Well here goes nothing.....

Well, considering people very likely weren't refining silver back in 1,000,000 BC, I'd say it didn't have established value simply because people didn't know about it.

But, if you were to take a shiny new 1 oz proof back to 1,000,000 BC, I'm quite certain some people literally would have killed for it. Then they would have become the leader of some sort of cult and they would have worshipped the shiny object for eternity. Or, until it tarnished from handling...

 

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Which leads me to a question. When ever any of the silver I had was sold, I immediately plowed the gain back into the hobby in the form of collectible coins. In fact, the few tubes of ASE's I had were obtained more for collector sake (at the time) then investment sake. So, would there be any reportable capital gains? Or would the capital gains be reported after the sale of the collector coins?

 

If you did nothing at the time, then its all reportable capital gains. "Like kind" exchanges have to be identified beforehand, then executed in a certain time frame, and the two asset classes have to be judged similar enough, to qualify. If they do qualify then the basis of your previous asset rolls into the new asset, and you delay paying taxes on the gains.

Like a lot of things, if you ask your accountant BEFORE you do something, they can help minimize taxes. If you ask them after the fact, its too late.

 

Thanks Chris.

[hunkers down and waits for that knock on the door]

 

When did Washington State secede from the Union?

Just because the state does not have Capital gains tax, it does not alleviate your responsibility to the federal government.

 

If you followed the rules strictly, then yes, there would have been capital gains that should have been reported. ("Should" by their standards, not mine.)

IMHO - Our tax laws have become way too complicated. Why can't our IRS and our legislators see there's something wrong with a system where you have to hire an accountant to make sure you're not violating any tax laws when selling and then buying $200 worth of coins? Or, worse yet, what are the tax implications of trading $200 worth of coins for $220 worth of coins? Whose standards do you use for putting a value on your coins and the other person's coins? I'm sure he thinks your coins are worth more than you do, or he thinks his coins are worth less than you do. Should you pay someone to have the coins appraised at the time of sale/trade for tax purposes?

Maybe we should eliminate income and capital gains taxes and go with a sales tax. But then, we're right back to figuring out how to handle the taxes on buying, selling, and bartering coins...

 

Preaching to the choir brother. I am in a profession that benefits by the complexity and still hates it. I believe an income tax should be submitted on a postcard. That is the level of complexity that should be allowed.

My problem with capital gains taxes is that they are really taxing inflation. Buy something that is a proxy for inflation, like gold. If you bought it at $100 an ounce in the 70's, sell it today for $1700 an ounce, you have not really gained any purchaing power. You kept purchasing power effectively. Yet, the government says you owe tax on $1600 "gain". Unless they index your purchasing price to an inflation table, and adjust your basis for inflation, all they are doing is taxing a person on inflation, inflation that they themselves create.

Ok, end of "why politicians suck" rant.

 

This reminds me of the old story about a man who made a bet that he could run through a gunpowder factory with a lit torch and come out the other side. Even if he manages not to blow himself up, he's still a fool.

 

Or one heck of a wild and crazy guy.......

 

Yeah, I would say a great guy to party with!

 

If true end times are here then your food, water shelter & warmth won't do you much good either. There is a reason it's called "End". I wonder why there are so many who consider PM holdings to only be the answer to Armageddon.

Now in case of a currency collapse, which is one of the reasons the OP gave, then these items won't do you much good either. Society will re-establish itself with a new currency and those with PMs will have some protection from losing all their assets. The OP already answered your last question.

 

I believe it is because there are quite a few doomsdayers putting PM aside nowadays. There is even a show about bomb shelter builders, and they stock it with food, fuel, guns, and PM. That is where I believe that thought has come from.

 

i was only talking about human hstory, as for before that, then yes, it could be considered worthless because no one was around to say it was valuable

 

In the very first sentence you've contradicted yourself. Your 401k is not included in your life savings? So what part did you ACTUALLY "invest" in Silver bullion?

I can sympathize with your pessimism but not the ignorance. You were invested in stocks & bonds "for a couple of years" ... it "did well" ... but you "feel like its getting worse"? Poor assessment thrice, I say. Here's why.
1) Investing needs to be LONG TERM : think decades not 'couple of years.' If your need/focus is 'a couple of years' please get some perspective/education ASAP
2) If an investor really did well in Paper then s/he would NOT panic and sell "everything." There's an honesty issue here, sad/scary to admit.
3) Investors shouldn't flip-out on -10% or -15% declines, nor pile in/out of anything on a hunch. That's very VERY poor "investing" (it's not, really: it's called gambling.)

Oh I could write treatise on this; so could nearly everyone here, with abit of perspective/research. Firstly, investing shouldn't be gambling - it should be prudent diversification. The GOAL is reasonable projection of (future) capital appreciation and/or (present) income needs. For that, PMs are especially POOR CHOICE: there's no real capital appreciation in bullion or PM ETFs, and ZERO income, dividend or yield. I would argue that PMs are NOT an investment at all. Rather, bullion is simply a form of savings, hard asset reserve, a rainy day fund. For that & that purpose alone, PMs can be a longer term allocation in your 'retirement savings.' But don't make it the deadweight around your neck, to sink your retirement fund either.

How much PM is appropriate? This is highly debatable; I think 10% for younger workers still contributing to the 401k/ Roth IRA, up to 35% max for older, conservative/pessimist, HNW savers with other diversified investments/assets plus current income AND manageable needs in the near term. You really need to check all those boxes for up to 35% in bullion, IMO.

For anyone who is inexperienced or just testing the waters, first try the unleveraged PM ETFs, held/traded in moderation in the brokerage acct. As you become more comfortable, cycle into small amounts (ounces) of bullion on any price dips (-10% > -15% declines) w/ buyer's discipline. This practice supports anyone's PM education/experience, most importantly.

Sorry and hope to be wrong, but I predict you will sell in a panic and at a loss within 12 months. That says absolutely NOTHING about Ag as either an appropriate asset nor about Ag's direction longer term, but rather speaks simply to the OP's imprudent and rash behavior (gambling.) I've seen this show before.

Really, I'm a committed bullionist but 'All in Silver, YAHOOOO!' is just textbook investor folly. EOS

 

Its actually an interesting point. I read of the economic history of ancient Babylon, and gold was not particularly valuable there until the religious nobility started using it. Once they started having a demand for it, (ceremonial objects), and the price went up, then the nobility started using it more. This increased price even further, increasing demand even further. It was an upward spiral. After a while, neighboring civilizations, who until this time hadn't had a lot of value assigned to gold either, saw gold was valuable to Babylonians and THEY started using it more for nobility and religion, adn THEIR price shot up as well.

Basically, some people like to say humans have ALWAYS valued PM highly. I would argue that value of PM is taught to societies by other humans, and it is not innate. This is also born out by going back to African cultures when they first interacted with Europeans. The Europeans would write how "stupid" these people were for not valuing gold more highly. Well, the Africans were valuing based on its utility to them, the Europeans were valuing it based upon the premise "its valuable", not from any personal experience. So who was "stupid"?

 

But then there is also nobody around who would consider it worthless either, so it can't be worthless. Non sequitur

 

This is the sort of OP I expected to see near the end of the PM bull market - all in to PM as it approaches the top. So I consider this the first canary in the coal mine. I still think the bull market will end in a blow-off top, but this sort of signal can't be ignored.

 

Agreed, this is what you see at the top, but I hardly think it is the first canary. A while back, my officemate who knows nothing about PM, coins etc. wanted to buy a 1000 oz Ag bar. That was when Ag was at $47. That was my first canary.

Also I am sure many of the so called PM bugs out there, and some on this very forum, got in late because of the hype and bought when Ag was in the 40's. They are now underwater on their positions, but think since they didn't sell, they did not lose anything. RIGHT!!! These folks are also canary's in the coal mine.

For anyone who has been around the block, knows that when everything looks good, all the money is already in the the middle of the table and it is too late.

 

Just don't try to trade silver. If it goes up $4/oz by next spring, don't sell yours and hope to buy it back at a lower price; that just doesn't work.

Regardless, I am following in your footsteps until I get to 70% of my assets, excluding car and household goods, i.e., depreciating assets. I am not buying gold or platinum. I believe silver will double long before gold does

Then I'll stop, as I want to keep cash on hand to buy the distress-sale collections that occasionally turn up. If the U.S. stock market crashes after the Euro crashes, there will be plenty of good coins for sale, very very cheap.

No doubt some of the previous posts would disagree with my 70% just like they disagree with your 100%. In my case, I have no family or other dependents -- if I am wrong, I am the only person who gets hurt. I have an enormous capital loss carryover from the Crash of '87, and it will cover all my coin sales (and more) until I die, so I don't worry about taxes. Good luck.

 

He has been reading Ruben's threads,

http://www.cointalk.com/t214858/