Precious metals have always been viewed as the ultimate hedge against inflation, deflation, depression or any other sort of economic calamity. While gold has traditionally been the haven of choice in times of crisis, its value tends to erode in times of plenty as market confidence improves. Moreover, there’s relatively little industrial demand for the metal.

Silver, on the other hand, is a monetary metal with a bevy of industrial uses.

Silver is most commonly used in electronics applications, thanks to its superb ability to conduct heat and electricity. You can find it in contacts for switches, light emitting diodes,  batteries, and the conductive surface of solar panels. It’s also found in smart phones and other mobile devices, hence the reason so many companies are willing to buy busted up iPhones.

Indeed, about 75 percent of silver production is used in industrial applications, which makes the metal a play on economic prosperity as well as a hedge against disaster.

The US economy has reached the point that the Federal Reserve feels comfortable enough to begin backing off its bond purchases. While the bull market of the last five years has been one that a lot of people love to hate, gross domestic product growth has averaged about 2 percent and the housing market is continuing to recover. Most importantly for silver, US industrial production has been gaining momentum, bumping up 0.7 percent in March after a long, hard winter.

There was a slight decline recently in Europe’s purchasing managers index, but the European revival seems to be gaining steam. Most Europe watchers are expecting European economic growth of about 2 percent this year, a view underscored by Standard & Poor’s which recently bumped up its growth forecast to between 1 percent and 1.5 percent.

Germany is leading the economic charge as usua,l but there are also positive signals in France. There’s also a good chance that Greece and Spain will begin emerging from their austerity programs in the next several months, especially since Greece recently reentered the global debt market with its successful offering of a 5-year bond.

So while China remains something of a drag because of its slowing pace of growth, the global economy isn’t staring an eminent collapse in the face, either. In fact, analysts at HSBC (NYSE: HSBC) estimate that industrial silver demand will increase from 475 million ounces last year to 486 million ounces in 2014. They also look for jewelry demand to add about 10 million ounces while investment demand should jump by 11 million.

That increased demand comes even as production has been falling. While the average production cost of the metal has been about $21 per ounce, it has only been fetching between $18 and $19 for much of the last five months, aside from a spike when news of the Ukrainian crisis first broke. That disparity will shake many of the more marginal miners out of the market, because they can’t break even on their production.

Assuming the global recovery continues at its current pace, it should only take about six months to work through the current excess supply of silver. When that occurs, the strongest silver miners that have maintained production through the slump will realize a solid price bump as supply and demand equalize.

Silver Wheaton (NYSE: SLW) is an interesting play on the silver market, because it isn’t a producer in the traditional sense. Rather, it is a silver streaming company which means that it makes an upfront payment to miners in return for the right to purchase a fixed percentage of their production. It then makes smaller delivery payments as it receives the metal. That makes Silver Wheaton more of a pure play on silver prices since it doesn’t have exposure to the actual production side of the business.

The company is by far the largest precious metals streaming company with a market cap of about $9 billion. It’s also the largest based on its $534 million in cash flow last year and $375 million in earnings. And while traditional miners generate cash by selling more than just their target metal – no matter what you’re digging out of the ground you’re bound to find more than your target product – 100 percent of Silver Wheaton’s revenue comes from precious metals.

Last year, the company moved 35.8 million ounces of silver equivalent, made up of 26.8 million ounces of silver and 151,000 ounces of gold, a 22 percent year-over-year increase and a new record high for the company. But because of relatively weak prices throughout most of last year, total revenue declined by 17 percent to $706 million with earnings off by 36 percent to $586 million.

Silver Wheaton is appealing, in large part, because of its fixed operating and capital costs, with virtually no exploration risk. While its upfront royalty payment to a silver miner can be lost if a mine fails, that loss is insignificant compared to the miner’s losses.

Silver Wheaton is also much more diversified that a traditional miner, with interests in 19 operating mines on three continents and 5 mines under development in North and South America. It also has the flexibility to buy into additional projects, investing $2 billion in acquisitions last year alone.

The company expects its production to hold relatively steady this year at 36 million ounces, but it’s working to ramp up its flow of metal to 48 million ounces over the next few years, which would result in a significant earnings bounce as silver prices rebound. It has also showed a strong commitment to its shareholders by paying a steady though variable dividend, with shares currently yielding 1.7 percent.

Analysts currently estimate that the company will post $1.07 in earnings per share this year, bouncing to $1.29 next year, but that’s largely assuming that silver prices remain relatively constant. That leaves significant upside in the shares, as silver prices gain momentum on solid demand growth and supply constraints.

Silver Wheaton rates a buy up to 25.