Is the Silver situation more troubled today than it was when the Hunts horded it in the 80's.

dlimb2 · December 15, 2003 12:05PM

If it is, then could we see silver back in the $50 range?

CoinHunter2003 · December 16, 2003 4:43AM

I don't think silver will ever hit the $50.00 mark again. However, I buy a lot of bars just
because I like having them and think it's a good investment at this time. Besides, it's
nice to "hoard" something!

Alex

UncleJoe · December 16, 2003 4:56AM

Silver trouble?

Trouble had nothing to do with it. The Hunts tried to corner the market on silver and their large purchases triggered the escalating silver prices.

They didn't realize that people would start selling off anything made of silver as the price rose and that created a supply of silver that they could not purchase which then resulted in the plummetting of silver prices back to "normal".

Joe.

dlimb2 · December 16, 2003 5:05AM

Then UncleJoe you would say todays low reserves or lack of is a problem...I wonder what happened to all that silver from the 80's, is it all in Commerorative and Silver Eagles?

DCAMFranklin · December 16, 2003 5:27AM

Anyone here notice a shortage of silver? The biggest use is processing film and that market has been cut in half! $50 silver? Pfffff!! I don't think we'll ever see $12 silver.

UncleJoe · December 16, 2003 5:37AM

I wonder what happened to all that silver from the 80's, is it all in Commerorative and Silver Eagles?

Good guess!!! The point is that there is plenty of silver and not enough commercial application to cause any real significant price movement for silver especially NOT $50/oz. IMHO.

Joe.

291fifth · December 16, 2003 5:39AM

Silver is common. It is going nowhere.

keets · December 16, 2003 5:41AM

could we see silver back in the $50 range?

when donkeys fly!!

al h.

LanLord · December 16, 2003 5:44AM

How many ounces of silver did the Hunt's have at their greatest level?

UncleJoe · December 16, 2003 5:51AM

Cut from an article:

In 1979 the sons of patriarch H.L. Hunt, Nelson Bunker and William Herbert, together with some wealthy Arabs, formed a silver pool. In a short period of time they had amassed more than 200 million ounces of silver, equivalent to half the world's deliverable supply.

Joe.

dorkkarl · December 16, 2003 6:12AM

<< Is the Silver situation more troubled today than it was when the Hunts horded it in the 80's. >>

not even close. i was there, it ain't nothing like that today.

K S

BillJones · December 16, 2003 6:26AM

Trying to corner the market in ANYTHING is like trying to take a fully grown elephant across the ocean in a row boat. As soon as the critter shifts position, the the whole thing capsizes. The Hunt brothers were prime examples of people with more money than brains.

fishcooker · December 16, 2003 6:53AM

The government changed Margin requirements, effectively initiating a Margin Call, and that caused the Hunts ploy to unravel. It wasn't extra supply coming to market.

Tassa · December 16, 2003 6:56AM

<< If it is, then could we see silver back in the $50 range? >>

I don't think so.

bulloncoins · December 16, 2003 7:02AM

I respectfully disagree with most on this subject. Silver leasing was not a factor when we last saw silver hit those heights. It is a large factor in the market manipulation of silver prices we are currently seeing. None of you have addressed leasing.......

As for silver being common.....take a look around your own home. Since the 60's most silverware is "stainless steel" or silver plate. I am willing to bet that most silver you find will be heirloom, not new unless you are investing in silver, or buying jewelry.

Silver is usually found nearer the surface than most mined ores. Most silver produced today is a by product of other metals ( gold, copper, zinc, etc.) as most large deposits in mines have been depleted long ago. Silver's uses are staggering. From electrical conduction to medicine, wood preserative to xray's, silver's uses continue to mount.

The population of the world continues to grow....and with it silver consumption.

Alot of people were burned by trying to get into the market too late as prices of silver skyrocketed, then were left holding when prices dropped. It soured them. They are still bitter against silver and always will be.

Yes, I think silver will see $50.00 an ounce within the next six years ( even higher).

dlimb2 · December 16, 2003 7:13AM

bulloncoins, I have done a little research and the lawsuits are mounting against fine jewerly stores passing off stainless steel for sterling silver...it goes all the way to some of the biggest Jewelry and Department Stores...I guess if the story were really known there is a lack of silver because I would think it would be cheaper to use silver than it would be to use stainless steel...that is if there was any to be had...something sure is strange about the whole deal...and why they would try to pass stainless steel off as sterling silver.

bulloncoins · December 16, 2003 7:17AM

Just the tip of the iceburg...

spoon · December 16, 2003 7:19AM

Wow! That's insane.. I never knew about the Hunts.

So if silver will never again reach $50 does that mean we can put it back into circ coinage

bulloncoins · December 16, 2003 7:20AM

SportsModerator · December 16, 2003 8:40AM

The Hunts controlled paper, not physical silver.

Silver will surpass the highs of 1980.

islemangu · December 16, 2003 8:47AM

To difficult to hold...nice slabbed mountain of dmpls maybe the next cornering attempt

Value on toning is tricky but prooflikeness is there or not.

AmericanSilverEagleCoins · December 16, 2003 9:40AM

Half the deliverable supply is pretty impressive

dlimb2 · December 16, 2003 10:35AM

"Half the deliverable supply is pretty impressive "

AmericanEagle and what supply might that be...and how much? Where is it coming from and why hasnt it been reported...all we hear is of the shortage...Now I want to hear about what you have to say.

Nic · December 16, 2003 11:39AM

Except speculation/bad currency, why will silver go higher? The days of photo/Xray/ flatware use are limited. K

nwcs · December 16, 2003 11:44AM

Not to mention that synthetic materials are being developed which will eliminate (eventually) the need for precious metals in common use.

SportsModerator · December 16, 2003 11:50AM

that's why the Govt. is now contracting for socks that contain silver thread that acts as an anti-fungal agent. There are too many other uses for silver being utilized in the medical field. The use of collodial silver sprays is becoming more widespread.

Photography only accounted for one third of silver usage at it's highest point.

bulloncoins · December 16, 2003 12:09PM

In most cases, silver is still reclaimed as part of the development process such as xrays and geophysical film. Why bother ? Because it is worth enough to bother with.

docday2003 · December 16, 2003 12:11PM

<< The government changed Margin requirements, effectively initiating a Margin Call, and that caused the Hunts ploy to unravel. It wasn't extra supply coming to market. >>

You are absolutely correct. It was a retroactive government intervention which derailed the Hunts strategy. If the gov had not intervened, the Hunts would have won.

docday2003 · December 16, 2003 12:14PM

<< In most cases, silver is still reclaimed as part of the development process such as xrays and geophysical film. Why bother ? Because it is worth enough to bother with. >>

You got it. Silver is going up over the next few years. IMHO

Fountainhead · December 16, 2003 12:15PM

"Trouble had nothing to do with it. The Hunts tried to corner the market on silver and their large purchases triggered the escalating silver prices. They didn't realize that people would start selling off anything made of silver as the price rose and that created a supply of silver that they could not purchase which then resulted in the plummetting of silver prices back to "normal"."

That is a flat-out LIE! That isn't at all what happened!

The Hunts were operating on the commodity market. They not only purchased silver contracts, but took delivery of a portion of them as well. So there was a silver shortage. As the price of silver rose, more investors jumped in, and those financial institutions -- some of whom also ran the commodity exchange -- who were short silver started racking up tremendous losses, and had to increase their margins by billions of dollars. The institutions plotted with the government and they tried to come up with a solution.

How did the exchange respond? At first, they limited the number of contracts one could take for delivery in any one month to 500. No more than 2,000 contracts could be held in total, and any account with more than 100 contracts was made a "reportable account". There was only one purpose in such rules: to force the sale of long silver contracts.

But it wasn't enough; trading switched to London, and the price continued to climb. So what could they do? On January 21st, 1980, THEY FORBADE ANYBODY FROM BUYING SILVER! That's right -- if you wanted silver contracts or silver metal, you couldn't do it on the commodity exchange. But, if you were short silver you could do so.

Thus, the Hunts could have their silver if they wanted it; but if they wanted to sell it to anybody, they could only sell it to the institutions who controlled COMEX and were themselves short of silver, and they could only sell at the prices they bid for it -- if they chose to do so.

Stir in a little financial and (specious) legal pressure courtesy of the government, and the Hunts were forced to fifty million of of their 190 million ounce hoard. At one time, the Hunts' silver was worth over nine billion dollars. In only a few months, as the price collapsed, their fortune had dropped to less than two billion dollars. The Hunts proceeded to cut a deal with the Feds so they could remain billionaires. The institutions running the COMEX exchange were saved from having to sell out, and it is easy to see that their officers, with inside knowledge of what would happen, had the opportunity to create personal fortunes while the Feds looked the other way.

It's as if someone at the roulette wheel at Vegas just kept winning and winning, until they had accumulated enough to buy the entire casino, only to have the house welch on all its bets!

Yes, large amounts of silverware were converted to good delivery bars, but that's because the sellers of such items valued them less as artwork than the Hunts did as a form a savings. The sorry result of the Feds essentially forbidding the large-scale use of silver for savings purposes in 1980 is that billions of ounces of this silver have been left idle in vaults in New York, Delaware, London, and California for decades, slowly collecting tarnish. That's where the "huge supply of silver that could not be purchased" came from.

Stork · December 16, 2003 12:19PM

Just some fyi...

The Hunt Brothers were discussed in this old string:

Hunt Brothers

I bought (but have only skimmed so far

) a book called Beyond Greed by Stephen Fay that describes the events.

Also, silver does have some amazing antibacterial properties...silver derived products have been used for burn treatments for example.

Interestingly, there has been the development of clothing products (like socks!) incorporating silver into the weave, which have greatly reduced odor. Pearl Izumi (?sp) has developed products based on this...I read a story (in Forbes I think) where their CEO went on a business trip and right before he got on a plane some entrepreneur gave him a t-shirt with silver. The CEO's luggage got lost and he wore that t-shirt for a week straight without any aromatic complications. I know a few people who could benefit from that sort of clothing!

Edited to add...hey who added all that while I was still typing? Now I'm all motivated to go read that book in detail!

SarasotaFrank · December 16, 2003 12:24PM

where is the price of silver today?

Stork · December 16, 2003 12:26PM

www.kitco.com The World Spot Price - Asia/Europe/NY markets

MARKET IS OPEN
(Will close in 15 hrs. 6 mins.)
Metals Date Time (EST) Bid Ask Change from NY Close
GOLD 12/16/2003 22:22 409.00 409.50 +1.80
+0.44%

SILVER 12/16/2003 22:12 5.59 5.62 0.00
0.00%

PLATINUM
12/16/2003 19:26 820.00 830.00 -2.00
-0.24%

PALLADIUM 12/16/2003 19:27 193.00 203.00 -10.00
-4.93%

Kitco.com--I love it!!

Fountainhead · December 16, 2003 12:43PM

hey who added all that while I was still typing? Now I'm all motivated to go read that book in detail!

Sorry, Stork, but I've never read that book, so I don't know what you'll find in it. The author's writing might not be as lucid and entertaining as mine.

dcarr · December 16, 2003 1:46PM

fountainhead,

That was an interesting post about the Hunt brothers and the COMEX manupulations in favor of the "house". I have heard most of that before, and I believe that it is true.

The moral of the story is this:

Don't invest in "paper" silver or on margin. Buy physical silver and take full possession of it yourself !

You can always sell silver bars on eBay, at your local coin dealer, or local flea market.

PS:
Silver does have important biocide properties. It kills germs, fungus, and mold on contact, and it is relatively harmless to humans. There is talk of replacing the arsenic preservative in lumber with a silver preservative.

In addition, silver has other remarkable properties in the energy arena (which will be very important in the future):

It is the most reflective metal (mirrors and solar furnaces).
It has the highest photo-sensitivity of any metal (film, solar cells).
It has the highest thermal conductivity of any metal (heat exchangers).
It has the highest electrical conductivity of any metal (batteries and superconductors).

I don't have the details in front of me, but I read that a US company has recently developed a silver-composite super-conducting wire that uses about 100 ounces of silver per mile. This wire is about 0.25 inches in diameter. It takes a copper wire over an inch in diameter to do the same job. The copper wire ends up being very heavy and expensive compared to the super-conducting silver-composite wire. China has ordered quantities of this wire for their power infrastructure improvements.

Fountainhead · December 16, 2003 2:22PM

The moral of the story is this:
Don't invest in "paper" silver or on margin. Buy physical silver and take full possession of it yourself !

Not quite. Those 200 million ounces of the Hunts was their physical silver; they held much more in the form of silver contracts.

Fact is, there are little-known laws on the books that the government can employ to force U.S. citizens to sell gold, bullion, and even real estate, if necessary; they are supra-constitutional yet legal, with ultimate roots in the pre-Constitutional Articles of Confederation and the acts of the Continental Congress.

What's more, the government can force the sale of privately-held gold and silver bullion at "official" government prices. Per ounce, that's $42.22 for gold, $1.23 for silver.

I believe that last rule is still invoked today when the government seizes precious metals from criminals and bankrupts; the government need only compensate other creditors at official prices. I think, but I'm not sure, that's how the Handy & Harmon bankruptcy two or three years ago was handled (they owed the Mint two million ounces of silver), and why the other creditors quickly (if bitterly) made out-of-court settlements.

Finally, even if the federal government doesn't seize your physical silver, that is no guarantee of ultimate security; on 9/11, the destruction of the World Trade Center buried most of the COMEX-warehoused silver for months. If any of that was yours, you were out of luck if you wanted to sell it when the price jumped 15% in the aftermath. Paper silver would have been much safer.

canadiancoinguy · December 16, 2003 4:27PM

Compare the world supply and uses of gold and silver. Then compare the prices. Either gold is way overvalued, or silver is considerably undervalued. I prefer silver when it's hovering closer to $7/oz

GOLDSAINT · December 16, 2003 9:09PM

My opinion is that the next run in both silver and gold will have nothing to do with, useage of these metals, and will have everything to do with peoples attitudes toward worthless paper money. The world now has a global economy, people are more informed ,and the U.S.A loses more economic power on the planet each year. New wold economic powers like China, and their people, will be the ones to move the metals markets in the future. If the Hunts did indeed tie up 200 million ounces of silver to make the market move to $50, what will happen if 1.5 Billion chinese all decide to buy one ounce of silver? What would happen if you had the same percentage of Chinese coin collectors that you have in the U.S. buying one ounce Chinese silver Eagles? In the last 20 years nearly half of the worlds population has been introduced to economic freedom. In the last 8 years there have been created more millionaires in China than in all of the U.S.A. In fact current estimates are that there are 5,000 new millionaires created each month in China alone. How many multi-millionares will there be in Iraq, Russia, all the east block countries, India, etc. over the next decade. Unfortunitly our U.S. leaders made the decission to turn the U.S. economy into a service economy during the last 20 years as the rest of the world took on the job of producing new products. These are the peole that will make the metals markets move in the future, and all these little games that our Gov. and the Fed have played for years with this market will no longer work!

UncleJoe · December 16, 2003 9:36PM

That is a flat-out LIE! That isn't at all what happened!

OUCH!!!

Fountainhead, While all that you wrote was true, I went for a very condensed and extrapolated version of the story.

If the Hunts were able to purchase the silver (therefor, no margin calls, and I don't claim there was any reason to do so after the rules changed) they would not of had any problems. But the amount of silver that they controlled as well as the amount that became available was so huge that they could not pay for it and eventually filed bankruptcy.

Joe.

dlimb2 · December 17, 2003 1:18AM

I totally agree with you on that...its a shame what our government has done to us.

dorkkarl · December 17, 2003 2:26AM

<< The Hunts controlled paper, not physical silver. Silver will surpass the highs of 1980. >>

it will, but not for the speculative reasons as in 79,80.

K S

bulloncoins · December 17, 2003 2:27AM

Ok all you eagle fans.....who has checked out the daily PCGS price guides of American Silver Eagle Circulation Strikes lately? Notice anything going on in the last two days?....any comments?

dlimb2 · December 17, 2003 2:49AM

bulloncoins
I see them edging up and did you look at the proof's holy cowwwwwwwwww.

bulloncoins · December 17, 2003 3:52AM

Sorry, but I need to enlighten you about this. When I stared collecting "bullion" (ASE's) in 2001 I came to this website. The price guide listed a complete set of PCGS ms69 Silver Eagles at a value of $1680.00.

It began dropping, while the price of silver began climbing. $1455.00, then $1420.00, then$$1355.00, the $1249, the last few months it has stayed around $1158.00 . Look at it now. Those price changes took place in the last few days. Meanwhile silver continues to move upward.

I asked HRH about this several months ago in a question and answer session. I was told to expect further drops in the prices. PCGS has been true to their word on that one.

pmh1nic · December 17, 2003 4:13AM

Excuse me if I'm stating the obvious but a lot of what was said is new to me. Doesn't the price go up because demand increases. A dramactic price increase for a dramactic increase in demand. The Hunt's artifically increased the demand by hoarding silver. Absent another such artifical increase in demand what is going to stimulate the dramactic legitimate increase in demand to drive the price of silver into the $50 range?

I noted the many remarkable characteristics of silver but I'm assuming (yea I know) the cost/performance benefits with respect to using silver for those technologies mention at the current price dwindle as the price increases to 10x the current price. In the electronics industrial as silver and palladium prices began to increase processing technologies were found to allow for the use of less expensive alternatives (base metals) to replace them in many applications.

Am I wrong in assuming that that for the most part all the silver that has ever been mined still exist? Is there more silver in the ground to be mined? Is reclaimation less expensive then mining the remaining silver? Does mining become cost effective at $10/oz., $20/oz.....?

Now unless the Mint comes up with a heck of a marketing program I don't imagine we're going to be selling 1.5 billion SAE's any time soon to the Chinese. The antibacterial properties of silver have been know for hundreds of years so I don't see any reason why there would be a tremendous surge in it's medical use in the future. The smell-less clothing sounds interesting though

.

Seriously, unless some indespensible property of silver that causes it to have dramactic, life changing characteristics attached to it is found I'm doubtful about that type of jump in pricing.

bulloncoins · December 17, 2003 5:21AM

<a href="http://www.financialsense.com/fsu/editorials/2003/0718.htm" target="new" > Link to good Editorial on subject</a> null

pmh1nic · December 17, 2003 5:26AM

BC

I tried cutting and pasting the link but it did work???

bulloncoins · December 17, 2003 5:30AM

I am trying to figure out what I am doing wrong here with this code. I am very rusty on it at best.

bulloncoins · December 17, 2003 5:42AM

Please try link marked "null" above.

Higashiyama · December 17, 2003 6:15AM

pmh1nic - regarding "Excuse me if I'm stating the obvious but a lot of what was said is new to me. . ."

You are being much too rational.

It is new because it is "innovative" thinking.

Silver is a commodity traded in a highly liquid global market. All information about current and potential future supply/demand are readily available, and are factored into the market price. Of course, factors could change, but much of the analysis contained in this thread should be read mainly for its entertainment value.

wallstreetman · December 17, 2003 6:35AM

pmh 1nic, How many people are born every minute on this planet? Thats a lot of extra demand!

Is the Silver situation more troubled today than it was when the Hunts horded it in the 80's.

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