Discussion in 'Bullion Investing' started by Soiled, Apr 1, 2016.
CHICKEN LITTLE !!!! The SKY is Falling, The Sky Is Falling,
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everyone is buying Palladium. The new Gold ...
Currently at $1,558.00 per OZ i might add it,s for sure kicking Butt !!
What happened to the Hunt brothers?
Exactly what you'd expect to happen to people running a failed multi-billion-dollar scheme -- they were fined multiple millions of dollars, declared bankruptcy, gathered themselves together, and resumed being rich. The surviving brother is a multi-billionaire.
Why were they fined? Do you think the surviving brother will try to corner the silver market again?
I don't think they were actually fined, but they were bankrupted by a civil suit [in which I was one of the plaintiffs] that determined they had engaged in an illegal conspiracy [not all conspiracies are crimes.]
Here's the story; a little long, but some of you may find it interesting. I failed to appreciate the difference between silver and silver Good Delivery Bars [GDBs]. I had enough ounces of silver coin to cover my short, which I did when the price for GDBs was about $25. At the time, silver [i.e., coins, non-deliverable bars, silverware, etc.] was selling at about $21/oz. I lost about $4/oz, even though fully hedged, so don't tell me that the price of a good delivery bar is the price of silver - it is NOT. Learning that lessen cost me several thousand dollars. On the other hand, I had been buying $20 gold pieces starting back when they were $38 each, and had accumulated a couple hundred of them. The silver spike ran the gold price up to where I sold them for an average of about $600 each, so my gold profit was many times my silver loss. [A few years later they were back down under $400.] I recovered about half my loses in the suit. I had to offset my silver profits against my loses in my claim, but when I asked if I had to offset my gold profits, which would have more than wiped out my silver loses, they said no. So in a way, the Hunt brothers did me a favor.
But I still hate them for their part in destroying the finest Roman Aureus collection ever put together. It had been given to the Metropolitan Museum. The then head of the museum decide he wanted a nice Greek vase; price about $3 million. So he decided to sell the collection to pay for it. It just happened that the Hunt brothers and some of their rich friends coveted some of those coins, and they ended up buying many of them. [I guess just to rub in the fact that the Met didn't give a damn about American collectors who weren't super rich, the auction was held in Switzerland.] Final irony: the vase was looted, it had to be given back to Italy where it was found, so the Met was out the aureus collection, out the $3 million, out their Greek vase.
and here I thought they started making ketchup ... lol j/k
Sorry to hear about you @harrync getting caught up in the Hunt brothers fiasco back then.
Thanks for the sympathy. But because the Hunt's fiasco ran up the price of gold too, I came out way ahead in the end. And filling out all the paper work for the claim was sort of interesting; in fact, I still have my copies of everything. I guess technically I was a claimant, not a plaintiff. Other bigger losers were doing all the heavy lifting on the lawsuit, I just piggybacked on their efforts.
There's no substitute for a first-hand account. Thanks for posting this!
Having said that, Wikipedia claims that Nelson Bunker Hunt "was fined US$10 million and banned from trading in the commodity markets as a result of civil charges of conspiring to manipulate the silver market", citing a New York Times article which says William Herbert Hunt was fined the same amount.
They both seem to have bounced back just fine from this minor setback. W. Herbert is worth $2 billion today. But I'm sure he learned his lesson.
Thanks for the correction on the fine. It was a long time ago; can't remember everything.
This is a truly amazing story. Thank you. Why were they trying to corner the silver market anyway? I have one more question. Don't you think the gov't is manipulating the prices of precious metals?
It is an amazing story... I've read that the Hunts took possession of millions of ounces of real silver. They hired cargo planes and hired off duty Texas Rangers to guard shipments of silver to overseas vaults as well as in cities in the US. Investors and manufacturing companies who needed physical silver for their products began pressuring regulators to do something, and they changed the rules. Silver collapsed. Even so, as was mentioned, even through the silver crisis, the Hunts spent tens of millions on coins and antiquities.
I'm sure the government does things that affect the prices of PMs, what with managing monetary policy, regulating mining, and whatnot. Does the government target PM prices for manipulation? Why do you think they would?
Another great Hunt brothers story: [I am not 100% sure I believe it, but if IIRC, it was in Barron's.] Just as Bishop Ussher calculated that the world was created around 6 pm on 22 October 4004 bc by adding up all the begats in the Bible, some clergyman had calculated the silver/gold ratio in the Bible as 5 to 1. Apparently there is no direct comparison, but you do something like "so many oxen for a talent of silver, so many slaves for an oxen, so many bushels of grain for a slave," etc. until you get the ratio of silver to gold. Five to one sounds pretty reasonable for 1000 bc - I remember reading somewhere that in ancient Egypt - 3000 bc or so - silver was worth twice as much as gold [see that shiny gold pebble, you pick it up; that black rock, ignore it. So more gold around than silver. People figure out that the black rock is tarnished silver, silver becomes more common than gold.] Over time, the silver/gold ratio keeps increasing; about 10 or 12 to one in ancient Rome. Anyway, as the story went, the Hunts were true Bible believers, and figured the Bible couldn't be wrong, so felt safe buying silver as long as the ratio was above 5 to 1. [I think it did get as low as 12 or 15 to one during the silver bubble.]
Because they control everything.
Hmm. Then which department of the government made you say that?
Silver is at 15.05
What do you think it will close at?
Well, this is odd -- silver taking a sharp bounce up the day before I'm interested in selling at a local coin show!
Of course, there's still time for it to fall back, and it's made back less than half of its drop from last week, never mind its latest peak. Meh.
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