The end of silver as a precious metal?

[Jislizard]

...
If silver's commercial use became precarious, it wouldn't happen for a long time. But then you still have investor demand and coin and jewelry demand.

The bottom line is, while it's possible in some future time that silver could go the way of aluminum, it won't happen in my children's, children's, children's lifetime I think...

I certainly agree on the timeframe, except I don't have children.

However...

Investor demand I can see going down as silver loses its shine. Who wants to invest in something that is not much use? Other than us, Hedge Fund Managers don't seem to be interested and Financial Advisors never even mention gold, let alone silver.

Coin demand I can see going down as the switch to digital transactions removes coins from circulation reducing the number of new collectors entering the hobby. Plus I pass on 99% of modern coin releases anyway, overpriced rubbish. Unless it comes back into circulating legal tender I can't see much of a demand for silver coins as collectable items.

Silver jewellery I can see going the way of the dodo, in as much as silver tarnishes, needs cleaning etc, you get a nice bit of gold and it is maintenance free. Plus look at how thin you can actually make the precious metal in jewellery, rolled gold, filled silver, plating. Steel is now being used in jewellery for men. Silver was always the cheap option for jewellery, for teenagers trying to impress girlfriends or small silver rings that kids can buy, the occasional charm bracelet that you can give to a kid so that for the next few years you don't have to think too hard about what to give them as a gift.

Sadly things like silver cutlery or napkin rings etc., things I might actually buy, are too expensive! Which is madness! The cost of the metal is one thing which can be accounted for, but the cost of manufacturing a fork in steel and a fork in silver can't be that much different. For instance a teaspoon in a plain style in steel would be about $2, for the same thing in Silver it is $70. And they don't weight that much, certainly not 3oz. Obviously the market for silver cutlery is smaller, and no one wants to clean the damn things but at least it is a market.

Anyway, a few years to go before that is likely!

 

[willrocks]

Has there been any conjecture that silver could go the way of aluminium

Possibly not because:

Aluminium is the third most abundant element (after oxygen and silicon), and the most abundant metal in the Earth's crust.

Aluminium was only expensive for a short period because it not known to occur in its metallic form anywhere on earth and after it was discovered there was no way of producing on a commercial scale.

 

[Jislizard]

Has there been any conjecture that silver could go the way of aluminium

Possibly not because:

Aluminium is the third most abundant element (after oxygen and silicon), and the most abundant metal in the Earth's crust.

Aluminium was only expensive for a short period because it not known to occur in its metallic form anywhere on earth and after it was discovered there was no way of producing on a commercial scale.

So it was expensive, until advances in science/technology made it cheap.

Not an obvious leap for silver of course but there is a historical precedent.

Conjecture has extended to asteroid mining, filtering PMs out of seawater, bio-concentration (I.e. finding a bug that eats precious metals and getting them to go around filling up on it before you then harvest them) and many other I am sure but they don't have much creedence.

 

[Pirocco]

Silver is an element that requires per weight unit the processing of alot more tonnes ore than alot other elements.
What will change this?

Why should anything change it?

If silver isn't needed then the price might go down, regardless of how much it costs to produce it or how rare it is.

It isn't being used as money, it is being used in industry, and industry evolves, maybe the next stage of that evolution will be to get rid of silver.

Because that's what links general prices to its price.
Which in turn is why (as capital reason, other reasons are like more practical than a tonne steel) people buy it in the monetary role storage of value.
Regardless what happens in industry, or what governments proclaim/force.
If that wasn't obvious.

What made silver cheaper? Historically, discovery of America, and its exploration. That was the "was expensive".
In more recent times, notably the last decades of the 20th century, the technological/scientific advances made alot things cheaper. Just compare a computer now with a computer then. Or the amount people in production units then with now, due to automation. Especially in mining this made a big difference.

If there will be an end of silver as precious metal, it won't be due to me.
I rather see ends of some other stuff as whatever out there, stuff with production cost lower than sand from and delivered on the beach.

What was silvers past? What will be silvers future? The higher a price, the more people search for cheaper alternatives, upto eventually giving up the benefits of using silver. And vice versa. Why is silver used industrially? Because it's fairly cheap. Because it's useful. Think away all industrial silver usages origining from the price and its properties. No small electronic devices anymore? No mobiles? Again slower computers? Back to big phones? And some dozens other examples.
See, there is no reason to end silvers usage. Why then hunting one? The capital element that would make its usage drop, is a higher price. But even we, that stockpile, and inflict the users a higher price, are only a temporary story. Because we sell our stockpiles again, and the price will go back.
This topic is much like what if we stop eating bread. Or what if we stop using bicycles. What ifs don't make the world. It needs people to stop eating bread. To stop using bicycles. You alone won't suffice and it could be that you walk and get passed by people on bicycles wondering what is this guy walking here all that end.

 

[Jislizard]

This topic is much like what if we stop eating bread. Or what if we stop using bicycles. What ifs don't make the world. It needs people to stop eating bread. To stop using bicycles. You alone won't suffice and it could be that you walk and get passed by people on bicycles wondering what is this guy walking here all that end.

I think I understand your point, and the use of paragraphs is a great improvement

But your examples such as 'what if we stopped eating bread' is treating silver like it is essential. I would say it was more like 'what if we stopped eating tripe, or pigs' trotters?' We pretty much have, because decent cuts of meat became cheaper and more readily available, some people still eat the stuff, and it gets fed to pets, so it isn't completely abandoned, but it isn't as popular as it once was.

Same with bicycles, I used to ride them but they are inconvenient, you can't carry much on them, you arrive sweaty, you need a change of clothes, etc. The local bike shop just shut down, probably because you can buy cheaper bikes from Aldi, if you want to buy one at all. They too have become mostly irrelevant, relegated to a hobby, I have six of them rusting in the back garden, not even worth trying to sell.

Gold has survived this long and that is pretty pointless as well, silver's future seems to be tied to gold so I wouldn't think silver has any reason to be worried.

 

[Pirocco]

This topic is much like what if we stop eating bread. Or what if we stop using bicycles. What ifs don't make the world. It needs people to stop eating bread. To stop using bicycles. You alone won't suffice and it could be that you walk and get passed by people on bicycles wondering what is this guy walking here all that end.

I think I understand your point, and the use of paragraphs is a great improvement

But your examples such as 'what if we stopped eating bread' is treating silver like it is essential. I would say it was more like 'what if we stopped eating tripe, or pigs' trotters?' We pretty much have, because decent cuts of meat became cheaper and more readily available, some people still eat the stuff, and it gets fed to pets, so it isn't completely abandoned, but it isn't as popular as it once was.

Same with bicycles, I used to ride them but they are inconvenient, you can't carry much on them, you arrive sweaty, you need a change of clothes, etc. The local bike shop just shut down, probably because you can buy cheaper bikes from Aldi, if you want to buy one at all. They too have become mostly irrelevant, relegated to a hobby, I have six of them rusting in the back garden, not even worth trying to sell.

Gold has survived this long and that is pretty pointless as well, silver's future seems to be tied to gold so I wouldn't think silver has any reason to be worried.

I don't treat silver as essential.
There is nothing that is essential.
Even water in bottles.
Because people will take any water including the zerocost rain, when that is what is left affordable.
And that latter illustrates the point once again: production cost. The link to general prices.
For gold, that is much less. Because the stockpile is way bigger than the price ratio suggests.
A stockpile, is former production that is available at zero production cost. There is no link with other prices.
The bigger a stockpile is, the more that link will be weakened.
And it's rather golds future that is tied to silver, as the recurring order of average price peaks indicates.
See, a rope doesn't pull.

 

[ryan71]

People adore pretty things and silver is pretty.

 

[willrocks]

Has there been any conjecture that silver could go the way of aluminium

Possibly not because:

Aluminium is the third most abundant element (after oxygen and silicon), and the most abundant metal in the Earth's crust.

Aluminium was only expensive for a short period because it not known to occur in its metallic form anywhere on earth and after it was discovered there was no way of producing on a commercial scale.

So it was expensive, until advances in science/technology made it cheap.

Not an obvious leap for silver of course but there is a historical precedent.

Conjecture has extended to asteroid mining, filtering PMs out of seawater, bio-concentration (I.e. finding a bug that eats precious metals and getting them to go around filling up on it before you then harvest them) and many other I am sure but they don't have much creedence.

Aluminium is cheap because it is the most abundant metal in the earth's crust, more abundant than iron. It was initially very expensive because there was no commercial, cost effective way to extract it from the earth.

While science/technology did help to make aluminium cheap, the primary reason for it being cheap is abundance.

I'm no expert, but it seems that silver is much less abundant (not too far behind platinum, gold, and palladium). http://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth's_crust

 

[valuecreator]

When I want to know what the smart money think, I watch what billionaires do with their cash.

When I want to know what the dumb money think, I come to SS and read the likes of Jislizard.

No offense, of course


ps. For those who think that I'm a bit harsh: this is what you deserve when you insult people's intelligence (ie. comparing plastic bags with the most useful metal on the planet, which happen to be money as well).

 

[Jislizard]

Certainly a massive supply of bauxite and cheap fossil fuels is going to keep the price of aluminium down, it isn't even worth saving your drinks cans and recycling them for most people.

Silver is a lot less abundant and the idea that there is a silver shortfall is often touted for keeping the prices high.

But don't get too hung up on the specifics of Aluminium, aluminium is just an example of how something can be worth a lot of money one day and be lying by the roadside in a relatively short space of time, I read the Original Post as being a question as to whether anything could happen to silver which would end up with it being worthless in the future.

Most of it seems to boil down to supply and demand. But that supply and demand relies on silver being hard to get hold of and there being a demand for it.

Unless an asteroid made of silver hits the earth or they find a new way to extract it or the find a massive deposit then most people are happy that digging it out of the ground isn't going to get any cheaper.

So the only thing that would downgrade silver from a precious metal to just a metal, would be a drop in demand.

It is unlikely that people will decide they don't want silver jewellery, in India it is a major type of wedding gift and unless they all get rich and decide to go with gold instead, that will continue.

Coin collectors might decide that the hobby is on the downturn, as many do, no new blood, ridiculous premiums, bad designs, unimpressive events to commemorate, too many new issues etc. however it is unlikley that thousands of years of tradition might evaporate in a short space of time, despite the examples of the stamp and phonecard hobbies etc.

Investors might decide to put their money elsewhere, even when silver was going to the moon, despite getting on the main stream media there weren't massive hedge funds lining up to invest in silver. Most news stories about investing in coins seem to be about dealers commiting fraud or going bankrupt.

I am not sure what it would take for people to be convinced that silver could lose it's value, dropping from $50 to $20 doesn't seem to have done that but that was probably because most people were around for the rise from $15 to $50 so they are aware that the $50 wasn't anything more than a freak spike.

The big demand I would think is from industry and I know people were concerned as silver went to the moon. The main concern was that silver would price itself out of the electronics industry and manufacturers would use copper or graphite or some other cheaper alternative rather than put up the price of all their products. It was a short lived spike so I don't think this ever happenned, but it was certainly talked about. But industry is fickle, if discretionary income decreases then less iThings will be sold and less demand for silver. If they manage to do away with silver in their products, like the photography industry did, then silver will take a hit. If the government stops giving out free money to people to buy solar panels then silver could take a hit.

It might end up being very abundant but no one wants it anymore because there are better alternatives, we might not be able to imagine what they could be but most people wouldn't have been able to imagine microwave ovens, television, flight, digging a tunnel under the sea from France to England or many of the other things that today we take for granted thanks to innovations in technology (and crashed alien spacecraft)

I am not advocating for silver to go to nothing, I don't necessarily think that silver is even likely to go to nothing, however until the GSR changes or the price moves this is the most interesting thread (except one that just dissapeared...)

 

[GOLDPIRATE]

I've been stacking plastic shopping bags for many years. MY DAY WILL COME!

The modern ones just rot, even out of the light. You might want to check your stack - it may be no more than a pile of plastic dust.

I'm sure there's a biblical quote appropriate to this thread, something about not piling up treasure where moth and corrosion will get them, but rather ..........

Um,,,gold does nether rot nor corrode Crow! Even moths don't like it lol....Also, God knows we need finances down here. Anyone wanna pay my bills for the next month as I need a break from life for a while......

 

[Jislizard]

When I want to know what the smart money think, I watch what billionaires do with their cash.

When I want to know what the dumb money think, I come to SS and read the likes of Jislizard.

No offense, of course


ps. For those who think that I'm a bit harsh: this is what you deserve when you insult people's intelligence (ie. comparing plastic bags with the most useful metal on the planet, which happen to be money as well).

None taken

I try not to think everyone has come from the same background and has the same experiences that I have so in order to put an idea across I can't assume any pre understanding of the situation, this is the same reason I try to avoid using abbreviations in my posts, even common ones.

Some people cling on to ideas long after they have passed, racial supremacy, religious superiority, 'filofaxes are only for yuppies' and many others, the belief that what was understood in the past is true for the present and will be true into the future despite the rest of the world changing can be dangerous. So it is good to have threads which do question the common beliefs, they may not be popular with all members for whatever reason but after a good discussion on the subject you can at least get to see different perspectives, even if you don't agree with them, at least by taking part you have helped to move human conciousness just that little bit further.

Here is a European folktale which compares the value of salt to the value of gold, (they didn't have plastic bags in the olden days) http://www.zsfiskk.sk/aktivity/proj...hy_rok/Salt better than Gold-angl. verzia.htm

Of course silver is far more useful than gold.