For those considering an investment in 100 oz silver bars, or any major silver purchase for that matter, drilling down into the global history shaping today’s precious market is a wise use of time. To gain an understanding of silver’s monetary significance specifically, investors should take into account the historical backdrop of the Silver Standard, the unique properties of silver, and the characteristics of good money. What will become evident is silver’s consistent role as the world’s most standard monetary element across the globe from millennia to millennia.
Let’s explore.
The oldest recorded use of silver as a standard for exchange traces back to 3000 BCE in Sumeria, modern-day Iraq. Throughout history, silver maintained its significance as a standard of value and real currency, persisting into the early medieval period during European globalization around 476 CE and the Viking Age from 793 to 1066 CE. With the dawn of the Renaissance in the 14th century, advancements like the compass, larger sailing vessels and improved navigation techniques facilitated the Spanish Colonization Era, establishing the worldwide Silver Standard by the 16th century.
In the late 1700s, the worldwide Silver Standard was grounded with the introduction of the Silver Piece of Eight, also known as the Spanish Dollar. These coins fostered greater efficiency in both international and local commerce due to their widespread recognition and high level of acceptability. In fact, these Spanish Dollars became the model for the Silver Trade Dollars of the 1800s. The flow of silver from Mexico, Bolivia, and Peru prompted widespread globalization and commerce during this period, causing monumental economic growth and an improved standard of living.
Over a long period, the Gold Standard eventually overtook the Silver Standard on the global stage. Britain, a dominant force, ushered forward the preference for gold as a monetary standard starting in 1717, under the leadership of Sir Isaac Newton, the Master of the Royal Mint. Newton set a lower exchange value of silver in relation to gold, compared to other nations, causing the importation of gold and the exportation of silver currency. In 1821, the UK formally adopted the gold standard – a standard followed by nearly all major nations by 1873.
Despite the global shift to a gold standard, China held onto the silver standard until 1935 and silver coinage remained in use across the globe until the 1960s. In the United States, silver certificate paper currency, redeemable in actual silver, continued to be issued until 1965. The US government continued to honor the promise of silver redemption for a few years after that. In 1970, the circulation of US silver coinage ended completely with the change in composition of the Kennedy half dollar from 40% silver to a silverless format.
For millenniums, silver’s essential role as money was due to just four elementary properties of silver. Although today, silver is also indispensable for its unique utility in industrial applications, it was originally touted for its (a) Durability, (b) Density, (c) Malleability and (d) Antibacterial properties. These factors, along with its scarcity and a few others, set the stage for silver’s widespread popularity as a rare precious element to be sought after as both a medium of exchange and a store of value. Silver most keenly meets the 7 key characteristics of money, “good” money that is.
7 Characteristics of (Good) Money
The bottom line? At the time, silver best met the requirements for ‘good’ money and a standard of value. It struck a delicate balance of scarcity, ensuring enough availability without being overly abundant, thereby offering a perfectly adequate money supply to fulfill the need for a universal exchange medium in growing world economies. This rationale underscores the longstanding prevalence of the Silver Standard before the surge in gold supply during the 1800s.
Monex is pleased to offer the 100 oz silver bar, competitive pricing, an attractive two-way buy/sell market and exceptional customer service. To learn more about how to invest or any one of our precious metals products, contact a knowledgeable Monex account representative today.
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