Let’s talk about silver and investing in silver. First of all, let’s make clear that silver is not gold. These are two different, very different kinds of investment vehicles to hold money in and I am very much for gold. I am very sceptical to silver as an investment or as a speculation or as a hedge or anything. Gold is money, gold is value, gold is fundamental, gold is something that Central Banks hold, they have in their books, their vaults.

Gold is something that used to be the base of our monetary system. Silver also to some extent, but you cannot really compare how gold and silver had worked over the years. Gold is the monetary foundation really and silver is something that has been used almost as a substitute during certain times and certain economies. This is the fundamental difference between silver and gold. And there is no relationship between silver and gold necessarily.

If you have a boom in one, sometimes you have a boom in the other, but there is no relationship – institutional or phycological or metalurgical for that matter. These are two very different markets, two very different metals that are used for very different reasons. Now gold is primarily considered as storage of value where silver is also an industrial commodity that is used for a lot of different purposes, so silver is more inclined to rise and fall in recessions and booms based on how the economy is going. While gold is more inclined to change value according to the financial policy and the monetary policy that is followed by different countries.

Now if you will be looking at silver historically you will see that silver will rise and fall much more dramatically than gold and silver has the tendency to follow gold. That’s true. It has tendency to follow gold but there is no necessity in this relationship and that is the important thing to realize. Silver could potentially go the other way around and they could part their ways, because there is no relationship by necessity here. And also one of the things that are holding up the price of gold is that central banks are holding it. Central banks are interested in gold, it is something that is essential to their holdings and silver is not.

Price of silver could go down pretty much and reach zero and it had fell very very dramatically historically, while gold still held up quite well. Gold is the real thing and I would advise anyone to hold their assets in gold and only a small fraction in silver. Silver seems to be merely a substitute in my opinion.