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Looking at the brighter side of the Budget.
On April 27th, 2009 myfamilysilver wrote on the subject of Press and Media.
As expected, the UK government’s annual Budget statement makes pretty grim reading: tax rises and spending cuts for years to come.
However, in stark contrast to falling financial markets and property prices in the first quarter of the year, the Royal Institute of Surveyors has recently reported an upsurge in interest in the purchasing of fine arts and antiques. The dramatic turnaround was led by jewellery and silver which are traditionally seen as “safe havens” during periods of financial turbulence. The collapse of equity has reminded people, once again, that precious metals will never revert to zero value (unlike some infamous banking shares).
Nevertheless, in comparison to other commodities silver still remains at a historically low value, recommending it strongly to investors. For example, Money Week has figured out that in 1980 (at the height of the Bunker Hunt silver boom) you could buy an average house in the UK for the equivalent of 1000 ounces of silver at £50 per oz.
Today, the same house would cost you (if you could get a mortgage…) 15,000 ounces of silver at £10 per oz. This margin may narrow during the recession but in simple terms it still means that residential property is over-valued and silver is too under-valued. Therefore, moving capital from one to the other makes sense.
Furthermore, a final though to leave you on. It’s very difficult to eat dinner with a semi-detached house!
John Culme, who for many years has been connected with Sotheby's Silver Department, is author of several books and articles, including The Directory of Gold and Silversmiths, 1838-1914, published in 1987, and co-author with Nicholas Rayner of The Jewels of the Duchess of Windsor. He is also a Liveryman of the Goldsmiths' Company, London.
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