THROUGHOUT HISTORY, many different things have been used as a

form of money; such as stones, salt, shells and beads. From the very

beginning, silver and gold have displaced all other mediums of exchange.

The invention of the printing press brought with it paper currency. No

government has ever successfully substituted paper for real money, because

no government can “print” silver.

NORMALLY, silver prices are anticipatory rather than reactionary. Once

the forces of the inflation index begin to be felt, investors will buy into the

market to make sure they are in position before the general public. Their

buying will drive prices upward.

THE SUPPLY: New mining production is not stimulated by silver prices.

Mining production is fairly fixed because over 70 percent of the silver

produced is a by product of copper, lead and zinc. Economists agree that

silver consumption exceeds production, that the shortage is being supplied

from private above ground hoards, and that the price of silver has risen

dramatically as the result of it. Part of that shortage is made up from

recycling jewelry, film and some electronic parts. The majority however, is

supplied by a diminishing world’s supply of silver.

THE DEMAND: Silver has chemical and physical properties which are

unique. It is the best conductor of heat, the most reflective of light and, next

to gold, the most resistant to corrosion. The Technological Revolution has

transformed the metal of coin and art into a metal of electronics,

photography, computers, aerospace and medicine! Silver is one of the most

perfect conductors of electricity and therefore is considered an industrial

metal besides a monetary metal. Since WWII, an average of 200 new uses

for silver were found each year. If science and technology continue to

progress, it is reasonable to assume that new uses are yet to be found.

SILVER AND INFLATION: Fifty years ago you could buy a loaf of bread

for a dime. Today you still can…if it is the same silver dime. The real value

of silver, like gold, hasn’t changed. It never changes, only the currency

changes. During periods of inflation, it takes more dollars to buy an ounce

of silver as the dollar loses its value. It is said the price of silver goes up,

but the value stays the same. Silver is a store of value and therefore a

protection against inflation. High interest rates tend to depress silver prices

because the silver users (photo, electronic, jewelers, etc.) find it

uneconomical to tie up money in inventories of silver so they sell their

stockpiles and drive the market down. However, inflation then becomes a

self-correcting factor and it eventually adjusts itself. As we witness the

deflationary collapse of traditional financial institutions on the one hand,

the destruction of the dollar’s value on the other hand, we are forced to find

somewhere to put our capital for preservation. Silver will be the subject of

tremendous bidding for this purpose.

THE OUTLOOK for silver as a long term & short term investment is

excellent. Silver prices must increase as silver users bid for the metal. For

investors who seek a long term hedge against the declining value of paper

currency, as well as a good average annual profit, the ownership of silver is

a must.