Silver rather than gold is the preferred store of value for many precious metals investors today.
Many people in America today lack precious metals education. Just a few decades ago the people of America used precious metals as every day money. The most popular of the two metals was silver. In history silver has rarely been the more valuable metal, just more popular.
What do I mean by that? What I mean is that because silver is generally less valuable per ounce than gold (silver occurs with a frequency about 15 times that of gold in the earth’s crust) it has been more commonly used for day to day trade historically around the world.
Today many opt for silver as their metal of choice to hold as an inflation hedge, and as a “safe haven” in the face of monstrous monetary inflation and astronomical federal debts. They choose silver because of it’s abnormal ratio to gold today. Today it costs about 50 ounces of silver to buy a single ounce of gold. Historically that ratio has been closer to 15 to 1. This means silver is, by that measure, a fantastic bargain.
Because silver is used in hundreds of industrial applications it is not just considered a precious metal or a monetary metal, but it is also considered an important, even a strategic, industrial metal. This ever growing industrial demand for silver is part of what has driven its dollar denominated price up faster (as a percentage) than gold for most of the last decade. Most of the silver used in industrial applications gets used up and is never recovered.
Most of the gold that has ever been mined is stored and is easily accessible. This is not the case with silver. Most of the silver that has ever been mined has been used up and is very difficult and expense to recover.
There are few pure silver mines. Silver is produced primarily as a byproduct of the mining of other metals. For this reason the supply from mining operations is somewhat inelastic. As demand increases this lack of production elasticity can create tremendous upward price pressure on the metal.
Today only 3% of American’s invest in precious metals. In time, when they awaken to the economic horrors and rapid price increases caused by a debasement of the currency, they are likely to pile into silver and gold. Silver is the poor man’s gold. Silver is what the masses will probably buy to act as a hedge against inflation, insurance against currency debasement and a safe haven against the ravages of inflation.
In the event of a hyper-inflation or currency collapse, an event where the value of the paper fiat money becomes so worthless that nobody will accept it in trade for goods, silver will become a trade item again and will take up its historic role as real money.
If you are sitting on lots of cash you might wish to trade some of that for a store of silver. In the not too distant future you may thank yourself for this decision.
Investing in stocks and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. I am a precious metals broker and sell precious metals. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.