The Case for Buying Silver in 2018

  Much can be said for 2017. For some it has been an incredibly stressful and difficult year while for others 2017 will be heralded as one of the greatest years in American history. What Americans from both sides of the political spectrum can agree on however is that 2017 has been an incredibly economically prosperous one. 

  The stock market has hit record high after record high. Real Estate in most areas of the country is also appreciating handsomely in value. Cryptocurrency investors made an absolute fortune, especially these past six months. There seems to be few if any investments that didn't significantly appreciate in value (unless you happened to be buying Venezuela's currency).


  The average silver investor probably can't help but feel somewhat left out when every other investment seems to be going so well. At the close of 2017 it is worth reconsidering the merits of owning some of this particular precious metal.

  People generally like to buy precious metals as a hedge against inflation or major economic downturns. This is as true for silver as it is for gold, however, there is a second important reason why one would want silver. Globally there is only about a billion ounces of silver available for investment, at $17 an ounce this represents a $17 billion dollar market cap. Gold by comparison has a $7.7 trillion dollar market cap (if you do the math you will find that available silver is more rare than gold strangely enough). The crypto markets are worth about $500 billion at this time, or about x30 times as much as silver. Visual Capitalist did an excellent job displaying this information in a graph recently that can be seen here:

  Only 20% of silver is even being used as an investment. Most silver mined is used up in industry or jewelry. Silver has thousands of commercial uses and is strongly preferred because it is much cheaper than platinum or other precious metals. Solar Panels, iPhones, batteries, even anti-freeze all use silver. Demand has been increasing each year. For a more full display of silver's uses see this beautiful infographic here:

  If silver were to return to having the same market cap as gold (as it did up until about a hundred years ago) then it would be worth an astounding $7,700 an ounce. If silver were to correct to just a fraction of that then it would still be an incredibly worthwhile precious metal to physically own.

  A major correction could happen with or without a breakdown in the global economy. One of the main reasons why silver is undervalued now is largely attributed to paper price manipulation via banks. European and American banks are trying to defend themselves in court however, there is significant evidence that this price manipulation has been ongoing. The price fixing could end when the paper price becomes too disconnected with the cost of mining or when the banks are forced to stop shorting silver ETFs via the numerous lawsuits that miners have against them.

 Silver may be the last undervalued major asset on the market. When this will end is anyone's guess but when it does I want to make sure that I have a respectable hedge.

 The United Precious Metals Association offers 0% Buy/Sell spreads on Silver Eagles so that you don't lose 10% on your investment day one. It costs about a penny per ounce per month for vaulting and insurance. If you have any questions don't hesitate to call or email us.