Thread: Why I Don't Trust Gold

MAY 27, 2010.

Why I Don't Trust Gold

By BRETT ARENDS

This is a very sad day for me.

In Part One of this series, when I argued that gold might be about to go vertical, I made a whole bunch of new friends among the gold bugs.

And now I'm going to lose them all.

That's because even though I think gold might be about to take off, I don't recommend you rush out and put all your money into gold bars or exchange-traded funds that hold bullion.

And this is for one simple reason: At some levels, gold, as an investment, is absolutely ridiculous.

Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

And that's not the half of it.

Gold is volatile. It's hard to value. It generates no income.

Yes, it's a "hard asset," but so are lots of other things—like land, bags of rice, even bottled water.

It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.

As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years.

I get worried when I see people plunging heavily into gold at $1,200 an ounce. What if the price goes back to where it was just a few years ago, at $500 or $600 an ounce? Will you buy more? Sell?

My concerns about gold go even further than that.

Let's step inside the gold market for a moment.

Everyone knows the price has risen about fivefold in the past decade. But this is not due to some mystical truth or magical act of levitation. It is simply because there have been more buyers than sellers.

Banal, but true—and sometimes worth repeating.

If the price rises you'd think there must be a shortage. But data provided by the World Gold Council, an industry body, tell a remarkable story.

Over that period the world has produced—or, more accurately, recovered—far more gold than anyone actually wanted to use. Since 2002, for example, total demand for gold from goldsmiths and jewelers, and dentists, and general industry, has come to about 22,500 tonnes.

But during the same period, more than 29,000 tonnes has come on to the market.

The surplus alone is enough to produce about 220 million one-ounce gold American Buffalo coins. That's in eight years.

Most of the new supply has come from mine production. Some, though a dwindling amount, has come from central banks. And a growing amount has come from recycling—old jewelry and the like being melted down for scrap. (This is a perennial issue with gold. I never understand why the fans think gold's incredible durability—it doesn't waste or corrode—is bullish for the market. It's bearish.) So if supply has consistently exceeded user demand, how come the price of gold has still been rising?

In a word, hoarding.

Gold investors, or hoarders, have made up all the difference. They are the only reason total "demand" has exceeded supply.

Lots of people have been buying gold in the hope it would rise. But the only way it can rise is if still more people buy it, hoping it will rise still further. And so on.

What do we call an investment scheme where current members' returns depend entirely on new money brought in by new members?

A Ponzi scheme.

Yes, as I wrote earlier, gold may well be the next big bubble. And that may mean there is big money to be made in speculation.

But I don't trust it as an investment.

How can you square this golden circle? I'll tell you in Part Three.

This is the second part of a three-part series on gold, "The Gold, the Bad and the Ugly." Next up: The way to play gold.

Write to Brett Arends at brett.arends@wsj.com

http://online.wsj.com/article/SB1000142 ... nalfinance

Interesting article. Thanks for posting it. One thing about silver is it has a lot of industrial uses compared to gold. I think I also read somewhere that some of the industrial uses of silver actually consume it in some way so it's gone, which decreases supply.

I keep hearing "junk" silver, like pre-1964 coins. Gerald Celente says he puts 20% of his savings towards gold.

Junk silver might be the ticket for us Po' folks...

RELATED

Part 1

Is Gold the Next Bubble?

http://www.alipac.us/ftopict-200612-gold.html

Originally Posted by SicNTiredInSoCal

I keep hearing "junk" silver, like pre-1964 coins. Gerald Celente says he puts 20% of his savings towards gold.

Junk silver might be the ticket for us Po' folks...

You might be right. I haven't compared the price of silver rounds to that. My instinct tells me the rounds might be a better deal, but I could be wrong.

The Many Uses of Gold

Gold Use Categories
Jewelry Dental
Financial Medical
Electronics Aerospace
Computers Awards
Glass Gilding

Of all the minerals mined from the Earth, none is more useful than gold. Its usefulness is derived from a diversity of special properties. Gold conducts electricity, does not tarnish, is very easy to work, can be drawn into wire, can be hammered into thin sheets, alloys with many other metals, can be melted and cast into highly detailed shapes, has a wonderful color and a brilliant luster. Gold is a memorable metal that occupies a special place in the human mind.

When Spanish explorers first arrived in the "New World" they met the native South Americans. These two cultures had been separated by a vast ocean, they had never touched one another, they spoke different languages and lived entirely different lives. Yet they had one thing in common - they both held gold in highest esteem and used it to make some of their most important objects.

Throughout the history of our planet almost every established culture has used gold to symbolize power, beauty, purity and accomplishment. Today we continue to use gold for our most significant objects: wedding rings, Olympic medals, Oscars, Grammys, money, crucifixes and ecclesiastical art. No other substance of the same rarity holds a more visible and prominent place in our society.

Jewelry: The Primary Use of Gold

The production of ornamental objects was probably the first use of gold over 6000 years ago. Gold is found in the pure state, is very easy to work and was probably the first metal used by humans. Today, most of the gold that is newly mined or recycled is used in the manufacture of jewelry. About 78% of the gold consumed each year is used in the manufacture of jewelry.

Special properties of gold make it perfect for manufacturing jewelry. These include: very high luster; desirable yellow color; tarnish resistance; ability to be drawn into wires, hammered into sheets or cast into shapes. These are all properties of an attractive metal that is easily worked into beautiful objects. Another extremely important factor that demands the use of gold as a jewelry metal is tradition. Important objects are expected to be made from gold.

Pure gold is too soft to stand up to the stresses applied to many jewelry items. Craftsmen learned that alloying gold with other metals such as copper, silver, and platinum would increase its durability. Since then most gold used to make jewelry is an alloy of gold with one or more other metals.

The alloys of gold have a lower value per unit of weight than pure gold. A standard of trade known as "karatage" was developed to designate the gold content of these alloys. Pure gold is known as 24 karat gold and is almost always marked with "24K". An alloy that is 50% gold by weight is known as 12 karat gold (12/24ths) and is marked with "12K". An alloy that contains 75% gold by weight is 18 karat (18/24 = 75%) and marked "18K". In general, high karat jewelry is softer and more resistant to tarnish while low karat jewelry is stronger and less resistant to tarnish - especially when in contact with perspiration.

Alloying gold with other metals changes the color of the finished products (see illustration at right). An alloy of 75% gold, 16% silver and 9% copper yields yellow gold. White gold is an alloy of 75% gold, 4% silver, 4% copper and 17% palladium. Other alloys yield pink, green, peach and even black colored metals.

Financial Gold - Coinage, Bullion, Currency Backing

Because gold is highly valued and in very limited supply it has long been used as a medium of exchange or money. The first known use of gold in transactions dates back about 6000 years. Early transactions were done using pieces of gold or pieces of silver. The rarity, usefulness and desirability of gold make it a substance of long term value. Gold works well for this purpose because it has a high value, is durable, portable and easily divisible.

Some early printings of paper money were backed by gold held in safe keeping for every unit of money that was placed in circulation. The United States once used a "gold standard" and maintained a stockpile of gold to back every dollar in circulation. Under this gold standard, any person could present paper currency to the government and demand in exchange an equal value of gold. The gold standard was once used by many nations but it eventually became too cumbersome and is no longer used by any nation.

The gold used as a financial backing for currency was most often held in the form of gold bars, also known as "gold bullion". The use of gold bars kept manufacturing costs to a minimum and allowed convenient handling and storage. Today many governments, individuals and institutions hold investments of gold in the convenient form of bullion.

The first gold coins were minted under the order of King Croesus of Lydia (a region of present-day Turkey) in about 560 BC. Gold coins were commonly used in transactions up through the early 1900's when paper currency became a more common form of exchange. Gold coins were issued in two types of units. Some were denominated in units of currency, such as dollars, while others were issued in standard weights, such as ounces or grams.

Today gold coins are no longer in wide use for financial transactions. However, gold coins issued in specific weights are popular ways for people to purchase and own small volumes of gold for investment. Gold coins are also issued as "commemorative" items. Many people enjoy these commemorative coins because they have both a collectable value and a precious metal value.

Uses of Gold in Electronics

The most important industrial use of gold is in the manufacture of electronics. Solid state electronic devices use very low voltages and currents which are easily interrupted by corrosion or tarnish at the contact points. Gold is the highly efficient conductor that can carry these tiny currents and remain free of corrosion. Electronic components made with gold are highly reliable. Gold is used in connectors, switch and relay contacts, soldered joints, connecting wires and connection strips.

A small amount of gold is used in almost every sophisticated electronic device. This includes: cell phones, calculators, personal digital assistants, global positioning system units and other small electronic devices. Most large electronic appliances such as television sets also contain gold.

One challenge with the use of gold in very small quantities in very small devices is loss of the metal from society. Nearly one billion cell phones are produced each year and most of them contain about fifty cents worth of gold. Their average lifetime is under two years and very few are currently recycled. Although the amount of gold is small in each device, their enormous numbers translate into a lot of unrecycled gold.

Use of Gold in Computers

Gold is used in many places in the standard desktop or laptop computer. The rapid and accurate transmission of digital information through the computer and from one component to another requires an efficient and reliable conductor. Gold meets these requirements better than any other metal. The importance of high quality and reliable performance justifies the high cost.

Edge connectors used to mount microprocessor and memory chips onto the motherboard and the plug-and-socket connectors used to attach cables all contain gold. The gold in these components is generally electroplated onto other metals and alloyed with small amounts of nickel or cobalt to increase durability.

Use of Gold in Dentistry

How would iron work as a dental filling? Not very well... your dentist would need blacksmithing tools, your smile would be rusty a few days after a filling and you would need to get used to the taste of iron. Even at much higher expense, gold is used in dentistry because of its superior performance and aesthetic appeal. Gold alloys are used for fillings, crowns, bridges and orthodontic appliances. Gold is used in dentistry because it is chemically inert, nonallergenic and easy for the dentist to work.

Gold is known to have been used in dentistry as early as 700 B.C. Etruscan "dentists" used gold wire to fasten replacement teeth into the mouths of their patients. Gold was probably used to fill cavities in ancient times;, however there is no documentation or archaeological evidence for this use of gold until a little over 1000 years ago.

Gold was much more generously used in dentistry up until the late 1970's. The sharp run-up of gold prices at that time motivated the development of substitute materials. However, the amount of gold used in dentistry is starting to rise again. Some motivation for this comes from concerns that less inert metals might have an adverse effect on long-term health.

Medical Uses of Gold

Gold is used as a drug to treat a small number of medical conditions. Injections of weak solutions of sodium aurothiomalate or aurothioglucose are sometimes used to treat rheumatoid arthritis. Particles of a radioactive gold isotope are implanted in tissues to serve as a radiation source in the treatment of certain cancers.

Small amounts of gold are used to remedy a condition known as Lagophthalmos, which is an inability of a person to close their eyes completely. This condition is treated by implanting small amounts of gold in the upper eyelid. The implanted gold "weights" the eyelid and the force of gravity helps the eyelid close fully.

Radioactive gold is used in diagnosis. It is injected in a colloidal solution that can be tracked as a beta emitter as it passes through the body. Many surgical instruments, electronic equipment and life-support devices are made using small amounts of gold. Gold is nonreactive in the instruments and is highly reliable in the electronic equipment and life-support devices.

Uses of Gold in Aerospace

If you are going to spend billions of dollars on a vehicle that when launched will travel on a voyage where the possibility of lubrication, maintenance and repair is absolutely zero, then building it with extremely dependable materials is essential. This is exactly why gold is used in hundreds of ways in every space vehicle that NASA launches.

Gold is used in circuitry because it is a dependable conductor and connector. In addition, many parts of every space vehicle are fitted with gold-coated polyester film. This film reflects infrared radiation and helps stabilize the temperature of the spacecraft. Without this coating, dark colored parts of the spacecraft would absorb significant amounts of heat

Gold is also used as a lubricant between mechanical parts. In the vacuum of space, organic lubricants would volatilize and they would be broken down by the intense radiation beyond Earth's atmosphere. Gold has a very low shear strength and thin films of gold between critical moving parts serves as a lubricant - the gold molecules slip past one another under the forces of friction and that provides a lubricant action.

Uses of Gold in Awards and Symbols of Status

What metal is used to make the crown worn by a king? Gold! This metal is selected for use because gold it is THE metal of highest esteem. It would make no sense to make a king's crown out of steel - even though steel is the strongest metal. Gold is chosen for use in a king's crown because it is the metal associated with highest esteem and status.

Gold is associated with many positive qualities. Purity is another quality associated with gold. For this reason, gold is the metal of choice for religious objects. Crosses, communion ware and other religious symbols are almost always made with gold for this reason.

Gold is also used as the first place winner's medal or trophy in almost any type of contest. First place winners at the Olympic Games are given gold medals. The Academy Awards Oscars are gold awards. Music's Grammy Awards are made of gold. All of these important achievements are honored with awards made of gold.

Uses of Gold in Glassmaking

Gold has many uses in the production of glass. The most basic use in glassmaking is that of a pigment. A small amount of gold suspended in the glass when it is annealed produces a rich ruby color.

Gold is also used when making specialty glass for climate controlled buildings and cases. A small amount of gold dispersed within the glass or coated onto the glass surface will reflect solar radiation outward, helping the buildings stay cool in the summer, and reflect internal heat inward, helping them stay warm in winter.

The visor on the helmet of an astronaut's space suit is coated with a very thin film of gold. This thin film reflects much of the very intense solar radiation of space, protecting the astronaut's eyes and skin.

Gold Gilding and Gold Leaf

Gold has the highest malleability of any metal. This enables gold to be beaten into sheets that are only a few millionths of an inch thick. These thin sheets, known as "gold leaf" can be applied over the irregular surfaces of picture frames, molding or furniture.

Gold leaf is also used on the external and internal surfaces of buildings. This provides a durable and corrosion-resistant covering. One of the most eye-catching uses of gold leaf is on the domes of religious buildings and other important structures. The cost of this "roofing material" is very high per square foot; however, the cost of the gold is only a few percent of the total project cost. Most of the cost goes to the labor of highly skilled artisans who apply the gold leaf.

Future Uses of Gold

Gold is too expensive to use by chance. Instead it is used deliberately and only when less expensive substitutes can not be identified. As a result, once a use is found for gold it is rarely abandoned for another metal. This means that the number of uses for gold have been increasing over time.

Most of the ways that gold is used today have been developed only during the last two or three decades. This trend will likely continue. As our society requires more sophisticated and reliable materials our uses for gold will increase. This combination of growing demand, few substitutes and limited supply will cause the value and importance of gold to increase steadily over time. It is truly a metal of the future.

http://geology.com/minerals/gold/uses-of-gold.shtml

Many well known uses of silver involve its precious metal properties, including currency, decorative items and mirrors. The contrast between the appearance of its bright white color in contrast with other media makes it very useful to the visual arts. It has also long been used to confer high monetary value as objects (such as silver coins and investment bars) or make objects symbolic of high social or political rank.

Currency
Main articles: Silver coin and Silver standard
Silver, in the form of electrum (a gold-silver alloy), was coined to produce money in around 700 BC by the Lydians. Later, silver was refined and coined in its pure form. Many nations used silver as the basic unit of monetary value. In the modern world, silver bullion has the ISO currency code XAG. The name of the United Kingdom monetary unit "pound" (£) reflects the fact that it originally represented the value of one troy pound of sterling silver. In the 1800s, many nations, such as the United States and Great Britain, switched from silver to a gold standard of monetary value, then in the 20th century to fiat currency.

Jewelry and silverware

Goddess Minerva on a Roman silver plate, 1st century BCMain articles: jewellery and silversmith
Jewellery and silverware are traditionally made from sterling silver (standard silver), an alloy of 92.5% silver with 7.5% copper. In the US, only an alloy consisting of at least 92.5% fine silver can be marketed as "silver" (thus frequently stamped 925). Sterling silver is harder than pure silver, and has a lower melting point (893 °C) than either pure silver or pure copper.[6] Britannia silver is an alternative hallmark-quality standard containing 95.8% silver, often used to make silver tableware and wrought plate. With the addition of germanium, the patented modified alloy Argentium Sterling Silver is formed, with improved properties including resistance to firescale.

Sterling silver jewelry is often plated with a thin coat of .999 fine silver to give the item a shiny finish. This process is called "flashing". Silver jewelry can also be plated with rhodium (for a bright, shiny look) or gold.

Silver is a constituent of almost all colored carat gold alloys and carat gold solders, giving the alloys paler color and greater hardness.[14] White 9 carat gold contains 62.5% silver and 37.5% gold, while 22 carat gold contains up to 8.4% silver or 8.4% copper.[14]

Historically the training and guild organization of goldsmiths included silversmiths as well, and the two crafts remain largely overlapping. Unlike blacksmiths, silversmiths do not shape the metal while it is red-hot but instead, work it at room temperature with gentle and carefully placed hammerblows. The essence of silversmithing is to take a flat piece of metal and by means of different hammers, stakes and other simple tools, to transform it into a useful object.[15]

While silversmiths specialize in, and principally work, silver, they also work with other metals such as gold, copper, steel, and brass. They make jewellery, silverware, armour, vases, and other artistic items. Because silver is such a malleable metal, silversmiths have a large range of choices with how they prefer to work the metal. Historically, silversmiths are mostly referred to as goldsmiths, which was usually the same guild. In the western Canadian silversmith tradition, guilds do not exist; however, mentoring through colleagues becomes a method of professional learning within a community of craftspeople.[16]

Silver is cheaper than gold, though still valuable, and so is very popular with jewelers who are just starting out and cannot afford to make pieces in gold, or as a practicing material for goldsmith apprentices. Silver has also become very fashionable, and is used frequently in more artistic jewellery pieces.

Traditionally silversmiths mostly made "silverware" (cutlery, table flatware, bowls, candlesticks and such). Only in more recent times has silversmithing become mainly work in jewellery, as much less solid silver tableware is now handmade.

Silver is used for awards medals, denoting second place. Some high-end musical instruments are made from sterling silver, such as the flute.

Dentistry
Silver can be alloyed with mercury, tin and other metals at room temperature to make amalgams that are widely used for dental fillings. To make dental amalgam, a mixture of powdered silver and other metals is mixed with mercury to make a stiff paste that can be adapted to the shape of a cavity. The dental amalgam achieves initial hardness within minutes but sets hard in a few hours.

Photography and electronics
Photography used 30.98% of the silver consumed in 1998 in the form of silver nitrate and silver halides. In 2001, 23.47% was used for photography, while 20.03% was used in jewelry, 38.51% for industrial uses, and only 3.5% for coins and medals. The use of silver in photography has rapidly declined, due to the lower demand for consumer color film from the advent of digital technology, since in 2007 of the 894.5 million ounces of silver in supply, just 128.3 million ounces (14.3%) were consumed by the photographic sector, and the total amount of silver consumed in 2007 by the photographic sector compared to 1998 is just 50%.[17]

Some electrical and electronic products use silver for its superior conductivity, even when tarnished. For example, printed circuits can be made using silver paints,[6] and computer keyboards use silver electrical contacts. Some high-end audio hardware (DACs, preamplifiers, etc.) are fully silver-wired, which is believed to cause the least loss of quality in the signal. Silver cadmium oxide is used in high voltage contacts because it can withstand arcing.

During World War II the short supply of copper brought about the government's use of silver from the Treasury vaults for conductors at Oak Ridge National Laboratory. (After the war ended the silver was returned to the vaults.)[18]

Small devices such as hearing aids and watches commonly use Silver oxide batteries due to their long life and high energy/weight ratio. Another usage is high-capacity silver-zinc and silver-cadmium batteries.

Mirrors and optics
Mirrors which need superior reflectivity for visible light are made with silver as the reflecting material in a process called silvering, though common mirrors are backed with aluminium. Using a process called sputtering, silver (and sometimes gold) can be applied to glass at various thicknesses, allowing different amounts of light to penetrate. Silver is usually reserved for coatings of specialized optics, and the silvering most often seen in architectural glass and tinted windows on vehicles is produced by sputtered aluminium, which is cheaper and less susceptible to tarnishing and corrosion.[19] Silver is the reflective coating of choice for solar reflectors.[20]

Other industrial and commercial applications
Silver's catalytic properties make it ideal for use as a catalyst in oxidation reactions, for example, the production of formaldehyde from methanol and air by means of silver screens or crystallites containing a minimum 99.95 weight-percent silver. Silver (upon some suitable support) is probably the only catalyst available today to convert ethylene to ethylene oxide (later hydrolyzed to ethylene glycol, used for making polyesters)— an important industrial reaction. Because silver readily absorbs free neutrons, it is commonly used to make control rods that regulate the fission chain reaction in pressurized water nuclear reactors, generally in the form of an alloy containing 80% silver, 15% indium, and 5% cadmium. Silver is used to make solder and brazing alloys, and as a thin layer on bearing surfaces can provide a significant increase in galling resistance and reduce wear under heavy load, particularly against steel.

Medicinal
Main article: Medical uses of silver
Silver ions and silver compounds show a toxic effect on some bacteria, viruses, algae and fungi, typical for heavy metals like lead or mercury, but without the high toxicity to humans that are normally associated with these other metals. Its germicidal effects kill many microbial organisms in vitro, but testing and standardization of silver products is difficult.[21]

Hippocrates, the "father of medicine",[22] wrote that silver had beneficial healing and anti-disease properties, and the Phoenicians used to store water, wine, and vinegar in silver bottles to prevent spoiling. In the early 1900s people would put silver dollars in milk bottles to prolong the milk's freshness.[23] Its germicidal effects increased its value in utensils and as jewellery. The exact process of silver's germicidal effect is still not entirely understood, although theories exist. One of these is the oligodynamic effect, which explains the effect on microorganisms but would not explain antiviral effects.

Silver is widely used in topical gels and impregnated into bandages because of its wide-spectrum antimicrobial activity. The anti-microbial properties of silver stem from the chemical properties of its ionized form, Ag+. This ion forms strong molecular bonds with other substances used by bacteria to respire, such as molecules containing sulfur, nitrogen, and oxygen.[24] When the Ag+ ion forms a complex with these molecules, they are rendered unusable by the bacteria, depriving them of necessary compounds and eventually leading to the bacteria's death.

Silver compounds were used to prevent infection in World War I before the advent of antibiotics. Silver nitrate solution use continued, then was largely replaced by silver sulfadiazine cream (SSD Cream),[25] which generally became the "standard of care" for the antibacterial and antibiotic treatment of serious burns until the late 1990s.[26] Now, other options, such as silver-coated dressings (activated silver dressings), are used in addition to SSD cream. However, the evidence for the effectiveness of such silver-treated dressings is mixed and although the evidence is promising it is marred by the poor quality of the trials used to assess these products.[27][28] Consequently a systematic review by the Cochrane Collaboration (published in 200 found insufficient evidence to recommend the use of silver-treated dressings to treat infected wounds.[28]

There has been renewed interest in silver as a broad-spectrum antimicrobial agent. One application has silver being used with alginate, a naturally occurring biopolymer derived from seaweed, in a range of products designed to prevent infections as part of wound management procedures, particularly applicable to burn victims.[29] The year 2007, saw the first antibacterial glass introduced to fight hospital-caught infection: it is covered with a thin layer of silver.[30] In addition, the U.S. Food and Drug Administration (FDA) has recently approved an endotracheal breathing tube with a fine coat of silver for use in mechanical ventilation, after studies found it reduced the risk of ventilator-associated pneumonia.[31]

Another example uses the known enhanced antibacterial action of silver by applying an electric field. It was found recently that the antibacterial action of silver electrodes is greatly improved if the electrodes are covered with silver nanorods.[32]

Silver is commonly used in catheters. Silver alloy catheters are more effective than standard catheters for reducing bacteriuria in adults in hospital having short term catheterisation. This meta-analysis clarifies discrepant results among trials of silver-coated urinary catheters by revealing that silver alloy catheters are significantly more effective in preventing urinary tract infections than are silver oxide catheters. Though silver alloy urinary catheters cost about $6 more than standard urinary catheters, they may be worth the extra cost since catheter-related infection is a common cause of nosocomial infection and bacteremia.[33]

Various silver compounds, devices to make homeopathic solutions and colloidal silver suspensions are sold as remedies for numerous conditions. Although most colloidal silver preparations are harmless, there are cases where excessive use led to argyria over a period of months or years.[34] High doses of colloidal silver can result in coma, pleural edema, and hemolysis.[35]

Clothing
Silver inhibits the growth of bacteria and fungi. It keeps odor to a minimum and reduces the risk of bacterial and fungal infection. In clothing, the combination of silver and moisture movement (wicking) may help to reduce the harmful effects of prolonged use in active and humid conditions.

Silver is used in clothing in two main forms:

A form in which silver ions are integrated into the polymer from which yarns are made (a form of nanotechnology)
A form in which the silver is coated onto the yarns.
In both cases the silver prevents the growth of a broad spectrum of bacteria and fungi.

http://en.wikipedia.org/wiki/Silver#Applications

Another pro of owning silver is its value in a time of crisis. I truly hope it will never come to this, but the fact that silver's value is not as concentrated makes it a much better currency for average purchases. If our financial system collapses, it's unlikely you will be able to easily "make change" for your gold coins. Moreover, your gold coins will be too valuable to cash in for normal purchases such as food. This is where silver comes in! It's a cheaper metal and the perfect concentration of value for these types of scenarios. My recommendation: Build up an emergency stash of silver carefully hidden where you can get it in a time of emergency.

http://www.goldwhy.com/gold-versus-silver.html

What else is different? Well, how did we come to this odd situation where silver above ground in refined form is more rare than gold? We have consumed the silver! Silver is used in electronics, photographs, and jewelry. The largest use is in electronics, and that is growing all the time, perhaps 40% of annual demand is from electronics. Silver is the greatest electrical conductor, better even than gold! Silver is used in switches, because it does not spark, and makes a great contact. Silver is used in bearings and some batteries. When used by modern industry, silver is used in tiny quantities. So tiny, in fact, that most silver used is not economically recoverable. It ends up in the dumps, in smaller quantities than can be mined or refined. Not only is the silver unrecoverable, but the demand cannot be stopped by higher prices. Silver is used in such tiny quantities, and in most cases, there is no substitute.

http://www.gold-eagle.com/editorials_04 ... 80104.html

Supply and demand pressures make silver a potentially more lucrative investment than gold. Gold supplies continue to increase globally while its use in manufacturing is limited. Silver supplies are decreasing, and it is used in several industrial capacities. With decreasing supply and steady to increasing demand, the value of silver should outpace the value of gold.

http://www.happynews.com/living/buying/ ... d-gold.htm

I have done better with silver than gold. I don't buy bars anymore. I like the rounds.

But I always love...like now...how when gold hits the high the commercials are everywhere!!!!! Remember... "it is never worth zero..." Ya...Ok....

I like the rounds better too. I'm not buying as an investment so much as along these lines:

Another pro of owning silver is its value in a time of crisis. I truly hope it will never come to this, but the fact that silver's value is not as concentrated makes it a much better currency for average purchases. If our financial system collapses, it's unlikely you will be able to easily "make change" for your gold coins. Moreover, your gold coins will be too valuable to cash in for normal purchases such as food. This is where silver comes in! It's a cheaper metal and the perfect concentration of value for these types of scenarios. My recommendation: Build up an emergency stash of silver carefully hidden where you can get it in a time of emergency.

I can't see trying to buy some food wth a gold bar. I read somewhere that you should have enough gold or silver to be able to bribe the border guards.

BTW, where do you buy your rounds?