Patrick Hannaford: Did Silver Soar?


Public Domain

In reason's June 1978 financial issue, Charles R. Stahl boldly proclaimed silver "the superinvestment of the decade ahead."

Citing both dwindling global reserves and an expected growth in demand-driven in part by the use of silver in new technologies-Stahl predicted that there would be a "period of actual silver shortage" sometime in the early 1980s. Silver-iron batteries were coming to market, with new uses emerging in the telecom industry and several possible military applications. Even silver coins were coming back in fashion. "In the years to come," Stahl wrote, "we will probably see a growing need for silver by current users, and new uses are likely to find worldwide acceptance."

With hindsight, it's clear that Stahl's recommendation came at the beginning of a financial bubble. His predictions ought to serve as a warning for readers considering the advice of financial commentators bearing bold predictions.