Silver is a much smaller market than the gold market and quality research about the poor man’s gold can be less easy to find. One academic who does stand out though is the late Professor Roy Jastram, whose works on gold lead him to an investigation into silver’s monetary history and record. His book ‘Silver: the restless metal’ is much cited by silver experts like David Morgan, but being out of print is now not that easy to get hold of. The Amazon book markets in the US and UK were trading at >$140 when we looked, so we headed down to the British Library in London to get hold of a copy. Published in 1981, this book is a look at silver’s recorded monetary history with a forward look at what the future might hold for the silver price.
The historical depth of data used in the compiling of this book is impressive. The main historical analysis focuses on England and the USA, and the statistical story of silver begins in England in 1273. Although American data begins later, this monetary analysis seeks to separate periods of inflation and deflation, has some interesting findings.
Inflation, deflation and silver.
Unsurprisingly, and as other monetary experts we cite find, Professor Jastram finds that “annual rates of inflation were not at all severe until the twentieth century”. More interesting is the finding that silver actually lost purchasing power against commodities in every period of inflation in England since the end of the sixteenth century. Similar more general findings of loss of purchasing power during inflations had also been found for gold in Jastram’s ‘The Golden Constant’. Only during the inflation deemed to start after 1933 in England was silver found to gain in ‘operational wealth’. This period may be of more relevance to investors today, and we return to this later.
In the USA the silver price is broadly found to be an almost constant between 1800 and 1827, before a downward trend from 1873 to 1932, before a contemporary trend of appreciation from 1932 onwards. As for gold, it is found that silver lost purchasing power in all American episodes of inflation until the present one beginning in 1951.…
