Oh No, Gold and Silver are going up not down.
Norseman88
Posts: 962
Where are the resident "experts" who continually brag about flipping their Silver for a small profit while proclaiming that PM's are going to do nothing but go down in price?
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Comments
I knew it would happen.
Metal Bid Ask
Gold $903.70 $904.70 -6.11
Silver $12.09 $12.14 -0.07 <<<<<<<<<<<......
Platinum $960.50 $970.50 -8.41
Palladium $193.20 $198.20 0.21
Updated:1/26/2009 10:15:08 PM CS
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If you continually flip it for a "small" profit it all adds up to big $$$
I don't have a problem with people flipping stuff at a profit I've done it with coins many times.
What I don't like are people who proclaim that they know that PM's are never gonna be a good investment (even though they've performed very well the past 8 years) yet they come here and brag about how much money they've made flipping Silver on E-Bay.
If you bought PM's when price was high then it dropped like last last year, What kinda investment is that? However if you bought few years back when silver was $5 and gold was $400 and sold @ $20/$1000 then bought again when it dropped late last year, your investment paid off. Can't make money if you don't flip it. Otherwise you're just holding for the unlikely scenerio of WTSHTF.
I agree PM's are not a good long term investment. Buy low, sell when it spikes and buy again when it drops. Otherwise you're just sitting still, Could have double your holdings if you went with the above scenerio.
Good timing!
What many people don't want to acknowledge is that the metals have been much more reliable than the stock market for 8 years now.
And even more importantly, people refuse to make a connection between what Washington is doing and the impact that governmental mismanagement has upon their personal finances.
It's not as if people haven't been warned - they have.
I knew it would happen.
<< <i>I don't think PM's are a good investment for the long term. You have to sell when price rises and buy again when it drops, Otherwise, You will not get a return on your investment.
If you bought PM's when price was high then it dropped like last last year, What kinda investment is that? However if you bought few years back when silver was $5 and gold was $400 and sold @ $20/$1000 then bought again when it dropped late last year, your investment paid off. Can't make money if you don't flip it. Otherwise you're just holding for the unlikely scenerio of WTSHTF.
I agree PM's are not a good long term investment. Buy low, sell when it spikes and buy again when it drops. Otherwise you're just sitting still, Could have double your holdings if you went with the above scenerio. >>
You have to consider paying tax on your gains, if you flip short term you pay whatever your income tax rate is which in my case would take nearly 40% between federal and state taxes instead of long term capital gains which in my case would be about 20%.
This isn't even the real reason I own some PM's, sure I want to make money on my PM holdings but if my hunch is correct I will be very glad I have what I do invested in PM's as I suspect that eventually the dollar will suffer a massive devaluation and when this happens PM's will soar in price until they hit an unreasonable price then come crashing back down to earth. If I constantly flipped my holdings I could make some money but I want to protect my purchasing power and in order to do this I need a certain amount of PM's safely tucked away to make the really big money. My average cost in Silver is under $10, Platinum is around $1,000, Palladium is around $200 and I've only got around 10 ounces of Gold at an average price of $900.
Flipping is no different than churning in a stock market account. It generates an immediate tax liability. Who needs that? Transaction costs are best managed with fewer transactions.
The best approach I've found is the time-proven method of averaging in over time. No big surprises, but a continually growing lump of assets. Almost the way it really oughta be. Kinda like it used to be. Ah, but these are different times, indeed.
I knew it would happen.
<< <i>the prime motivation for keeping ahold of precious metals is simply to avoid losing your purchasing power in the face of almost-certain dollar devaluation. >>
The entire world will have to devalue their currencies after this mess is over, therefore, it's gonna be a washout. As such, I believe, it will not be a major factor in the price of PM's.
I believe just the opposite would happen to pog if everyone devalued their currencies. And short of a few far-sighted countries, pretty much all of them will have to in the end.
If you bought PM's when price was high then it dropped like last last year, What kinda investment is that? However if you bought few years back when silver was $5 and gold was $400 and sold @ $20/$1000 then bought again when it dropped late last year, your investment paid off. Can't make money if you don't flip it. Otherwise you're just holding for the unlikely scenerio of WTSHTF. I agree PM's are not a good long term investment. Buy low, sell when it spikes and buy again when it drops. Otherwise you're just sitting still, Could have double your holdings if you went with the above scenerio.
This is sound longer term trading imo and not flippin' physical silver on a much shorter term basis.
roadrunner
I know it's alot of money for 1 oz. of Gold but I've always wanted a high relief Gold piece and this was alot cheaper than buying the original.
<< <i>Tax??? >>
Better be careful, there might be some IRS agents surfing through here.
I'm thinking that the strongest countries will want to cement their strong positions in the world. That's only natural. What's the best way to do that? IMO, the best way for a strong country to insure it's position is to insist that it's trading partners and allies not pull any shenanigans with their currencies, thus maintaining stability.
My contention is that the consensus will arrive at using gold, or something finite and measurable, as a foundation for maintaining the strong nations' status in terms of foreign exchange.
Isn't that what Bretton Woods was all about, after all?
I knew it would happen.
<< <i>The entire world will have to devalue their currencies after this mess is over, therefore, it's gonna be a washout. As such, I believe, it will not be a major factor in the price of PM's.
I'm thinking that the strongest countries will want to cement their strong positions in the world. That's only natural. What's the best way to do that? IMO, the best way for a strong country to insure it's position is to insist that it's trading partners and allies not pull any shenanigans with their currencies, thus maintaining stability.
My contention is that the consensus will arrive at using gold, or something finite and measurable, as a foundation for maintaining the strong nations' status in terms of foreign exchange.
Isn't that what Bretton Woods was all about, after all? >>
I wonder if China would ever entertain the thought of trying to accumulate Gold along with the other PM's and build up their strategic oil reserves with all the dollars they're currently awash in?
It only makes good sense to diversify their "investment" in the dollar into things with tangible value, maybe they want to make the Yuan the world's reserve currency?
<< <i>You have to consider paying tax on your gains, if you flip short term you pay whatever your income tax rate is which in my case would take nearly 40% between federal and state taxes instead of long term capital gains which in my case would be about 20%.
This isn't even the real reason I own some PM's, sure I want to make money on my PM holdings but if my hunch is correct I will be very glad I have what I do invested in PM's as I suspect that eventually the dollar will suffer a massive devaluation and when this happens PM's will soar in price until they hit an unreasonable price then come crashing back down to earth. If I constantly flipped my holdings I could make some money but I want to protect my purchasing power and in order to do this I need a certain amount of PM's safely tucked away to make the really big money. My average cost in Silver is under $10, Platinum is around $1,000, Palladium is around $200 and I've only got around 10 ounces of Gold at an average price of $900. >>
This is horribly wrong! Do not take this as tax advice, nothing personal Norseman88.
Precious metals are taxed at 28% on any gain. Full stop, end of story. There is no capital gain in that sense, PMs are in a different category.
They are not taxed at whatever your rate of income tax is, that's a mistake. They are not taxed as a capital gain. Further, any paper metals are taxed as if they were the physical, there is no difference in the eyes of the IRS. You can't flip back and forth and decide at the end of the year what your total is. Each transaction is a separate and taxable entity. I've read here that some people think they can trade paper and convert any profits into physical and call it a like for like trade. Nope, doesn't work that way. Putting yout profits into the metals is fine but again those profits are subject to the 28% rate and should be paid as such. Taxes on paper metals are exactly the same as physical metals, fair or not, that is the law. It may be a paper certificate, but it's not a stock, it's the same as bullion to the IRS.
Like anything else, you can take deductions on shipping, sales costs, storage, etc. However, the final balance of each transaction will be taxed at a flat rate of 28%, no ifs, ands, or buts. I'd wager that 95% of those flipping metals and 100% of those flipping small amounts are not filing their taxes properly, if at all on these profits.
Sure, you may get away with it for a while, but not in the long run. More scrutiny has been placed on PMs via the Patriot Acts and youi can bet the IRS will continue to look at this area as a revenue stream. EBay sure looks like a fountain of information for the IRS, to think differently would be foolish.
Many people have contacted their congresscritters to look into this obvious disconnect between PMs and other investments and the different ways they are treated for tax purposes as capital gains are currently subject to a 15% tax rate. There will not be any change towards equality, sorry, not going to happen. PM transactions don't have the transparency and paper trail that other investments have. Given that lack of complete control that the government so desperately needs to feel all-powerful, they have settled on a separate and higher tax rate and it could be raised at any time, it seems unlikely they will ever be reduced or actually treated the same as capital gains.
Reading this forum, it seems many are unclear as to how PMs are looked upon and treated for tax purposes. In fact, many CPAs/ tax accountants/attorneys are not aware either. It's not a very well understood field. However, upon further study, the laws are clear. My tax attorney for the last 12 years was unaware at first and he worked for 20+ years for the IRS in their legal and collections departments. I was the first metals investor/trader of significant size he had ever worked for. He admitted that his eyes were opened and he previously had no idea of how PMs were kept in such a separate category.
The only way around this is to be incorporated into a business, such as a B&M store and then PMs will be treated as inventory. Even still, once an incorporated individual takes personal ownership, the flat 28% rate applies. For these reasons, my tax attorney threatened to tear off my arm and beat me with it if I didn't incorporate several years ago. I took his advice and it's paid for itself many times over. Of course, I file properly. Your milage may vary.
Proceed with due caution and the proper legal advice. Thankfully, at least that part is deductable.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
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<< <i>the prime motivation for keeping ahold of precious metals is simply to avoid losing your purchasing power in the face of almost-certain dollar devaluation. >>
The entire world will have to devalue their currencies after this mess is over, therefore, it's gonna be a washout. As such, I believe, it will not be a major factor in the price of PM's. >>
OPA i think you have this backasswards
your reasoning for having PM as a hedge against future purchasing power is right...the value is in the PM.
a devalued dollar/world currency means MORE $$$'s are needed to purchase the same amount of PM.
if a currency was valued more, then the price of PM would decrease,
a dollar devaluation translates to inflationary pressures, right?
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<< <i>the prime motivation for keeping ahold of precious metals is simply to avoid losing your purchasing power in the face of almost-certain dollar devaluation. >>
The entire world will have to devalue their currencies after this mess is over, therefore, it's gonna be a washout. As such, I believe, it will not be a major factor in the price of PM's. >>
OPA i think you have this backasswards
your reasoning for having PM as a hedge against future purchasing power is right...the value is in the PM.
a devalued dollar/world currency means MORE $$$'s are needed to purchase the same amount of PM.
if a currency was valued more, then the price of PM would decrease,
a dollar devaluation translates to inflationary pressures, right?
Remember, I said "major" factor ... I agree it will be a factor...but demand and supply will be the "major" factor.
You would think if the government really wanted to jump start the economy they would lump all long term investments into a graduated scale of taxation. Of course many in government would say we can't let the rich get away with paying less than their fair share so to that I would say let's have a graduated tax scale that would make the "rich" pay their fair share.
My proposal (short of 0% which is what I thnk it should be) would be married filing jointly $0-$50,000-0%, $%50,001-$100,000-5%, $100,001-$150,000-10%, $150,001-$200,000-15% and anything over $200,000 would pay a 20% capital gain. How could the government say with a straight face that the rich weren't paying their fair share as capital gians would kick in at $50,001. Now for a single person you would cut these rates in half.
Many members on this forum that now it cannot fit in my signature. Please ask for entire list.
If those are the rich, then who are the people that have gold and silver? Sounds like an increase in tax will be comming.
Silly me, I thought it was the average Joe/Jane that had 401Ks, and 500K in it, is not enough.
<< <i>I agree with Deadhorse. There's one small part said about the tax 'and could be raised any time' which brought a flashback. Less than a month before the election, I heard our new pres saying he had a problem with all those rich people having 500 thousand in their 401Ks.
If those are the rich, then who are the people that have gold and silver? Sounds like an increase in tax will be comming.
Silly me, I thought it was the average Joe/Jane that had 401Ks, and 500K in it, is not enough. >>
500K in a 401K is not the definition of a "rich" person especially if it's a married couple.
Now if more of the elected would acknowledge it.