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History of Silver, Part I: the Metal of the Moon

Articles & Blogs - Silver Commentary

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This is the start of a three-part series. Part I discusses the dawn of silver mining and the recognition of silver as a precious metal – and “money”. Part II looks at the gradual build-up of global silver stockpiles over a period of centuries, while Part III looks at the rapid depletion of those stockpiles.


Somewhere around 5,000 years ago, humanity began to master the process of extracting “precious” metals from ore. According to the Silver Institute, the first “sophisticated processing” of silver occurred with an ancient tribe known as the Chaldeans – at approximately 2500 B.C.


There were several properties of gold and silver which attracted our primitive ancestors. First, there was the aesthetic beauty of these metals. Secondly, these two metals were particularly malleable – making them ideally suited for a wide range of artistic and ornamental uses.


Finally, these two metals were scarce (or “precious”), but not so scarce that it was impossible to amass large quantities of these metals. It was these considerations which soon led to gold and silver becoming the first universally accepted “money” to have been devised by our species (and today they stand out as being the best forms of money ever devised by humanity).


Glittering gold was equated with being “the metal of the Sun”, while shining silver was considered “the metal of the Moon”. Thus, our “primitive” ancestors quickly established the first gold/silver price ratio. Each year, there were thirteen cycles of the moon for each full, cycle of the sun, thus the original price ratio between these two, precious metals was 13:1.


Science has subsequently determined that silver is approximately 17 times as plentiful in the Earth's crust. Therefore, our early ancestors either stumbled upon a ratio that just happened to coincide very closely with the natural abundance of these metals, or they had a much more sophisticated understanding of geology than we give them credit for. For roughly 4,000 years, the average gold/silver ratio was 15:1. These ratios are especially interesting today, given that the price ratio is currently, extremely skewed in gold's favor – at more than 60:1.


For roughly two thousand years, the center of silver production was the “Cradle of Civilization”: the various ascending (and descending) cultures which were located around the perimeter of the Mediterranean Sea.


A thriving, silver trade among these tribes developed, reaching its zenith some time after the 8th century, B.C. Most of this early, silver production came from the Larium mines – located near the ancient capital of Athens. Annual silver production in this era was estimated at about one million ounces per year.


As the mines of Larium were gradually depleted, ancient production shifted its focus to newly-discovered silver deposits in Spain. For the next 1,000 years (until roughly 800 A.D.), Spain became the leading source of silver in the world.


With production of the earlier mines steadily declining, the production from Spain did little more than offset lower production from the Larium mines, and the handful of other, early sources of silver. Thus, total production leveled off at a plateau of approximately 1.5 million ounces per year.


While silver was never equated with gold in value (due to its greater abundance), throughout the first 2500 years of silver production its status as “money” never diminished. This is yet another piece of data to “file away”, given that the majority of market commentators today (especially in North America) disparagingly refer to silver as simply an “industrial metal”.


The “logic” of these neo-“experts” is that because silver also has superior chemical and metallurgical properties in countless applications (in addition to its aesthetic beauty) that this somehow makes silver less “precious”.


Such infantile reasoning would never have fooled our ancestors who lived a thousand years ago (or 2,000 years ago, or 3,000 years ago, or 4,000 years ago...). In fact, with most of the global stockpiles accumulated over a period of 4,000 years now consumed (literally) in various “industrial” applications, silver has literally never been more “precious” than it is today.

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