Silver has long been valued as a precious metal, and it is used to make ornaments,jewelry,high-valued tableware,ustensils and currency coins.

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.