The banker who tried to buy the world—and almost did

The Biggest Bet in Commodities History

In 1973, Nelson Bunker Hunt and William Herbert Hunt—sons of oil billionaire H.L. Hunt—began accumulating physical silver on a scale the world had never seen. By 1980, the brothers controlled between 100 and 200 million ounces of the metal, roughly half the world's deliverable supply. Silver prices skyrocketed from $6 per ounce in January 1979 to an all-time peak of $50.42 on January 18, 1980. The brothers financed their purchases through elaborate leveraging schemes involving Swiss banks, Middle Eastern investors, and commodity exchanges in New York, Chicago, and London.

They stored millions of ounces in vaults across three continents, forcing industrial users who needed silver for photography, electronics, and jewelry manufacturing to pay ransom prices or shut down production lines. Eastman Kodak, then heavily dependent on silver for film production, watched its raw material costs spiral out of control. Tiffany & Co. took out a full-page newspaper advertisement condemning the Hunts for their "unconscionable" manipulation. The brothers' stated goal was to protect wealth against inflation, but regulators suspected an old-fashioned corner—monopolizing supply to dictate price.

How the Corner Actually Worked

The Hunts exploited a fundamental quirk of commodities markets: buyers could control vast quantities of physical goods by posting margin deposits of just 10-20% of the contract value. They purchased futures contracts on the COMEX exchange, then demanded physical delivery instead of settling in cash—a legal but rarely used tactic that drained silver from exchange warehouses. By standing for delivery, they converted paper contracts into metal bars locked in Swiss vaults under the name of offshore companies like International Metals Investment Company and Bache Precious Metals.

As available supply dwindled, short sellers who had bet against silver faced a nightmare: they had promised to deliver metal that no longer existed on the market. The squeeze forced them to buy back contracts at any price, driving silver even higher. The brothers borrowed billions using their silver as collateral, then used that borrowed money to buy more silver, creating a self-reinforcing loop that made them worth an estimated $10 billion at the peak. Their partnership with Saudi Arabian investors Naji Nahas and Mohammad Aboud Fustok added another layer of capital, with the group reportedly controlling contracts for over 300 million ounces when positions on both COMEX and the Chicago Board of Trade were combined.

The Margin Call That Broke the Hunts

On March 27, 1980—a day traders still call Silver Thursday—the entire scheme collapsed in hours. Worried regulators had quietly changed margin requirements in January, forcing speculators to post more cash upfront to control the same amount of silver. The rule change was nicknamed the "Silver Rule 7," and it specifically targeted positions above 3 million ounces. The CBOT went further, implementing "liquidation only" trading that prohibited new long positions entirely. These emergency measures stopped the Hunts' buying spree cold, and silver prices began falling.

By late March, silver had crashed to $10.80 per ounce, triggering massive margin calls the brothers couldn't meet. On Silver Thursday, they owed Bache Group alone $100 million by day's end. The Hunt brothers defaulted on their obligations, and their broker—faced with potential bankruptcy—frantically liquidated their positions, accelerating silver's collapse. Panic spread through financial markets as investors feared a cascade of bank failures. The Federal Reserve orchestrated an emergency $1.1 billion bailout through a consortium of banks led by Paul Volcker, preventing a wider systemic meltdown that could have rivaled the 2008 financial crisis.

Aftermath and the Legacy of Silver Thursday

The Hunt brothers faced criminal and civil charges, though they avoided prison time. In 1988, a jury found them guilty of conspiring to manipulate the market, resulting in a fine and prohibition from trading commodities. They declared bankruptcy that same year, with Nelson Bunker Hunt's personal fortune evaporating from billions to virtually nothing. William Herbert Hunt also filed for bankruptcy protection, marking one of the most spectacular wealth destructions in American history.

The silver manipulation prompted sweeping regulatory reforms. The Commodity Futures Trading Commission gained broader authority to impose position limits and emergency trading halts. Exchanges implemented stricter surveillance systems to detect concentration of positions before corners could develop. Today, position limits remain controversial—some argue they prevent legitimate hedging, while others insist they're essential safeguards against market abuse. The Hunt debacle is still studied in business schools as a cautionary tale about leverage, regulatory arbitrage, and the dangers of mistaking a bull market for genius. Adjusted for inflation, silver's 1980 peak of $50.42 would equal approximately $185 in 2024 dollars—a level the metal has never approached again, remaining a monument to history's most audacious commodity corner.