Silver can be considered not only the metal used to produce inexpensive jewelry, but also the object of long-term investment. From 1950 world silver inventories have fallen by 93%, while industrial consumption of silver continues to exceed the supply of silver. In the time interval from 2015 to 2020 it will be world shortage of silver.
Silver market is very small compared to many other markets. In the year the world produces about 650 million ounces of silver, 200 million comes from recycling and 50 million from sales of private individuals, totally about 900 million ounces of silver. This is the same approximate size of the annual consumption of silver, 45% of silver used in the electronics industry, 30% of silver used in jewelry, 20% silver - in pictures, and about 5% of the white metal is bought for investment purposes.
The dimensions of the world's silver is approximately 300 million ounces, that is, at a price of $ 15 (as it was several years ago) per ounce of silver world reserves were estimated at 4.5 billion dollars. If the silver is now worth less than $ 10, these reserves are in dollar terms declined. At the same time, the real value of silver stocks have not declined.
The market volume of silver - U.S. $ 3 billion - a tiny figure. For comparison, the cost of debt isover 50 trillion (thousand billion) U.S. dollars. Recently, however, the situation on world markets is not very stable:
The crisis of insolvency of the borrowers to extend to all sectors of the economy and an increasingly acute. Worst of all those who expected a loss of housing.
The stock market is reeling today rise - recession tomorrow. If you are a day trader, the instability of this you could only dream of, but if you're going to retire, then this situation can bring you to a heart attack.
Therefore, silver is now worth its weight in gold. First, the silver used in industry. Silver is used in the manufacture of computers, cell phones and the current relay. This means that as the modernization of countries like China, India and Vietnam, as well as regions such as Eastern Europe, the demand for silver will increase.
Silver is also used in medicine. Few know that silver is used throughout history as a germicide. Modern medical devices such as catheters and stethoscope contain silver, and in every medical facility of the western world uses silver sulfadiazine to prevent infections. Silver less than gold. Gold is not wasted. It is estimated that 95% of all mined gold will not disappear. With silver are reversed: 95% of all mined silver has been used for various purposes.
Forty-five percent of all silver mined is used for industrial purposes. 28% went to the jewelry, and 20% was used for film development photos. Only 5% of silver in coins.
Silver supplies are drying up. It is estimated that in 1900 the world was 12 billion ounces of silver. By 1990 this number had fallen to 2.2 billion ounces. By 2007, stocks of silver declined to 300 million ounces.
According to the most pessimistic forecasts of the world's silver inventories will end in 10 years. This can have disastrous consequences for the world economy. Ten years later, the silver can also seriously affect the world, like a barrel of oil, valued at $ 200.
In addition, as a precious metal, silver is also money. And with the collapse of the U.S. dollar, gold and silver are considered as insurance against loss of value. As more people realize that their cash - it's rubbish, that real estate has become a game of chance, and that the stock market is too unstable, money can become a reliable support.
Now the price of silver is approximately $ 13-14 per ounce. If silver will continue to be used for industrial purposes, and a crisis of the monetary system, who knows what might jump the price? At the turn of the 1979th and 1980 ounces of silver worth $ 48. In terms of current dollars, an ounce of silver would be worth $ 80.
More recently, there were silver exchange traded funds that allow investors to gain access to this precious metal. The reason that I find silver index fund perspective, is that such a fund is real money, but the U.S. dollar is the usual paper.
Until 1963 the U.S. dollar was a real money that could be equated with the silver. After 1963 the dollar lost a silver support, turned into a bill by the Federal Reserve System. An index fund like the silver backed old money, which means that as the fall of the purchasing power of the dollar, the new silver exchange traded funds can be a "new old money."
The importance of an index fund of silver is that it allows the public easier and more convenient to own silver. Have a share in an index fund is easier than storing physical silver, which has considerable weight and should be kept in safety, for example in the safe. And participate in an index fund Silver safer than buying a silver mine, which can be very risky.
In addition, the silver ETFs is quite transparent. If the price of silver increases, you will remain a winner, and if reduced - you lose. The risk is minimal in this case, because you're buying physical silver - you can not buy shares of company that may go bankrupt. While the index fund to fulfill its obligations and protects your money, your investment is safe.
Industrial use of silver will continue to increase as the modernization of developing countries. At the same time as the falling dollar's purchasing power, the average investor is aware of the benefits of index funds will buy silver and fund units.
This will lead to the fact that these ETFs will consume stocks of silver needed for industrial use. In the foreseeable future - perhaps a couple of years - these two forces collide, and the price of silver will rise faster than all other assets.
Anyway, there are several ways to make money on silver. Buy physical silver in ingots or coins. You can also buy stocks of silver mining companies. The easiest way is to open impersonal metallic account for silver in bank. This way you won't pay VAT tax and it is legal. So you’ll be able to buy and sell silver online using your internet banking and store it in your bank. Nowadays more and more banks provide these type of services.