To us “older generations”, that means silver is cool, rad, boss, nifty, or exciting in today’s vernacular. I told my 14 year old son the other day that silver matters and it is anything but a boring investment for old timers. In fact, many of the hottest technologies from the coolest, forward-thinking companies rely on silver.
My kids and I tease each other, light-heartedly, about our respective generations. I get a little jab in whenever I see kids walking around in “skinny jeans” or saggy jeans, or skinny saggy jeans (seriously) or when I see kids texting each other while sitting in the same room or same backseat of a car. They have plenty to poke fun at too. How many people really rocked the Flock of Seagulls haircut or neon leg warmers? As if!
Every generation is weird in its own way. I remember thinking how old-fashioned my parents clothes looked to me, and still do. So it was no surprise to me that my son thought that investing in silver and gold was pretty old fashioned.
Driving home after a football workout, I asked him what he knew about investing. He was getting to the age where I thought I should start thinking a little bit more about the future and why not learn a little bit about growing his savings? I eventually asked him what he thought about investing in precious metals like silver and gold. His response was something like:
I do! And in addition to my stocks and mutual funds which include names like Apple, Cisco, Facebook, Go Pro, Tesla, FireEye, Gilead, Amazon, and Netflix, I also invest a little in physical silver and gold. Silver is really interesting to me because it is not only a precious metal and as such has been a store of value for 5000 years, but it is also an industrial metal used in numerous high tech processes and products.
The rest of our conversation went something like this:
“Let me tell you why silver matters and how investing in it is also like investing in many of the hottest stock sectors and technologies.
Besides having the highest electrical conductivity of any element, silver has the highest thermal conductivity of any metal and is the most reflective. It is also incredibly ductile and malleable. Think about how important those characteristics are in modern technology!”
I told him that silver was not just for coins, bullion, tableware, and jewelry but is also used in dentistry. He languidly raised one eyebrow and sighed, then turned to look out the windshield. “Ok – he’s right that was dull”. I told him it is used in building CDs and DVDs. He still didn’t seem that impressed. Then, I mentioned plasma screens and he seemed to perk up a bit.
“Silver is in your iPod, mom’s iPad, our computers at home, and the servers that run our ISP, Google, and social media companies. Silver is used in the membrane switches on our TV and microwave. The button batteries in our watches and other small devices probably also have silver in them as silver oxide batteries are starting to replace lithium batteries. A lot of TV and film crews use silver oxide batteries because they last longer the than the traditional battery packs.” I found out later silver batteries have been used in the space program and submarines.
I continued, “There’s probably silver in this truck we’re in.” According to the Silver Institute, 36 million ounces of silver are used in the automotive industry every year.
“And”, I continued, glancing in the rear view mirror, “the mirror you preen in has silver in it.”
“I don’t preen!”, he shot back.
“You’re right”, I acknowledged, somewhat sheepishly.
“Maybe you should spend a little more time preening in that silver mirror of yours”, he said snarkily. Touche’
“Um, silver is used in solar. I read an article that there are 20 grams of silver per solar panel“, I said.
“Wow, that’s a lot of silver!”, he replied. It is estimated that some 70 million ounces of silver annual will be used by the solar industry by 2016.
“Silver is even being integrated into clothing to fight odor, provide warmth, and even to power devices like your iPhone.”
“That’s cool”, he replied, nodding his head slightly.
Looking out at the already drought-stricken Central California hillsides, I mentioned that silver iodide is used in cloud seeding to create rain.
I told him that besides all of its uses and that it is a store of value, that the silver demand exceeded the supply. Some 850 million ounces of silver are mined every year and there is only another 150 million ounces or so in above ground silver stockpiles. The rest comes form recycling and we just don’t recycle silver like we do gold. Physical demand is 50 million ounces per year higher than production and that’s why the stockpiles have shrunk. Silver coin sales are accelerating and it is really difficult to buy physical silver in any sort of large quantity from many silver dealers. Even worse, many silver miners need $16 – $18 per ounce just to break even. The won’t “break-even” for very long before they have to shut down and move on to something else.
“That’s why”, I explained, “I like to invest a little bit in silver. It’s a store of value, it’s currency, and it’s used increasingly in all kinds of high tech, green, and biotech applications. I think silver is really cool”.
He looked pensive. His eyes started to glaze over.
I lived for moments where I could actually teach my children something. I started to worry that I was losing his attention. My boys had gotten very skilled at acting like they were listening to me, but really thinking about their video games Call of Duty, Minecraft or Skyrim.
Struggling to keep him in the moment, I desperately blurted out, “Silver is used in biotech in equipment like imaging machines, but also as an anti-microbial. Pioneers used to put silver coins in their water barrels as they traveled across the plains to retard the growth of harmful microbes.”
He sat up straighter. Encouraged, I continued, “It is still used today for water purification. Silver is used in catheters, and bandages, even ducting in hospitals for the same reason.”
His eyes began to widen. Buoyed by my apparent success in pulling him from the brink of the conversation boredom abyss, I went on, ” Silver ions destroy viruses and bacteria, even MRSA.”
“Now I get it!”, he interrupted, “That totally makes sense!”
Not expecting such an enthusiastic response, all I could muster was a semi-confused “Uh, huh”.
“You know how lycanthropy is supposed to be caused by a virus… Werewolves, Dad. Lycanthropy is the disease that werewolves have. Anyway, it makes total sense why you have to kill them with silver, like a silver bullet or blade.”
“And some people think vampires are caused by a virus” he continued in rapid-fire, “and silver hurts them too! Even if they are legends, it’s amazing that people, even back then, figured out how powerful silver is.”
He turned to look at me. He put the finger tips of both hands on the his temples, then quickly moved his hands away from his head while spreading his fingers. “Boom”, he said. “Mind blown”.
And … he was gone.
A few moments later he mused purposefully loud enough for me to hear, “Silver is pretty … cool. I gotta invest in some”.
Maybe I hadn’t lost him after all.