The Silver Disaster of the Hunt Brothers in History!

This story begins in Texas, USA. There, two things are abundant: oil and the daring cowboy spirit to gamble big. The Hunt brothers—Nelson Bunker Hunt and William Herbert Hunt—happened to embody both.

Their father, H.L. Hunt, was a legendary figure who made his fortune through poker and eventually built a vast oil empire. He left his sons not only enormous wealth but also a deep distrust of government-issued currency. With this inherited suspicion, combined with their innate gambling instincts, the brothers set their sights on an ancient metal—silver—in the early 1970s.

Prologue: Two “Smart Guys” and Their Calculations

At that time, silver prices hovered around $1.50 per ounce. To the Hunt brothers, this was practically giving away treasure. They firmly believed that the dollar would depreciate due to inflation, and silver—used as money for centuries—was the real hard currency.

Their plan was simple and aggressive: since they believed it was valuable, they would buy it all.

Thus, a rare “hoarding” campaign began. The brothers mobilized all their family resources and connections, secretly accumulating silver through a network of affiliated companies and offshore accounts worldwide. They didn’t just buy futures contracts; more importantly, they demanded physical delivery, transporting tons of real silver into warehouses in New York, Switzerland, and other locations.

How big was their appetite? At their peak, they controlled over 50% of the deliverable silver inventory globally, with enough silver to meet more than a year’s industrial demand worldwide. In today’s terms, they aimed to create a “supply shortage” in the global silver market with a single click.

Climax: A Crazy “Silver Storm”

Controlling the physical market was equivalent to choking the market’s neck. Starting in 1979, the Hunt brothers launched a massive assault on the futures market, aggressively buying long positions. The market’s reaction was immediate:

· Price Rocket: Silver prices soared from $6 per ounce in August 1979 to $35.52 in February 1980 (approaching a historical high of nearly $50), with a nearly 500% increase in six months.
· The End of the Shorts: All market participants betting on falling prices (shorts) were pushed to the brink. Want to deliver silver as per contracts? Sorry, the physical silver was stored in the Hunt’s warehouses, making it impossible to buy. They could only watch as prices hit new highs daily, with losses mounting infinitely. This tactic is called “short squeeze,” and the Hunt brothers played it to the extreme.

Suddenly, speculators worldwide were fired up, pouring in funds chasing the trend, turning the silver market into the world’s biggest casino. The Hunt brothers’ paper wealth skyrocketed, as if they had forged an unbeatable financial empire with silver.

Collapse: When Rules Suddenly Changed

However, they forgot one thing: there’s a house in every casino.

The Hunt brothers’ approach was fundamentally challenging the entire financial system’s rules. The New York Mercantile Exchange (COMEX) and regulators quickly realized that the market had become severely distorted, with liquidity drying up.

The house struck back. Starting in January 1980, the exchange repeatedly launched “killer moves”:

1. Significantly increased margin requirements: what once could be controlled with minimal margin now required nearly 100% cash.
2. Strictly limited new positions: forbidding the establishment of new silver futures longs.
3. Forced liquidation: requiring a drastic reduction of existing holdings.

This was like instantly removing the leverage and oxygen that the Hunt brothers relied on. Their operations, built on massive borrowing, faced margin calls in the billions, with a flood of additional margin notices.

On March 27, 1980, the famous “Silver Thursday” arrived. Silver prices plummeted like an avalanche, crashing sharply in a single day, and within a month, fell over 60% from the peak. The Hunt brothers’ financial chain was completely broken, and they were forced to liquidate.

It is reported that Herbert Hunt told regulators over the phone, “I am bankrupt.” (I'm busted.)

Final Chapter: The Empire Falls, a Cautionary Tale

Like a tree falling, the Hunt brothers, once rivaling the wealth of nations, were forced to sell their assets—horses, coins, land, and even lawnmowers—to pay debts. By the late 1980s, both brothers declared personal bankruptcy, faced hefty fines for market manipulation, and were banned from trading commodities futures again.

A high-stakes gamble to “monopolize the realm” ended in ruin—bankrupt gamblers, disgraced and broken. The story of the Hunt brothers became one of the most classic cases in Wall Street textbooks about greed, leverage dangers, and the inevitable failure of market manipulation.

To conclude with their own words: Herbert Hunt once bitterly defended, “I felt like a woman whose purse was stolen, but I was accused of indecency because my clothes were torn.” However, the verdict of history is clear: when you try to snatch the entire market’s purse, you must be prepared to face the system’s counterattack.