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Each email has a link to unsubscribe. Register I'll try later. Register for free to continue reading. Interestingly, the silver-gold ratio in ancient Egypt was France mandated a ratio of Faced with the challenges of a bi-metallic monetary system with fixed exchange rates and the aftermath of a worldwide financial crisis, the US Congress passed the Coinage Act of Following the lead of other Western nations, including England, Portugal, Canada, and Germany, this act formally demonetized silver and established a gold standard for the United States.
With silver playing a smaller role as a monetary metal, the silver-gold ratio gradually spread. The modern average over the last century has been around Since the world went to a total fiat money system, there seems to be some correlation between the silver-gold ratio and central bank money-creation.
During periods of central bank money-printing, the gap tends to shrink. In fact, it plummeted in the aftermath of the financial crisis as the Fed engaged in extreme monetary policy. Looking at the current silver-gold ratio indicates that silver is still undervalued. That means, in effect, we have silver on sale. Third, supply and demand dynamics look good for silver moving forward. While silver is fundamentally a monetary metal, more than half of global demand comes from industrial and technological applications.
In the 20th century, photography was the primary industry using silver. That changed with the advent of digital photography. But silver's unique chemical properties make it indispensable in all sorts of modern applications and demand is no longer supported by just one or two industries. In the first decade of the 21st century, silver demand for electronics, computers, healthcare and other high-tech industries expanded dramatically. This reflects two of the metal's key characteristics - it has the highest thermal and electrical conductivity of any metal, and it is widely available.
It also has anti-bacterial properties. As you might expect, non-investment silver demand dropped in due to the economic contraction sparked by government response to the COVID pandemic. March and April saw precipitous drops in demand, but the market has shown signs of recovery since. Analysts expect industrial demand will rebound further as the global economy begins to recover from the impacts of the coronavirus pandemic. Silver demand will likely get a boost from the push toward solar power and other green energy initiatives in the coming years.
Solar power generation is expected to nearly double by according to a report released last summer by the Silver Institute. Even if the global economy recovers more slowly than expected in the wake of the pandemic, green energy demand for silver will likely remain robust. Analysts expect many government stimulus plans will include funding for green initiatives. On the supply side, mine output fell sharply in Production was projected to fall by 6.
The big drop in silver output is largely a function of mine shutdowns due to coronavirus, but mine output was already trending down before the pandemic. Global mine production fell by 1. When you look at all the dynamics, the future looks bright for silver. As Peter Schiff emphasized in his podcast, silver is a good quality investments. Silver is cheap. Silver stocks are a bargain.
So, rather than buying overpriced stocks supposedly to make a point and a political statement, you can make a much better political statement, a much better point by buying some physical silver and buying some silver stocks, because then you could stick it to the billion dollar banks who are short and also make some money for yourself. That is a much better outcome. Original Post. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
SchiffGold 2. Silver the Monetary Metal In the first place, silver is at its core a monetary metal. Either scenario is bullish for silver.
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Coins are our virtual good, and you can use them to award exceptional posts or comments, giving them Silver, Gold, or Platinum. Silver costs around $26 an ounce. Stackers think the price will rise as inflation erodes the value of currencies, demand for silver rises, and. Silver futures on the Comex were down 8%, priced at $ an ounce on Tuesday Silver price plunges nearly 10% as Reddit rally reverses.