One great thing about the internet is that if the facts are juicy enough, they last for a very long time.
Here we run through some potentially sordid details involving Warren Buffett’s former record-sized silver bullion position. A then record-sized silver bullion position which started in 1997 and likely ended as the founding silver bullion metal for SLV in 2006.
To begin a bit of balancing background on Mr. Buffett, as the mainstream financial media often ignores disparaging details regarding his actions and broader ramifications domestically and even globally.
Stock and bond market cheerleaders often trumpet Warren Buffett and his consistently ignorant remarks revolving around gold. Buffet parakeets often too have benefited from what one might argue is our nation's increasingly non-competitive economic system. An increasingly overly financialized, industrially consolidated, bankrupt bailout rationalizing, phony fiat capitalistic system critically described.
Another critical background fact revolves around the gigantic Warren Buffett silver 1997-1998 buy and eventual silver 2006 sell timeline.
This silver bullion position was so significant that it put his conglomerate, Berkshire Hathaway, into the modern silver bullion record books. In a few short months, they amassed one of the largest silver hoarding positions owned by one private entity in the contemporary era (eat your heart out naive Hunt Brothers).
Amassing this the record-sized silver bullion position also blew out silver lease rates to the tune of up to 75% on an annualized basis. Warren Buffet and his silver Berkshire bugs caused an acute shortage of fine silver bullion in the late 1990s, more on that matter shortly.
Warren’s now near $100 billion fortune (only on paper), is undoubtedly the stuff of modern fiat currency pile and scoreboard legend.
But while Warren is quick to play his “ah shucks,” I’ll have another corn syrup Coke and hot dog routine publicly.
The fact is, his ongoing public fortune, makes Buffett one of the most beloved and also criticized businesspeople in the world today.
Much of Warren Buffett’s success arguably remains a result of consistent investment principles applied over a long period, in a generally rising world-leading financial market favorable to his chosen asset class (equities).
He is also often charged with a deeply documented love for backroom sweetheart deals (e.g., Bank of America, and drug money laundering Wachovia Bank merger - i.e., his 2011 warrant play).
He has often acclaimed his desire for anti-competitive business protectionary moats — his lust over the power of compounding interest on his mostly fiat-based US dollar-denominated stock investments. His shareholders who have benefited off his career success love him. Others who have not been as successful and or believe his ideals to be noble pursuits are critical of him.
You can learn more about Warren’s highly successful, yet crony-capitalistically questionable investment ideology here.
This following unsavory gem dropped from Warren Buffett's mouth in 2006 published in the New York Times during the consumer debt-fueled housing bubble.
There’s class warfare, all right, but it’s my class, the rich class,
that’s making war, and we’re winning. — Warren Buffett
The disparity of wealth in the USA has only widened since as he and his holding company also benefited from bankrupting financial crony bailouts in 2008 (approved by the US federal government and its private, non-governmental central bank).
Warren Buffett Silver Holdings 1997 - 2006
The following record-level silver bullion buy and hold trade, a position put on by Warren Buffett’s Berkshire Hathaway before the start of the 21st Century.
Further below this timeline chart, you can hear Warren himself speak publically, addressing this silver bullion position back in the year 1998. All total, the Buffett silver bullion position amassed to 129.7 million ounces.
Warren Buffet Silver Investment Buy Sell Timeline
The Warren Buffett silver video below is positioned to begin at the moments in where Warren Buffett got asked about his near 130 million ounce silver bullion position. Recorded at the 1998 annual meeting of Berkshire Hathaway shareholders (i.e., likely surrounded by his biggest cheerleaders at the time).
In it, you will hear Buffett and see by his body language as he spearheaded this record-sized silver position soft inquisition. Whereas bad cop Munger plays it aloof, appearing as though silver bullion buying was somehow beneath his elite investment level aptitude.
Warren Buffett Silver Investment Thesis 1998
BERKSHIRE HATHAWAY SHAREHOLDER QUESTION 1998:
I actually had a question about the silver purchase last year. When you announced it, you said that you believed that supply and demand fundamentals would only be reestablished at a higher price… I was just wondering if you could go into more detail about what some of those fundamentals are. We’ve read a lot about battery technology and some other things.
WARREN BUFFET SILVER RESPONSE TRUNCATED:
Yeah, we have no inside information about great new uses for silver or anything of the sort… you can see from looking at the (silver) numbers that… the present price for silver does not produce an equilibrium between supply… and usage (demand). And that eventually, something will happen to change that picture… could be a change in price.
Around the 2:10:08 mark, Mr. Buffett continues the Hunt Brothers Silver price run scapegoat legacy. Alluding as if it were three Hunt brothers alone, who themselves drove the 1980 price of silver to $50 oz fiat USD by late January.
Nevermind virtually the entire world’s price discovery commodity complex was multiplying muli-fold in questionable fiat US dollar value terms for more than a decade leading up to 1980.
Possibly the most controversial part of the Warren Buffett 1997-1998 silver hoard was not even the explosive physical silver lease rate spikes which they profited through undoubtedly. It was likely too how it affected the late 1990s silver market wholly. And why did Berkshire eventually sell its silver hoard at such low nominal fiat values so early?
WARREN BUFFET SILVER LEASE RATE SPIKE
After only more than doubling their cost basis in fiat US dollar currency value in less than a decade’s time span, the 127 million ounces of silver got sold. But to whom?
With just a quick gander at the above silver Warren Buffett buy-sell timeline price chart earlier in this article, you can see with hindsight 20/20. Berkshire and silver buying Buffett were 5 years early in precisely timing the silver April 2011 price peak of near $50 oz.
Allegations remain that in 2005, one of Buffett’s conglomerate holding companies engaged in illegal transactions with AIG. And further still alleged was that through market authority negotiations to follow, ended with Warren and Charlie selling the 129.7 million ounce pile of silver bullion which likely helped then begin the now largest silver ETF called SLV.
This dubious silver ETF ‘investment’ vehicle coincidentally started in the 2006 silver price era with a foundation of about 130 million ounces of silver supposedly backstopping it. None of which is deliverable to average SLV shareholders. Same retail shareholders who pay 1/2% fees yearly for the privilege of not owning silver bullion, rather unsecured silver price mimicking stock shares.
With all the disparaging remarks, Warren Buffett and his partner Charlie Munger make about gold or other precious metals investments. We suggest taking them with both a backward and longer-term forward-looking silver lining.
Whether or not Warren Buffett is an investing icon worth looking up to, or merely a crony capitalistic parasite whose name might indeed become mud. That is not ours to determine here.
The facts are Buffett (a now hundred fiat US dollar billionaire on paper), went hell-bent long silver bullion in 1997 and 1998. He and his team did so faster and arguably as aggressively as the 1980 Hunt Brothers did as they foolishly used COMEX silver derivative leverage which backfired in their face.
Why Buffett and Berkshire dumped this record silver bullion stockpile, a question Warren will likely never truthfully own up to publically.
For in doing so, the 'Oracle' might just further tarnish his legacy.