The inexorable rise of silver

Silver is one of the most important of all precious metals. Today, owning silver as part of your portfolio seems to be a smart choice as prices have risen substantially over the past year or two and show little signs of topping out any time soon.

World silver production by country

1. Peru: 123.9
2. Mexico: 104.7
3. China: 89.9
4. Australia: 52.6
5. Bolivia: 42.6
6. Russia: 42.2
7. Chile: 41.8
8. USA: 39.8
9. Poland: 39.2
10. Kazakhstan: 27.1

Measured in millions of ounces per annum.
2009 data according to the Silver Institute.

Sayings about silver

First, here are some facts and sayings you may or may not know about silver.

• “The major monetary metal in history is silver, not gold.” — Milton Friedman
• “Debt is the Money of Slaves. Silver is the Money of Gentlemen. Gold is the Money of Kings.” — Anonymous
• “Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them.“ — David Ricardo

Facts about silver

Silver isn’t stockpiled. Silver isn’t stockpiled in national reserves in the way that gold is. Governments stockpile gold in reserves.

High quality cutlery is usually made of Sterling silver. Sterling silver is composed of 92.5% silver and 7.5% copper. The high silver content gives sterling silver a high melt value in addition to its intrinsic value.

Silver is stable in pure air and water. When it is exposed to air or water that contains ozone or hydrogen sulfide, it will tend to tarnish.

Silver as a byproduct. Did you know that most silver is produced as a byproduct of the gold, copper, lead and zinc refining process?

Dimes, quarters and half dollars (USA) minted prior to 1965 contained a large amount of silver. A bag of pre-1965 dimes, quarters and half dollars with a face value of $1,000 would contain the equivalent of about 715 ounces of silver.

About 95% of all silver consumption can be attributed to industrial use. The major users of silver for industrial purposes includes the production of jewellery, silverware and photography.

Silver has the highest electrical conductivity of any element. The conductivity is better than copper and all other metals. It has the lowest contact resistance and is widely used in such applications as electrical circuits and contacts and batteries.

Silver serves an important role in water purification. Did you know that silver tends to prevent bacterial growth, and is therefore an important part of making water pure? Dating all the way back to the times of Alexander the Great and Aristotle, this quality was known to exist.

Silver was the name of the Lone Ranger’s faithful horse. The Lone Ranger’s (Clayton Moore) faithful companion, Tonto, was played by actor Jay Silverheels.

The 1895 Morgan Silver Dollar is one of the rarest and most valuable silver coins in the world of numismatics. According to the U.S. Mint, just 12,000 coins were produced for general circulation and another 800 Proof coins were minted. Recent auctions have seen the extremely rare coin sell for upwards of $120,000.00. Only 75 or so coins (all proof) have ever come to public view and it is speculated that the other coins were never actually minted, melted down and destroyed or in some researcher’s position, lost at sea.

Silver is more malleable than any other element except gold. One grain of silver can be made in to a sheet that is 150 times thinner than a sheet of notebook paper.

The Comstock Lode was the greatest single discovery of silver in US history. Back in 1859, over 17,000 people rushed to the Eastern Sierra Nevada Mountains to get a chance at improving their fortune by cashing in on the silver rush.

Silver is the best conductor of heat of all the elements. It is used widely in solar panel, rear window defoggers and many other operations where heat transference is important.

Silver’s melting point is 961.78 degrees Celsius or 1763.2 degrees Fahrenheit.

Peru is the number one silver producer in the world. According to 2009 statistics, Peru produced 123.9 million ounces, followed by Mexico – 104.7 million and China – 89.1 million. The United States was 8th with 39.8 million ounces.

Silver has always had a relationship to gold. Back in the 19th century, one ounce of gold was equivalent to 15.5 ounces of silver. The ratio changed over time. In 1910 it was 38.2 ounces of silver for one ounce of gold. In 1930 it was 63:1, 1970 – 23:1 and 1990 – 102.1

Silver iodide is used to seed clouds and produce precipitation. This element’s versatility is a major selling point.

Silver is more ductile than any other element except gold. One gram of silver can be coiled up in to 8,000 feet of thin wire.

Silver is used in long-life batteries. Your watch, camera and flashlight will all be powered by batteries containing silver.