: Silver:

Silver-History:

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The U.S. Treasury held 2.06 billion ounces of Silver in 1959.  Most of this stockpile was sold during the 60’s with the balance used in the minting of Silver Eagles from 1986 through 2002. (CPM Group , Silver Survey 2003, p.31) The U.S stockpile is now depleted. As of 2002 the largest remaining government silver inventories are in India, which holds around 87 million ounces.
 
The net result of 13 years of silver deficits is that through 2002 the cumulative deficit is 1,525.5 million ounces. (CPM Group , Silver Survey 2003, p.27) This entire deficit is made up from above ground inventories. World estimated above-ground non-coin silver inventories have fallen from around 2.2 billion ounces at the beginning of 1990 to around 419 million ounces with an additional estimated coin inventory of about 487.5 million ounces. Reported institutional inventories held on the COMEX, Tocom, CBT, and U.S. and Japanese Industry have fallen from 245.8 million ounces in 1996 to 144.4 million in 2002, a drop of 41.3%. (CPM Group , Silver Survey 2003, p.17) The total value of last year’s entire silver usage of 784.8 million ounces is around $3.6 billion, but the value of the paper and derivative contracts based on silver had a value of $193 billion, thereby dominating the silver market. (CPM Group , Silver Survey 2003, p.26) Long positions represent 400 million ounces of potential silver demand. Against this amount there are only 107.2 million ounces of silver on the COMEX of which only 46 million are registered and available for delivery.

The Return of Silver as Money

The final catalyst for silver is a return of silver and gold to their real purpose which is money used as a medium of exchange. Since the U.S. and the world went off the gold standard by abandoning Bretton Woods and quit using silver as coin, there has been an attempt to treat silver as purely an industrial commodity. However, throughout 5,000 years of recorded history, silver has been the prominent form of money. In fact, its use as money has been more prominent than gold. Emperors, kings and princes and merchants may have transacted business in gold, but the common man used silver. In trade, silver was the dominant monetary metal until the 20th century. It’s use as money has been recorded in the bible's first book of Genesis. Abraham purchased a burial site for his wife Sarah from Ephron the Hittite for four hundred shekels of silver. (Genesis: 23, 10-15)

A Unique Commodity

Unlike fiat currencies or paper money, which can be created in unlimited amounts, silver, like gold, has all of the properties of real money. It is divisible, durable and utilitarian. It is tangible. Money is a commodity that differs from other commodities because of its use as a medium of exchange. In each country, the use and function of money was once tied to gold and silver. It is only in the 20th century and briefly during the 17th century that countries deviated from the use of gold and silver as true money. Paper currencies were used for their convenience, but they were all backed and exchangeable for real money: silver and gold. It is only when money began to be viewed in the abstract that it became easier for governments and banking corporations to cast aside the properties that gave currency its value.