Interestingly enough, gold remains intact; an ever present commodity. Silver, on the other hand, is being used up and discarded. We are in a silver crisis at present and a host of people are buying up silver while they can. Let’s take a look at why this is happening.
Increasing Number Of Uses
The Silver Institute reveals how valuable silver has become. Its use in technology has become critical in the global silver market. The components of silver make it suitable for a wide range of applications.
It is one of the best electrical and thermal conductors, making it ideal for a variety of electrical uses such as switches, multi-layer ceramic capacitors, conductive adhesives, and contacts for silvered films in electrically heated automobile windshields. It’s also used as a coating material for optical data-storage media, including DVD’s. Health and medical applications are also using silver as well, due to its natural antibacterial qualities.
Most consumers are not aware of how much silver is used in these common applications. As a matter of fact, NASA’s Magellan spacecraft relied on silver-coated quartz tiles to protect it from solar radiation during a four year scientific mission.
Silver is used in many of the electronic devices we use today, including cell phones, plasma- display panel televisions, personal computers and laptops. Silver is also incorporated into button batteries, water-purification systems, automobiles, and it is a component of the growing photo-voltaic industry, to name just a few.
The Silver Institute also reports that high temperature semiconductors, which will revolutionize the transmission and storage of electrical power and the efficiency of motors and most other electrical equipment, rely upon silver to operate.
Many chemical processes including the production of polyester fabrics, hydraulics, engine antifreeze and flexible plastics, utilize silver as well. When we take a broad look at the latest technological advances and the most important ones of the last century, we see the role of silver in nearly every major field of advancement.
In addition, silver has numerous important applications that help our environment. By replacing our need for harsh chemicals and reducing the amount of energy we use, silver can help us decrease the size of our “footprint” on the environment.
Most importantly, silver is the main ingredient in photovoltaic cells, the solar panels used to transform natural sunlight into power. It is also used to reflect light to run generators. The addition of silver to windows reduces up to 95% of the sunlight transmitted indoors, thereby allowing residents to save on energy costs.
Solar energy is cost-effective, environmentally responsible and provides an immediate source of power. From single-family homes to corporations and multinational companies, solar energy is expected to grow exponentially in the United States and abroad and has already began implementation as a replacement for traditional fuel-based power.
The use of silver in nanotechnology is a growing area of interest. The idea is simple: when silver is added to fabrics, appliances, carpets and air purifiers, it acts as a sterilizer, killing harmful bacteria that otherwise would have had to be treated with harsh chemicals. By reducing our reliance on potentially toxic substances, silver in nanotechnology is a major victory for green technology.
Another key use for silver is in the millions of water purifiers that are sold each year. Silver prevents bacteria and algae from building up in their filters so that they can do their job to rid drinking water of bacteria, chlorine, trihalomethanes, lead, particulates and odor. Research has shown that the catalytic action of silver, in concert with oxygen, provides a powerful sanitizer that virtually eliminates the need for the use of corrosive chlorine.
Silver’s association with anti-bacterial properties has long been established. The ancient Phoenicians knew enough to keep water, wine and vinegar in silver vessels to ensure freshness. It is only recently, however, that scientists have discovered why silver works. Quite simply, silver interrupts the bacteria cell’s ability to form the chemical bonds essential to its survival. These bonds produce the cell’s physical structure so when bacteria meets silver it literally falls apart. For this reason, silver enforced bandages are especially in demand. Bandages with silver ions prevent bacterial growth and speed healing time, making them especially valuable for treating burn and wound victims.
Supply Is Limited
According to silverseek.com, last year’s total mine production for silver was 819 million ounces, yet demand was 1.1 billion ounces, making the total shortfall for 2013 about 262 million ounces. Recycled silver last year fell 24%, the largest drop on record. Physical demand rose by 13%, so much so that the United States mint literally sold out. China used less than 1 million ounces of silver in 2012, but rose sharply to 35 million ounces in 2013 due largely to its use in solar panels. 62% of silver is used for industrial applications. 21% is used for jewelry and 12% for coins. 95% of silver used is gone, never to enter the supply side again.
Moneyx.com points out that, “what is not so well known is that while gold has demonstrated a solid trend of price appreciation since 2001, more than quintupling in price, the price of silver has in the past outperformed that of gold.”
In fact, between January 2, 2009 and December 31, 2012, the price of gold increased over 90%, while the price of silver increased over 160%. In addition, there is a compelling argument for investing in silver because the economic and monetary fundamentals in place today are even more bullish than the conditions of the 1970s when the silver price exceeded $50 per ounce. Yet today’s market prices, at well below the $50 level, are a mere fraction of levels projected by silver industry experts for the future.
Worldwide market demand for silver is growing, while supplies of silver are quickly disappearing. New high-tech uses for silver will further strain already tight supplies in the future. World demand for silver now exceeds annual production and has done so every year since 1990, depleting above-ground stockpiles of silver. The U.S. government, once the largest stockpile of silver on the planet, dumped billions and billions of ounces of silver into the world market over the years, resulting in depressed silver prices.
Today, that government silver hoard is gone, and now the U.S. government is a buyer of silver at prevailing world silver prices. For these reasons and many more, the silver market certainly appears to represent an outstanding investing opportunity.
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