Jim’s Daily Rant. Hole In The Silver Dam! Part II - The Hunt Brothers Corner The Market.

Be sure to read Part I first: Hole In The Silver Dam! Can You Say “Silver Arbitrage?”

In the Late 1970s the Hunt Brothers tried to corner the world Silver market. They sent terror throughout the financial system by paying an exorbitant $50 per ounce and were on their way to success. They were stopped by every legal illegal means to shut them down.

Now a major country, India, is doing the same simply by declaring in banking law what the world has said for centuries – that the silver to gold ration is 10:1.

This defies all the Central Banks and the Deep State!

Per Wickipedia:

In the late 1970s, the Hunt Brothers—Nelson Bunker Hunt, William Herbert Hunt, and Lamar Hunt—attempted to corner the global silver market, leveraging their inherited wealth from their oil tycoon father, H.L. Hunt, who died in 1974. Driven by concerns over inflation and the weakening U.S. dollar following the abandonment of the gold standard in 1971, the brothers believed silver would serve as a safe-haven asset. They began accumulating vast quantities of physical silver and silver futures contracts, using borrowed funds and money raised from international investors, including those from Saudi Arabia, to finance their strategy. By 1979, they controlled an estimated 100 million troy ounces of silver, roughly one-third of the world's private supply, and had nearly cornered the market.

Their aggressive buying drove the price of silver from around $6.08 per troy ounce in January 1979 to a record high of $50.35 per troy ounce on January 18, 1980, a rise of over 713%. This surge attracted widespread attention and sparked a short squeeze, as short-sellers were forced to cover their positions by buying silver at inflated prices. However, the strategy relied heavily on leverage, which became a critical vulnerability. In response to the market disruption, the Commodity Exchange (COMEX) introduced "Silver Rule 7" on January 7, 1980, which severely restricted the use of margin to purchase commodities.

The rule change triggered a collapse in silver prices, which fell over 50% in just four days. On March 27, 1980—known as "Silver Thursday"—the price plummeted to $10.80 per ounce. The Hunt Brothers faced a $100 million margin call they could not meet, leading to a financial panic that threatened the stability of major Wall Street brokerages. To prevent systemic collapse, a consortium of U.S. banks provided a $1.1 billion line of credit, secured by the brothers’ assets, including their stake in Placid Oil. Despite this rescue, the brothers lost an estimated $1.7 billion, becoming the greatest debtors in financial history at the time.

The fallout included legal consequences. In 1988, a federal court found the brothers guilty of conspiring to corner the silver market and ordered them to pay $134 million in damages to Minpeco, a Peruvian government-owned mineral company. Both Nelson and William Herbert Hunt filed for Chapter 11 bankruptcy protection in September 1988. In December 1989, they were each fined $10 million and banned from trading in U.S. commodity markets. The incident significantly damaged the family’s reputation and led to a decline in their net worth from an estimated $5 billion in 1980 to less than $1 billion by 1988. The event remains a landmark case in financial history, illustrating the risks of market manipulation and the fragility of leveraged positions.

See: Part III - Cook Books, Iraq, India and Ground Hogs.