Silver has historically been both a monetary metal and an industrial metal.Silver consumption is skyrocketing due to worldwide demand for consumer electronics and power, communications and computing infrastructure, although much of the silver "consumed" in industrial usage is eventually recovered through recycling. On the supply side, most silver production is a side-effect of mining other industrial metals such as copper, zinc and lead. Stocks are certainly much more volatile, as you can see in the chart of the Dow Jones Industrials. This means the opportunity for larger gains, but also the risk of larger losses. Using similar cyclic logic on the DJIA, seeing bottoms at 1932 and 1980, and tops at 1929, 1966 and 1999, it is again tempting to project the next bottom between 2010 and 2020 somewhere south of 100 grams, with the next top possibly around 2,200 grams but probably not occurring until 2032 or later. With the Dow currently around 370, these would be huge swings – down 75% and back up over 2000%! Now you can decide to go better investing choice!
Liquidity is also a question. Or, I should say, under what conditions is it liquid. With stocks, you have very high liquidity as long as you have an account at a brokerage firm that trades on the exchange where the stocks are listed. For the bigger brokerages you can now trade via your computer, your smartphone, etc, and trades are pretty much instant. On the other hand, in a financial meltdown, you may not be able to get much value for your stocks when you need the money. If you have a bag of silver coins in the safe in your bedroom closet, on the other hand, there's a good chance you'd be able to use them to trade locally for necessities like food if our economy ever did reach the point of meltdown. During normal times, you can also take your silver locally to places like pawn shops, coin shops, etc, and get cash in hand. You can't do that with stocks.
You make some very good and interesting points Peter. I would have never thought about it in terms of our economic meltdown and using silver that way. Thanks.
