Silver Gets No Respect

"When I was born, I was so ugly the doctor slapped my Mother."That's just one Rodney Dangerfield line that will live on as part of Rodney's "I get no respect" legacy.And, right now that's exactly what silver is getting - no respect! - in spite of turning in stellar returns over the last month.

As recently as August 11, the silver price rested below $18 an ounce.Today it touched $20.50 an ounce and appears to be on a mission to draw investor attention.It seems though, you have to do better than a 13.8% one month rise to accomplish that.

So, why is silver moving so strongly now?From an historical perspective, the value of silver to gold was originally set by passage of the coinage act of 1792, the Bland Allison Act.Influenced by recommendations from then Secretary of the Treasury Alexander Hamilton, the value of silver to gold was set at 15 ounces silver equal to 1 ounce gold.

For years that was the standard until Nixon removed us from the gold standard in 1971.The last time gold and silver actually traded near that level was January 21, 1980 when gold hit $850 an ounce and silver hit $54 an ounce.Today the ratio lies near 63:1.

Some investors believe we will again see the day when gold and silver prices converge at this level.That is said to mark the time when both metals peak in value as they did in 1980.Other investors focus more on silver's growing industrial demand, as the development of solar power, for example, could drive silver demand much higher.

Still, others find themselves concerned over recent reports that silver supply is being grossly overstated and that we in fact are in the midst of a silver shortage.So, take your pick.Whatever is driving silver prices higher, it hardly gets a mention.

You would think anything that has risen 25% in just the last year would be heralded as the investment of the year - maybe even the decade.But no, silver just quietly goes about its business of steadily rising in price.

If you are looking for ways to further diversify your savings and retirement accounts, a few American Silver Eagle Coins may be the answer.Consider this.If silver did move toward the historical ratio of 15 ounces per ounce of gold, silver today would have to be $84 an ounce.

If there is indeed a silver shortage, when word finally does get out, silver is set to make a powerful move toward that level.And, if industrial demand really does put an added strain on supply, a potential price explosion is in the making.

So the next time you look at buying a gold coin, you might want to consider an occasional substitute of 50 or 60 silver coins instead.

For breaking gold and silver news visit learcpaital.com for real time prices and low online pricing.