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One of the most common pet peeves that people have is running out of something when they need it most. If you wake up in the morning and pour yourself a bowl of delicious cereal, you’re likely going to be peeved when you open up the fridge and find that you only have a few drops of milk left. There are few things more annoying than climbing into your car to commute only to find that you’re nearly out of gas and have to pull over right away to fill back up. Or maybe you think you have enough clean laundry to get you through the week, only to find yourself doing a 3AM laundry run so you have clean socks and underwear to wear for the next day. All of these scenarios are annoying, but they aren’t exactly the end of the world. There’s one shortage that everyone should be concerned about, though – that is the shortage of silver that is quickly approaching. Investors have likely noticed the price of silver is on the rise lately, and the reason why is extremely simple – we’re using this material at a high rate, while our natural supplies are dwindling. What does this mean for Canada and the global economy? Is a silver shortage inevitable, or is there anything that we can do to stop it? Will your average Canadian be affected, or just investors? And perhaps most importantly, how will the silver market change in the coming years? We answer all of these questions below.
When people think of silver, the first things to come to mind are pieces of jewelry or coins. While a gorgeous pair of earrings or currency are two methods in which silver is used, they actually fall far behind its primary function: an industrial ingredient. Silver is known as the ‘white metal’, and it has unique properties that aren’t easily replicated or replaced. It resists corrosion and oxidation, and it’s a fantastic thermal and electrical conductor. It’s lustrous and reflects light, which makes it beautiful, but it’s also resistant to germs and corruption. It’s easy to manipulate – it can be ground into a fine powder, mixed into a paste, converted into a salt, threaded through wires, used as a colloid or a catalyst, flattened into sheets, or mixed with other metals. As of 2013, only 6% of silver in the United States was used for jewelry or silverware. A further 25% was used for coins and medals. The rest was directed towards industrial and electronic uses. Therefore, the price of silver isn’t reliant on fashion or jewelry trends; it has been rising due to its part in technology and industry.
As mentioned above, silver is an amazing metal for being thermally and electrically conductive. It is often used as a contact in electrical switches. Your bedroom light switch or your microwave likely has small amounts of silver that make the whole operation possible. Your car is loaded with these contacts as well; if you want to listen to the radio or signal that you’re about to turn, you can thank silver for that. Silver is also used in printers, cell phones, RFID tags, batteries, superconductors, and more. As for energy, silver is one of the materials that make a green future possible: it’s one of the major components of solar panels that produce energy from the sun. Silver is extremely difficult to replace, and as of today there is no real alternative to the metal.
Silver, as we all know, is a naturally occurring ore. It seems as though we are running out of this mineral due to our current reliance on it. Experts say that silver supplies could run out as soon as 2029 unless new deposits are found. The price of silver has skyrocketed in response. In 2000, silver was only $5 an ounce. In 2011, it reached a record high at $48 an ounce. While they have since settled down, chances of returning to single digit prices seem incredibly unlikely. Silver mines are also dangerous for workers and take time to set up and establish, so finding new deposits is not a “silver bullet” to the problem. The shortage is likely to affect the world for many years, and it doesn’t seem likely to solve itself.
Knowing that the Earth is running low on a natural resource can be very stressful. Luckily, everyone can do their part to help! For one, you can find old pieces of jewelry or silverware in your home and trade them in to be recycled. This is a win/win – you affect the price of silver while getting some cash for your own use. Secondly, you can buy jewelry made of different materials, such as platinum. Saving even the 6% of silver used for jewelry or luxuries can make a big difference in the long term.
Investing in silver is very different than it was a decade or two ago. EDI Refining buys and sells silver to Canadian investors. Whether you need to offload some old electronics or medals, or you’re interested in entering the market, we can help. Call us today at 1 866 688 3353 for more information or to have your questions answered.
