If you’re a baseball fan, silver is a double play. If you’re a football fan, it’s a double reverse. For a blackjack fan, it’s a double down. And right now, I believe it’s time to double down on silver as an investment opportunity.

 

Silver is recognized around the world as an important industrial metal AND a precious metal that has intrinsic value, making it a solid hedge against currency debasement and buying power destruction.

 

And right now it is 1/70th the price of gold!

 

To give you perspective–silver is used in just about every electronic device, from computers to cell phones and all the circuitry in between.  In medicine, it’s used for many life-saving purposes, including treating burns and wounds and as a powerful coating for prostheses, catheters and other surgical implants. Mirror surfaces use silver because of its high degree of reflectivity. And, there is growing demand in the solar market for it.

 

But right now the price of silver is barely above its mining cost even though it is being consumed at a record pace. Why is that? Is the price being manipulated in some way? It’s been a touchy topic for banks and others in positions to manipulate markets. I would argue that they are keeping hard assets depressed so that paper assets can stay elevated.  But as we know, every bubble ends up bursting and every bull market starts to growl.

 

One thing I know is clear– the low price of silver doesn’t reflect its surging demand and dwindling supply.

 

Anyone who has taken Econ 101 knows that silver prices should be going up according to the fundamentals of supply and demand. Because it is undervalued, many investors are buying silver in large quantities at a price they believe is way below what it should be.

 

Savvy investors know that silver can protect you as good as gold against inflation, geopolitical uncertainty, dollar devaluations and financial crises.  For thousands of years it has been a store of value and a medium of exchange. Just like gold, it has intrinsic value.

 

Historically, the gold-to-silver ratio (the amount of silver it takes to purchase one ounce of gold) is 33 to 1. That means for every one ounce of gold, typically I can buy 33 ounces of silver.  Today it’s priced at over 70 to 1!  That is well outside the average.

 

With the investment and industrial demand on silver increasing, supply diminishing and markets such as Asia emerging, I believe silver will return to its vintage ratio of 33 to 1, making it a precious metal of choice for savvy investors.

 

So if you haven’t thought about adding silver to your portfolio or putting it in your IRA—now’s the time to consider it.  It’s a chance that might not come around again.

 

Scott Carter

Author Scott Carter

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