For the first few months of 1980, the silver market had been slipping
as newly enacted rules began tightening their grip on the Hunt
Brothers’ silver scheme.
On March 27 (known as “Silver Thursday”), silver opened at $15.80
and closed at $10.80 as the Hunt Brothers reportedly initiated a
massive sell-off of silver and contracts to meet their obligations.
Commodities and the futures market crashed on these reports, but
rallied somewhat, bringing silver to $12 an ounce within a few days.
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But the futures contracts owned by the Hunts were predicated on
silver at $35 an ounce. What had been a $3.5 billion profit on their
efforts to corner the silver market evaporated, replaced by a reported
$1.5 billion debt.
Silver Thursday went down as the single greatest reduction of wealth
and value of the metal in market history.
Beginning in the early 1970s, Nelson Hunt and his brothers William
Herbert and Lamar Hunt began accumulating large amounts of silver. By
1979, they had nearly cornered the global market. Prices of silver
futures contracts and silver bullion rose from $11 an ounce in
September 1979 to $50 an ounce in January 1980. Silver prices
ultimately collapsed to below $11 an ounce two months later.
During the rise, dealers and the public were caught up in the
fervor, trying to cash in before the price moved too far either
direction. Stories of fortunes made — and lost — are the truest
versions of fairy tales and nightmares, numismatically speaking.
Places like SilverTowne in Winchester, Ind., were melting silver and
reselling it as fast as possible, while collector coin prices spiked
as dealers and collectors had newfound wealth to reinvest in rarities.
In February 1985 the Hunt brothers were charged, by the United
States Commodity Futures Trading Commission, with manipulating and
attempting to manipulate the prices of silver futures contracts and
silver bullion during 1979 and 1980.
In September 1988, the Hunts filed for bankruptcy under Chapter 11
of the Federal Bankruptcy Code, largely due to lawsuits incurred as a
result of the silver speculation.
Their famous ancient coin collection was sold in a series of
auctions in 1990 and 1991.