38. Creating a Bubble Market
The Hunt brothers’ speculation created a global silver craze. As silver prices doubled, trebled, quadrupled, and kept on rising, people around the world began melting silverware. Thieves went on a silver stealing spree. Tiffany’s ran ads attacking the Hunt brothers’ speculation for making silver unaffordable to consumers.
The Hunt brothers ended up creating 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 averting such bubbles, stepped in and issued a rule specifically targeted against the Hunts: it banned banks from lending to precious metal speculators. The result was a swift bursting of the bubble.