When I think of the modern day silver investor, I think of a nomad—a survivor in a cloudy (and now stormy) wilderness with early access to a tremendous opportunity. In fact, silver coins are an opportunity that will likely eclipse any other in the history of human civilization.
Those of us unmoved by the mainstream (and without a lot of money) see a perfect storm gathering around this tiny, overshadowed, and forgotten market.
The new group of silver investors, the ones who get there first and take advantage of low silver prices and protect what they have now, will lead us out of our current crisis. They will hold what has always been money and a metal that has become essential for modern society.
Here is how we know this, and what you can do about it.
Historically Low Prices
Silver prices are historically low, especially when compared to gold.
The silver-gold price ratio
may have topped recently, but history has it trading around 15:1.
However, price sentiment has severely distorted the true ratio. Most people simply assume that gold is rare when compared with silver based on price. Very few people understand the actual supply/demand character of silver.
Silver Supply vs. Gold Supply
There was a time (40 years ago) when the amount of above-ground silver actually did significantly outnumber the amount of above-ground gold. However, this is no longer the case.
Above one billion ounces or 31,000 tons of silver exist above ground. There are approximately 120,000 tons of gold above ground, practically all that has ever been mined. This equates to a 4:1 ratio, or four times more gold than silver existing above ground.
Silver Supply and Demand: The Current Economic Crisis
The silver supply story,
especially the swing during the 20th century that has led to the current shortage is fascinating.
With the absence of government and other significant stockpiles, silver demand is met mainly by mining and scrap. And silver is mined primarily as a by-product of other metals.
The current economic depression will have a significant impact on the mining sector - resulting in even less silver coming into the market.
will suffer as overall demand for all commodities declines in this current depression.
Silver demand, on the other hand, will continue to rise. Although it is not commonly known, silver is important as an industrial metal with
being discovered every year. In the coming months and years, industries like defense, health, and energy will likely place significant pressure on an already stretched supply situation.
For the first time ever, there is generally accepted, though seldom reported evidence of a retail supply shortage in silver, demonstrated by higher premiums everywhere and significant delays in delivery. For the silver investor, this represents a tremendous opportunity.
Silver Investing for Everyman
Perhaps the biggest plus for the new silver investor is the role silver plays as “poor-man's gold.” As the banking system continues its collapse, it is likely that more and more demand for silver will come from the common man.
It is a sobering truth that every fiat currency throughout history has failed, and there is mounting evidence that the dollar will soon begin its final descent. As the dollar fails, there will be a great shift toward real money, coincident with the usual and disastrous inflation. Silver will be resurrected as currency once again as the dollar crashes and society needs a temporary system of barter.
Gold will likely go first, and it is already priced higher than most can afford. But silver is a different story. Silver is inexpensive not only in relation to gold, but with respect to any other investment that is comparable in terms of liquidity, long-term value, and fundamental supply and demand character.
With only 1 billion ounces of silver available and prices below $20 per ounce, whatever supply is left, surely will not last long and the issue of weight will be a long lost problem. Add to this the ease with which practically anyone can afford to build a silver coin portfolio, whether all at once, or over time with no counterpart liability.
The silver investor realizes the importance of silver as a “lifeboat” or a hedge against (hyper)inflation.
For a great way to get started now with rare silver coins, download our Free Guide To Investing in Silver Coins.
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