As an investment strategy, it is a good idea to weigh the investment economics of a silver bar opportunity. In terms of gold, 100 oz silver bars have become relatively undervalued, suggesting advantageous profit opportunities. On top of that, it is intriguing to note the expanding uses and demands for silver. Photovoltaic power, aka solar cells, alone points to silver’s indispensable status in the green movement. Wise investors look at price volatility along with increased utility as an investment opportunity, especially in terms of the benefits of an alternative asset class.
Let’s explore.
Without a doubt, silver will be a key component of the green revolution. One can argue their preference ‘for or against’ government interference in free markets, but it is hard to argue that there will not be a growing concerted focus and public subsidizing of eco-conscious agendas. Because silver possesses unique conductivity and inherent physical properties, it is an important ingredient in numerous green technologies, ranging from electric cars to solar panels to organic anti-bacterial solutions. Furthermore, the amount of silver in these applications is minuscule compared to the finished product’s value and the effectiveness of silver’s essential properties.
For example, in solar cell technology, silver is made into powder and then a paste, which is loaded onto a silicon wafer. When light strikes the silicon, electrons are set free and the silver, the world’s best conductor, carries electricity for immediate or future consumption. Because the typical solar panel uses about two-thirds of an ounce of silver, the cost of silver is de minimis in relation to the value of the panel it is used in. That is less than most spend to replenish their Starbucks App accounts. Given its expanding technological use, silver is expected to be increasingly necessary at multiples of its current price.
Gold is the flagship of the precious metals complex. It is a good benchmark because it is so widely traded and highly utilized as a store of wealth. But, silver is like gold on steroids. It has the monetary properties of a store of wealth, along with the growing essential utility in industrial applications. Furthermore, above-ground stockpiles are relatively nominal in value, which makes silver ripe for extraordinary upside potential.
In times of a rare and unexpected catastrophic event, which is referred to in economic terms as a “Black Swan Event,” the value of silver bullion can be quite weak immediately, as silver is such an exceptional and speedy source of cash liquidity. However, as cash calls subside, we have seen rapid growth in the values of all silver bullion products. Silver has proven to be more volatile than gold offering better profit-taking opportunities, such as the COVID crisis. For example, from the COVID-inspired March 20, 2020, downward effect, in less than five months, gold appreciated 40%, while silver reached an incredible 135%. Silver has seen such remarkable opportunities in the past, and it is hard to argue that such cannot transpire again, especially considering the world’s current state of affairs.
Some say a systemic problem with banks and the U.S. dollar’s demise as the world’s reserve currency are two potential Black Swan Events to prepare for, and tangible silver is a good alternative asset to own. Ok, but don’t ignore the Gray Rhino in the room. What is a Gray Rhino? As opposed to a black swan, a “Gray Rhino” is a metaphor referring to a highly likely yet ignored high-impact threat, something we ought to see coming, and should not be neglected. The inevitable dollar crisis is less of a Black Swan Event than the Grey Rhino in the room that nobody wants to face.
It should be readily apparent that the staggering U.S. National Debt, along with its staggering obligatory spending to carry that debt, is so insurmountable that it is unsustainable without a partial or total default. Whether you call this Debt Clock a time bomb or a runaway train, the Rhino is charging ahead.
Whether you see economic benefits of silver with or without a high-impact event or simply increased forward progress in technologies where silver plays an essential role, it seems evident that acquiring 100 oz silver bars could be the investment strategy that makes sense for you. Market timing can cause some to postpone moving forward, so do not hesitate to discuss your interest with your Monex account representative.
As with any bullion investment, you may choose to take a short-term or long-term view. In any case, it is prudent to consider your exit strategy and have a reliable avenue to sell if the need arises. With the wide array of trading and storage services that Monex provides, you may find that Monex is a valuable source for commodities, services and information, including actively quoted buy and sell prices.
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