What would Silver be Worth if The Dollar Collapses? [2022]

The price of silver has fluctuated over the years. In fact, in the last 5 years, it has gone from a low of $15.71 in 2018 to a high of $25.14 in 2021 and back down to $23.40 in 2022.

The price of silver is called the Spot Price and this refers to the current market price for precious metals. Their prices fluctuate constantly due to several factors such as supply and demand, technology, national and global economic trends, as well as the strength of the dollar.

The US dollar is a base currency for silver because all global markets measure it in dollars. Therefore, it has a great influence on its pricing.

To get a better understanding of this, let’s take a look further.

What is the Relationship Between the Dollar and Precious Metals?

Since the early 1970s, the relationship between the dollar and precious metals has been inversely related. If the dollar increases in value, the price of precious metals goes down. And if the value of the dollar reduces, the price of precious metals goes up.

A good example of this was in 2008 when the US was nearing a financial breakdown. The price of precious metals rose. Then in mid-2014 when the dollar began to strengthen, the price of precious metals decreased.

Silver is one of the most merchandised precious metals on earth and is extremely popular among investors. However, investors are less likely to buy when the dollar values are high because they will most likely end up with less value.

Will Silver Go Up if the Dollar Crashes?

There are different ways to answer this question. On one hand, if the USD were to collapse, silver could rise to infinite levels because there are only 3 billion ounces of silver in the world. This means that there’s only half an ounce of silver for every human being in the world which would make it extremely scarce and very valuable. With the law of demand and supply, it could rise exponentially.

On the other hand, a currency collapse could cause a drop in the value of assets as markets respond to the crisis. Investors may need liquidity to pay off their loans, pay their bills, and living expenses. They may decide to sell off their investments in silver and other precious metals in a bid to protect other assets.

What Happens if the Dollar Collapses?

If the US dollar were to collapse, there would not only be an economic crisis but a global one as well. USD is an international currency that is used to do many cross-border dealings. No other currency can compare to the greenback’s supremacy and accessibility.

Banks would close down, there would be a limited supply of food, gas, and other amenities. Interest rates would increase, there would be hyperinflation, and investors would be scrambling for other currencies. This would open the door for other currencies, precious metals, etc. to increase in value.

What Should You Own if the Dollar Collapses?

There are many schools of thought when it comes to the best option for investment in the event of a USD collapse. Precious metals such as silver and gold have been used for centuries as a store of value. There is no perfect fit when it comes to investing in precious metals because each investor’s circumstance is different and they have to determine what will work best for them.

Foreign currency is also another option that investors could go for. The Japanese yen has been a very strong currency for several years, while the euro is also a good option due to its stability in the Eurozone compared to other parts of the world. The Swiss franc is also widely used due to Switzerland’s stable economy during times of market instability.

Investing in Bitcoin and other cryptocurrencies is another option for investors. They give security against inflation and offer the likelihood of huge gains if they continue to grow in reputation. Bitcoin is known as ‘digital gold’ because of its scarcity, durability, and portability. It’s an attractive option to protect wealth from a potential dollar collapse.

Is Silver an Attractive Investment?

Before making an investment, you should carry out proper research to understand your risk levels before making a decision. That being said, silver is viewed as a safe-harbor investment because of its store of value and the fact that it’s a hard asset. It’s also viewed as a hedge against inflation because it can protect your wealth from the continued increase in inflation or currency devaluation. It also has more industrial uses such as solar panels, medical equipment, etc.

However, silver is extremely volatile. It has experienced price ranges from $0.30 per ounce during the Great Depression to nearly $50 per ounce in the 1970s. The silver market is much smaller than the gold market which makes it more susceptible to price swings when compared to gold. This needs to be taken into consideration before deciding whether or not to invest in it.

What Will Gold Be Worth if the Dollar Collapses?

Gold is dollar-denominated which makes the precious metal inversely related to the value of the USD. What this means is that if the value of the dollar increases, the value of gold will be lower. Likewise, if the value of the dollar crashes, the value of gold will increase. This is because higher amounts of gold can be purchased when the dollar value is lower.

According to Peter Schiff, CEO and Chief Economist of Euro Pacific Capital, the value of gold could rise 10 fold if the dollar collapses. It could even go as as high as $20,000 an ounce if there is a loss in the confidence of the dollar. Gold is seen as a hedge against inflation and when inflation goes up, the price of gold is likely to follow.