The Spokesman Review
Silver prices are flirting with $50 per ounce for the first time in decades.
In North Idaho, that inevitably brings back memories of Nelson Bunker Hunt and his brother William Herbert Hunt – two Dallas billionaires who tried to corner the silver market.
The brothers used their profits from Libyan oil fields to begin quietly buying up silver during the 1970s, a time of high inflation. At one point, the Hunts controlled an estimated 110 million ounces of silver. They were also major stockholders in the Sunshine Mine near Kellogg. During the Hunts’ high-stakes gamble, the price of silver briefly shot above $50 per ounce in January 1980. The brothers’ speculative buying came to an abrupt end when commodity exchange rules were modified, forcing the Hunts to put up money they didn’t have or quickly sell off their silver stocks.
Silver prices tumbled rapidly over the next two months, and so did the Hunts’ fortune. By some accounts, they lost $1.7 billion.
Michael DiRienzo, executive director of the Silver Institute in Washington, D.C., said the current run-up in silver prices is a much different scenario. Silver prices have been rising steadily since 2006. Both investment demand and growing industrial use are contributors, DiRienzo said. In addition to fabrication demand for jewelry, silver is an industrial metal, used in electronics because of its conductivity. LINK...
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Some important points to take away from this article:
- $50 of goods and services in 1980 is much different than what you can get for $50 today.
- Today there are NO, Hunt Brothers trying to corner the silver market, ask yourself how many people you know that are "investing" in silver bullion?
- Silver has been rising steadily since 2006 and it's thousands of small investors that are barely starting to get involved, not one big player.
- There was no iPods or Blackberry's in the 1980's. The amount of silver in an iPod will not affect the price of the iPod, BUT the number of iPods around the world will certainly affect the price of silver.
- The USA was still a creditor nation as opposed to now being the largest debtor nation in history.
