in these uncertain times. "We wanted to fill a vacuum that the banks have left behind." Which means: for the growing number of customers who don't trust the investment advisor at their local bank, the Philharmonic offers a perfect alternative.

Germans Don't Sell Their "Real Money" 5-Deutschmark Coins

It's impossible to know how many Germans are using the coin for investment purposes and how many for cross-border transfers. What's clear is that the Bundesbank is not benefiting from the silver boom. German citizens are holding back on domestic coins at the moment; German coins are good only for collecting, not smuggling. Silver mintages have become shelf warmers.

Now it's too late for the Bundesbank. The Austrians were first to grasp that in bad times, it makes more sense to mint investment opportunities rather than collector's items.

For those without knowledge of Europe's laws it may be helpful to know that Austrian banking secrecy laws will protect foreign depositors as Austria does not pass on information to foreign tax authorities that would reveal their holdings outside their domestic tax legislative. But the EU Moloch in Brussels will probably pressure Austria to reveal such intimate details in the medium term. So better buy your legal tender Austrian silver Philharmonics tomorrow than the day after.

As there is not much else to say, Spiegel being renown for decades of faultless reporting, I want to add a few interesting details that may support the never ending allegations about a huge suppression scheme in silver prices.

Searching the Oesterreichische Nationalbank's annual report (PDF) the term "silver" in its physical meaning brings up only four references concerning silver in the annual report, all included in this one paragraph on page 109 (slight redaction for readability):

This balance sheet item exclusively subsumes the claim on the Austrian Federal Treasury from silver commemorative coins issued before 1989, based on the 1988 Coinage Act as promulgated in Federal Law Gazette No. 425/1996.

In theory, the maximum federal liability is the sum of all total silver commemorative coins before 1989, minus any coins returned to and paid for by the central government, minus any coins directly withdrawn by the Austrian Mint and minus repayments, which are effected by annual installments of €5.814 million. The proceeds from silver recovery, including the interest on the investment of these proceeds by the Austrian Mint, are designated for repayment by the contractual deadline (every year on Dec 15.)

Any amount outstanding on December 31, 2040, will have to be repaid...from 2041 to 2045 in 5 equal installments. The federal liability came to € €1.183 billion on December 31, 2008.

In short this means the Austrian central bank is at least €1.183 billion short silver (indeed and not with COMEX-contracts) as it is highly unlikely that coin owners will sell them at former Schilling face values of 5; 10; 25; 50; 200; 500 Austrian Schillings (divide all figures by 13.7603 to arrive at the € face value) when the pure market silver value means gains pf up to 3-digit percentage ranges, depending on face value and silver fineness of these coins. Find more details on theresale value here.

Although all these figures are minuscule in comparison of Eurozone banks borrowing €442 billion for 12 months from the ECB, it may be another grain of salt, that central banks might be keen no to see silver rising further. In my personal opinion, I see 3-digit €/$ prices for an ounce of silver.

So it may not be a bad idea to keep all the silver you have and maybe buy a little more at current prices.

There are many costly traps for physical silver buyers in Europe: Austria still applies a horrific 20% VAT on the monetary metal, absolutely defying any other logic than impeding investors from buying silver.

Germans have to give less of the purchase price to the taxman. In Germany, silver coins with a face value and being legal tender, are only levied with 7% whereas VAT on bullion bars is a hefty 19%, defying any logic than maybe "protective measures" to a yet officially unknown winner in the tax game.

Austrians can unofficially evade the 20% VAT up mark, a clear discrimination to the other monetary metal gold which is VAT free (making the whole affair look like a political and not logical decision), by buying their coins in Germany or from German sellers on eBay.

Tax-Disadvantaged Austrians Can Buy Silver Cheaper in Germany

This means that Austrians can get Philharmonics cheaper in Germany, or on eBay Germany, than at home. They, too, can import a 6,000 silver Philharmonics from Germany, saving 13% VAT percentage points and stay within the bound of Austrian and EU laws.

It might be interesting to find out whether these rules also apply in other countries. The USA requires travelers to declare monies above $10,000 face value. It is up to one of my readers to find out - best with the advice of a lawyer - whether one could also import Austrian silver Philharmonics up to an exchange rate adjusted face value. This would result into a handy transfer of 4,761 ounces without alerting the IRS or immigration.

Non-EU citizens can hit another bargain: As they are VAT exempted, they can get an immediate cash refund of the 20% VAT asked by the Austrian commercial seller at the VAT refund offices at Vienna's airport by simply presenting their purchase records.

Source Seeking Alpha 5 July 2009

November 21, 2010 VAT on Silver in UK

Yes the VAT on investment silver is a problem in Europe, and sadly the UK government is NOT ALLOWED (!!) to extend the zero rates or introduce new zero rates! And this has been the case since power to govern the country began to be handed over to the Roman, sorry European empire from 1973 onwards.
However it is worse than described here because the VAT on silver is NOT equal across Europe nor is it equal within the UK! In Germany legal tender silver bullion coins such as American Eagles get charged at less than half the German VAT rate 7% instead of 19%.
And if you are a member of the VERY EXCLUSIVE LBMA you can enjoy buying and selling silver at 0% (YES ZERO % !!) VAT.
Alas for the rest of us surfs in the UK we have to cough up 17.5% extra on our investment as a thank you to the Nice Government Men for being, well Nice Government Men.
So if you buy an ounce of physical silver today at £11.42 in the form of one of our Silver Roses + our mark up + manufacture + government mark up, means your ounce will cost £16.52 – 44.66% over metal price. (Though buying larger amounts will reduce the mark up and bars are cheaper)
So silver is definitely a longer term investment

November 21, 2010 The UK and Silver

Silver at the moment is still very low in comparison to where it should be. Our cousins across the pool are not slow at all on picking up on the truth that silver and gold cannot just disappear, they are very pro active in protecting their wealth.

The reason why the Americans are so quick is that it has not been long since they used precious metal to trade with, it is in their constitution and there is no tax bearing down on investment silver. The UK has not known silver to be used as legal tender for centuries. It is true that here in the UK, silver is taxed but as my good friend silverbob pointed out that; VAT maybe on silver but you don’t have to give details on who you are, where you live, how much you have bought or even a limit on the amount you can buy, but with gold you do.

November 19, 2010 HM Revenue & Customs - UK Reference Links on Gold & Silver

November 1, 2010 Silver petition has started!

Thank you visiting this website and submitting the petition. Together we can make it happen!

Say NO to Silver bullion VAT, sign the petition!