Demand remains a big question if worldwide recession due to energy and fertilizer situation in Persian Gulf. Do we know that solar manufacturing remains on high levels or is this market becoming somewhat saturated and liquidity allowing to finance solar drying up?
It is up to us to remember that silver is money. Silver could be a Tier Zero asset. I Hand you a coin, ZERO outsiders would know about our transaction. Old folks here now and then use the word ‘Silber’ I/ of Geld. Holding a heavy solid silver coin, listening to the sound is a experience I can’t describe. In any case, it’s not a mistake holding some physical silver. COMEX/LBMA price shenanigans, so they have lost credibility. Shanghai SGE is for real as one can cart out silver bars. It does take sober thinking to see silver (and gold) hold their value against falling currencies. Did I just read about another emergency injection by the FED? Also, one can price cattle, housing and even indices in PMs. Gives a different picture of valuations. One can use PMs to save up to buy a farm tractor or any other investment. Works more than fine.
Thank you. This is a very thoughtful set of points.
On the recession risk you raise, I broadly agree. A global slowdown driven by energy or fertiliser shocks would almost certainly affect industrial demand in the short term. Solar deployment is capital-intensive, and financing conditions matter. We have already seen periods where higher interest rates slowed project pipelines and compressed installation growth. So the solar demand story is structural but not linear. It is likely to move in waves.
At the same time, much of the current solar expansion is policy-driven and strategically prioritised rather than purely cyclical. Governments are increasingly treating energy transition investments as infrastructure linked to energy security and industrial competitiveness. However, this creates its own vulnerability. Public finances in many developed economies are already under visible strain, with rising debt burdens and persistent fiscal deficits limiting policy flexibility. If subsidy regimes or financing support are reduced as a consequence, installation growth could slow materially for a period. Structural demand does not remove policy risk.
Your point about silver as money is also important historically and behaviourally. For most of recorded economic history, silver served as transactional money rather than a reserve asset. The practical and psychological experience of holding physical metal has shaped investor behaviour across generations, and tends to re-emerge whenever confidence in financial assets weakens.
One additional aspect worth mentioning is the different historical roles gold and silver have played in portfolios. In some of my recent articles on gold, as well as in two book reviews I shared with readers, I tried to explore how precious metals have behaved amid prolonged periods of monetary uncertainty. Looking at several centuries of price history suggests that the two metals tend to move very differently. Gold has often acted primarily as a stabiliser of purchasing power, typically displaying lower volatility and stronger defensive characteristics during episodes of financial or monetary stress. Silver, by contrast, has historically shown much larger price swings, reflecting its dual identity as both an industrial input and a monetary asset.
This distinction does not make one metal superior to the other. Rather, it suggests they may serve different roles depending on an investor’s objectives and tolerance for uncertainty. Gold has frequently been viewed as a form of monetary insurance. Silver has at times offered the possibility of enhancing purchasing power, but usually at the cost of significantly higher volatility and longer periods when its relevance appears diminished. Readers who followed those earlier discussions may recognise that the same theme appears again here: precious metals tend to reveal their usefulness across regimes rather than within a single market cycle.
In paper versus physical markets, debates over pricing credibility have existed for decades. What matters analytically is that silver sits at the intersection of two demand regimes. Industrial users need the metal regardless of monetary narratives, while investors tend to seek it when monetary anxiety rises. That dual demand structure is one reason the metal can remain neglected for long periods, only to attract intense attention suddenly.
Finally, pricing real assets in precious metals can be a useful way to gain perspective on long-term valuation cycles. It removes some of the illusion created by currency depreciation and can complement more conventional forms of analysis.
Holding some physical silver as a form of optionality has been a rational choice for many investors across history. The more difficult question, and the one markets constantly force us to confront, is not whether silver has value, but when and how that value becomes recognised in price.
Silver has always felt to me like an asset that can test investors more than it rewards them. Gold has often behaved more like a monetary insurance policy that helps preserve purchasing power. Silver, at times, may offer the potential to grow purchasing power, but usually with much higher volatility and long periods when holding it requires real patience.
In my experience, the difficult part is rarely the analysis itself. Even after thirty years in markets, managing one’s own reactions to daily price moves remains the hardest part. What feels important in the moment often turns out to be noise.
This is why investor psychology has always been a core pillar of my writing alongside value investing and Austrian economics.
Demand remains a big question if worldwide recession due to energy and fertilizer situation in Persian Gulf. Do we know that solar manufacturing remains on high levels or is this market becoming somewhat saturated and liquidity allowing to finance solar drying up?
It is up to us to remember that silver is money. Silver could be a Tier Zero asset. I Hand you a coin, ZERO outsiders would know about our transaction. Old folks here now and then use the word ‘Silber’ I/ of Geld. Holding a heavy solid silver coin, listening to the sound is a experience I can’t describe. In any case, it’s not a mistake holding some physical silver. COMEX/LBMA price shenanigans, so they have lost credibility. Shanghai SGE is for real as one can cart out silver bars. It does take sober thinking to see silver (and gold) hold their value against falling currencies. Did I just read about another emergency injection by the FED? Also, one can price cattle, housing and even indices in PMs. Gives a different picture of valuations. One can use PMs to save up to buy a farm tractor or any other investment. Works more than fine.
Thanks for your comprehensive write-up on silver.
Thank you. This is a very thoughtful set of points.
On the recession risk you raise, I broadly agree. A global slowdown driven by energy or fertiliser shocks would almost certainly affect industrial demand in the short term. Solar deployment is capital-intensive, and financing conditions matter. We have already seen periods where higher interest rates slowed project pipelines and compressed installation growth. So the solar demand story is structural but not linear. It is likely to move in waves.
At the same time, much of the current solar expansion is policy-driven and strategically prioritised rather than purely cyclical. Governments are increasingly treating energy transition investments as infrastructure linked to energy security and industrial competitiveness. However, this creates its own vulnerability. Public finances in many developed economies are already under visible strain, with rising debt burdens and persistent fiscal deficits limiting policy flexibility. If subsidy regimes or financing support are reduced as a consequence, installation growth could slow materially for a period. Structural demand does not remove policy risk.
Your point about silver as money is also important historically and behaviourally. For most of recorded economic history, silver served as transactional money rather than a reserve asset. The practical and psychological experience of holding physical metal has shaped investor behaviour across generations, and tends to re-emerge whenever confidence in financial assets weakens.
One additional aspect worth mentioning is the different historical roles gold and silver have played in portfolios. In some of my recent articles on gold, as well as in two book reviews I shared with readers, I tried to explore how precious metals have behaved amid prolonged periods of monetary uncertainty. Looking at several centuries of price history suggests that the two metals tend to move very differently. Gold has often acted primarily as a stabiliser of purchasing power, typically displaying lower volatility and stronger defensive characteristics during episodes of financial or monetary stress. Silver, by contrast, has historically shown much larger price swings, reflecting its dual identity as both an industrial input and a monetary asset.
This distinction does not make one metal superior to the other. Rather, it suggests they may serve different roles depending on an investor’s objectives and tolerance for uncertainty. Gold has frequently been viewed as a form of monetary insurance. Silver has at times offered the possibility of enhancing purchasing power, but usually at the cost of significantly higher volatility and longer periods when its relevance appears diminished. Readers who followed those earlier discussions may recognise that the same theme appears again here: precious metals tend to reveal their usefulness across regimes rather than within a single market cycle.
In paper versus physical markets, debates over pricing credibility have existed for decades. What matters analytically is that silver sits at the intersection of two demand regimes. Industrial users need the metal regardless of monetary narratives, while investors tend to seek it when monetary anxiety rises. That dual demand structure is one reason the metal can remain neglected for long periods, only to attract intense attention suddenly.
Finally, pricing real assets in precious metals can be a useful way to gain perspective on long-term valuation cycles. It removes some of the illusion created by currency depreciation and can complement more conventional forms of analysis.
Holding some physical silver as a form of optionality has been a rational choice for many investors across history. The more difficult question, and the one markets constantly force us to confront, is not whether silver has value, but when and how that value becomes recognised in price.
Excellent piece. Most probably an excellent investment too, for the patient.
Thank you, I appreciate that.
Silver has always felt to me like an asset that can test investors more than it rewards them. Gold has often behaved more like a monetary insurance policy that helps preserve purchasing power. Silver, at times, may offer the potential to grow purchasing power, but usually with much higher volatility and long periods when holding it requires real patience.
In my experience, the difficult part is rarely the analysis itself. Even after thirty years in markets, managing one’s own reactions to daily price moves remains the hardest part. What feels important in the moment often turns out to be noise.
This is why investor psychology has always been a core pillar of my writing alongside value investing and Austrian economics.