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Silver is characterized by a brilliant white metallic luster and is also called the gold of ordinary people. It is the second most important or the most used raw material in the world (right after oil). And experts estimate that the known reserves of silver will be released within the next decade. It has extraordinary physical properties and for most of history, silver has been the real money that people have used in their daily lives. With silver coins, it was easier to carry value for everyday purchases and without the risk of losing your entire property in the event of loss or theft.
Silver has been used as (natural) money for centuries and millennia in Europe, the Middle East, North Africa and throughout Asia. It has always had (and still has) an extraordinary importance in the developed societies of China and India. The love of Asians for silver, which in their culture is almost equivalent to gold, will prove to be an important factor in the growth of the value of silver in the coming years, as they gain purchasing power and, considering their number in the billions, the result will be an enormous increase in the demand for silver.
Silver is not only ideal for the function of real money, but has many exceptional properties that make it indispensable in industry and healthcare.
So silver is not just a luxury metal like gold, but a useful, industrial metal, which means that there is a massive demand for it that is growing.
Its not oil that runs the world today but electricity. The efficient use of electricity is made possible by silver because it has the highest electrical conductivity of all materials, which is even higher than the conductivity of copper.
All electronic devices, computers, mobile phones, screens, as well as cars, absolutely need silver for their operation.
The consumption of silver for industrial purposes is therefore increasing year by year. Higher demand sooner rather than later leads to higher prices. In the case of silver, it is important to know that it is irreversibly consumed, because recycling methods are not profitable. All the silver used in the industry therefore disappears forever. Annually, this already amounts to 50% of all silver production. About 28% of the production is spent on jewelry production. Only around 17% is left for investment in silver bars and silver coins. So there is less and less silver, not more and more.
At the same time, experts estimate that the known silver reserves will be consumed already in the next decade!
Industrial consumption of silver already represents around 50% of the total demand for silver. The silver embedded in the products is lost forever and no longer appears on the market.
At the same time, mines that mine only silver are a real rarity, because such rich veins of silver are extremely rare. Only 29% of silver comes from silver mines, as its concentration is very low and is even measured in per mille. The rest of the silver is mined in lead, copper and zinc mines, where the silver remains as a by-product.
Since the price of gold is much higher than the price of silver, people get the impression that there is much less gold than silver and that this is the reason for the higher price of gold.
But the truth is again completely different. The obtained gold is carefully stored and therefore almost no losses occur. Most of the silver is intended for industrial use and is therefore irretrievably lost. It is a shocking realization that there is much less free silver than gold in the world today (estimates are around 7x).
Of course, there is a possibility that geological research will discover new potential reserves in the future, but before such a vein of ore is discovered, all the research is done, investors are acquired and even more importantly: to get a permit to operate the mine in order to protect the environment, it can easily take ten years and more before the first shovel is buried. As a natural metal, silver is very rare, its concentration is present in permille and thus most of it is obtained during the mining of other ores.
Discovering new silver will prove to be a very demanding task. Especially considering the fact that people have been mining it for thousands of years and almost all the reserves in the upper layer of the earth’s crust are known and exhausted.
Environmentally friendly, renewable energy sources are the priority direction of most countries to reduce environmental pollution by burning coal and using oil. Solar cells have great promise in the future, but for their maximum efficiency, they absolutely need silver.
In solar photovoltaic (PV) cells, there is a silver paste that collects the electrons produced when sunlight hits the panel. Due to its high conductivity, silver maximally converts sunlight into electricity. The production of solar cells is growing rapidly, and the demand for silver from them alone will reach a good part of the production of silver.
A further advantage and useful value of silver is that it offers the highest thermal conductivity. Wherever it is necessary to transfer heat without losses, it is necessary to use gold. Therefore, it is used, among other things, in the production of protective clothing for astronauts, who must also work in conditions close to absolute zero, a very cold 273 degrees Celsius.
Silver even allows us to see ourselves in the mirror because it is used as a reflective coating due to its highest light reflectance.
These are just a few of the traditional areas of industrial use of silver. New technologies are already on the way, which urgently need silver and in ever-increasing quantities.
The expansion of the 5G network, which is still in its infancy and will enable the establishment of the Internet of things (IoT), will stimulate the production of products such as semiconductor chips, cables, micro-electromechanical systems, various devices that require the Internet to function; for all this, we need the highest electrical conductivity and therefore – silver.
Today, the cashiers at the store charge us for the purchased goods by scanning the barcode affixed to the product. In a few years, the march of RFID chips will become common practice. These chips will be installed on each product. You will collect them in your bag and leave the store with them. No cash register. RFID chips emit a signal via radio waves, and with prior registration at the merchant, the purchase will be automatically calculated and charged. With billions of products around the world now equipped with barcodes and once RFID chips, demand for silver will skyrocket even further. Because RFID chips absolutely need silver to function flawlessly, because it has the best electrical conductivity.
Silver is extremely flexible. It can be pressed, rolled, stretched into really small, thin and long shapes. In addition to the design of jewelry, with these properties, it is indispensable in the production of miniature electrical devices. For example, mobile phones, parts of control panels of cars or airplanes, etc.
The use of silver in health care was widespread and recognized before the advent (and marketing) of antibiotics. With the aggressive marketing of antibiotics, effective and relatively affordable silver was pushed into oblivion. But antibiotics have created a new problem: bacteria have adapted to them, and some mutated bacteria can no longer be controlled with antibiotics. At that point, healthcare has no choice but to reach for silver again.
Silver was used to disinfect water already by the ancient Greeks and Romans. The water was simply poured into silver vessels and left to stand overnight. Nano particles of silver that were released into the water killed bacteria and viruses. You might smile at that and think of all the possible scientific research that would be required to confirm this “myth” from ancient times. Let me console you that even today there is no better way to purify water than with silver filters. That is why they are also built into the space station.
Nano particles of silver, which are used in the so-called colloidal silver consistently kills all bacteria and viruses. They have no defense against them, nor can they mutate and adapt to silver. Mutating bacteria due to overuse of antibiotics is an extremely pressing problem, because variations of bacteria are created against which antibiotics no longer have any effect. That’s when doctors resort to nano silver, which ends the life of these super bacteria as effectively as a mini silver bullet.
Also in the treatment of infections and healing of wounds, especially those that heal slowly. I experienced this myself when my mother had an open inflamed wound on her stomach for several months after a difficult operation. It was only when they tried therapy with silver plasters that the inflammation in the wound subsided and soon the wound was dry and healed.
Silver has so many useful properties that it is used in more than 1,300 patents. Without silver, we would not have more than 42,000 different products in the form, function or efficiency that we have today.
Silver (rather than gold) was therefore the common money widely used in everyday life throughout most of history throughout the world.
The word money also comes from the Roman name Denarius for a coin that was made of silver. How strongly this silver coin has been imprinted on the collective memory of Europe and nearby Asia is shown by the fact that a series of currencies are called denar or dinar.
Today, silver is considered a relatively cheap precious metal compared to gold. But only few know that for centuries the value of silver was much higher compared to gold.
The historical ratio between the price of gold and silver was 1 : 15. So for 1 gram of gold you got 15 grams of silver.
However, ever since silver is no longer used as a means of payment, the price of silver has started to slide down sharply since 1873. The least silver has ever been worth compared to gold was just recently.
In March 2020, 1 gram of gold would get you 126 grams of silver.
However, silver is not devalued but undervalued. When thinking about investing in precious metals, the vast majority of people think of gold first. For investors who want to enter with an investment that has a greater chance of growth, silver is all the more interesting.
In the midst of the last major crisis, a kilogram of gold cost 43,510 € in August 2012.
When the new crisis broke out in July 2020, the price of gold jumped up to 55,000 € per kilogram. The price of gold has therefore already exceeded the peak of 2012.
With silver, this effect follows with a delay.
Thus, in March 2011, the price for a kilogram of silver was 1,026 €.
In January 2021, the price for a kilogram of silver rose to a maximum of 759 €.
This data alone shows that silver has not yet reached its peak from the last crisis. Considering that it is considered to be the younger brother of gold, a movement towards the top and even its excess can be expected.
The price of silver is much more volatile than the price of gold. Which means it rises much faster and also falls much more, usually in relation to the movement of the price of gold.
Thus, with an increase in the price of an ounce of gold, we can expect an increase in the price of silver by 3x to as much as 13x.
For the actual overvaluation / undervaluation of silver, it is therefore best to follow the ratio between the price of gold and silver.
Over the past hundred years, the ratio between the price of gold and silver has been constantly changing dynamically. This also provides an opportunity for additional earnings in the form of obtaining an additional amount of one or another amount of precious metal upon exchange at a favorable ratio.
The lowest ratio during this time occurred in 1980 during the great manipulation of the Hunt brothers, when one gram of gold was worth 15 grams of silver.
By 1991, the ratio jumped to 1:91, which means that a gram of gold was already worth 91 grams of silver. And it fell again to 1:32 in 2011, which means that the price of silver rose so much that a gram of gold was worth only 32 grams of silver.
Then through the development of events a shock came to be in 2020, when in March of this year a gram of gold was worth an extraordinary 121 grams of silver.
Only a few months later, the ratio was approx. 1 : 70.
Framework guidelines for sales or the purchase of gold and silver shows the following relationship.
Silver is considered undervalued at a ratio of 1:80
At 1:40, the ratio is balanced.
Below 1:20, silver is overvalued.
The price of silver and gold, expressed in currencies, naturally rises significantly during periods of economic and financial crises. That’s when people realize that paper money is rapidly losing value and return to real, natural money that stores value. In a crisis, due to this property, the price of gold and especially silver rises sharply.
What can happen in the future with the price of silver expressed in dollars (and consequently euros)?
When the FED, the central bank of the USA, in the recession of 2008-2009, “quantitatively released” or created 1,200 billion dollars from nothing, then the price of silver grew by 4.4 times in three years.
In the current crisis situation of 2020-2021, the FED quantitatively released a good 4,190 billion new dollars from scratch. And every month a few hundred new billions are added. In fact, in one year, the FED conjured up 35% of all the dollars that existed at any time in history. At the beginning of 2022, this number has already risen to 8,000 billion new dollars!
History does not remember such a financial experiment. But history teaches us that every coin has two sides. And the other side of the tremendous increase in the availability of money is inflation. The higher the growth of money, the higher the inflation will be.
High inflation, however, destroys people’s savings. In such years, gold and especially silver, which is more useful in everyday life, represent protection against the decline in the value of money.
At the same time, the value jumps up. Thus, during the crisis in the 1930s, one silver coin, which today is worth maybe 30 euros, could support the whole family for the whole week.
The state treats silver as an industrial metal for tax purposes because so much of its production is used in various products. Therefore, the purchase of silver is taxed with value added tax.
But there is a way to buy silver without paying VAT. You can do this by buying and storing silver in a duty-free zone in a reliable country like Switzerland. Of course, you need to do this in a proper and safe way that ensures you actually own the silver or gold bars.
For more up-to-date information and instructions, register for the Gold and Silver webinar.
All calculations and results in the techniques described in the book are examples and are not a guarantee of future results or for all users. Author Martin Korošec, official representatives of the publisher and the company are not financial advisors, stockbrokers or registered investment advisors. All types of investments or named companies or financial instruments are presented for educational purposes only and not for the purpose of recommending a purchase. Consult your chosen licensed advisor before investing.