In 1792, one US dollar was legally defined as 371.25 grains of pure silver. Not a promise. Not a government guarantee. A physical weight you could measure, hold, and melt down. The dollar is now backed by nothing but institutional trust. Silver has become one of the most compelling assets for long-term wealth strategy.
Is Silver a Good Investment for the Future?
Felix Prehn, a former investment banker and Goat Academy founder who built a financial education brand followed by 600K+ people on YouTube, with 570+ public Trustpilot reviews and a stated goal of reaching over 1 million people, shared his secrets about silver. Read the post and be better prepared for your investments. You will learn:
Key Takeaways
- Why the gold-to-silver ratio is the single most powerful signal for timing a silver purchase
- What real risks silver carries and why volatility is a permanent feature, not an exception
- How six consecutive years of supply deficits are tightening the physical silver market
- Why solar panels, electric vehicles, and AI are structurally lifting silver demand
- How two political decisions destroyed sound money and why silver is the direct response
- What silver’s 5,000-year track record as money means for your portfolio today
- Felix Prehn’s tips for silver investors
If you want to watch the video on the topic, please scroll down, and you’ll find it at the bottom.
The Rarest Silver Investment Setup in Modern History
Right now, three forces rarely align in any single market:
- A structural supply deficit running six years straight
- Massive industrial demand growth from solar panels, electric vehicles, and AI
- Monetary demand as a hedge against currency debasement
No other asset in the precious metals space carries all three at once. Silver offers a setup professional investors consider genuinely rare. Many investors are only beginning to notice it.
Read the Gold-to-Silver Ratio Before Buying Anything
The silver ratio divides the gold price by the silver price. The number tells you how many ounces of silver it takes to buy one ounce of gold. It is the single most powerful signal for timing a silver investment.
In the 20th century, the average hovered around 47. More recently, it fluctuates between 50 and 70. The ratio currently stands at 60, right at the historical average:
- Ratio at 80 or above: silver prices are historically cheap relative to gold, worth accumulating
- Ratio below 60: silver prices are relatively expensive, a common signal to take profits
In 2020, the ratio spiked to 120, then fell to 70 within months. Silver prices doubled during the period while gold barely moved.
Silver Prices Are Volatile and Not for Everyone
Silver prices can swing 30 to 50% in a single year. Greater price volatility compared to gold is a permanent feature of the silver market, not an exception.
Real risks for anyone investing in silver include:
- Interest rates: when the Federal Reserve keeps rates high, silver prices fall
- Strong dollar: makes silver more expensive for foreign buyers, reducing global demand
- Substitution: copper nanowires and graphene are long-term industrial replacement risks
- Efficiency gains: industries are actively working to reduce silver content per product
- Storage costs: storing and insuring physical silver eats into profits for large holdings
Silver is historically more volatile than gold. Price swings are larger due to its smaller market size and heavy reliance on industrial applications. About 70% of silver is produced as a byproduct of mining other metals like copper, lead, and zinc. In the 1970s, silver prices ran from $1.50 to $50. In the 2000s, silver prices climbed from $4 to $49.
Silver’s price also tends to rise during periods of higher-than-usual inflation. When inflation reached 9.1% in 2022, silver climbed to around $23 per ounce from $15 per ounce in 2019. A sharp rise in silver prices rewards patient investors with clear risk tolerance. Impulsive buyers chasing annual demand spikes consistently get hurt.
Types of Silver Investments and How to Own Them
Physical silver ownership is the most direct form of investing in silver:
- Silver coins and rounds: popular for authenticity, ease of trading, and government-backed guarantees
- Silver bullion bars: lower premiums compared to silver coins, ideal for cost efficiency
- Insured third-party vaults: audited, tracked, and safer for larger holdings
- Digital platforms: own physical silver stored in vaults, tradeable online in fractions
Direct physical ownership gives you full control with no counterparty risk. Exchange-traded funds and mining stocks give investors a way to gain exposure to silver prices without physical delivery. Each carries a different risk profile worth understanding before committing capital.
Silver Remains Different From Gold
Gold is primarily a monetary metal. Central banks buy it, investors hoard it, and only about 10% goes to industrial use. Silver is fundamentally different. Roughly 60% of silver demand is industrial, and industrial use remains a major driver heading into 2026. Silver stands at the intersection of monetary history and modern technology supply chains.
A lower price compared to gold makes silver accessible to a broader range of investors, providing an entry point into precious metals ownership gold bullion simply cannot match.
Six Years of Supply Deficits and Counting
From 2021 through 2026, global silver demand has exceeded global supply every single year. The silver market is projected to remain in a structural deficit for the sixth consecutive year in 2026. The projected shortfall is 67 million ounces. The cumulative gap is approaching one billion ounces.
Physical silver has been drawn from warehouses, ETF holdings, and exchange stockpiles to cover the deficit. When the tight physical market reaches a breaking point, a short squeeze becomes possible. Sellers who do not physically own silver get forced to buy it back at any available price, triggering a rapid spike.
Silver Is Consumed, Never Recovered
Gold is hoarded. Almost every ounce ever mined still exists in vaults, jewelry, and central bank reserves. Silver gets permanently consumed in micrograms per device, spread in billions of products: smartphones, solar panels, electric vehicles, AI infrastructure, medical devices, and water purification systems. Pulling a few milligrams of physical silver from a circuit board costs more than the silver is worth. Annual demand keeps rising while the recoverable base shrinks permanently.
Primary Silver Mines Cannot Fill the Gap
Silver does not come from primary silver mines in meaningful volumes. About 70% is a byproduct of base metals mining. Production decisions are driven by the economics of copper, lead, and zinc, not silver prices. Even if miners wanted to open new dedicated operations, permitting and construction require 10 to 15 years. Silver prices alone cannot bring new supply online fast enough to close the deficit.
Renewable Energy, EVs, and AI Are Lifting Silver Prices Structurally
Every solar panel requires silver for electrical connectivity. The industry has tried to reduce silver content per panel. The most advanced panels use more silver per unit, not less. Electric vehicles, AI data centers, 5G networks, and semiconductors all depend on silver. Silver content per chip is rising because speed and energy efficiency demand better conductivity.
Silver holds three properties no other industrial metal combines: it is the most electrically conductive metal on Earth, the most thermally conductive, and the most reflective. No substitute works at scale in solar panels or advanced electronics. Graphene and copper nanowires are being researched as long-term alternatives, but none have matched silver’s performance at scale.
Two Political Decisions That Destroyed Sound Money
In 1873, Congress removed silver from legal tender status. The money supply contracted and triggered the Long Depression, which lasted 25 years. Farmers could not repay debts, wages fell, and unemployment spiked. People called it the Crime of 1873. It is widely believed to be a backroom deal engineered by financial elites to concentrate control of the global financial system.
In 1971, Nixon severed the dollar’s last link to precious metals entirely. In under 100 years, money went from a physical weight you could measure to something requiring pure faith in institutions. Many investors now view silver as a direct hedge against currency debasement.
Silver Has Been Money for 5,000 Years
The Sumerians used silver as currency as early as 3,100 BC. Silver came before gold in everyday commerce because gold was too scarce to make change for a loaf of bread. The Spanish silver dollar circulated globally from the 1500s through the 1800s as the world’s first true reserve currency. Silver’s 5,000-year track record as a wealth strategy is a fact no other asset class can match.
Felix Prehn’s Tips for Silver Investors
- Learn the gold-to-silver ratio before buying anything.
Felix advises using it as a timing signal: “When you are high, so say 80, silver is usually really cheap. It’s when you might want to accumulate. When we are below 60, silver is usually outperforming. It’s often a signal, maybe take some profits.” - Know your risk tolerance before you put money in.
Felix is direct about volatility: “If you buy silver and the price drops 40%, you need to be able to stomach that, or buy less, or learn some exit rules.” He suggests silver is not suitable for people without risk management. - Store silver in insured third-party vaults, not at home.
Felix shares his personal preference: “I prefer to put things into insured vaults, third-party storage companies that are audited. Everything is tracked there.” Home storage gives access but carries real risk. - Buy silver to protect against currency debasement, not to get rich quickly.
Felix closes with a clear framing: “Silver isn’t a get-rich-quick play. It is insurance against the dollar losing value. You don’t buy silver because you think the world is ending. You buy it because you understand how money actually works.”
Frequently Asked Questions
Is silver a good investment for the future?
Silver combines strong industrial demand from solar panels, electric vehicles, and AI infrastructure with a six-year supply deficit and monetary demand as a hedge against purchasing power loss. No other precious metal carries all three at once.
Is physical silver better than exchange-traded funds or mining stocks?
Physical ownership gives direct control and no counterparty risk. With exchange-traded funds or mining stocks, a third party stands between you and the asset. Storage costs are the main tradeoff. Many investors hold a mix of physical silver and exchange-traded funds depending on their liquidity needs.
What drives silver prices and how volatile is silver compared to gold?
Silver prices fluctuate far more than gold prices, with price swings of 30 to 50% common in a single year. Interest rates set by the Federal Reserve, a strong dollar, and shifts in global demand all move silver prices. Political instability, wars, and financial crises push investment demand higher during periods of economic uncertainty.
How does silver fit into a diversified portfolio?
Silver is long-term wealth preservation and a hedge against currency debasement. Volatility does not equal risk. Over the long run, silver has been a consistent hedge against inflation. In the 1970s, silver went from $1.50 to $50. In the 2000s, silver went from $4 to $49.
Why is the physical silver market so tight and what is a short squeeze?
The tight physical market reflects six consecutive years of annual demand exceeding global supply. Physical silver has been drawn from ETF holdings, warehouses, and exchange stockpiles to cover the gap. When the physical market gets tight enough on exchanges like COMEX, sellers without physical silver get forced to buy it back at any available price, triggering a sharp price spike.
What makes silver different from gold and other metals as an investment?
Gold is your insurance. Silver is insurance plus industrial leverage. Gold demand is about 10% industrial. Silver demand is about 60% industrial. Silver is part of the technology of the future. It is not a lesser version of gold. It is a very different asset.
Disclaimer
The content on the website is for informational and educational purposes only. It does not constitute and should not be construed as financial or investment advice or an offer to purchase or sell securities. The content is not personalized or tailored to a specific person or group of persons, nor to their personal investment or financial needs.
You should consult a financial adviser or other investment professional authorized to provide investment advice. Investing comes with risks, including the risk of loss. Presentations of trades made by Goat Academy or its personnel are not a guarantee that any investment decision made by a student will be successful. Past performance is not a guarantee of future performance.
Link to the YouTube Video:
If You Don’t Understand Silver, You Don’t Understand Money
Publishing date: 4th May 2026