In the current global financial system, the international silver price is derived from trading of vast volumes of 'paper silver' that dwarf both physical silver exchange inventories and new physical silver supply.

To understand what is real and tangible in the silver market, it is crucial then to grasp the difference between paper silver and physical silver, and how paper silver is traded in practically unlimited quantities, while physical silver is a scarce and valuable commodity that plays a role as both an investment precious metal and an industrial precious metal.

In short, physical silver is a real tangible asset with intrinsic value, that has no counterparty risk and is difficult and costly to mine. Paper silver is not.

Paper silver is altogether different, comprising securities and derivatives spanning unallocated, synthetic, and fractionally-backed claims that do not provide any ownership of real physical silver.

In this visually stunning new infographic from BullionStar, we show the silver market as it really is, and the huge differences between physical silver and paper silver. Topics covered include:

• The enormity of paper silver trading compared to physical silver supply and silver inventories
• The benefits of investing in physical silver vs the risks of investing in paper silver
• The huge popularity and production since the launch of silver coins such as the American Eagle and the Canadian Maple
• How real physical silver is both an investment precious metal and an industrial precious metal
• How silver is a monetary metal that has been used as real money throughout history

(Click on image to enlarge)