Yes 2010 was a great year for silver and the price went up amazingly fast but there's still more to come. The most basic thing that drives the price of anything is its perceived value and scarcity. Silver has always been perceived as valuable and used as the basis for currencies for hundreds of years. The planet only has a certain amount of silver on and in it - this is not going to change apart from going down as we consume it more and more. That means that not only is silver a valued precious metal but it is in limited supply and that supply is based on a fixed and finite amount. We don't have any way to create silver artificially so whatever we use is lost forever.
There is a certain amount of recycling of silver but it's not like gold where it's considered so precious that extreme measures are in place to make sure it's always reclaimed when items are disposed of. In fact, the perceived value of silver is still so low that most of the silver which is mined is actually a by-product of mining activities for more precious elements such as gem stones. There are surprisingly few actual silver mines and most of what you see around is sold off by the jewel mining companies, so we're not even getting it out of the ground very effectively.
This means that we can't just turn up production - most of the production is not focused on silver. Think about what these factors mean for a second. Limited supply, ever-increasing usage and inefficient system for getting more of what is there. These things alone mean that we're struggling to keep up with demand. There are many documented cases of large companies and even governments running out of silver to the point where some silver coins (including the American silver dollar) have had to stop being minted because of lack of silver.
Now consider the current global economic crisis and how that affects silver. We're on a crazy ride where governments have over spent seriously and are struggling to pay back the debts they have. One of the ways they try to address this is to print more money. This may seem logical but for every bill they print the ones in your wallet become worth less. Think about it. If you have a company and you create 100 shares of your company and sell them for $1000 per share - you've priced your company at $100k. Then your partner creates 1000 more shares - they all still represent the same value, so the price per share drops to equal the value divided by the new number of shares - in this example the company value is still $100k but now each share is only worth $91 instead of $1000. So if you've bought shares for $1000 and then they've printed more and yours are now worth only $91 you'd be pretty upset.
This is exactly what's happening to the currency you have. That's why prices of everything seem to be going up around you. In reality your currency is going down so it appears like prices are going up.
Why does all this matter? Because silver is a fixed resource - they can not print any more of it. Whatever you own has an intrinsic value which cannot be removed like the fiat (false) currency which you're being paid in and having to pay for your goods with.
When you buy silver in small amounts you're also ensuring that you can easily sell it in small amounts later. So even if you want 100 ounces of silver it may be best to buy 100 1ounce coins or 10 10ounce bars which you can more easily sell to a larger audience when the time is right.
Imagine if you'd bought 100ounces a few years ago when the price was just $4 - that would have cost your $400 and now be worth $3000 - and that's tax-free.
This article scratches the surface of what the true value of silver is and why 2011 is a good time to buy silver. Andy Henry shares more information and videos aboutInvesting in silver in 2011.