Silver as a commodity- my take

Like gold, during tough periods silver tends to be a safe haven asset. It has been used as a storage of value and as a currency throughout most of history, cheaper than gold silver many with smaller budgets, see silver as very appealing.

Industrial uses:

Silver is very conductive material making it an important element in the manufacturing of electronic products. Used in medicine, energy storage and renewable power generation. From an industrial standpoint, silver has value.

Silver compared to other assets:

looking at price fluctuations during short periods, silver tends to fluctuate significantly. It displays volatility during short periods due to its low liquidity. However, looking back historically this precious metal has compounded by roughly 3.45% annually over a 100 year period. While this doesn’t seem that spectacular it has surely been a significantly better store of value than fiat currencies. Silver has clearly kept fairly stable during inflationary pressures.

Just like gold silver shows low correlation compared to equities and bonds. Although it seems more sensitive to economic disruptions than gold, when economies lift, demand shows strength.

A common pattern noticed is that when equities fall gold rises, fear and uncertainty drives this trend. Silver seems to fall during sudden equity crashes, this cycle tends to happen because silver is heavily tied to industrial use. However, during bad periods of painful inflation accompanied by equity declines, silver seem to act more like a anti equity asset- just like gold. Inflation seems to drive this trend. The difference in prices between these two assets are indeed at extreme ends, polar opposites. If at anytime in the future a massive price increase occurs in silver, the overall global stock index will likely lose a significant portion of value.

Purchasing physical silver:

Purchasing silver in Europe comes at a disadvantage. Governments throughout the EU apply VAT- sales tax to the purchase of silver and other precious metals. For most, there’s a great deal of difficulty avoiding these taxes while trying to conduct business in the eurozone.

The most sensible option would be Norway. A 25% sales tax is added to the purchase of precious metal bars; coins are exempt though. Fortunately Norway is a member of the European Economic Area and not a member of the bureaucrat EU, this gives certain Europeans the right to move goods around without the all of anti business nonsense the EU seem to embrace.

Precious metal storage:

Storing your silver in a private vault held by a reputable company will keep your asset safe from the banking system. Vault storage will significantly reduce counterparty risk, shielding your wealth from government incompetence and instability. A good choice of location would most probably be Switzerland, with its long history and fine reputation of upholding the property rights of individuals, Switzerland continues to be well trusted.

Based on the fact that currently debasement is all around us, buying silver to protect one’s wealth seem to be a smart bet.