Often considered the “poor man’s gold”, silver has been climbing the investment and demand charts since its discovery thousands of years ago in Anatolia, now modern day Turkey. Silver’s unique properties make it ideal for thousands of applications found in every day life.
Silver is not only the best conductor of electricity of all metals, the best conductor of heat of all metals, and the most reflective of metals, it is also a powerful anti-bacterial & anti-viral agent, that is malleable and ductile – and valued for its beauty.
The top producing silver mining countries are Peru, Mexico, and China (followed by Australia, Poland, Chile, the United States, Russia, Bolivia, and Canada).
A BRIEF HISTORY OF SILVER MINING:
All the silver ever mined in the last 5,000 years would fit in a 55 meter cube.
The first major silver mines were discovered in Anatolia (Turkey) around 3000 BCE.
Roman discoveries developed Spain into a major silver producer during the 1st Century (CE).
After Columbus’ New World expeditions in the early 1500s, the discovery of huge, prolific silver deposits in Mexico, Peru and Bolivia changed the focus of silver mining and enriched the Spanish Empire for 300 years.
Between 1500 and 1875, approximately 1.5 billion ounces mined in Mexico with the majority produced during the 1700s.
The backbone of the Spanish Empire was the one billion ounces of silver produced from Veta Madre (The Mother Vein) in Guanajuato Mexico.
Silver mining became an important industry in the State of Nevada (The Silver Sate) when the fabled Comstock Lode was discovered in 1857.
Between 1859 and 1877, Comstock yielded silver and gold with a value approaching $400 million – the equivalent of more than $500 billion today.
Discoveries in several countries (including Canada, the United States, and Mexico) between 1900 and 1920 led to a 50 percent expansion in global production – to about 190 million troy ounces annually.
Improved techniques in ore separation beginning in 1921 allowed for concentration of silver with lead, zinc, and copper. The explosion in production of these various base-metal sources has led to an increase in both silver output and silver usage.
A BRIEF HISTORY OF SILVER AS CURRENCY:
Silver first introduced into Egypt around 2500 BCE – and was considered more valuable than gold.
China was the first country to monetize silver (in 475 BCE).
Around the year 775 CE, the Saxon kingdoms issued silver coins known as “sterlings” – with 240 of them being minted out of one pound of silver. Large payments were reckoned in “pounds of sterling” – which is the origin of the term “British Pounds Sterling”.
After the Norman Conquest in 1072, the pound was divided for simplicity of accounting into 20 shillings and 240 pence or pennies.
Spanish “Pieces of Eight” were coins, first struck in 1497, containing a high silver purity and weight. They were the basis of the monetary system of the Spanish Empire and were widely circulated around the world. They were accepted as legal tender in the US until 1857.
The Mexican Peso evolved into one of the world’s strongest and most widely accepted currencies from the 1600s until the 1900s due to its silver content.
By the mid 1800s, China through trade and mercantilism, was in possession of 50% of the world’s above ground silver. The British sold opium to China in exchange for tea, silk, and silver – a factor in the Opium Wars between Great Britain and China during the mid-1800s.
1930s Silver was used as China’s official currency until the 1930s.
As the best conductor of electricity, silver has a multiple of uses in switches, contacts and fuses in electrical appliances, automobiles and electronics such as computers, TV’s, DVD and CD players, and cell phones.
Chemical reactions use silver as a catalyst; approximately 700 tons of silver are consumed annually in the production of plastics.
Mitsui of Japan is developing a catalytic converter for diesel engines using silver as opposed to platinum or palladium.
Billions of silver oxide-zinc batteries are produced annually for use in watches, cameras, and small electronic devices.
Invisible silver is a thin coating of silver on double thermal windows. This coating not only rejects the heat from the sun, but also reflects internal heat inward.
As the most reflective of metals, silver is used in specialized optical devices, automobile windshields, and for both commercial and household mirrors.
Very little silver used in industrial applications is (currently) re-cycled; instead it is “consumed”.
Hippocrates, the father of modern medicine, wrote that silver had beneficial, anti-disease properties.
Alexander the Great was advised by Aristotle to store boiled water in silver containers to prevent diseases caused by contaminated water. Wealthy, ancient Greeks, Romans, and Phoenicians stored their wine, water and oil in silver jugs to maintain their freshness and prevent spoiling. Silver compounds show a toxic effect on some bacteria, viruses, algae and fungi. Health and medical applications of silver are wide ranging and its uses include dressings and ointments for burns and wounds, anti-bacterial pharmaceuticals, coatings on hospital implements and surfaces, to name a few.
Silver is being used to treat waste water and to treat streams containing radioactive and biological contaminants.
Silver is increasingly being used for water purification and as an anti-bacterial agent in swimming pools.
Clothing is being manufactured with silver impregnated fabric to kill bacteria and fungi in order to reduce disease and odor. Military uniforms, sporting wear, and everyday clothing are now produced that contain this special fabric.
Recent research shows that silver also promotes the production of new cells, increasing the rate of healing wounds and bone.
ANNUAL USES OF SILVER:
Percentage of Total Use (in 2008):
37.7% – Jewerly and Silverware [261.0]
20.3% – Photography [140.7]
17.8% – Electronics and Batteries [123.4]
7.4% – Brazing Alloys/Solders [51.6]
4.1% – Coinage [28.2]
2.6% – Super Conductors [18.0]
1.6% – Mirror [11.3]
1.0% – Caustic Silver [7.2]
0.9% – Tube, Sheet, and Bar [6.3]
0.9% – Biocides [6.0]
5.7% – Miscellaneous [39.5]
Annual Total Use: 693.2
“Gold is the sweat of the sun, silver is the tears of the moon.” ~ Inca proverb
Like gold, silver has served as a form of money and a store of wealth for 5,000 years. For the average investor, silver can be an effective means of diversifying investment assets and preserving wealth against the ravages of inflation. Silver typically lags gold, then plays catch-up, resulting in highly leveraged investment opportunities.
Although the value of silver may vary, it has an intrinsic value that is immutable and permanent. The price of silver is determined both by its role as a financial asset as well as industrial demand trends.
Many experts suggest that investors should include silver among their investment assets – as a store of value. Between 1971 and 1981, the U.S. dollar lost more than half of its value, but silver prices rose nearly five times.
© 2010 – 2011, Oren Pardes. All rights reserved.