From Crank Genius to Crackpot Loser
As silver prices spiked, people around the world melted silverware. Thieves went on a silver-stealing spree. Tiffany’s ads attacked the Hunt brothers’ speculation for making silver unaffordable to consumers. The brothers ended created a bubble market for silver. It was a bubble in which the Hunts themselves, as the world’s biggest silver hoarders, were most at risk. The Federal Reserve, which aims to avert such bubbles, stepped in and issued a rule specifically targeted against the Hunts. It banned banks from lending to precious metal speculators. That burst the Hunts’ bubble market burst on March 27th, 1980, which came to be known as “Silver Thursday”. Prices collapsed, and the Hunts almost immediately lost over a billion dollars. They pledged most of their assets as collateral for a rescue loan package. However, the value of their assets declined steadily throughout the 1980s.
By 1985, their net wealth had fallen from over $5 billion just before Silver Thursday, to less than a billion. Then things got worse, especially for the genius behind the silver hoarding plan, Nelson Hunt. The brothers hung on for much of the 1980s, but their luck ran out in 1988. That year, they lost a lawsuit that accused them of conspiracy related to their silver speculation. They were hit with hundreds of millions in liability and fines. Nelson Hunt was hardest hit, and he broke the record for the biggest personal bankruptcy in US history. From visionary businessman, he was now seen as a crackpot loser. His assets were seized and sold to satisfy creditors, including his oil fields, house, bowling alley, and a $12 million coin collection.
