Broadly, instead of using simple supply and demand, it explains changes in the demand for one asset (a small silver coin, say) relative to another (a large coin) in terms of changes in the rate of return that the holder of the assets can expect from each.

ECONOMIST: The lessons of sound money from 1,000 years' experience

One reflected the cost of turning, say, an ounce of silver into a coin (this included minting costs plus a government coinage tax known as seigniorage).

ECONOMIST: The lessons of sound money from 1,000 years' experience

In a daily research note Wednesday, Barclays Capital estimated that silver-coin demand globally hit a record high of 3, 800 metric tons in 2011, while U.S. sales hit a record high of 1, 240 tons.

FORBES: Seasonal Effect Prompts Large Spurt In January U.S. Mint Gold-, Silver-Coin Sales