29 June 2010

Silver Is Likely to Multiply In Value Faster than Gold

Half of silver demand, or 435.1 million ounces, goes into industrial applications including electrical conductors, alloys, solar panels and batteries, according to GFMS Ltd., which compiles reports for The Silver Institute, a Washington-based industry group. That compares with 12 million ounces for gold, 3.85 million ounces for platinum and 6.19 million ounces for palladium. Industrial demand for silver will gain 14 percent in 2010, the most since at least 1988, Barclays estimates.

...Solar-panel installations may jump 44 percent this year to about 33 billion watts of capacity.....Crystalline silicon solar panels use as much as 0.12 gram of silver per watt of capacity. The metal accounts for about 35 percent of a silver- oxide battery and as much as 40 grams of silver are used in a 32-inch plasma TV screen, VM Group estimates. _BW

Silver has many more industrial uses than gold, but is also widely seen as valuable in itself -- as a form of wealth, or money. Silver's value at this time is historically rather low, compared to gold. If economic times turn difficult -- as they easily could at a time when the world hegemon is ruled by an unprecedentedly incompetent government -- silver's innate value as money would probably push its cost well past doubling, approaching a quadrupling.
Doubling as a store of value for buyers concerned about the economy and as an industrial material for those bullish on growth, silver is outperforming metals from copper to zinc this year and keeping pace with gold...."Silver is really attractive because you have strong investment demand and strong fabrication demand," said Jeffrey M. Christian, the managing director of CPM Group, a research company in New York...."You buy gold when you think the world is going to hell in a handbasket. You buy copper when the economy is booming. In between those two, if you're a bit confused, you buy silver."

The metal, used to create the first telegraph messages, rose 9.5 percent since the end of March, heading for a sixth quarterly advance. That's the best streak since 11 consecutive quarters through the beginning of 1980, a year after the Hunt brothers tried to corner the market.

While gold reached a record $1,265.30 an ounce on June 21, silver would have to more than double to get to the all-time high of $50.35 reached in New York in 1980. Silver rose 13 percent this year in London, gold added 14 percent and the London Metal Exchange Index of six industrial metals fell 9.2 percent. _SFGate
If paper currencies lose their value any more quickly than at present, a return to hard currencies is likely. If not in official markets, then in grey and black markets that are likely to spring up in ever more visible locations. Gold, silver, and copper would be used as money, but other things such as prescription drugs, common ammunition, and culinary substances such as salt and spices may all find themselves put to use as makeshift currencies. Barter is also likely to grow in popularity -- assuming a person has anything of value to trade.
....gold is rising due to the instability of the global financial system. Gold is money, and as the ultimate global currency and store of value, the yellow metal is regaining its place in history as a trusted reserve currency.

But throughout history, gold has not been the only monetary metal. Silver has always played a role alongside gold. In fact, up until the beginning of the 20th Century, more people used silver as money than they did gold. _GoldNews
It is a shame what governments have done to money, in their utter greed for dominance and power. People who are capable of thinking these things through will need to decide when to stop playing along.

In good times you want to grow your wealth. In bad times, the best that you can often do is just to hold on to it.

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Blogger neil craig said...

I wonder if Roosevelt's decision that US citizens couldn't hold gold, but not silver, may have enganced its attractiveness. This seems copntradictory but people can be like that.

Wednesday, 30 June, 2010  
Blogger al fin said...

Right. There are a lot of contradictions in the relationship between a metal's attractiveness and its usefulness as money. If a metal becomes too attractive, it is useless as money. A paradox.

Wednesday, 30 June, 2010  

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