Silver and My Great Depression DNA

Expert Insight

Precious metals like gold and silver may not be in every investor’s – certainly not a trader’s – makeup.

Bill Patalon’s grandparents in Northeastern Pennsylvania knew—the Great Depression instill its value into them. Silver has been a store of value since long before modern financial markets, and today Bill shares five converging forces – deglobalization, surging industrial and defense demand, mainstream investor adoption, and a structural multi-year supply deficit – that are now driving it toward significantly higher prices.

For investors who understand the setup, the case for owning silver today is stronger than it has been in decades… in fact, for a century or more.

You could say I’m a “silver bug.”

I’m not one of those extremist “silver stackers” – though I admire their passion.

When it comes to silver (and gold), I’m more pragmatic: I fully understand how high those metals can climb.

Precious Metals Insights invited me to tell you what I see next for silver.

Because I’m downright stoked …

You may be thinking, “Okay, Bill: Why is a ‘stock jockey’ talking to me here about precious metals … and specifically silver?”

I’m glad you asked.

I believe now is the time to build your stakes in gold and silver – while we’re in a lull … and not during a FOMO-driven hot streak.

As Jim Woods wrote recently, “I think there are plenty of profits to come in the weeks, months and years ahead with gold … if you have little, or no, gold exposure right now, then I say the time for waiting is over.”

I’m here today to deliver the same message but about silver – and to tell you about the five specific “catalysts” that make the next rally fait accompli.

Now let me show you why I know that …

My DNA Code …

I often think my affinity for precious metals – especially silver – is in my family DNA.

It goes back to my Dad’s folks – William Patalon Sr. and Anna Patalon – who lived in Northeastern Pennsylvania.

My grandfather was a machinist with the Lehigh Valley Railroad – the coal-hauler known as the “Route of the Black Diamond” – and he worked out of the Coxton Railroad Yard in Duryea near Scranton. My grandmother worked in a cigar factory. And at the end of her working life, she had a job in the Topp’s facility there (I scored some great baseball cards and even some “Wacky Packs”).

They were true “products” of the Great Depression.

Even as a kid I could see that my grandparents:

• Were fiercely self-reliant (my grandfather even built the house they lived in).
• Believed in the value of education: My Dad, William Jr, was valedictorian of his high-school class, attended Pittsburgh’s Carnegie Tech, and had a 50-year career as an engineer.
• Did not lie … ever … and drilled that quality of character into their kids.
• Went out of their way to fix things – instead of throwing them away. (My grandfather even made his own wrenches, hammers and specialty tools).
• For a long time, did not trust banks.
• Paid cash for everything – even new cars.
• And understood that hard assets always had value – which is why they hoarded silver.

When my grandmother finally died – and my Dad, sister and I went to clean out their Duryea house to sell it – we found Mason jars stuffed with Liberty Dimes, Standing Liberty Quarters, Walking Liberty Half Dollars, Ben Franklin Half Dollars and Washington Quarters.

The common denominator: Those coins were all 90% silver – and folks viewed them as both collector’s items and “stores of value” in case Depression-like tough times returned. We found hundreds of coins from 1964 – the last year silver content was that high.

That’s right: My grandparents were OG Silver Stackers.

It just made sense.

Silver was a hard asset. It was affordable. It was easy to find. And could “accumulate” it 10, 25 or 50 cents at a time.

And it was legal – which gold wasn’t, thanks to U.S. Executive Order 6102. That order, signed on April 5, 1933 by U.S. President Franklin Delano Roosevelt, effectively made it illegal for everyday Americans to own gold for investment purposes.

Washington fixed the price of the “yellow metal” at $20.67 per troy ounce at the time of the forced exchange. A year later, thanks to the Gold Reserve Act of 1934, our leaders in Washington boosted the price to $35 an ounce – a 69% increase. I’m not here to debate the merits of the forced surrender – I understand its structural necessity. But I do remember that my grandparents (devout Democrats) repeatedly talked about how Washington screwed over regular folks (though they said it a lot more nicely than that).

Owning gold remained verboten until New Year’s Eve 1974, when President Gerald Ford repealed the FDR executive order.

The bottom line: If you wanted to own hard assets/precious metals – and many regular Americans thought it made sense – silver was really your only other option.

As we’ve seen, that’s exactly what my grandparents did.

My Dad was more structured: He collected coins – one of the many hobbies he passed along to me. He got me started on Lincoln pennies. Then I moved on to Washington quarters.

But with my work as a business reporter, newsletter editor and investing-book author, it was inevitable that my “Great Depression DNA” would bubble to the surface.

And it did.

After I lost my Dad a few years back, I looked for those Mason jars stuffed with silver. As it turns out, Dad was a bit of a “stacker” himself: As my “handful-of-silver” photo shows, he saved swaths of those coins – and I found them. Then I started buying U.S. Silver Eagles and Canadian Maple Leaf coins. I got interested in old Morgan silver dollars. And I even “accumulated” some silver bullion and smaller gold bars.

Remote storage made it all easier.

And I looked to the markets, too – spotlighting metals-related investments for myself and my newsletter subscribers.

My “Great Depression DNA” – and the five catalysts I’ll detail next – proves that silver still has “must-own” status.

Even more today than it did back then …

Let’s take a look …

Catalyst No. 1: The New Era of Perpetual Uncertainty

Though I joke about my “Great Depression DNA,” I don’t see a 1929 sequel. But I do see an era where surprises will increase in number grow nastier in magnitude. After taking decades to create truly global markets, we’re reversing course: “Deglobalization” is shifting us back into regional trading blocs.

That whole “division of labor and specialization” that increased efficiency and decreased costs is going away. That raises the potential for supply chain disruptions and further feeds the current inflationary spiral. And Deglobalization exacerbates the risk of “bad-news” surprises – which financial markets hate. It reminds me of that old Holiday Inn campaign that says “the best surprise is no surprise.”

But new rules are taking hold, thanks to …

Catalyst No. 2: The Changing Equation

Historically, silver demand was a 50/50 proposition: Half was industrial and the rest non-industrial (monetary, investing, jewelry, silverware and a few other things).

In the last five years, we’ve seen a shift. Thanks to green energy, electric vehicles and drones, and AI infrastructure, industrial demand has zoomed. According to some experts, industrial may now account for as much as 67% of total silver demand.

And while silver’s demand-mix has shifted toward industry, total global demand has continued to rise — with industrial growth increasingly setting the floor and investment flows driving volatility.

When analysts talk about surging industrial demand for silver, they focus mostly on green energy, EVs and AI – which I get, since those are the biggest drivers.

But “biggest” doesn’t mean “only.”

And as a guy who spent slices of his reporting career on the defense “beat,” I look at the headlines and see yet another big driver of silver demand …

Catalyst No. 3: The Best Defense

As this chart from my own Stock Picker’s Corner newsletter illustrates, modern weapons systems rely heavily on silver in their sensitive systems.

One example: Experts estimate that U.S. Tomahawk cruise missiles use as much as 15 ounces of silver — most of it in the circuitry.

In the first month of “Operation Epic Fury,” U.S. forces launched 850 Tomahawk cruise missiles against Iranian targets – the most ever in a single campaign (check out the Center for Strategic International Studies (CSIS) chart below). That firepower factoid made big headlines in Washington – and raised the question: “How will we replenish our cruise-missile stockpile – especially since defense contractors produce less than 200 a year?”

The Most Tomahawks Fired… Ever

It’s a good question – but it misses the bigger truth: Each Tomahawk takes about two years to build, costs nearly $3.5 billion, and contains as much as 15 ounces of silver.

And the more of them we blow up, the bigger our restocking needs become.

Industrial demand for silver is rising. But so is investment demand – thanks to …

Catalyst No. 4: The Mainstreaming of Metals

I’ve been doing this – writing about investing – for the better part of 40 years. In the early 1980s – when my career was just getting started – about 13% of households owned stocks. That rose to about 32% by the end of the decade. Today, we’re looking at about 62%.

The number of households zoomed during that same stretch – from about 81 million in the early ‘80s to roughly 135 million today.

Experts referred to this as “structural democratization” – a mouthful of jargon that basically means the “plumbing” of the stock market changed in a way that let everyday folks invest. Mutual funds, ETFs, 401(K) accounts, zero-commission trading, the removal of “odd-lot fees,” and even fractional share trading. It all made stocks more accessible to Main Street investors.

I see similar shifts with precious metals – albeit not quite as dramatic.

You’re already seeing indirect ownership – with gold ETFs, multi-asset funds and 401(K) options for gold making it easier to invest.

TV commercials pitching gold and silver as inflation hedges are hitting home. Cable venues like CSN are boosting their coin-and-metals offerings.

Back in 2023, Costco Wholesale Club (COST) stoked real headlines when it started selling gold bars. The move was so successful that it added silver coins and platinum bars to its metals lineup – and its inventory seemed to sell out quickly. Wells Fargo analysts figured Costco was selling between $100 million and $200 million a month – enough to materially boost the warehouse club’s results.

I’m not saying these are great places to buy. What I am saying is that all of this is boosting the visibility of gold and silver – and, by extension, acting as a kind of “Good Housekeeping Seal of Approval” that supercharges additional interest in the metals. An early-January survey of 2,000 adults (35 to 64) by the folks at the Gold IRA Guide, an online research portal, found that 38.6% had bought gold or silver as an investment during the prior 12 months.

Also interesting: Among recent precious-metals purchasers, 91.7% said they were equally or more likely to buy again sometime this year.

Both metals had enjoyed hot runs ahead of the survey – which may have stoked their allure at the time of the survey. And both sold off after the results were reported – which may have tempered that ardor. But the fact remains that the “investment awareness” about gold and silver is wider than ever.

That means silver demand will be higher in both the industrial and investment realms …

But meeting all that demand will be a challenge because …

Catalyst No. 5: The Long-Term Supply Shortfall

The silver market will endure a structural deficit for the sixth year in a row here in 2026. And cumulative shortages since 2021 exceed 800 million ounces, draining major global inventories, recent reports tell us.

The cause is simple and is keyed to a short list of hard realities:

• As much as 72% of silver production comes as a “byproduct” of mining operations for lead, zinc, copper and gold – and not from primary silver mines.
• The supply of silver doesn’t respond quickly to silver-price shifts.
• Global mine output peaked about a decade ago, and has been flat ever since – despite higher metals prices.
• And new mines can take a decade or more to start producing – meaning we’re looking at a possible 15-year lag.

That means that – in the near-term and medium-term – the supply of silver is structurally capped.

Go back to your Econ 101 classes from college, and bring it all together: When demand for something increases, and the supply holds steady or falls, the price increases. And if demand surges – the price skyrockets.

Silver prices are headed higher.

Maybe not tomorrow. Or next month. Or even later this year.

But they’re headed higher – and probably much higher.

My own experiences – and my “five catalysts” – prove it.

I recently interviewed “Great Silver Bull” author Peter Krauth – a longtime friend and colleague – who told me that $50 is the new “floor” for silver. It could recapture and exceed its recent $120 “blowoff” high late this year or sometime in 2027. A price point in the $200 range is certainly possible. And a new “blowoff top” of $300, or more, is a future possibility.

And if you start playing with the numbers – with key metrics like the gold/silver ratio … and look at where experts like our own Jim Wood believe gold could get to – we’re looking at prices way above that $300 level …

We could be talking about silver prices up past $400, $500 – or more. That’s not a prediction. But it’s a possibility.

Bill Patalon
Chief Stock Picker, Stock Picker’s Corner