Silver

The Indispensable Metal


 

 

 

 

 

Throughout history many different things have been used as a form of money; such as stones, salt, shells and beads. From the very beginning, silver and gold have displaced all other mediums of exchange. The invention of the printing press brought with it paper currency. No government has ever successfully substituted paper for real money, because no government can print silver.

Normally silver prices are anticipatory rather than reactionary. Once the forces of the inflation index begin to be felt, investors will buy into the market to make sure they are in position before the general public. Their buying will drive prices upward.

The Supply

New mining production is not stimulated by silver prices. Mining production is fairly fixed because over 70 percent of the silver produced is a by product of copper, lead and zinc. Economists agree that silver consumption exceeds production, that the shortage is being supplied from private above ground hoards, and that the price of silver has risen dramatically as the result of it. Part of that shortage is made up from recycling jewelry, film and some electronic parts. The majority however, is supplied by a diminishing world’s supply of silver.

The Demand

Silver has chemical and physical properties which are unique. It is the best conductor of heat, the most reflective of light and, next to gold, the most resistant to corrosion. The Technological Revolution has transformed the metal of coin and art into a metal of electronics, photography, computers, aerospace and medicine! Silver is one of the most perfect conductors of electricity and therefore is considered an industrial metal besides a monetary metal. Since WWII, an average of 200 new uses for silver were found each year. If science and technology continue to progress, it is reasonable to assume that new uses are yet to be found.

Silver and Inflation

Fifty years ago you could buy a loaf of bread for a dime. Today you still can if it is the same silver dime. The real value of silver, like gold, has not changed. It never changes, only the currency changes. During periods of inflation, it takes more dollars to buy an ounce of silver as the dollar loses its value. It is said the price of silver goes up, but the value stays the same. Silver is a store of value and therefore a protection against inflation. High interest rates tend to depress silver prices because the silver users (photo, electronic, jewelers, etc.) find it uneconomical to tie up money in inventories of silver so they sell their stockpiles and drive the market down. However, inflation then becomes a self-correcting factor and it eventually adjusts itself. As we witness the deflationary collapse of traditional financial institutions on the one hand, the destruction of the dollar’s value on the other hand, we are forced to find somewhere to put our capital for preservation. Silver will be the subject of tremendous bidding for this purpose.

The Outlook

The outlook for silver as a long term as well as short term investment is excellent. Silver prices must increase as silver users bid for the metal. For investors who seek a long term hedge against the declining value of paper currency, as well as a good average annual profit, the ownership of silver is a must.

Uses Include

Batteries | Bearings | Brazing and Soldering | Catalysts | Coins | Electrical | Electronics | Electroplating | Photography | Medical Applications | Jewelry and Silverware | Mirrors and Coatings | Solar Energy | Water Purification

Silver is used in more applications than any other commodity!

  • Most reflective of all materials
  • Greatest conductor of both heat and electricity
  • Strongly resists corrosion and oxidation
  • Second most malleable and ductile metal
  • Recently discovered to be a very effective anti-microbial/bacterial

Highlights:

  • The possibility of silver-based catalytic converters. In 2003 a bill was passed by the congress to study the use of silver in the automotive catalytic Research and testing is currently being carried out in a three-year government program.
  • New Developments in superconductors require silver tape. A new form of cabling has recently been developed which can carry more electrical current in much smaller spaces with far less resistance. This new technology (Nobel Prize awarded in 2003) should one day replace old power grids, especially in larger cities where space is at a premium and large electrical loads a necessity.
  • Environmentally friendly replacement of lead based solders (Silver is unique in that it can join many different metals together at temperatures well below the metals melting point) The European Union law, which bans the use of lead based solders,comes into effect on July 1, 2006. Silver used as solder accounted for some 37.5 M ounces in 2004, and is likely to increase significantly in the coming year because of the EU’s decision.

More reasons to buy silver: