Silver May Soar And Here’s Why
With the U.S. public debt crossing $30 trillion dollars, many people worry that the global reserve currency – the U.S. dollar – may ultimately collapse in the near future. If that were to happen, then what would be the value of a widely used commodity such as silver?
In order to understand how silver will be valued during a hyperinflationary collapse, it’s hard to think in terms of U.S. dollar amounts. That is because the U.S. dollar would essentially be worthless if it were to collapse in value. In a sense, the price of silver would be infinite if measured in terms of the U.S. dollar!
So what makes silver such a valuable commodity in a U.S. dollar collapse? After you finish this article, make sure to contact our executive team at Allegiance Gold. At Allegiance Gold, we believe that education about how precious metals can help your portfolio is very important. Here’s a look at its most valuable attributes.
1). Silver has a limited supply
Unlike the U.S. dollar – which can be printed out of thin air – you have to dig silver out of the ground in order to extract its value. Also, there is a limited supply of silver in the ground and in circulation. Currently, it is estimated that there is around $1.3 trillion of silver on the entire planet. Compare that to the US dollar which has $2.3 trillion in circulation. However, 80% of that $2.3 trillion in US dollars has been created since 2020.
In the past, bull runs in silver have led to a lack of supply in the bullion market. As an example, during the bull runs in the 2000s, silver coins were simply unavailable. When there was a limited supply, the premium on the coins was anywhere from 20% to 40% over the spot price. In effect, the limited supply causes the price of silver to go even higher due to panic selling and hoarding.
2). Silver is used in manufacturing
Unlike gold, silver is widely used in manufacturing. In fact, silver is used in batteries, dentistry, glass coatings, LED chips, medicine, photography, photovoltaic (or solar) energy, nuclear reactors, and RFID chips (for tracking parcels or shipments worldwide), semiconductors, touch screens, water purification, and more. Because of this, much of the silver in the world is taken out of circulation or otherwise destroyed. During bull markets in commodities, silver often outperforms other precious metals.
This is even more true if there is a bull market in manufacturing. Right now, the global economy continues to expand. We are seeing billions of people move from poverty into the working class. That creates incredible demand for automobiles and electronics. This could further the consumption of silver which could push the price even higher.
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3). Silver is extremely fungible
Because silver’s price per ounce is a fraction of that of gold, it is easy to spend on everyday items. For instance, you can purchase a bag of what is known as junk silver and use them for regular transactions in a hyperinflationary collapse. These are old circulated U.S. dimes and quarters that have actual silver in them. Right now, one junk silver dime from 1950 has a value of about $3. During a hyperinflationary collapse, a couple of junk silver dimes should buy a week’s worth of groceries. That gives silver a great amount of potential utility.
4). Silver is widely accepted as money
Just about everywhere you go in the world, you can use silver as money. Because of this, it has a lot of value. Additionally, silver is expected to be the money of choice for everyday transactions in the event of a collapse in the US dollar. In the event of a hyperinflationary collapse, you can expect to see lots of independent stores or private sellers accept precious metals such as gold and silver for their transactions.
Silver’s Value in a Potential U.S. Dollar Collapse
In the event of a collapse in the U.S. dollar, silver’s value will be immense. Therefore, it may be a good idea to diversify some of your wealth in silver, especially junk silver. Even starting with a small monthly investment is a step in the right direction. At Allegiance Gold, we can show you exactly what could work for your financial portfolio. Our executives are constantly educating our clients on the importance of adding precious metals to their financial portfolios. Make sure to call 844-790-9191 and ask for your FREE Gold IRA Guide, or simply fill the form below. Now is the time to act on learning how silver and gold can preserve your wealth.