Silver Investing Shocking Secret - How it Might Exceed $400 Per Ounce in 2010

So what is a better investment gold or silver? Many people might say gold but to tell you the truth silver can rise ten times higher as compared to gold. Many analysts are of the opinion that silver prices can rise as high as $400/oz in the next few months. First, let's discuss some historical performance of gold vs silver. Between 1970 and 1980, gold prices increased from the Bretton Woods fixed price of $35 per ounce to an unprecedented $850/oz. This was an increase of 2,329% in ten years.

Now, during the same period starting from 1970 and ending at 1980, silver prices jumped from a mere $1.50/oz to almost over $50/oz. This was an increase of 3,233% over a period of ten years. So, just compare buying a few ounces of gold as compared to silver and their returns over a period of just ten years.

Now, let me explain why this unprecedented rise in silver prices might happen. You see as compared to gold, silver has far more industrial applications. As the global economy starts to expand again in this year, the demand for many industrial products will grow. Silver like gold is available only in limited quantity. So you can well imagine what happens when the demand rises but supply does not!

The most important application of silver is as an electricity conductor. Silver wires are used as high tension cables. You will be surprised to know that silver is also used in a number of household appliances like refrigerators, washing machines, wall switches, fuses and so on.

Silver is used extensively in photography. This use might decrease as digital photography replaces traditional photography. But this will be replaced by new uses of silver in other industries. Now, take a look at your computer, every computer, server, monitor, cell phone and switch has silver. Lasers, satellites, high-tech weaponry and robotics, all require silver. Digital technology and telecommunications need silver.

A new double layer of silver on glass is sweeping the window market, as it reflects away almost 95% of the hot rays of the sun. A new electronic application for "smart tags" that are replacing bar codes could use significant quantities of silver. Silver is heavily used in chemical industry. Silver is a great reflector and as said before is used widely in mirrors and glass coatings.

Batteries use silver. Silver is used in soldering, pharmaceuticals, catheters and many other areas. So, you can well imagine as the global economy starts to expand again and the demand for these products and services increase, you will see a skyrocketing of silver prices.

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Cheapest Gold or Silver Investing?

First of all I don't think you can be hurt by buying/investing in either right now. If you picked either one and decided to go with that, I think you will be better off than about anything else you could possibly invest in. I am not a financial planner or investment advisor so before you take any of my advice at all, or buy a darn thing with it, consult someone else! There, now that I've covered my butt, here's my information.

Gold is mainly recycled and held. 95% of all gold mined in the history of the world continues to be held by mankind. There are approximately 4.58 billion ounces of gold in the world still available in some form.

What About Silver? According to the two industry silver surveys by the silver institute and the cpm group, there are about 250 million ounces to up to 650 million ounces of silver, or about 1/7th to amount of gold on the planet. It may shock some to find out there is a lot less silver on the planet than gold.

Which is more volatile as a price? Again, I can't imagine an upcoming scenario where anyone buying either is hurt but if you look historically the ratio between gold to silver has been much different than it is currently.

In 1792 the US Congress passed the First Coinage Act. The Act officially established the Dollar as our currency, defining one Dollar as a weight of pure silver, 371.35 grains to be exact. A Quarter Eagle ($2.50), was defined as 61.875 grains of gold. The Act legally set the gold/silver ratio at 15. In 1834, Congress passed the Second Coinage Act, slightly tweaking the gold/silver Ratio from 15 to 16. Since these times you have seen the ratio climb up to around 100 but since the 70's average around a 20-1 ratio. Would this point you more toward silver investing with the ratio currently being 55?

Which would you want? 55 ounces of silver or one ounce of the cheapest gold? Yes it would be harder to transport 55 ounces of silver than gold but with there being less silver on the planet and with all the newfound uses of the metal, I am stating my position as being one for silver investing vs, purchasing even the cheapest gold.

Ray Higdon is an American, a lover of our country and a homebased business advocate. You can find out more about Ray at Silver MLM Site