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The Silver Series: The Many Phases of Silver (Part 1 of 4)

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Silver Series: The Many Phases of Silver

Part 1: The Many Phases of SilverPart 2: Who Controls The World's Silver Supply?Part 3: The World's Growing Demand For SilverPart 4: Making The Case For Silver

2015 Silver Series Part 1: The Many Phases of Silver

Since the early days of civilization, the ancients connected the brilliance of silver to the moon. Artemis, the Greek goddess of the moon, wore silver sandals and shot from a silver bow and arrow. This lunar comparison might be fitting because like the moon, silver also has many phases. The properties of silver make it the most dynamic of precious metals.

Evidence shows that silver was first separated from lead as far back in 3,000 BC. Many ancient civilizations used silver as money, including the Greeks, Romans, and Ottomans. This was because of silver’s natural properties which make it malleable, divisible, durable, consistent, and rare.

Throughout history, people have used silver to prevent and combat illness. We now know today that silver has unique and impressive antibacterial properties that help it break down the cell walls of harmful bacteria. Silver also is the most conductive metal, and one of the three most reflective metals (along with gold and aluminum, and depending on the wavelength of light). These properties help make silver one of the most important industrial metals, with uses from photography to solar cells.

Don’t miss another part of the Silver Series by connecting with Visual Capitalist.

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Gold

A Brief History of Jewelry Through the Ages

Jewelry has been coveted for centuries by many different cultures. Here’s a look at the history of jewelry, and how it’s evolved into a $348B industry.

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Jewelry has been an integral aspect of human civilization for centuries, but it was the discovery and subsequent spread of precious metals and gemstones which really changed the game.

In today’s infographic from Menē, we visualize how the uses and symbolism of jewelry have evolved across time and space to become the industry we’re familiar with today.

Antique, Yet Ageless

There isn’t a single corner of the world that’s untouched by the influence of jewelry.

  • Ancient Egypt
    Gold accompanied the affluent into the afterlife – the famous 1922 discovery of King Tutankhamun’s tomb was filled to the brim with gold jewelry.
  • Ancient Greece and Rome
    Jewelry was used practically, and as a protection against evil. The gold olive wreath design was highly popular during this time.
  • Mesopotamia
    Both men and women in the Sumer civilization wore intricate pieces of jewelry, incorporating bright gems like agate, jasper, or lapis lazuli.
  • Meso-America
    The aristocracy in Aztec culture wore gold jewelry with gemstones to demonstrate their rank. The jewelry also doubled up as godly sacrifices.
  • Ancient India
    The Mughal Empire introduced the combination of gemstones with gold and silver. Today, pure gold jewelry is often gifted to new brides for financial security.
  • Ancient China
    Both rich and poor wore jade jewelry for its durable and protective properties. Pure gold jewelry is making a fashion comeback, doubling as a form of investment.

Modern Jewelry: At a Crossroads

Today, jewelry is at once the very same and vastly different from what it used to be.

The industry is worth upwards of $348 billion per year, and it’s not hard to see why. As an alternative asset, jewelry has grown 138% in value over the last decade – only outperformed by classic cars, rare coins, and fine wine.

However, perceptions of jewelry vastly differ. It’s not a stretch to say that Western jewelry buyers are enamored with diamonds, given their enduring association with special occasions – but it’s interesting to note how that ideal was fabricated.

The Invention of Diamonds

The De Beers Group is well known for making diamonds great again. In the early 1900s, the company had already monopolized the diamond trade and stabilized the market, but they faced the challenge of marketing diamonds to consumers at all income levels.

The average American considered diamonds an extravagance, preferring to spend money on cars and appliances instead. The concept of engagement rings existed, but weren’t widely adopted. The #1 slogan of the century – “A Diamond is Forever” – transformed all that.

Even as more companies like Tiffany and Co and Cartier entered the playing field, De Beers had set a successful industry standard. But there’s a catch – diamonds are actually:

  • Not all that rare in nature
  • Intrinsically low in value
  • Easily replicated in a lab
  • Decreasing in sales

Despite these caveats, the popularity of diamonds illustrate how Western consumers do not approach jewelry in the same way as Eastern economies, where its function as a store of wealth persists.

The Eastern Gold Standard

In Eastern economies, jewelry often takes the form of pure gold. The reasons behind this difference are surprisingly pragmatic: gold is considered a secure and innate store of wealth that maintains its purchasing value over decades, allowing families to pass wealth from generation to generation.

The rich history of the precious metal has made it a sought-after commodity for centuries, and China and India drive more than half of global gold jewelry demand every year:

YearShare of Demand (India + China)Total Global Jewelry Demand (tonnes)
201457%2510 tonnes
201558%2426 tonnes
201655%2068 tonnes
201757%2201 tonnes
201858%2200 tonnes

Source: Gold Hub – Values have been rounded up to the nearest tonne.

Why are Eastern cultures so attracted to the properties of pure gold?

Part 2 of this series will show why gold is the world’s most incredible metal, and why it’s coveted by billions of people.

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Animation: How Billionaire Investors Are Protecting Their Wealth

Ever wonder what keeps Warren Buffett or Ray Dalio up at night? Here are the market risks they are concerned about, and how they are protecting their wealth.

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It can take a lifetime to build a fortune of Buffett or Dalio sized proportions.

But, as all billionaires know, there is always risk present in the market – and even though a catastrophic geopolitical or financial event is very unlikely, it is important to be prepared for anything.

How Billionaires Protect Their Wealth

Today’s animation comes to us from Sprott Physical Bullion Trusts, and it shows the worries that are keeping billionaires up at night, and how they are positioning themselves to preserve wealth in any market environment.

Let’s take a closer look at the actions that these billionaires are taking, and why they are so concerned in the first place.

The Cash Misconception

Most billionaires are surprisingly cash poor on a relative basis. The average billionaire only holds 1% of their net worth in liquid assets like cash because the vast majority of their fortunes are usually tied up in business interests, stocks, bonds, mutual funds, and other financial assets.

Wealth is not stagnant, and the portfolios of these billionaires will move along with the health of the economy and markets. This can either make their wealth flourish – or any market crash could damage their entire fortune.

For this reason, billionaires are very concerned about market fluctuations, and they actively seek ways to protect their wealth even in the wake of a catastrophic geopolitical, economic, or monetary event.

How Billionaires are Positioned

In two earlier infographics, we outlined the current geopolitical risks that have elite investors worried, as well as the types of market risks that could materialize.

Keeping the above points in mind, billionaire investors are positioning their portfolios accordingly.

Warren Buffett
By accumulating massive amounts of cash in Berkshire Hathaway, value investor Warren Buffett has preserved his optionality. If a downturn hits the market, he can deploy the cash and get assets at bottom barrel prices. (Sidenote: see the size and scope of the vast Warren Buffett Empire)

David Einhorn
The billionaire founder of Greenlight Capital believes that financial repression and monetary debasement employed by central bankers can be neutralized with gold.

Paul Tudor Jones
The reclusive hedge fund manager, who called the 1987 crash, is being very careful in choosing the assets he holds. He has observed bonds are the most expensive they’ve ever been by virtually any metric – and has joked that he’d rather hold a burning chunk of coal than a U.S. Treasury bond.

Ray Dalio
The founder of the world’s largest hedge fund is adamant that 5-10% of a portfolio should currently be held in gold. Not surprisingly, in November 2017, Bridgewater loaded up on its gold holdings by 525%.

No matter the size of your investment portfolio, it’s worth studying how the world’s most elite investors are protecting their fortunes. By hedging against big events and diversifying their investment portfolios to include safe havens, they maximize their chances for success in any investment environment.

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