Silver

Silver is becoming scarce

After World War II, the U.S dollar became the most widely accepted currency worldwide because it was viewed as a proxy for silver and gold. However, excessive dollar printing forced the United States to default on its silver backing promise by 1968. This was followed by the gold backing default three years later which ushered the world into a purely fiat currency system.

Following these defaults, 1,540 million troy ounces of U.S government’s silver reserves were sold into open markets causing a massive supply influx which was slowly devoured by industries. A typical computer keyboard, for example, contains a few grams of silver which, given the low price, was un-economical to recover. Thus, it was estimated that about half of all silver mined throughout history was thrown away as end-of-life electronic components over the last 50 years. Today, government silver reserves globally are exhausted.

Silver is undervalued

Silver demand has been much higher than mine production for many decades to the point that Thomson Reuters's 2016 World Silver Survey estimates that the “identifiable worldwide above ground silver reserves” are only 71,578 tons of silver compared to gold's 183,600 tons worth of equivalent gold reserves.

Thus, according to Thomson Reuters numbers, there are an astonishing 2.5 gold ounces in reserve for every silver ounce. As of November 21, 2024, a gold ounce is value as being worth 85.75331859828576568704301006 silver ounces.

Historically, 16 ounces of silver were equivalent to a gold ounce. Today this ratio is 85.75331859828576568704301006. Read more on how this ratio is a great indication on whether to buy silver or gold.