Silver Thursday: The Day the Silver Market Collapsed
On the morning of March 27, 1980 – referred to as “Silver Thursday” – chaos broke out on New York’s commodities exchange floor. Silver prices were collapsing, dropping more than 50% in one day. Silver had been selling for around $21 an ounce earlier in the day; by the afternoon, it had plummeted to around $10. Brokers yelled into telephones as billions of dollars in value melted away. At the eye of this tempest were two Texas billionaire brothers, Nelson Bunker Hunt and William Herbert Hunt, who had appeared invincible as the kings of the silver market just weeks before.
The Hunt Brothers: Oil Fortune and Silver Obsession
Bunker and Herbert Hunt were the beneficiaries of one of America’s grand oil fortunes, the sons of the fabled wildcatter H.L. Hunt. By the 1970s, they had already accumulated an enormous wealth. But Bunker, the older of the two brothers, distrusted paper money, believing that runaway inflation and economic instability would devalue the dollar shortly.
Building a Silver Hoard: The Start of a Market Manipulation
In 1973, when silver sold for around $2 an ounce, the Hunts secretly started accumulating as much precious metal as they could. For them, silver was a more secure wealth repository than bank money. Bunker even had apocalyptic anxieties based on his religious beliefs that paper money would eventually be useless during a worldwide calamity. A vault containing silver bullion would be the best insurance policy if that day arrives.
The Strategy Intensifies: Futures Contracts and Physical Delivery
In 1974, their father passed away, leaving the brothers a new source of capital (his wealth was estimated at $2–5 billion). Empowered by their immense wealth, the Hunts redoubled their efforts to corner silver. During the late 1970s, they continued buying, expanding their strategy beyond bullion bars and coins to invest heavily in silver futures contracts. Notably, they decided not to play by the traditional commodity-trading rules; rather than closing their futures trades for cash, the Hunts insisted upon the physical delivery of each bullion bar they had contracted for.
Cornering the Silver Market: A Global Impact
They warehoused the metal in storage facilities and Swiss bank vaults, pulling a constant supply of silver off the open market. Every delivery reduced the supply for all others, pushing prices upward. By 1979, this hoarding tactic had ballooned into a blatant effort to corner the world’s silver market. Their buying was almost incomprehensible in its scope. The Hunts and their investors, said to include some wealthy Saudis, had accumulated about 200 million ounces of silver by 1979, representing about one-third of the world’s total supply of tradable silver.
Silver Mania: Soaring Prices and Public Hysteria
Silver was trading at about $6 an ounce in early 1979; in January 1980, it would reach an all-time high of $48.70. At that height, the Hunts’ stash was worth an estimated $10 billion on paper. The mania spread well beyond Wall Street. With prices soaring, everyday Americans began rummaging for any silver they could unload. Families dug up heirloom silverware and antique tea sets to be melted down for cash. Thieves started breaking into homes to steal sterling candlesticks and flatware. Even physicians felt the pinch as the price of X-ray film, which was silver-coated, soared.
Public Backlash and Market Tension
The hysteria reached such absurd proportions that Tiffany & Co., the famous New York jeweler, took a full-page newspaper ad condemning the Hunts. “We believe it is unconscionable for anyone to accumulate several billion, yes billion, dollars’ worth of silver and thereby bid the price up so high that others have to pay artificially high prices for silver articles,” the ad staunchly asserted. The Hunt brothers’ personal crusade was twisting the price of everything from medical equipment to forks to jewelry, and individuals were beginning to get upset.
The House of Cards: Leverage, Margin, and Regulatory Action
For a while, the Hunts seemed to have staged one of the greatest market plays in history. But their position was as risky as it was massive. By early 1980, the brothers had borrowed massively to continue purchasing more silver. Their empire was built on a shaky base of margin loans – funds borrowed by brokers and banks hungry to profit from the silver boom. The Hunts’ great influence had also drawn the attention of market regulators and the U.S. government.
Silver Rule 7: The End of the Silver Speculation
In January 1980, as the silver frenzy was nearing its peak, the Commodity Exchange (COMEX) in New York acted forcefully. The exchange introduced “Silver Rule 7,” which suddenly restricted the rules on speculative silver trades, essentially banning most new silver purchases on margin. The Hunts suddenly could not use any more leverage; if they wanted to buy more silver, they would have to put up 100% cash in advance. No more borrowing to magnify their bets. At the same time, Federal Reserve Chairman Paul Volcker quietly encouraged banks to stop lending to anyone speculating in precious metals. The signal was clear: the Hunts’ silver binge had to be stopped.
Collapse: Margin Calls and the Fall of the Hunt Brothers
Abruptly denied the easy credit and leverage that had fueled their buying, the Hunts grew increasingly isolated. The demand side of the silver equation – which they had so wildly expanded – started to shrink. Then the unavoidable occurred: gravity took hold. Silver prices began slipping after reaching a peak near $50 an ounce in January. Initially, the drop was slow, but as soon as news got around that the party may end, other investors started scurrying for the exits. The Hunts attempted to prop up the price, but with no new buyers, their effort was akin to trying to stem the tide.
Silver Thursday: The Aftermath and Financial Ruin
In late March 1980, the bottom fell out. On Silver Thursday, with silver’s price plummeting, the Hunts were deluged with a barrage of margin calls – requests from their brokers for additional cash to secure the loans that had financed their trades. They could not pay. Within a period of one day, the Hunt fortune disintegrated. Approximately a $7 billion paper profit became a $1.7 billion loss. The price of silver, which the brothers had pushed to unprecedented levels, tumbled back to around $10 an ounce. Nelson Bunker Hunt tried to keep up an appearance of courage, even while he watched the gradual crumbling of his empire. “A billion dollars isn’t what it used to be,” he said with wry humor.
The Ripple Effect: Market Rescue and Legal Fallout
It was gallows humor: within a few months, the Hunts had moved from the wealthiest of the wealthy to quite possibly the biggest individual debtors in the world. The failure of the Hunts’ silver play rocked the financial system. For a time, it seemed their default could bring down others with it. Several Wall Street firms and banks that had lent the Hunts money were abruptly in danger of record-breaking losses. To avoid a chain reaction if the Hunts went completely bust, a group of banks quickly arranged an emergency rescue in the form of a $1.1 billion line of credit.
The Long Road Down: Bankruptcy and Lifetime Trading Ban
This lifeline was intended to keep the brothers solvent enough to prevent them from taking other financial participants down into bankruptcy with them. It was an unprecedented intervention – a private-sector rescue of two individuals whose own speculation had nearly destabilized markets. The bailout chased the wolves away for the time being, but it could only delay the day of reckoning, not avoid it. In the years that followed, the complete scale of the debacle became apparent. The brothers’ financial empire was in ruins. They spent most of the 1980s selling assets to pay their creditors. Bunker Hunt was forced to sell oil fields, a valuable coin collection, and even his cherished thoroughbred racing horses – some of which, in an irony not lost on observers, were named Extravagant, Goofed, and Overdrawn.
Final Reckoning: Lawsuits, Fines, and Lessons Learned
The formerly powerful Hunts, who had strolled through life as billionaires, were now humbled and short of cash. The legal fallout from their bold silver escapade soon closed in on them. In 1988, after years of investigations and civil suits, a federal jury concluded that Bunker and Herbert Hunt had indeed plotted to corner the silver market. As a result, the Hunts were directed to pay about $130 million in damages to settle claims by investors, including a Peruvian government-owned mining company ruined by the silver collapse. Both brothers sought personal bankruptcy protection that same year as debts and legal fees piled up. Finally, in 1989, the Hunts made an agreement with regulators. Each brother paid a $10 million fine and consented to a lifetime ban on commodity trading.
Legacy of the Hunt Brothers Silver Scandal
Their dazzling adventure in the silver market had finally reached its conclusion. The two men, who just a while back had been among the wealthiest people on earth, were now living far away from the halls of international finance. Bunker Hunt would later look back, with a hint of bitter modesty, that he was “just trying to get along on $10 million a month” after the collapse – a far cry from the heights he once experienced.
Despite their Texas swagger and great wealth, the Hunt brothers discovered a painful lesson: not even a fortune as vast as theirs could defy the fundamental laws of economics. Their daring bid to corner the silver market initially produced dazzling results, catapulting silver prices to record levels. But eventually, it created a bubble that burst with devastating force, wreaking havoc on the financial system in the process. The Hunts’ story is one of the most spectacular boom-and-bust stories of modern times. It’s a tale that investors and speculators continue to awe at today; how two men nearly cornered the moon, and then plummeted back to earth. It continues to be a warning to anyone foolish enough to think markets can be conquered through sheer will (or money) power alone – because as the Hunts discovered, what rises in a speculative boom will more or less certainly come crashing back down.
10 Responses
I was unfamiliar with this. Thanks for the history lesson.
How much did the Gov’t play in this downfall. If the Gov’t can change the rules, in the middle of the game, one would think this would always be used. TL
Strategy (MSTR) and the big Bitcoin miners are hoarding Bitcoin, and can be said to be well down the road toward the same disaster via their combined massive Bitcoin hoard, and many individuals, institutions and even some sovereigns will be badly hurt by the Bitcon Ponzi scheme where the cost to mine remains, since April of 2024, higher than the value of each coin, and the market is too thin for these whales to sell off meaningful tranches.
I do not see how it is self evident that free market forces brought down the Hunt brothers. After all, by this article’s own admission its was regulators and the COMEX, spurred on by Karens such as Tiffany & Co., who triggered calamity. Silver, as a junior version of real money, should not be considered wrong to hoard, anymore than it is inherently wrong to hoard dollars. Free market forces are able to bring on new supply in the face of rising prices, and this alone will be sufficient to moderate prices. Government socialist/regulatory intervention is never the God fearing, liberty-affirming or most efficient answer.
Gold and silver are still the real money.
Thank you for taking the time to share such a detailed and thoughtful comment. You’ve raised several important points that deserve a careful response, and I appreciate your passion for sound money principles and free markets.
On Bitcoin vs. Silver:
Your comparison between the Hunt Brothers’ silver corner and current Bitcoin accumulation strategies is intriguing, though I’d suggest there are some fundamental differences. The Hunt Brothers weren’t simply hoarding silver as a store of value—they were actively manipulating futures markets by demanding physical delivery on an unprecedented scale, deliberately removing supply to drive prices artificially higher. That’s quite different from companies or institutions accumulating Bitcoin as a treasury asset or investment strategy.
That said, your point about market liquidity is well taken. Any asset—whether silver, Bitcoin, or anything else—can become problematic when concentrated ownership meets thin markets. The real test comes when those large holders need or want to exit their positions.
On Free Markets vs. Regulation:
You make a fair point about regulatory intervention, and I understand the frustration with government overreach. However, I’d gently push back on the characterization that free market forces weren’t at play in the Hunts’ collapse.
Yes, COMEX implemented Silver Rule 7, and yes, Paul Volcker discouraged lending for precious metals speculation. But consider why those actions were taken: the Hunts had borrowed massively on margin—leverage provided by private brokers and banks who were themselves at risk of catastrophic losses. When the brothers couldn’t meet their margin calls, the entire financial system faced a potential domino effect.
The regulatory response was arguably a reaction to market forces already in motion. The Hunts’ position was fundamentally unsustainable because:
1. Supply response was happening: As you correctly note, rising prices bring new supply. Americans were melting down silverware, and new mining production was ramping up.
2. Demand destruction was occurring: At $50/ounce, industrial users were seeking alternatives, and consumer buyers were priced out.
3. Leverage creates fragility: The brothers’ empire was built on borrowed money. When prices stopped rising, margin calls became inevitable—that’s a market mechanism, not a regulatory one.
The intervention may have accelerated the timeline, but the collapse was already baked in. No amount of capital could indefinitely support a price divorced from underlying supply and demand fundamentals.
On Hoarding vs. Manipulation:
You’re absolutely right that hoarding silver—or gold, or dollars—isn’t inherently wrong. People have every right to accumulate wealth in the form they trust most. The problem with the Hunts wasn’t that they owned a lot of silver; it was how they acquired it and the systemic risk their leveraged position created for others.
If they had simply bought and held silver with their own capital, paying in full, there would have been no margin calls, no emergency bailouts, and likely no regulatory intervention. The issue was the leverage and the deliberate market manipulation through futures contracts.
On Gold and Silver as Real Money:
On this point, we’re in complete agreement. Gold and silver have served as money for thousands of years, and they continue to offer a tangible store of value that paper currencies cannot match. That’s precisely why we’ve been in this business for over 50 years—helping Americans protect their wealth with precious metals.
The difference between sound investment in precious metals and what the Hunts attempted is the difference between building wealth and gambling with it. At CMI, we’ve always advocated for precious metals as a prudent part of a diversified portfolio, not as a vehicle for speculation or market manipulation.
Final Thoughts:
I share your conviction that free markets, when allowed to function properly, are remarkably efficient at discovering true prices and allocating resources. I also share your belief that gold and silver remain the most reliable forms of real money in an uncertain world.
Where we might differ is in recognizing that markets can be distorted by concentrated leverage and manipulation—and that sometimes, intervention becomes necessary to prevent systemic collapse that would harm innocent parties who weren’t part of the speculation.
The Hunt Brothers’ story isn’t a cautionary tale about owning precious metals—it’s a cautionary tale about the dangers of excessive leverage and attempting to corner markets. There’s a world of difference between the two.
Thank you again for engaging so thoughtfully with this piece of history. These are exactly the kinds of conversations that help all of us think more clearly about money, markets, and the proper role of precious metals in our financial lives.
If you’d like to discuss this further, I’d welcome the conversation. Give us a call at 800-528-1380.
Respectfully,
Johnny Estes
That’s an excellent question, and you’re right to be concerned about government intervention and rule changes. It’s a legitimate worry that deserves a thoughtful answer.
The Government’s Role:
The government did play a significant role in the Hunts’ downfall, primarily through two actions:
1. COMEX’s Silver Rule 7 (January 1980) – which restricted speculative purchases and essentially banned new margin buying of silver
2. Federal Reserve Chairman Paul Volcker’s “guidance” – quietly encouraging banks to stop lending for precious metals speculation
So yes, the rules changed mid-game, and that absolutely accelerated the collapse. Your concern about this precedent is well-founded.
But Here’s the Context:
The situation in 1979-1980 wasn’t normal market activity—it was an unprecedented attempt to corner a global commodity market. The Hunt Brothers and their associates controlled roughly one-third of the world’s tradable silver supply. They were using massive leverage (borrowed money) to continue buying, which created systemic risk far beyond their own positions.
When someone’s speculation threatens the stability of the entire financial system—potentially taking down banks, brokerages, and innocent investors who had nothing to do with the scheme—regulators face a difficult choice: intervene or risk a broader collapse.
The “Changing Rules” Concern:
Your point about rule changes being used again is valid, and history shows it has happened in other situations:
1933: FDR’s Executive Order 6102 confiscated private gold holdings
1971: Nixon closed the gold window, ending dollar convertibility to gold
2008: Various emergency measures during the financial crisis, including short-selling bans
2021: Trading restrictions on GameStop and other “meme stocks” by certain brokerages
So yes, when markets get extreme or systemic risk appears, authorities do change rules. Whether that’s justified depends on your perspective and the specific circumstances.
The Free Market Counterargument:
Many would argue (and I have sympathy for this view) that the Hunts’ position would have collapsed on its own without intervention. Here’s why:
1. Margin calls were inevitable – The brothers were massively leveraged. When prices stopped rising, their brokers would have demanded more collateral regardless of regulatory action.
2. Supply was responding – Americans were melting down silverware, new mining production was coming online, and industrial users were seeking alternatives. That’s the free market working.
3. They ran out of capital – Even with their billions, the Hunts couldn’t sustain buying against the entire world’s silver production indefinitely.
The intervention may have sped up the timeline, but the mathematics of their position were unsustainable.
The Real Lesson:
The uncomfortable truth is that we live in a world where regulators can and do change rules when they perceive systemic risk. Whether that’s right or wrong, it’s reality.
For precious metals investors today, the lesson isn’t “don’t own silver” or “don’t own gold.” The lesson is:
1. Own physical metal outright – not on margin, not through leveraged positions
2. Take delivery and store it securely – so rule changes in futures markets don’t affect you
3. Don’t try to corner markets – accumulate for wealth preservation, not speculation
4. Diversify – don’t put everything into one asset, no matter how much you believe in it
Why This Matters for CMI Customers:
At CMI, we’ve always advocated for physical ownership of precious metals as a wealth preservation strategy—not speculation, not leverage, not futures contracts. When you buy gold or silver from us and take delivery, you own it outright. No margin calls. No counterparty risk. No regulator can change rules that affect your physical holdings.
That’s the difference between what the Hunts were doing (highly leveraged futures speculation attempting to manipulate markets) and what we encourage (straightforward ownership of physical precious metals).
Final Thought:
You’re right to be skeptical of government intervention in markets. It sets uncomfortable precedents and raises questions about property rights and free markets. The best defense is to structure your precious metals holdings in a way that insulates you from those interventions—which means physical ownership, no leverage, and a long-term wealth preservation mindset rather than speculation.
The Hunts’ story is a cautionary tale not about owning precious metals, but about the dangers of leverage and market manipulation. Own metals the right way, and rule changes in futures markets won’t touch you.
Thanks for the thoughtful question. If you’d like to discuss this further or talk about how to structure precious metals holdings for maximum security, give us a call at 800-528-1380.
Best regards,
Johnny Estes
Newsflash…JP Morgan now holds MORE than the Hunt Brothers had. Yes, more than 200 million ounces. Interesting enough they also hold the world’s largest short position on silver futures. Can they possibly lose? If they lose 20 billion on paper as the price rises they’ll stand to make 2-300 billion on the physical metal!
Ernie, thank you for bringing this up! You’re touching on one of the most fascinating—and controversial—topics in the precious metals world, and you’re absolutely right that JPMorgan’s position deserves scrutiny.
While I work in the market I am going to attempt to respond with as much acuracy and facts as possible. Please keep in mind this is my perspective from the reseach that I do and am open to any and all valid points, so here goes!
The Facts as We Know Them:
You’re correct that JPMorgan has accumulated a massive physical silver position over the past decade or so. Various analysts and industry observers estimate they hold somewhere between 150-300 million ounces of physical silver—potentially more than the Hunt Brothers ever controlled. At the same time, JPMorgan has historically been one of the largest short sellers in the silver futures market.
On the surface, this looks like the perfect hedge: if silver prices fall, they profit on their shorts; if prices rise, they profit on their physical holdings. As you point out, it seems like a “can’t lose” position.
But Here Are Some Key Differences from the Hunt Brothers:
1. Legitimacy and Transparency
JPMorgan is a regulated financial institution operating (presumably) within legal boundaries, with positions disclosed to regulators. The Hunt Brothers were private individuals secretly accumulating silver through shell companies and partnerships, deliberately hiding the scale of their operation. That doesn’t make JPMorgan’s position less concerning to some observers, but it’s a different animal legally and structurally.
2. The Nature of the Short Position
This is crucial: JPMorgan’s short positions in the futures market are likely hedges rather than naked speculation. When you’re a major bullion bank providing liquidity to the market, you often take short positions to offset physical inventory or client obligations.
Think of it this way: if a mining company wants to lock in a price for silver they’ll produce next year, someone has to take the other side of that contract. Banks like JPMorgan provide that service. Their shorts may simply be the flip side of legitimate business operations.
The Hunt Brothers, by contrast, were taking massive long positions on leverage, demanding physical delivery, and deliberately trying to squeeze the market. Very different strategies.
3. Leverage vs. Capital
The Hunts were massively leveraged—they borrowed billions to buy silver they couldn’t actually afford. When prices turned against them, margin calls destroyed them.
JPMorgan, as far as we know, owns their physical silver outright and has the capital base to weather price swings. They’re not facing margin calls that could force liquidation. That’s a fundamentally more stable position.
4. Market Impact Intent
The Hunt Brothers were explicitly trying to corner the market and drive prices higher for their own gain, with little regard for the systemic consequences.
JPMorgan’s accumulation, while massive, appears to have been done more gradually and (arguably) as part of their broader precious metals banking operations. Whether they’re positioning for a major price move or simply acting as a market maker is a matter of debate.
The Uncomfortable Questions:
That said, you’re raising legitimate concerns that many in the precious metals community share:
1. Is this market manipulation? Some analysts argue that JPMorgan’s dual position (long physical, short paper) allows them to suppress paper prices while accumulating physical metal at artificially low prices. Multiple investigations and lawsuits have alleged precious metals price manipulation by major banks.
2. What happens when they unwind? If JPMorgan ever decided to close their short positions and let their physical position run, it could trigger a massive price spike. That’s a lot of market power in one institution’s hands.
3. Is this the same game, different players? Your point is well taken—if what the Hunt Brothers did was wrong, why is a bank holding even more metal considered acceptable? That’s a fair question that deserves serious consideration.
The Regulatory Reality:
Here’s the uncomfortable truth: the rules are different for major financial institutions than they were for the Hunt Brothers. Whether that’s right or wrong is a matter of perspective, but it’s reality.
After the Hunt Brothers debacle, position limits and reporting requirements were supposed to prevent future corners. Yet here we are with a single institution potentially holding more silver than the Hunts ever did. That raises questions about whether regulations actually prevent concentration or just determine who is allowed to concentrate.
What This Means for Silver Investors:
Despite—or perhaps because of—JPMorgan’s massive position, the fundamentals of silver remain worth watching. Here’s what we’re actually seeing:
1. Central bank buying has increased significantly – This is the primary driver of increased physical demand, largely motivated by geopolitical concerns and diversification away from dollar-denominated assets.
2. Industrial demand remains relatively stable – While silver’s industrial applications continue (electronics, solar panels, etc.), we’re not seeing dramatic year-over-year increases in industrial consumption.
3. Recycling adds meaningful supply – Silver recycling contributes an estimated 25% or more to total supply, which helps balance the market alongside mining production.
4. If a major bank is accumulating this much physical metal, it’s likely a response to geopolitical uncertainty and monetary policy concerns rather than expectations of physical scarcity.
The Bottom Line:
You’ve identified a real issue, Ernie. JPMorgan’s position is unprecedented and does raise questions about market concentration and potential manipulation. Whether it’s the “same disaster” waiting to happen as the Hunt Brothers is debatable—the structure is different, the leverage situation is different, and the regulatory environment is different.
But your core point stands: massive concentration of any commodity in a few hands creates risk and raises questions about market fairness.
For individual investors, the lesson remains the same: own physical metal outright, take delivery, and hold for the long term. Whether JPMorgan’s position eventually blows up, gets unwound gradually, or proves to be a brilliant strategic play, physical silver in your possession retains its intrinsic value as a monetary metal and store of wealth.
The Hunt Brothers tried to corner silver and failed spectacularly. If JPMorgan is attempting something similar (and that’s a big “if”), time will tell whether they’ve found a way to do what the Hunts couldn’t—or whether they’re setting up for an even bigger disaster.
The fundamentals—geopolitical uncertainty, monetary policy shifts, and central bank behavior—support precious metals ownership as part of a diversified wealth preservation strategy. That case stands on its own merits without needing to manufacture scarcity narratives.
Owning physical precious metals isn’t about panic or speculation—it’s about the calm confidence that comes from holding real, tangible wealth that has stood the test of time. It’s a steady hand in uncertain times, not a frantic bet on the next big move.
Thanks for the thought-provoking comment. This is exactly the kind of discussion that helps all of us think more clearly about these markets.
Best regards,
Johnny Estes
I really appreciate the insightful response. While several banks did pay penalties for the fixing of prices (Deutsche Bank et al..) I don’t believe J.P. Morgan was involved. To a small investor, (me) it just had an ominous feel that one player can play both sides. Fair point that they need to hedge but have we every seen the enormity of a hedge position while holding an ungodly & unprecedented amount of a commodity?
The Hunt Bros. story is a bit more nuanced than presented here. Jeffrey Christian of the CPM Group maintains “If it had only been the Hunt’s silver purchases and antics (which have been grossly misrepresented by others in the silver market), only silver would have risen. The fact that silver was one small market in the midst of a broad upward movement across commodities, along with the dollar rising as investors turned to it as a safe haven, suggests that the Hunts were only participants in the upward move in silver, which they had anticipated and which they clearly helped.” Quoted by Mike Maloney in https://goldsilver.com/industry-news/article/the-3-flaws-why-the-hunt-bros-were-not-the-primary-reason-for-silvers-1970s-spike/
Regarding the contention that “The Hunts and their investors, … had accumulated about 200 million ounces of silver by 1979, representing about one-third of the world’s total supply of tradable silver”, according to the 2018 Silver Yearbook from CPM Group, there was roughly 2.8 billion ounces of above-ground investable silver in 1980. So the Hunts controlled about 8.9% of investable silver at their peak. (Maloney, op. cit.) Not inconsequential, but not so dramatic either.
I love CMI’s emphasis on education, I have used your resources and recommended CMI to my “newbies” (I’ve been stacking for 15 years now!). In today’s hot market conditions, comparisons to 1980 and 2011 are natural, but it really is different this time. Thank you for being more than just another dealer
John, thank you so much for this thoughtful and well-researched comment! I read your response last night and wanted to respond right away, but your comments led me down a rabbit hole and I wanted to make sure that my response is accurate this time! You’re absolutely right to call out the nuances in the Hunt Brothers story, and I really appreciate you bringing Jeffrey Christian’s perspective (I really like his research and approach to the truth) and the CPM Group data to the conversation. This is exactly the kind of informed discussion that helps us all understand these markets better.
You’re Right About the Numbers:
We should have been more precise in the article. You’re correct that according to CPM Group’s 2018 Silver Yearbook, there was roughly 2.8 billion ounces of above-ground investable silver in 1980, which means the Hunts controlled about 8.9% of investable silver—not one-third of the world’s supply as is often reported (while I cannot find it quickly, I believe that Jeffery recently did a video on this). That’s an important distinction, and I appreciate you setting the record straight with actual data.
The “one-third” figure that gets repeated in many accounts appears to refer to a much narrower definition of “tradable” silver at that specific moment, but your point stands: the Hunts’ holdings, while massive, weren’t quite the market-cornering position that popular narratives suggest.
Jeffrey Christian’s Perspective Is Valid:
Jeff Christian’s quote that you shared is spot-on, and it aligns with what we know from CPM Group’s analysis. The late 1970s saw:
• Oil prices quadrupling
• Gold rising from $190 to $850
• Copper tripling
• Inflation hitting 14%
• The Iranian hostage crisis
• The Soviet invasion of Afghanistan
• Interest rate deregulation
Silver was clearly rising in a broader commodity bull market driven by extreme global economic uncertainty. If the Hunts were the sole cause, we wouldn’t have seen gold, platinum, palladium, and oil all peaking at virtually the same time. The correlation coefficient between gold and silver during this period was 99.2%—they moved in lockstep.
So yes, the Hunts were participants in the move, and they certainly amplified it, but they weren’t the sole cause. That’s a fair and important clarification.
Where I Think the Real Lesson Lies:
Here’s where I want to refocus, though, because I think this is the critical takeaway for investors today:
The Hunts’ fatal mistake wasn’t buying silver—it was how they financed it.
They borrowed billions on margin to accumulate their position. When silver peaked and began to decline, they faced cascading margin calls they couldn’t meet. Even with their enormous wealth, the leverage destroyed them. They went from paper billionaires to owing $1.7 billion practically overnight.
Now, Federal Reserve Chairman Paul Volcker did quietly encourage banks to stop lending money for precious metals speculation, which cut off the Hunts’ access to credit. And yes, COMEX implemented Silver Rule 7, restricting margin purchases. But here’s the critical point: the Hunts’ strategy was unsustainable regardless of regulatory intervention.
You can’t borrow indefinitely to prop up an asset price. Eventually, the mathematics catch up with you. The Hunts were essentially trying to create value out of thin air through leverage—borrowing more and more to keep buying, hoping the price would keep rising to justify more borrowing. It’s a perpetual motion machine that defies economic reality.
Sound familiar? It’s the same fundamental problem we see when governments continuously expand their balance sheets—creating currency out of thin air (though, we don’t actually “print” most of it anymore; it’s digital ledger entries). The practice works until confidence breaks, and then it unravels quickly.
The Hunts were running their own version of monetary expansion, except instead of a “printing press”, they had margin accounts. The Fed’s intervention may have accelerated the timeline, but the collapse was baked in from the moment they chose leverage over capital.
If the Hunt Brothers had bought and held 200 million ounces of physical silver with their own capital—no leverage, no margin, no futures manipulation—they would have:
1. Weathered the price decline
2. Not faced margin calls
3. Not been vulnerable when credit dried up
4. Not threatened the financial system
5. Not triggered regulatory intervention
6. Likely still been wealthy when silver eventually recovered
The broader market forces you and Jeff Christian correctly identify were absolutely in play. But the Hunts’ use of massive leverage—trying to sustain the unsustainable through continuous borrowing—turned what could have been a prudent (if large) investment into a systemic risk that was destined to collapse.
Why This Matters for Today’s Investors:
Your point about “it really is different this time” is well taken. The current environment has its own unique drivers:
• Central bank buying (the primary driver of increased precious metals demand)
• Geopolitical tensions and monetary policy uncertainty
• De-dollarization trends among some nations
• Stable industrial demand with meaningful recycling supply
These are fundamentally different dynamics than 1980 or even 2011. And we shouldn’t use fear-based comparisons to scare people into buying.
The Timeless Lesson:
But here’s what isn’t different: you can’t create sustainable value through leverage alone, whether you’re individual investors or governments.
Whether it’s 1980, 2011, or 2025, the principle remains: own physical precious metals outright, with your own capital, as a long-term wealth preservation strategy. Don’t speculate on margin. Don’t try to corner markets. Don’t borrow to amplify your position. And don’t build a strategy that depends on the ability to continuously borrow more—because that strategy always ends the same way, with or without regulatory intervention.
The Hunt Brothers story—when we look at it with the nuance you’ve brought to this discussion—teaches us that even in a legitimate commodity bull market driven by real macroeconomic forces, trying to sustain a position through continuous borrowing is a mathematical impossibility that eventually collapses under its own weight.
Bringing it all together:
• Mike Maloney and Jeff Christian are right: The Hunts were participants in a much broader commodity bull market, not the sole cause of silver’s rise.
• The popular narrative is wrong: The Hunts didn’t control one-third of global supply; they controlled about 8.9% of investable silver.
• But the leverage lesson is still critical: Their use of massive margin debt—borrowing continuously to sustain their position—was mathematically unsustainable and would have collapsed regardless of regulatory intervention
The Fed and COMEX just accelerated the inevitable.
Both things can be true: the Hunts weren’t the primary cause of silver’s rise, and their leveraged approach was destined to fail because you cannot indefinitely borrow to prop up prices.
Thank You for the Kind Words:
I’m genuinely grateful for your comment and for your 15 years of experience in this market. Thoughtful, data-driven investors like you are exactly who we want in our community. Your willingness to engage with the details and hold us accountable to accuracy is what makes these discussions valuable.
You’re right that comparisons to 1980 are natural in today’s hot market, but we need to make those comparisons with precision and nuance—not sensationalism. Thank you for helping us do that.
If you ever want to discuss the current market dynamics or CPM Group’s latest analysis, I’d welcome the conversation. Give us a call at 800-528-1380.
Best regards,
Johnny Estes
P.S. – I’m glad our educational resources have been helpful to you and the folks you’ve recommended to us. That means the world to us.