Money Morning: Here is What Happened to Silver Prices During the Last Recession

November 08, 2018

Article in Money Morning

The Dow Jones Industrial Average plummeted nearly 50% from peak to trough during "the Great Recession," which lasted from December 2007 to June 2009. That's why investors buy defensive and alternative investments like gold, silver.

These types of investments can hold, and even increase, their value no matter what else is happening in the world. It doesn't matter if unemployment is at an all-time high or there are negative interest rates.

There will always be buyers for certain commodities. And that's especially true for silver…

Silver isn't just useful as a resource for electronics or jewelry, though that boosts its demand too; silver is also useful as a currency.

Silver was used as a currency going all the way back to ancient Greece, so it has a long history as a form of payment. Today, it's not as common or easy to pay in silver, but silver coins and silver bars are still durable and portable, two important characteristics of money.

That also gives silver added demand in times of economic crisis. If fiat currency ever becomes worthless, there would still be gold and silver to conduct transactions.

And right now, investors are wondering if they should buy silver, as they expect an impending economic recession.

Here's what has investors so worried…

Why Silver Investors Are Expecting a Stock Market Crash

There are plenty of reasons to expect economic turmoil ahead, which include:

  • Tariff wars between the United States and China.

  • Trade tensions across the globe.

  • U.S. interest rates increasing too rapidly.

  • A slowdown in the U.S. housing market.

  • Student loan debt reaching $1.5 trillion as of March 2018.

  • U.S. credit card debt reaching $1 trillion in March 2018 for the first time ever.

  • Greece's debt crisis.

We could keep adding to the list, but you're already well aware of just how bad things could get.

There are a lot of reasons why investors are expecting economic volatility and are turning to buying silver coins and bars right now.

But haven't silver prices dropped recently? And what happened to the price of silver during the last economic recession?

Those are great questions, and we're going to answer the first one right now. Then, we're going to show you what happened with silver prices during the last economic recession and what it means for silver prices this time around…

Here's How Silver Prices Have Performed in 2018

Money Morning Resource Specialist Peter Krauth told us silver prices traded in a range between $16.25 and $17.25 per ounce for the first half of the year but were hit hard when the dollar rallied. The dollar hit a high for the year in May. Since then, silver prices fell to trade around $14.59 an ounce.

Krauth also said we could see an increase in investment demand in the very near future as the smart money is starting to prepare for what's ahead…

You Won't Believe How Silver Prices Performed During the Great Recession

Savvy investors saw the Great Recession coming all the way back in 2005 when prices traded for $7.31. By 2011, silver was trading for a high of $48.70.

That's an astounding 566% return in six years.

Silver protected portfolios and helped some investors profit during the last economic collapse, and you're going to need some portfolio protection for what's ahead…

The stock market crash of 2008 is nothing in comparison to the maelstrom that's brewing now. Jobs will suffer, the housing market will spiral downward, and millions of American seniors will face bankruptcy.

But if you know how to prepare, you'll be one of the few lucky ones.

To read this article in Money Morning, click here.

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