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Silver – 30 Year Crash Anniversary…The Hunts’ Tragic Mistake

Exactly 30 years ago today, March 25th, 1980, the Hunt brothers got a $135 million margin call…Herbert Hunt’s reply: “We can’t make it”.  $100 million of their bullion was sold the next day (decent amount of cash in those days), and the already crashing silver market continued its nose dive from $50 in January to $10.80 2 days later on March 27th.  What was at one time an estimated $3.5 billion profit vaporized, wiping out all their equity.

1978-82 Chart    Great Playboy article from ’80…   Sept 1980 Playboy Article

Was this reckless?  By definition, you’d have to say yes.  But it wasn’t an arrogant, cocky attitude about the markets that got them into trouble and kept them buying at the top.  No, rather it was a strong belief in the future of silver, and the undervalued nature of its price.

The Hunt’s passionately believed the world was going to be changing for the worse, and that the dollar, just recently untied to the gold standard (Aug 15, 1971), was going to fail like all other unbacked, fiat currencies in world history.  The tragic mistake was that they were so passionate in their beliefs about the globe’s bleak financial future and coming silver shortages, that they paid no attention to the trading aspect of the investment, kept buying near the top (as late as $34/oz), and only looked to recruit more Arab buyers rather than actually sell and take some profits.

If they had a plan, sold some futures against their massive bullion holdings, they could have made silver a life-long investment.  Diversify their silver profits, add more to their oil & gas holdings, even look into tech considering it was the early 80’s.  With cash flow from the businesses, they could have been steady buyers in the market for decades, and enlightened more people of the merits of silver as investment.  Instead, the public saw silver crash, stay depressed for years (it opened the new millenium still under $5), and completely gave up on it.  A tragic ‘what if?’ for fans of the miracle metal that is silver.

   The case for silver today can be read right here  in an article posted on Silverseek.com.

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