Is Gold More Important Than Silver?

May 7, 2016

It has been my nature from the earliest point, I can remember that I have always looked for inspiration in the underdog.

There is no logical reason for this, as my upbringing was about as “middle of the middle” as it could be. However, all the stories, movies, and lectures that have stood with me throughout my life have been those where the HEART was the significant theme. Where the underrated, or unexpected, or “underdog”, rose above adversity to win! To me the overall theme is that heart is greater than intelligence, training, coaching, and any other metric that goes through the human psyche.

‘What does this have to do with silver or gold?’. For me, it is truly the story of the underdog because upon even a casual inspection of the facts, silver conducts heat better than any element, reflects light better than any known element, and conducts electricity better than any other element. This alone suggests that my often quoted statement—“Silver is the best technology stock you can own”—has some merit.

It seems the idea is that the only asset that is not simultaneously someone else’s liability is gold. This is an often used expression by the gold bugs, but is it really true? Silver certainly would fill that description, as would a number of fully owned material goods.

However, the facts are far different. Silver has been used as money more often, in more places, and for more transactions than gold ever has been. In fact, in an interview at the New Orleans Investment Conference, Milton Friedman stated, “The major monetary metal in history is silver, not gold.”

The fact remains that gold is “establishment” money held by central banks all over the world, and banks have been net buyers of gold for several years now. Gold is generally moving from West to East, which parallels the trend of manufacturing moving in the same direction. No central bank in the world holds silver as a monetary asset. In a way, at this point it would be almost impossible because so little silver remains in either bullion or coin form—that is, investment form. The rough numbers are two billion ounces of investable silver and perhaps five billion ounces of investable gold.

Is this the reason that the ultimate form of payment between nations—gold—has been and will continue to be accumulated by both nations and global citizens? Will gold do an accounting after the day of reckoning when the trust between nations to “pay” in anything meaningful is questioned? How likely is this idea that the system can fail? Is it something imminent, decades away, or simply a ‘conspiracy theory’ of overactive imaginations?

When the run to gold begins, the public race for silver will overtake gold by a wide margin as people immediately decide to put their faith in something tangible, and silver is far more affordable for the world’s population than gold is.

At this point, many in our community think that some tie to gold is inevitable. Remember the golden rule; ‘’he who owns the gold makes the rules’’, and the global banking establishment still own roughly half of the world’s gold, but for practical purposes—none of the silver. 

David Morgan is a widely recognized analyst in the precious metals industry and consults for hedge funds, high net worth investors, mining companies, depositories and bullion dealers. He is the publisher of The Morgan Report on precious metals, author of “Get the Skinny On Silver Investing” (Morgan James Publishing, 2009), and featured speaker at investment conferences in North America, Europe and Asia. His website at

Seventy-five percent of all gold in circulation has been extracted since 1910