22. The 1970s Was a Good Decade for Silver
The Hunt brothers’ silver speculation caused its price to spike by over 800%, from $6 an ounce in early 1979, to over $50 by early 1980. The siblings made about $4 billion in paper profits, but in reality, they had simply created a huge asset bubble that was bound to burst sooner or later. Their speculation created a global silver craze. As that precious metal’s prices doubled, trebled, quadrupled, and continued to rise, people around the world began to melt silverware, and thieves went on a silver stealing spree.
Tiffany’s even ran ads that attacked the Hunt brothers’ speculation for making silver unaffordable to consumers. The Hunt brothers had created a bubble market for silver. It was a bubble in which the Hunts themselves, as the world’s biggest hoarders of silver, were most at risk. The Federal Reserve, whose mission includes the avoidance of such bubbles, stepped in and issued a rule specifically targeted against the Hunts. It banned banks from lending to precious metal speculators. As a result, the bubble swiftly burst, and the brothers’ plan took a disastrous turn for them.
