Silver; a monetary or industrial metal?
 

Is silver more of a monetary or industrial metal? It's both of course, so is gold. But I feel gold is much more of a monetary metal. IMO copper is much more of an industrial metal, but it can be a monetary metal too.

But back to silver. What's silver's real strength? An industrial metal or a monetary metal?

Re: Silver; a monetary or industrial metal?
 

Every silver investor ought to know what they believe about this. Assuming that silver is an industrial metal, if the SHTF, then industry is going to grind to a halt reducing the demand for silver. Historically silver has been included in several bi-metalic standards, but if you think the dollar is crashing I would encourage you to hold more gold than silver.

Re: Silver; a monetary or industrial metal?
 

It is both. As an industrial metal and as collateral on notional paper debt loans.

In a confidence crisis, because of the out of balance ratio between the metals, silver has a shorter distance to fall than gold - as far as notional value is concerned.

We must also realize that in a broad market deflationary crash, as notional value drops, purchasing power increases. This could very well be a self cancelling monetary effect for PM's.

Hence the term, "securities".

Re: Silver; a monetary or industrial metal?
 

I think the beauty of silver is that it is both. It has the monetary heritage but is also consumed in industry.

The problem with gold is that the vast majority of the above ground stocks are still around in a usable form. If TSHTF, I can sell my wedding ring. It is a lot harder for me to go digging through the dump to mine the silver in a circuit board.

Re: Silver; a monetary or industrial metal?
 

I feel that today's silver is more of an industrial metal than a monetary metal. That has not always been the case of course. As far as I know, the Romans did not value silver for its ability to make a better wepon. It was in great demand for coinage though.

If SHTF and the dollar crashed and the world was in a major depression, then silver would not be in demand as an industrial metal for at least a while. But IMO, it would revert back to being more of a monetary metal again then. I believe to a much lesser degree copper would too.

But gold is the king of monetary metals.

Re: Silver; a monetary or industrial metal?
 

IMHO - When the SHTF the monetary system will be destroyed and the trading vehicle will be diamonds, gold and silver. Man has always traded for these and they are easily recognizable. While diamonds require a certain skill gold and silver require only minor acid verification. Besides it is convenient to trade with coins and silver and gold have the only real value. Who wouldn't trade for either of them? Perhaps after all the above, H2O, will be the most valuable! :wink:

Re: Silver; a monetary or industrial metal?
 

Now IS mainly industrial.
Will be mainly monetary or equally both.

Re: Silver; a monetary or industrial metal?
 

I think SLV & Ardent have it right - from everything I have read - while silver is both, its primarily an industrial metal while gold is limited in industry and has always been money.

If industry grinds to a halt, as the dollar or stock market crash, silver will be less in demand.......so I have both, and will always keep some silver around, but I expect it to hit a high and then start to come down in price while gold moves on ahead....and thats when one should sell silver and put the money into gold!

And if you look at 1979-80, when gold spiked before, gold was twice the profit silver was.........history doesn't always repeat but it does give one a good indictation of where things might go!

Re: Silver; a monetary or industrial metal?
 

Yes. Piece together for yourself what the demand picture is for silver, and how various economic events might affect that demand. Industrial collapse is a possibility. In that case, as with any deflationary chain of events, a drop in the price of silver is quite possible.

This thread is among the most important ever on this site.

Re: Silver; a monetary or industrial metal?
 

It is both. It depends on surrounding issues. Like gold, it has whatever value people believe it has. If it is being over used industrially, the price will reflect it, and if times are such that people accept it as a value of storing wealth, it will behave like a PM.

Right now, I believe it is viewed primarily as an industrial metal, while gold is valued more as a store of wealth.

Re: Silver; a monetary or industrial metal?
 

:proud: Wow, my thread is one of the most important ever on this site and I didn't mention nickel even once! Dam, I just did.:D

Seriously though, I agree with you DrillAndFill. In addition, I wanted to make the point that many of us (not all) silver buyers watch for "safe haven" type of news events and wonder why the price of silver doesn't always increase at the same percentage as gold. We need to also watch the news for information that is tied to the minining and industrial consumption of silver. Much more like that of the base metals.

I understand I might seem to be spliting hairs here. I also know I'm not telling a lot of you anything you didn't already know.

Re: Silver; a monetary or industrial metal?
 

I couldn't vote here because I think as silver demand decreases its monetary value will increase.

Its currently in that process.

Re: Silver; a monetary or industrial metal?
 

But where do you think silver currently leans towards? Industrial or monetary GREENSLIVERHORN?

Re: Silver; a monetary or industrial metal?
 

Silver 200 years ago was 100% monetary and today it is 90% industrial. It has changed due to changing circumstances; fiat money has reduced the demand for PM as money and rising technology has increased the demand for various applications. As a result, the magnitude and nature of the demand for silver is totally different.

Where in the next 25 years? If there is a rapid and very large demand for silver as money, it means that fiat hasn't fared too well and I suspect that most people won't be very happy about the state of things. At the preferred minimum though, I think that the true value of fiat will slowly become apparent to the population making them seek refuge in value. In addition, the industrial (and maybe health) uses of silver will multiply.

It is impossible to know which useage will predominate, store of value or industrial. Doesn't matter though, both trends are up and the trend production of new silver is down. The direction of silver price is clear.

Buy a bunch silver and sit on it. Don't read GIM, Kitco, Apmex, any of that. Check on the price in 15-20 years and be rich.

Re: Silver; a monetary or industrial metal?
 

"Buy a bunch silver and sit on it. Don't read GIM, Kitco, Apmex, any of that. Check on the price in 15-20 years and be rich." TomD

Hey! What's that about not reading GIM?:rofl: But I know what you are saying and you might just be right.

Re: Silver; a monetary or industrial metal?
 

As technology discovered new uses and as people were forced to stop using silver as money, silver began a transition from money to primarily an industrial metal; but it is not black and white, rather I see silver shifting along a line, a continuum, between the two points over time. Currently the money use is dormant while the industrial use basks in the limelight.

Unlike most other metals, an economic collapse which would tend to lower the price and lessen the industrial demand may be largely compensated by silver shifting back along the line to it's money function, since it is more affordable than gold and the memory of it's money use has not faded.

But only gold, not silver or platinum or diamonds, is held as a monetary reserve by banks and powers.

I think it wise to have both.

Ragnarok

Re: Silver; a monetary or industrial metal?
 

Primarily it's an industrial metal today. That's not a bad thing because unlike gold, it's supply is shrinking.

Re: Silver; a monetary or industrial metal?
 

Re: Silver; a monetary or industrial metal?
 

I think the Carry Trade is secured by collateral - borrowing short, investing long.

Silver options have risk to the downside in its well shorted market, so why the line up of "investors" (suckers for the big four dealers) in this market ?

Short term higher interest loans secured by silver option contracts.

As long as they can get a higher yield in the loan than the loss on the options its a money maker.


The options are used as collateral that can be bought on margin !

Investors can use precious metals options to mitigate market risk.

When silver is used as collateral it IS money.


-JMO

Re: Silver; a monetary or industrial metal?
 

The big question here is "can the world live without silver". Probably yes. It could drop to 2 US dollars and get no buyers. Would be a SHTF scenario for most here.

But the bet here is inflation of dollars is going to come first, driving people towards hard assets.

Until that point somebody somewhere will pay multiples to keep his machines running.

Hold back from the metal recycler and watch the ETF's around the world's inventory gains (anyone have a link for a study on the total oz's held by the world's ETF's in gold and silver?) vs Comex's. Inventory on paper is still worth watching.

Especially when a lot of people need to cover delivery contracts.

Re: Silver; a monetary or industrial metal?
 

My coin dealer told me that China is in the process of trying to get control of the silver market as they need it for industry as much as they do. I haven't seen any speculation on this yet.:confused:

Re: Silver; a monetary or industrial metal?
 

Silver; a monetary or industrial metal?



yes

Re: Silver; a monetary or industrial metal?
 

China and other developing countries are the wild card here. A new factor in the equation. Oh, a few more new wild cards keep flying in too. We dont know what sort of safe-haven buying will happen with a bad ME war. There is no good past history to guide us that reflects today's realities. Will traditional cultural buying of gold cause gold to go more bullish than silver? Maybe. However, the backdrop of silver industrial demand will be there.

We like silver for the short/med term due to its volatility and industrial demand and supply deficit.

When the world markets turn sour... eek. We'll see what happens.

Together through the fog! :cooler:

Re: Silver; a monetary or industrial metal?
 

As of now, silver has gained in importance as an industrial metal. But remember that gold is the "noble" metal for a reason: it occurs in pure form in nature, and does not tarnish. Neither can be said of silver. And because so much industrial silver is in the form of alloys and chemical compounds, it will be more costly and difficult to extract and purify than gold. So, while silver may be laying in every trash heap, coin or better quality silver will be uncommon. Think of the difference we once had between iron ore and steel, and how the true metal of royalty, in the mid-1800s, was aluminum.

And those who have to extract the metals will pay a high labor and health cost to get it.

Re: Silver; a monetary or industrial metal?
 

You might check out these specimens;
http://www.johnbetts-fineminerals.com/jhbnyc/native.htm

Re: Silver; a monetary or industrial metal?
 

Monetary tilt.

Re: Silver; a monetary or industrial metal?
 

Very cool stuff. Amazing world we inhabit......

Re: Silver; a monetary or industrial metal?
 

If you see the dollar dropping in value before your eyes while the government claims a CPI of 2-3%... what do you do? Ultimately you want a way to store your wealth that is dense from both a mass and volume perspective.

Diamonds have the problem of grading and the fact that you can't melt them down. That, and they are only rare because of the Oppenheimer family.

That leaves precious metals. Platinum family are a pain in a SHTF scenario because of difficulty in identifying them, unlike silver and gold. Gold you can't really use as a daily currency; it works best when transferring large sums over a border. If you don't anticipate a neo-Bolshevik takeover and your incipient liquidation as a class enemy, then silver is good... easy to trade for a loaf of bread and convenient as money that can't be printed by the state, only mined with a great deal of effort.

From that perspective, I don't think that silver is ever off the table as a monetary metal. Add in the fact that it isn't utilized much as money now, and that future large inflation is virtually guaranteed as more people fight for less resources, and the first instinct of a government is to print more paper money when that happens... holding silver is a wise move, IMO.

Re: Silver; a monetary or industrial metal?
 

Here is a clip form Mary Anne & Pamela Aden's recent article (COMMODITIES ARE STILL HOT):

Silver's major trend is clearly up above $9.40 and it's poised to reach or surpass the May highs near $14.88. Silver is used in industry and it also plays a role as gold's little sister in times of uncertainty. This could explain why silver has been stronger than gold since 2003 and why it's recently been outperforming gold (see Chart 3D).

At the beginning of January, 2006 spot silver was @ $9; currently spot silver @ $13.10.

At the beginning of January, 2006 spot gold was @ $560; currently spot gold @ $630.oo

You can calculate the difference in % gain of both. In the short/med term silver will beat gold in % percentage gain. From 2002 to current, silver as gain 30% each year. Base on my research, silver is going to gain 30%-60% in value in the next 10 years. The abuse of gov over printing fiat will ultimately lead us back to biblical times when silver and gold will be use as legitimate money.

I have to admit, though silver can be very profitable esp. as a short/med term investment, it is very heavy and bulky to store. It takes back breaking effort to score a huge profit with silver. If spot silver hit $20, I'll bring out my dolly and roll half of my silver and trade them for gold coins.


Quote: One thing we learn from history, is that, we never learn from history. Anonymous.

Re: Silver; a monetary or industrial metal?
 

WTSHIF I would take a silver coin over a $100.00 fiat bill anyday of the week....... most of you are thinking like "they" want you to think and not as you should think.

Only reason that I am alive today is that I just to go into enemy controlled territorie and look towards our defences in order to find what they could find and then make it better.

Many times have I walked around my home, looking at it from the road and the forest, and then came back to make improvement in my defenses...... must of them wont go up till the time is here and it then will take me one day to set them up.

Think the same way about PM :beer:

Re: Silver; a monetary or industrial metal?
 

I find it interesting that current U.S. Quarters and Dimes are still clad in a Siver colored material. Why go to all the expense? Why make them look like the old Silver Dimes and Quarters? Could it be there is an "Historical Memory" in the population that Silver is real money? There has to be some psychological reason for cladding the current Quarters and Dimes. In my opinion Silver will
remonetize in an economic emergency.

Re: Silver; a monetary or industrial metal?
 

One reason I think they went with the more expensieve clad was to continue to give the sheeple of the day confidence in the money by its appearance.