your opinions on the potential silver downside

just wondering what your thoughts might be on this subject, im looking to get heavily invested in silver with no gold holdings.

 

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Silver is very volatile and I think that silver has a lot of upside potential but it will be a very wild ride. The year 2008 was a very good example of this when you had a high of $20 (March 2008) and a low of $8(???). I think that the long term negative fundamentals of the dollar and the pitiful financial condition of the U.S. (i.e trillion dollar deficits, increasing national debt, etc.) will keep gold and silver on a long term up swing IMO. Like, I said, it will be a wild ride so fasten your seat belt.

 

Silver downsides? I'm very worried about a VAT tax. Other than that, I think silver is great. If the economy continues to falter, silver will trend up as a hedge against inflation and a store of wealth. If the economy improves, silver should also trend upward due to industrial demand.

 

I agree with you on the VAT Tax issue. I think it will screw silver holders/traders. I think that only prior issue US coins will be exempt (90%, 40%, and war Nickels).

 

If you are a long term investor, then after the basics (living expenses, emergency fund), do what you wish. Avoid too much premuim in the beginning. Think "spot," "spot," "spot."

Now, if you were to write that you were contemplating between a big cruise, a week in Vegas, or dumping all your dough on Silver, Silver would get the vote.

If you can't get excited about gold, consider a small percentage (10-25% of your Precious metals budget for gold). That way you can honor your gut, and still have some exposure.

 

Is the VAT tax an American problem yet, or more in England?

 

For some reason I thought that there was some talk about a VAT tax in the U.S. in the near future but I might be wrong on this.

 

what is the vat tax?

 

http://en.wikipedia.org/wiki/Value_added_tax

 

Me too on the VAT tax. I don't see how they can do this. It will crush most everyone. I see in Europe those PIIGS have between 25% and 35% VAT taxes and since the austerity moves (IE raising the VAT and the age of retirement etc.) have been raising their VAT's from 2% to 5%. Courtesy of Bloomberg's late night world wide news show in the last couple weeks is where I saw it. Spain, Greece and Portugal have made those changes to the VAT.

Regarding silver, I have been waiting for like $11 to get some rolls of ASE's. I don't see it going down, though we could get lucky if something happens or the banks buy more shorts before the CFTC creates smaller limits.

I see the "discovery" of a trillion in resources in Afghanistan (now they are saying it could be triple that) hasn't really had an impact on gold or silver prices.

Overall, I think we will go up more than down. And eventually when the supply dries up we will probably get a nice bump. I'm not as locked and loaded as I would like to be, so a nice pull back would offer up another purchasing opportunity.

The key is, that regardless of what happens, the opportunity to play the silver to gold ratio is good. It should be around 16 historically, so you can buy on that alone, but right now I think it is around 65. So, the profit potential is there. It should close the gap on any supply issues.

 

Someone has been looking at it and there are some bills I think that have been written IIRC. The VAT is for sure in a lot of European countries and I'm not sure about other countries. Between that and Cap and Trade I am worried! :crying:

 

Vat is comming boys! All the things ive read puts it here at between 2013-2020.I think we have afew yrs to increase your position in reguards to silver holdings before it kicks in i strongly suggest doing so.

 

The VAT tax is irrelevant for silver investors in 2010 because you can buy all the silver you want now without paying the tax, and it will increase the selling price in the future because physical demand by industry will not go down, and neither will the cost of production.

I think the downside risk for silver is to fall to the cost of production. The upside is probably a minimum of the old $50 high. It will eventually be taken out.

 

The only downside to silver is the problem of storage,which is a good problem to have if you own alot of silver. If you cant touch it,stack it,hold it,you DONT OWN IT!

 

There is no down side to silver as long as you are willing to hold it for a while. If the price goes down that just means you buy more at a cheaper price.

I've read that there is more above ground gold then silver at this point in time. If that is true, 16 to 1 will be more like 1 to 1 if there is a run on silver to take possession. Imagine $1250 an ounce silver. Not saying it will happen, but it could.

 

Today I was out garage sale-ing with the wife and found a really nice Harley for only $4800. I joked with the wife and asked her if she though he would take silver in exchange.

SS, I would love to see my silver go way up, but sadly in some areas it's actually a by product from mining other metals so I don't see it getting too crazy high, but still....It's nice to dream.

 

The opposite is actually true. Since silver is largely a by product, an increase in demand will not necessarily result in an increase in mine supply, so the price has the potential to get "crazy high."

 

Cloud I love you. I hadn't looked at it that way.

 

Silver could become the victim of its own success. As the price goes higher technology will search for industrial substitutes. As an example - think about the amount of gold and silver used in the production of PCs in the 80s compared to now. Once these lower cost substitutes are employed silver will never regain its share unless silver price falls below that of the substitute.

 

But silver was popular and "precious" long before computers came along. I doubt that that would make it worthless.
I do see your point about tech changing the "need" for it though.