Why am I so shy?

I have realized through my experiences in highschool that I am a really shy person. There are different things that make me shy, and I think that I will explore these things. I really like to watch people, and just observe different things about this. Most of the time I would rather do this then talk to people. Lots of times I don't feel that I have anything to say to people also. I can never just think of anything creative, and I am afraid of sounding stupid. So I just stand back and be a shy person. I am only shy around people I don't know. When I am around my friends I can be wild and crazy. I am funny, and I know all the right things to stay. But when one person comes around me that I don't know I automatically hide in my own little shell. I am afraid of being rejected and looked down upon. So I don't really talk unless I want to, but most of the time I just nod and smile. I have tried harder lately to be more outgoing. But it can be hard to me, because I don't really like to just talk and talk I like to watch and observe people. I think that I am shy is because I am afraid of being rejected by others. I know that my friends wont turn me away so I am not shy around them. I like to meet new people, it just takes me a long time to get to know them, and not be shy.