When it comes to alternative currencies, gold is usually the tender of choice. David Morgan, publisher of The Morgan Report and creator of Silver-Investor.com, disagrees. Morgan says that when it comes to precious metals as legal tender, silver is the best bet.
Silver is less expensive than gold, which makes it easier to transport and use. “In an absolute crisis, silver would be would be the monetary metal of choice. Its value per unit is a lot less than gold,” Morgan says.
The lustrous metal has been synonymous with money throughout history. “Silver has been used as money in more places and more times than gold ever has,” Morgan tells The Daily Ticker.
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Silver is trading near $23 an ounce in the futures market, having recovered only about 5% from recent lows. The precious metal reached record highs of $50 an ounce in 1980 and again in 2011 when the Hunt Brothers famously tried to corner the market.
Gold, in contrast, is trading near $1,425 an ounce, up 8% from its 52-week low reached last week. Yesterday Goldman Sachs (GS) reversed its April 10 sell recommendation on gold, saying the precious metal could trade as high as $1,530 within the next three months.
Gold has little utility and risks becoming obsolete while silver is used heavily in industry, says Morgan. Metals consultancy Thomson Reuters GFMS says industrial uses account for about half of silver’s annual demand—much more than gold.
Because of its industrial usefulness, a recovery in the global economy could propel silver prices while possibly hurting the value of gold.
Related: Arizona Becomes Second State to Approve Gold and Silver as Legal Tender
In the meantime, Morgan is working on using silver—in addition to gold—as an alternative currency.
Utah has set up a mechanism to use gold as payment for bills and Morgan hopes the state sets up a similar program using silver. He suggests a metals-based debit card as the best and most practical way to use the alternate currencies