Hunt Brothers Silver Legacy
The Hunt Brothers: How Two Billionaires Broke the Silver Market
It’s 1980 and silver has peaked shy of over $48 an ounce… how did this happen?! The Hunt brothers. Nelson Bunker Hunt and William Herber Hunt singlehandedly inflated the price of silver by more than 700%.
This is not a story of a couple of guys striking it rich on the silver market, oh no, this was messy. What began as a money-making machine, turned into a historic collapse known as Silver Thursday. The hysteria, panic, and overall madness led to legislation change.
Though these brothers are painted as having conspired to corner the silver market, Nelson Bunker Hunt denied these allegations. Either way, it makes for a compelling story. Culture is obsessed with stories of the “big guys” going down – Bernie Madoff, Mr. Copper, Lou Pearlman, the list goes on.
Cornering the silver market takes big money, and the Hunt brothers had plenty to draw from.
Where’d the Money Come From? A Bit of Hunt Family History
The Hunt fortune is said to have begun with Haroldson Lafayette Hunt – born into a struggling family, he was neither educated nor did he have the means to do so. At the age of 22, he found success as a businessman, buying and selling cotton and cotton plantations. His focus soon shifted towards bigger and faster money, oil. Haroldson struck BIG in Texas, amassing billions, and with his passing the Hunt brothers ran a bulk of the family business – Bunker, Herbert, and Lamar Hunt.
The Hunt brothers followed in their father’s footsteps, and had great success, in part because of the oil boom of the 1970s. The Hunt family was wary of the government and paper currencies, which influenced their holdings in oil, land, livestock, and precious metals.
Puppet Masters of the Silver Market
With a weakening dollar and a prediction for continued hyperinflation, the Hunt brothers began hoarding physical silver and purchasing silver futures contracts. Nelson Bunker Hunt and William Herbert Hunt were extremely bullish and convinced that silver’s value would skyrocket.
Rather than accept cash settlements for future contracts, they took the less common route of having the physical silver delivered. In the early 70s, as the Hunt brothers began to dabble in Silver, the price was $2 an ounce. By 1979, silver had risen to $6 an ounce. That’s big, however, that’s nowhere near the peak price.
It’s said that the Hunt brothers had over 100 million ounces of silver, close to a third of all the silver in the world! In December of 1979, silver prices were creeping up to $25 an ounce.
At today’s silver price of $31.93 per ounce, the Hunt brothers’ historical holding of 100 million ounces would be worth about $3.193 billion.
The global silver market began to experience heightened supply issues. Jewelry prices were rising, burglaries became more common, and everyday people were on the prowl for anything silver in their homes to cash in on the frenzy.
1980 started with a bang, silver prices peaked just short of $50 an ounce. The Hunt brothers continued to borrow money to accumulate even more silver.
It Worked Until It Didn’t…
The Hunt brother’s plan was working out just fine until the COMEX (Commodity Exchange, Inc.) decided to step in and interfere. On January 7, 1980 (about a week before silver’s peak), the COMEX introduced Silver Rule 7.
How Silver Rule 7 Sabotaged the Hunt Brothers
The Comex adopted this new rule to put the brakes on the Hunt brothers and curtail the excessive buying up of silver futures contracts. It placed heavy restrictions on the purchase of commodities on margin. Meaning, that using borrowed money from a brokerage proved to be more difficult. Keep in mind that the Hunt brothers were borrowing heavily to buy up silver futures.
The Hunt brothers cornered the global market, but it didn’t last long. From the hand of the Federal Reserve, banks were encouraged to stop making loans for speculative activity. Margin calls were beginning to take a toll on the Hunt brothers, and their ability to cover these loans began to slip.
Here comes the downfall…
What was Silver Thursday?
The commodities market took a deep dive on Thursday, March 27, 1980. The Hunt brothers missed a margin call and Silver Thursday came to fruition. The price of silver began dropping and it plunged more than 50% in a single day – under $11 an ounce.
Their billions of dollars in assets quickly morphed into over a billion dollars of debt. This wasn’t only bad for the Hunt brothers; it also threatened the collapse of several investment firms and banks. To prevent the bottom from dropping out, multiple banks banded together to give the brothers a $1.1 billion credit line to cover their obligations, though they were now personally bankrupt.
The Messy Aftermath
And the criminal investigation begins…
To make matters worse for the Hunt brothers, the price of oil crashed in the 1980’s, nearly wiping them clean. They declared corporate bankruptcy in 1986 and personal bankruptcy in 1988.
In 1988, the New York Jury ordered the Hunt brothers to pay more than $130 million to cover damages against the Peruvian government’s mineral marketing company, which suffered severe financial damage from the crash. The brothers still made it out on top because their trusts, which held the family’s oil companies, were untouched by the litigation.
To put the nail in the coffin, the Commodity Futures Trading Commission fined the brothers $10 million each and banned them from trading in the American commodity markets for their attempt to manipulate the nation’s silver reserves.
Could It Happen Again?
Could a Hunt-style silver squeeze happen in today’s market? While modern regulations make cornering the market far more difficult, silver remains volatile and susceptible to dramatic price swings.
During the COVID-19 pandemic, silver demonstrated this volatility, plunging to $13 an ounce in March 2020 before surging to $28 by September – a 115% increase in just six months.
The fundamentals driving silver’s value have also evolved significantly since the Hunt era. Industrial demand has expanded beyond traditional photography into crucial modern technologies, particularly solar panels, which require significant amounts of silver for photovoltaic cells.
Meanwhile, global mine production has struggled to keep pace with demand, creating a delicate supply-demand balance that leaves the market sensitive to disruption.
Yet despite these market pressures, the silver market of today bears little resemblance to 1980. Digital trading, enhanced oversight, and stricter position limits make it virtually impossible for any single entity to accumulate the kind of market-moving position the Hunt brothers once held.
While silver prices may continue to experience significant fluctuations, the safeguards put in place after Silver Thursday remain a bulwark against market manipulation at that scale.
Where Are they Now?
Don’t worry, the Hunt family is doing fine. Despite all the shenanigans and financial hiccups, they are still one of America’s richest families. With the fortune made by H.L. Hunt, the family has scaled and invested across a multitude of industries.
Interestingly enough, Lamar Hunt (Brother to Nelson and William) was a founding member of the American Football League and ownership of the Kansas City Chiefs remains within the family. Along the lines of sports, the Hunts also own FC Dallas and a minority stake in the Chicago Bulls.
The family is still involved in oil and gas and has an impressive real estate portfolio. All-in-all, the family is projected to be worth somewhere north of $20 billion.
The Hunt brothers’ silver saga serves as a powerful reminder that even the deepest pockets can’t control the market forever. While the Hunt brothers failed to corner silver, they succeeded in leaving an indelible mark on financial history.
I was a broker then. I recall the COMEX changing the rules saying BUY orders would only be accepted for covering shorts. No one was allowed to buy to initiate a short position. I had a client that had daily margin calls that looked like zip codes. That was ugly and a rigged outcome like I've never seen.
Years before that I had potato contracts long and somehow they all rotted in the storage. Longs should have gone to the moon. Instead they declared a force majeure and cash settled everything at the prior close.
These SOB's can always change the rules. Never forget that.
SO IT WAS A SET UP ENSUEDBY THE CABAL, THEY ARE COMING FOR DJT NOW