Could You Buy All the Silver in the World?

In the early seventies, amidst political upheaval, inflationary pressures and stagnant economic growth, the richest family in America (at the time), the Hunt family of Texas, tried to corner the market on precious metals. As a way to hedge themselves from the rampart printing of dollars the US government was doing, the Hunts decided to accumulate large amounts of hard asset investments. Since gold could not be held by private citizens back then, the Hunt brothers focused on silver.

In 1979, the Hunt brothers, along with a group of wealthy Arabs, formed a pool buying silver and silver futures. The Hunt brothers used their positions in silver futures to acquire more of the physical metal. As cash was continually losing value due to inflation, the Hunts decided to settle their long silver futures contracts with delivery of silver, instead of cash settlement. Before too long, they had amassed over 200 million ounces of silver which was about half of the world’s supply.

Prices soon started to appreciate. When they started, the price of silver was below $5/oz. By late 1979  prices had increased tenfold and were trading near $55/oz.  As prices went higher and new buyers got into the market, the exchanges became increasingly fearful of defaulting. As the Hunts owned 77% of the world’s silver, either in physical form or futures contracts, the market had been cornered. The Hunts’ $1 billion investment was now worth around $4.5 billion. 

The U.S. government became concerned over what it saw as a clear attempt at manipulating the nation’s silver reserves.  Federal commodities regulators introduced special rules to prevent any more long position contracts from being written or sold for silver futures. This stopped the Hunts from increasing their positions by temporarily suspending the fundamental rules of the commodities market. 

The Hunt name, however, kept them afloat with easy terms on more short-term capital. The Federal Reserve then took an unusual step: it strongly encouraged banks to stop making loans for speculative activity. When it became clear that the government was after the Hunts’ scalps, their credit dried up. Concerns that the Hunts might not be able to meet margins with new loans and would go under (pulling several brokerages and banks with them), put further downward pressure on the price of silver. On March 27, 1980, the Hunt brothers finally missed a margin call and the market plunged; silver led the way, dropping to under $11 from its high of $48.70. 

Government officials considered a bailout to prevent systemic chaos. The action was vetoed, however, because the government agencies didn’t want to be seen as underwriting dangerous financial speculation. In the end, the Hunt name held true, and the brothers arranged a private bailout from a consortium of banks and companies. The Hunts were dragged in front of Congress, scolded, charged with manipulation, fined, fined again and forced into bankruptcy. It took nearly a decade for them to unwind all their silver holdings and satisfy creditors, and the final bill left them billions poorer.

Contributed by Taylor Cook

Breezes About Kitchener

In 1916, after much controversy, Berlin, Ontario, Canada (my hometown) was re-named Kitchener as a result of anti-German sentiment during the First World War. A revision was necessary to the popular title of the city’s souvenir pamphlet 'Breezes About Berlin'. Rather than rework the name of the pamphlet (Kicking Around Kitchener?) city leadership decided to simply create stickers that could be placed over the old phrase. 

The decision was emblematic of Kitchener's municipal decision-making over the next century, which tended to be ad-hoc, shortsighted, and to the detriment of any coherent cultural identity.

The World's Largest Church

The Basilica of Our Lady of Peace of Yamoussoukro is a Roman Catholic church located in the West African country of Côte d'Ivoire (Ivory Coast). The basilica was constructed between 1985 and 1989 at a cost of $600 million (adjusted for inflation). Upon its completion it was declared as the largest church in the world, surpassing the previous record holder, St. Peter’s Basilica. It has an area of 322,917 square feet and is 518 feet high (roughly the height of a 40 story skyscraper). 

The basilica is constructed with marble imported from Italy and is furnished with 75,000 square feet of contemporary stained glass from France. Columns are plentiful throughout the basilica but are not uniform in style; the smaller columns are there for structural reasons, while the bigger ones are decoration and contain elevators and pipes for rainwater. There is enough space to seat 7,000 people inside the dome, with standing room for an additional 11,000 people. Apart from the basilica there are two identical buildings, serving as a rectory and private papal villa, respectively. The villa is reserved for papal visits, of which only one has occurred: when the basilica was consecrated  by Pope John Paul II on September 10, 1990.

Rather than place the monument in the country’s metropolitan center, Abidijan, Côte d'Ivoire President Félix Houphouët-Boigny chose his birthplace of Yamoussoukro to be the site of the church. As construction was nearly completed, the president commissioned a stained glass window of his image to be placed beside a gallery of stained glass of Jesus and the apostles. This image depicts him as one of the three Biblical Magi, kneeling as he offers a gift to Jesus.

The basilica has been met with global controversy since its conception. The lavishly built basilica sits in the middle of the African bush in an impoverished town where only a small number of homes have running water and adequate sanitation. The cost of the basilica doubled the national debt of Côte d'Ivoire, which overtime, would lead the country down a path toward political violence and social unrest.