Silver Stocks are a Screaming Buy

Silver stocks are a screaming buy. And I’ll tell you why in just a moment. But first, did you know that gold and silver could soon become “legal tender” in Florida?

That’s what Florida Chief Financial Officer Jimmy Patronis is hoping for…

Backed by Trump to replace Matt Gaetz, Patronis said the following in a statement last week:

Gold and silver have been trusted assets for thousands of years. And it makes perfect sense to use them as legal tender. I will launch a study to determine the best way to get it done.

He’s right.  But I’m not sure it matters if we use them as legal tender, anymore.  Mostly because it’s unlikely that any person born after 1980 will have any interest in such a thing.  Millennials, Gen Z’s and a new generation of Gen Alphas that will soon be entering the workforce will understand gold and silver about as much as they understand rotary phones and fax machines. 

This isn’t to say using gold and silver as legal tender would be a bad thing.  Even on a national level. It’s just that getting more than 50% of the U.S. population to embrace it would be a herculean task.  

Younger generations embrace financial convenience more than the rest of us because they’ve grown up with it.  Good luck finding a Millennial or Gen Z with a checkbook or even a wad of cash.  They use Venmo, Apple Cash, Zelle, and Cash App.  Not bills and coins.  And they’re sure as hell not going to see gold and silver as anything but something “old people use.”

Of course, I could be wrong.  Patronis is going to launch a study to find out if Floridians will embrace such a move.  My guess is that the only folks keen on such a thing are those eligible for AARP benefits.  And I say this as someone who is in this category and who would also welcome such a thing.  Not so much because I want to pay for my gym membership or groceries with gold and silver.  But because capital gains taxes on gold and silver sales in states that have approved gold and silver as legal currency, are eliminated. 

Today, 11 states accept gold and silver coins as legal tender.  And there are more states trying to do the same thing. 

While I’m skeptical that gold and silver will ever have any meaningful impact on financial transactions in this country, implementing such a thing would provide an opportunity to use gold and silver as a tax-exempt hedge against inflation and devaluation of the U.S. Dollar.  

Patronis has also pointed out that using gold and silver as money could create a healthy currency competition that would serve to reduce the harmful effects of any future Central Bank Digital Currency, or similar scheme, as well as ongoing financial abuses like “de-banking,” or dropping law-abiding individuals and businesses from financial institutions for political reasons.  The plan would also include the following tax-exempt parameters:

• Gold and silver bullion would NOT be characterized as personal property for state taxation or regulatory purposes.
• The purchase or sale of any type or form of bullion would NOT give rise to any state tax liability.
• The exchange of one type or form of legal tender for another type or form of legal tender would NOT give rise to any state tax liability.

To be honest, I see no downside to Patronis’ plan.  Although it will be interesting to see how much it would cost the state to run the study and then integrate gold and silver into the state’s monetary framework.  

For those bullish on gold and silver, this is definitely a good thing.  Although in the case of silver, I’m far more bullish on its industrial uses than I am of its potential as legal tender in Florida.

Why I’m Bullish on Silver Stocks

Silver has long been a metal used equally for industrial purposes and investment-grade categories (i.e., coins, jewelry, etc.).  But that 50/50 balance is changing.  In fact, industrial demand for silver now represents about 60% of total silver demand.  And this figure is likely to continue growing as a result of rapidly growing markets that require large amounts of silver to operate. 

From solar panels and EVs to AI and cryptocurrency, these markets are heavily reliant on a steady supply of silver.  These are also markets that have guaranteed growth for the foreseeable future. 

Couple that with the fact that silver has always been considered a safe haven asset in times of uncertainty. And indeed, these are times of uncertainty. Most recently with the fall of Assaad, which a lot of folks believe presents a new powder keg for the Middle East.  Something that can only exacerbate the already heightened tensions in Israel, Lebanon, and Iran.

Then consider the Ukraine crisis, increased cyber attacks on the U.S. from both China and Russia, the global immigration crisis, the China-Taiwan conflict, the continued increase in extreme weather events, nuclear threats from Russia and North Korea, social unrest in Europe and Africa, and a rise in food insecurity in Latin America.

There’s certainly no shortage of crises in the world today.  And while I’d be lying if I said all of these crisis situations didn’t concern me — both from a moral perspective and a global security perspective — it would be foolish to ignore the fact that these crises are also adding to the value of silver as we head into 2025.

So beyond just owning physical silver, you should also have some exposure to silver stocks as we head into 2025.  My favorite right now is Silvercorp Metals (NYSE: SVM).  After doing a $130 million private placement last month, the stock fell into oversold territory.  It’s now trading at a significant discount.  And as an added bonus, it has no debt and about $200 million in cash and short-term investments.  At these levels, it’s a steal.

To a new way of life and a new generation of wealth…

Jeff Siegel

Check us out on YouTube!

@JeffSiegel on Twitter

Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

Want to hear more from Jeff? Sign up to receive emails directly from him ranging from market commentaries to opportunities that he has his eye on.