There are many reasons for this precious metal being a smart investment. Like gold, it’s a liquid asset that you can cash in anytime. It can be stored easily and highly portable. Silver is relatively inexpensive, certainly less so than gold, so there’s less money down. Yet its value does not depend on what happens to the monetary system.
Suppose the worst were to happen to the financial world: our banking system collapses or our money becomes almost worthless due to hyper-inflation. Silver would still have intrinsic value, and could be used as money. Silver is relatively unknown to the mainstream investments crowd, and very few people are aware of its benefits.
Silver coinage has been used as money for thousands of years. Its intrinsic value as jewellery and industrial metal is well established. Historically, the relative value of silver and gold has been tracked together. The price ratio of gold to silver for the past 5,000 years averages at 1:15. This made sense, since 1:15 reflected the ratio of gold to silver being mined. By the 1920s, the silver-to-gold price ratio was down to about 1:100. But the 1800s also saw the dawn of the industrial age, which continues today. Silver’s use as electrical conductor, heat conductor, catalyst, and alloy came into its own.
The future for silver investments is very bright, largely because of the fact that it’s running out. Consider gold: it is barely used for anything except jewellery, so essentially, all the gold on earth is still around in some form or another. Silver, however, has thousands of industrial uses. It’s found in common electrical items like batteries and circuits. And it’s used up in chemical processing, medicine and the solar industry. In addition, it doesn’t usually get recycled. Therefore, it has dual value as an industrially valuable metal and as an investment asset, and it’s running out fast!
Dean Arif
September 2015