Gluskin Sheff Chief Economist and Strategist Davind Rosenberg discusses the reasons for why silver is an attractive investment poised to outperform even gold in the coming years.
From Breakfast with Dave January 19, 2010.
Silver also is very likely the metal that has the most industrial uses from batteries to mirrors to video equipment, so it is more than just a store of value as gold is. The silver price is more tan 60% below its prior peaks even after the impressive rally of the past year. And when you take a look at where silver trades to gold, which is still flirting near record highs, it would have to triple to get to where gold was in relative terms at the peak back in January 1980 (gold was trading near $740/oz â€“ more than 30% below where it is today â€“ when silver was trading at its record peak back in January 1980 at $45/oz).
Relative to oil, silver could surge 4x from here and it still wouldnâ€™t match the prior high in this relationship over three decades ago. Considering the problems that plague every major currency in the world, from the U.S. dollar, to the Yen, to the Euro, to sterling, and knowing from the McKinsey report that the need to monetize the surge in public debt will be required to cushion the economic blow from what will likely be another 5-6 years of deleveraging in the private sector, and given the much more stable supply outlook for silver (all the low-cost shallow mines on the planet have already been gutted) and where it trades relative to gold, not to mention what little attention the metals grabs and how under-owned it still appears to be, exposure to silver, whether it be in bars, coins, ETFs or mining companies, is likely going to be prove to be a very attractive investment in coming years.
We’ve recommended silver as part of your SHTF Wealth Preservation Plan for quite some time, and we continue to agree with others, like David Rosenberg, who suggest silver is going to continue to rise in price, and more importantly, in purchasing power relative to other goods.
Silver has often been called the poor man’s gold because it is affordable and closely follows the long-term gold trend.
As a wealth preservation store of value, you could do as Mr. Rosenberg pointed out and invest in silver mining stocks or exchange traded funds. If you’d prefer to invest in the physical commodity, consider one ounce denominations of the Silver America Eagle or even generic rounds. For preparedness planning, we’ve recommended 90% silver coins like dimes and quarters struck prior to 1965.
(Read the article What is Money When the System Collapses? for information on why having 90% silver coins might be a good idea)
Our view is that in terms of bartering and trade, depending on the scenario that is playing out, the 90% coins would be most recognizable by merchants in the United States in the event that the US Dollar collapses. Here is a breakdown of some popular coins to acquire if interested in 90% legal tender coins:
1946 – 1964 Roosevelt Silver Dime 0.0723 ounces of silver per dime
1932-1964 Washington Quarter 0.1808 ounces of silver per quarter
1964 Kennedy Half Dollar 0.3617 ounces of silver per half dollar
1965-1970 Kennedy Half Dollar 0.1479 ounces of silver per half dollar (40% silver)
For more information about calculating silver content for specific coins, including fair value price for a specific number of coins, we recommend the CoinFlation.com Calculator.
Hat tip Tom of the North