Silver is money just like gold, Linda, and it's important to think globally. Demand in China and India (sometimes seasonal) is a significant price driver and there is now a new exchange for the metals in Hong Kong that will break the stranglehold of London/NY and diminish the ability of the banksters to manipulate these markets.
I believe that the silver market will have greater upside than gold albeit significantly more volatile. There is a worldwide shortage of both metals, as the number of tons mined cannot come close to meeting demand. The shortage is more acute with silver which has many industrial uses where the metal is not recoverable and is thus consumed.
While industrial demand does indeed diminish as the economy slows, demand as a safe haven from rapidly inflating fiat currencies more than compensates.
The silver/gold ratio is the number to watch. Historically it's been under 20:1 but recently much higher as the price has been manipulated by short selling banksters. Presently, in round numbers 1600/40 = 40:1. The trend is a return toward the historical ratio and according to some like Embers and Sprott even an overshoot into single digits. That means if gold goes to say $2000, silver could go higher than $200.
”I think the gold-to-silver ratio is going to go back to 16 to 1 given the passage of time, say three to five years. And I bet you that silver overshoots. The gold-to-silver ratio may even get down to 10 to 1. I believe that the price of silver has been suppressed.” --Eric Sprott 12/2010
Here's Eric: http://www.youtube.com/watch?v=T2w7wGwUZ9Y
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