Silver, the Atomic Bomb, and Russia

The Role of Silver in the Manhattan Project

In 1942, during a critical phase of the Manhattan Project, the project's organizers encountered a problem while constructing the first atomic bombs. They had devised a method to enrich uranium using electromagnets, but this required a large amount of resources. Copper, needed to create electromagnetic coils, was in high demand for weapons production, including shell casings, coatings, and wiring. As a solution, the Manhattan Project leaders decided to covertly borrow 300 million ounces of 0.999% silver from the Treasury Department. Being the most conductive metal globally, silver was perfect for the job. It was used to create highly efficient wire coils, which generated the powerful magnetic fields required to separate and enrich uranium. In total, 14,700 tons of US silver was melted down and shaped into the enormous electromagnetic coils used to build the country's initial nuclear arsenal. The silver coils ensured efficient use of nearly 1% of the entire nation's electric capacity, which was directed towards these efforts. By 1970, the silver was returned to the Treasury Department. Thus, America's silver reserves indirectly played a role in ending World War II and facilitated America's rise to a global superpower.

Russia's Interest in Silver

The use of silver coinage in the US ceased in 1965, and by the late 1970s, America had sold almost all of its silver reserves. Currently, nations do not hold silver as a monetary or strategic asset. However, this is changing as the Russian government recently declared its intention to start adding silver to its precious metal reserves. Russia's influence within the BRICS+ and Global South has never been more significant, despite its isolation from the West. It is playing a crucial role in developing the BRICS' alternative to the dollar-based monetary system, as it has been excluded from the legacy system. There is a high probability that other countries will follow Russia's lead and start building their own strategic silver reserves. Silver bullion reserves make sense for nations, as seen during the Manhattan Project, where silver proved useful. Most nations have a strategic oil reserve, and every serious central bank has gold reserves, so why not silver? In the modern technological world, silver is indispensable. It is crucial for manufacturing advanced electronics, batteries, solar panels, medical supplies, and more. Modern weapons also require silver to operate at optimum levels. Following Russia's announcement, silver has reached 12-year highs, which is likely not a coincidence.

The Future of Silver

The fundamentals for silver demand already looked promising before Russia's announcement. With the possibility of national buyers entering the market, this could create massive demand, similar to the recent gold run driven almost entirely by central banks. So far, silver's bull run has been primarily driven by industrial demand for solar panels, electronics, and medical uses. However, it is believed that investment demand will rapidly increase. In the US, inflation expectations are soaring, the Fed is back in easy money mode, and investors are beginning to sense something significant happening in precious metals. Silver is a small market compared to gold. A slight increase in additional investment demand could disrupt the balance and send prices skyrocketing. If nations start buying silver, coupled with additional investor demand, the result could be explosive. In the event of a significant economic recession, silver could temporarily fall due to lower industrial demand. However, this should be offset by the increase in investment demand as central banks respond to the slowdown with quantitative easing (QE) and other inflationary policies.

Bottom Line

Silver appears to be a fantastic long-term investment and hedge. What are your thoughts on this development? Do you think the demand for silver will continue to increase? Share this article with your friends and let us know your thoughts. Don't forget to sign up for the Daily Briefing, which is available every day at 6 pm.