Is Silver Money or a Commodity?

Posted - January 5, 2023
Is Silver Money or a Commodity?

A commodity is easily summarized as a raw material that can be bought and sold. Money is a far more nuanced topic largely understood as a medium of exchange, or, as the U.S. Constitution references it, a “tender in payments of debts:”

“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

Is silver a commodity? Is silver money? Both? Let’s start by taking a look at silver as money. 

Did you know the 1964 Kennedy half dollar is more valuable than any other Kennedy half dollar coins that precede or follow it? Why, might you ask? This is because that particular coin is 90 percent silver, more than twice the silver content than the other Kennedy half dollars and that is what makes it considerably more valuable than being just a coin.  

So, you can see, in this instance, why one would be less likely to pass that silver on as mere pocket change. That particular coin’s market value far exceeds its face value of 50 cents. As a result, the ’64 Kennedy is more appealing to collectors and less likely to be spent as actual money. 

Silver as a Commodity

More and more people are gravitating toward precious metals as a way to provide some sort of buffer against troubling economic indicators and silver is one of the more popular choices as a potential investment. As well, silver comes in many forms, not just coins. 

Silver is found in jewelry, cutlery, plates, candlesticks, picture frames just to name a few. Depending on the content, these items can easily increase in value over the years. However, silver is not just limited to being some shiny collectible in your home or vault. 

Silver is a big player in the industrial world as well. As the leading conductor of electricity, it can also be found in computers, smartphones and tablets, solar panels, cameras and batteries, to name a few. It’s also a world-renowned germ killer and sanitizer which is why many medical tools are actually coated with silver. 

Why Silver Doesn’t Work as Money

The point here is that silver is and will always be in demand because its many qualities as a commodity make it more valuable than something you might simply find in an expendable coin with a face value below its commodity value. Sure, silver is still used in the minting of coins but because of the industrial demand, and ballooning of monetary supply, there isn’t enough silver available for coinage. Therefore, silver will always prove itself to be more valuable than the face value of a common coin. 

Yes, silver is money, but its value as a commodity has outpaced its face value when traded as money.

So, keep an eye out for that 1964 Kennedy half dollar and consider other possible silver coin collectibles as a commodity. A little research goes a long way here and will also serve as a worthy reminder that, as a commodity, silver can be more than just a coin. This precious metal is a worthwhile investment no matter its form or function. 

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Hero Bullion provides an environment that is informative and safe for those looking to own physical gold and silver bullion as an investment. We love helping folks at all stages throughout their bullion journey making progress towards acheiving their financial goals. Whether you are a seasoned bullion investor or brand new to the game of gold and silver bullion ownership, we're here to help and serve you in any way we can.