Silver

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JamesTerry's picture
JamesTerry
Status: Member (Offline)
Joined: Apr 26 2013
Posts: 18
Silver

Hi everyone,

 

Just a quick question I have about silver for anyone to answer for me. 

I understand that silver is an industry standard material.  It is used in phones, laptops, batteries, medical appliances, construction etc. making it pretty darn useful.  But once it is used and binned the silver is rarely, if ever, extracted.  So the amount in circulation is going down and down and down making it more sought after and more expensive.  I understand that. 

But surely with less and less of it being available, over time they will just look to find an industry substitute for silver.  Much like they are doing with oil now.  Won’t this make silver obsolete over time and therefore everyone’s amassed collections of physical silver will have been for nothing?

Am I right in thinking this or is there something I am missing? 

Thanks,

James

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2379
Silver

There are new uses for Silver being developed all the time.... its properties are fixed;  most conductive, most reflective, etc..  these are unchanging.  

Here's one new use announced within the last few months; 

http://www.abc.net.au/science/articles/2013/02/07/3682707.htm?site=scien...

Light-trapping, silver nano-antennas could dramatically improve the performance of solar panels by catching more light, according to a new study.

A team of physicists, including Professor Constantin Simovski from Finland's Aalto University, has developed theoretical designs that could increase photovoltaic cell efficiency in a commercially viable way.

It proposes incorporating chessboard-patterned arrays of tiny silver nano-antennas into solar panels.

This would trap more incoming light, allowing it to be preferentially re-radiated through the photovoltaic slab, improving efficiency.

Be aware that if the world goes into a dramatic, industrial depression.. Silver could go down due to the (majority today) industrial component of demand.  Then again, it might not go down in price if its monetary use reasserts itself in the face of fiat money devaluation around the world.  Paper money can go to zero.. Silver never will. 

If you had asked your question back when the trend was clear that digital photography was going to take the place of film-based photography... you might have thought that Silver demand would fall off a cliff then.  That didn't happen though...

The real macro trends are this;

1)  Like most mined metals, ore grades for Silver are decreasing and mining costs are increasing.

2)  As you say, most Silver that is used industrially is not recycled, hence it is "gone".

3)  Right now.. today.. the monetary function of Silver is reasserting itself as evidenced by the store shelves of coin shops and big online dealers being literally empty.  

Some materials just have the exact right properties for their application - if replacement was as easy as you propose, don't you think auto makers would have long ago replaced Platinum and Paladium in catalytic converters with something cheaper?          

 

JamesTerry's picture
JamesTerry
Status: Member (Offline)
Joined: Apr 26 2013
Posts: 18
Thats a great response. 

Thats a great response.  Thanks for taking the time to answer Jim.

JamesTerry's picture
JamesTerry
Status: Member (Offline)
Joined: Apr 26 2013
Posts: 18
Could you maybe also tell me

Could you maybe also tell me if you think it is smarter to purchase silver by the kilo (provided you can afford it) rather than in 1 oz coins?  Financially it makes more sense yes?  I understand that it is obviously easier to distribute when you have a lot of small coins.

dshields's picture
dshields
Status: Platinum Member (Offline)
Joined: Oct 24 2009
Posts: 599
Silver was and Is money...

I use the word money and not currency. I agree with Jim H. While silver does have industrial uses it has a long history of being gold's little brother as money. Money is something that has intrinsic value. This is different than currency which does not have intrinsic value. Given the world situation with the arrival of the end of a super debt cycle and increasing costs of energy, I would not hesitate to purchase gold and/or silver. The central banks and governments of socialist states (Europe and the US) have promised far more benefits than can be delivered. Out of control spending by governments and the debt they are accumulating will eventually lead to a loss in confidence and subsequent financial crisis as investors come to understand they are either not going to get paid back (haircut) or they will be paid back with basically worthless currency as a result of inflation. Gold and silver have always been seen as hedges for inflation.

Given the antics of the last few weeks in the gold and silver paper and physical markets, it starts to look like A LOT of people all over the world are starting to see price drops in these commodities as serious buying opportunities. As a result, paper prices and physical prices have diverged. This is an unusual and potentially serious problem for the markets if it continues. I have been buying silver every month for a while now (dollar cost averaging) and I have no intention on selling any of it unless I am forced to. I am not in the market to trade - I am in the market to buy and hold. I suppose I am one of those people that believe the current world financial situation will not be resolved without some type of "reset". If I am right and there is a "reset", your silver holdings will probably look real good.

 

JamesTerry's picture
JamesTerry
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Joined: Apr 26 2013
Posts: 18
Awesome, thank you for

Awesome, thank you for replying.  I will be buying my first kilo bar today in England.  I spoke to one of the guys at the bullion dealership today to ask if I should come down and buy it in person rather than online because of the increasing demand taking a toll on shipping times and he said that, while it is all becoming a little more stable in his shop, this is the first day that he has been able to get back to the phones as he has had to help out in the packaging department because of the crazy demand.

 

This is what it looks like today.

QTY Net
Per Unit
VAT
Per Unit
Gross
Per Unit
1+ £562 £112.40 £674.40

Good idea then?

Jesper.Madsen's picture
Jesper.Madsen
Status: Member (Offline)
Joined: Jul 31 2012
Posts: 3
VAT free silver

There are companies offering silver with 0 vat shipped from Estonia. The fact is that Silver is VAT liable all over EU, but the rate on silver COINS (not bars) in Estonia is 0.

i brought home 10 kg some weeks back, but then found an online distributor offering to ship it back to Scandinavia. Don't pay the VAT in UK, there are smarter ways ..

Good luck 

JamesTerry's picture
JamesTerry
Status: Member (Offline)
Joined: Apr 26 2013
Posts: 18
But then surely you pay just

But then surely you pay just as much in shipping costs from places like Estonia, provided you aren't on holiday there and able to pick up your items instore.

Jesper.Madsen's picture
Jesper.Madsen
Status: Member (Offline)
Joined: Jul 31 2012
Posts: 3
40 EUR

Cost me 40 EUR to ship 50 ounce of silver, beats the 25 % VAT we face here 

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