Apr

25

 During the third week of 1980, silver made a high of about 49.45/oz– and then collapsed, taking Nelson Bunker Hunt, William Herbert Hunt (and eventually Continental Illinois Bank) into bankruptcy.

Today, about 31 years later, silver finally reclaimed that "glorious" price … and traded at 49.79/oz….proving many market saws — including, EVERY market forecast will eventually be proven correct– it's the timing (and margin clerks) that make things difficult…

(A belated happy 85th birthday to Nelson Bunker….).

Recap from January 1980:

Fed Funds rate: 14.00%           Today=0.25%
10-year treasury yield: 10.6%  Today=3.4%
Dollar Index (DXY) = 86           Today=74.0
DowJones=875                        Today=12,400
CRB Continuous Commodity Index=290   Today=682
US CPI Index=78                     Today=223


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2 Comments so far

  1. Steve on April 26, 2011 6:50 am

    I am not sure if there are many things in modern history that can be compared to the Hunt Brothers. This is a story that should be taught in College courses.

    Imagine going from 5 Billion to 1 Billion in a few months. And this all occurred when there really was nothing like hedge funds of today. This was a time when there really was not anything like a Billionaire in American Vernacular.

    As I recall, the way regulators broke the Hunt brothers back was by raising margin rates so high that they had to sell their contracts into a declining market.

    One interesting sidenote is that Lamar Hunt deceased and former owner of the Kansas City Chiefs chose not to participate in the scheme on any level.

    One has to wonder when logic, objectivism, and senibility breaks down and greed and insanity takes over.

  2. Andre Wallin on April 26, 2011 12:58 pm

    regarding post below: trading is about dieing well, philosophy in order to prepare to die. capitalism is a manipulation of human nature in order to make people productive. I think that seeing the opposite of this with clear eyes is what trading is about. reaching an understanding of the manipulation that is occurring all around oneself is what trading is about. Japan is an example of too many people seeing the lie. just speculating…

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