Investing in Silver 101

Silver has served as currency for thousands of years, and many of today’s names for money actually stem from silver. For example, the word “dollar” originated from the silver coin “Joachimsthaler,” while the British “pound sterling” referred to a pound of silver, equal to 240 silver ‘sterling’ pennies. Silver’s monetary history in places like the United States is enshrined in laws such as the US Constitution, which originally mandated silver coins as legal tender.

Why was silver so widely accepted as money? Silver coins are durable, scarce, portable, and fungible, making them ideal for trade and as a unit of account. As a precious metal, silver retains intrinsic value over time and is a hedge against inflation, making it a compelling choice for long-term wealth preservation.

China (Yuan Dynasty, 1260s–1340s)

China was one of the first civilizations to introduce paper money, originally under the Song Dynasty, but the Yuan Dynasty (established by the Mongols) took money printing to a new level. The Yuan government expanded the money supply extensively to cover state expenses and military campaigns, leading to severe inflation. As the currency rapidly lost value, the government attempted to introduce various reforms, but they were unsuccessful. This currency crisis contributed to social unrest and weakened the Yuan Dynasty, eventually leading to its fall and the rise of the Ming Dynasty.

Weimar Germany (1921–1923)

After World War I, Germany faced massive war reparations imposed by the Treaty of Versailles, economic instability, and political turmoil. The German government, unable to meet its financial obligations, started printing large amounts of paper currency (the German Mark). This excessive printing led to extreme inflation, which turned into hyperinflation by 1923. Prices doubled every few days, and people resorted to using wheelbarrows of cash to buy basic goods. The value of the Mark dropped so severely that, by the end of 1923, it was effectively worthless. The economic collapse destabilized the Weimar Republic, contributing to social and political unrest and eventually leading to the rise of the Nazi regime.

Yugoslavia (1989–1994)

In the 1990s, following political and economic crises and the breakup of Yugoslavia, the central government of the Federal Republic of Yugoslavia resorted to massive money printing to fund state expenditures. Hyperinflation peaked in 1994 when prices doubled every day, leading to an inflation rate estimated at 313 million percent monthly. Yugoslavia issued banknotes in absurdly high denominations, such as 500 billion dinars. Eventually, the government reformed its monetary system, replacing the old dinar with the new dinar and pegging it to foreign currency to stabilize the economy.

Zimbabwe (2000s)

Zimbabwe’s economy began to spiral in the early 2000s due to political turmoil, land reform policies, and declining agricultural output. The government, facing a shrinking tax base and increasing economic hardship, began printing money to cover its expenses. Hyperinflation set in as the supply of Zimbabwean dollars exploded, peaking in 2008 when inflation rates reached as high as 89.7 sextillion percent monthly. The currency became so worthless that the government issued banknotes in trillion-dollar denominations. Ultimately, Zimbabwe abandoned its currency and switched to foreign currencies, such as the U.S. dollar, to stabilize its economy.

There are multiple ways and strategies to invest in silver, each catering to different goals and risk appetites. You might opt to own physical silver bars or coins, invest in silver mining stocks, buy physically-backed Exchange Traded Funds (ETFs), trade silver futures, or explore synthetic products linked to silver prices. Each method offers unique advantages—but they also come with important considerations.

One key factor to keep in mind is counterparty risk. If your goal is to safeguard wealth from systemic financial risk, holding physical silver bars and coins is often the most secure choice. Unlike other silver investments, physical silver isn’t tied to the stability of financial institutions or third parties. For instance, popular silver ETFs like the iShares Silver Trust (SLV) may track silver prices but don’t allow investors to directly access the underlying metal. SLV’s primary purpose is to mirror silver’s performance—not to deliver actual silver to holders.

To truly own silver free of counterparty or default risk, it’s best to hold physical bars or coins in a secure, private location, such as a vault in a stable jurisdiction, safely out of the reach of potential banking system disruptions. In essence, physical silver offers the peace of mind that comes with having tangible wealth you can rely on, no matter what happens in the financial world.

What are the Industrial Uses of Silver?

Silver is the most conductive metal for heat and electricity, and it’s also highly reflective, which makes it indispensable in electronics, solar energy, and medical equipment. Silver’s uses range from photography to water purification and even in anti-microbial clothing, giving it unique versatility among commodities.

The diversity of applications means that silver demand is driven by sectors that compete for limited supply.

According to Metals Focus and The Silver Institute, industrial demand for silver has been on a remarkable rise, with fabrication uses—like electronics, solar panels, and medical devices— making up an impressive 71% of the annual silver supply, averaging around 26,000 to 27,000 tonnes. And here’s the catch: even as demand climbs, mining supply has been steadily decreasing.

On top of this robust industrial demand, jewelry and investment demand have surged beyond the remaining 29% of the supply, consuming not only fresh silver from mines but also tapping into recycled silver reserves. This strong appetite has led to a significant net deficit in the silver market, averaging 18% to 25% over the past two years. In simple terms, demand is outstripping supply, creating a supply squeeze that could impact silver’s value in the near future.

BullionStar's silver bullion products are sourced from the world's most prestigious national mints and refineries including the US Mint, the Royal Canadian Mint, the Austrian Mint, Germany's Heraeus refinery and Swiss refinery PAMP Suisse. These mints and refineries guarantee the purity and authenticity of their bullion products, and are some of the best known brands in the bullion industry, making them a great silver investment. BullionStar has also commissioned it's own BullionStar 1 kg 99.99% fine silver bar, manufactured by Heraeus in Germany. The BullionStar 1 kg silver bar can be traded with no spread between they buy and sell price.

7 Reasons Silver Has Been Valued for 6000+ years

In this first part of The Silver Story, join us as we explore 7 reasons why silver has been a valued precious metal for over 6000 years. From its early uses in ancient civilizations to modern applications, silver has significantly impacted human history. Uncover the facts and factors that contribute to silver's value and explore why it remains a sought-after metal today.