July 14, 2026

Two Billionaires Cornered a Third of the World's Silver, Drove It to $50, and Got Buried by Their Own Price

They drove silver from $6 to $50 an ounce by hoarding bullion in Swiss vaults and taking delivery on every futures contract that expired. The higher the price climbed, the more silver came out of dresser drawers and jewelry boxes to bury them.

Nelson Bunker Hunt and William Herbert Hunt were the sons of H.L. Hunt, a Texas oil wildcatter who died in 1974 as one of the richest men alive. They inherited his billions, his distrust of paper money, and his taste for enormous bets. When Libya nationalized Bunker's oil fields in 1973, he looked for a harder asset. He and Herbert started buying silver at around $3 an ounce, took delivery of the actual metal, and flew it to Swiss vaults.

They had form for this. In 1977 the same brothers quietly amassed futures on a third of the U.S. soybean harvest; the Commodity Futures Trading Commission ordered them to sell and fined the family $500,000. So when the Hunts returned to silver in the fall of 1979, they did it the same way: they bought futures, and when the contracts expired they took the metal rather than the cash. Taking delivery pulls physical silver out of circulation, which is the whole point of a corner. Own enough of the stuff and the traders who owe it to you have to come to you to buy it back.

By the end of 1979 the Hunts and their partners held about 195 million ounces of silver, on the order of a third of the world's supply outside government vaults, a hoard the SEC compared in size to more than half of all the silver reported held in the United States. The position was leveraged to the hilt: about $1.1 billion of their own equity margined holdings with an apparent value of roughly $6.6 billion, and at year-end a $30,000 deposit controlled a contract worth more than $170,000. Silver ran from about $6 an ounce in early 1979 to a record $49.45 on the London Fix on January 18, 1980, with COMEX futures touching $50.35 intraday. Exact peak figures vary a few cents by source, but the order of magnitude is clear. Every dollar move made the brothers roughly $100 million on paper.

Then the price did what the price always does in a commodity corner. It called forth supply. As silver rose, metal poured in from everywhere, jewelry boxes, pawn shops, tea sets, coin collections, and, one account noted, a rash of burglaries. Photographic-film makers like Kodak watched input costs soar, and the British firm Ilford laid off workers. Tiffany & Co. took out a full-page ad in The New York Times calling it "unconscionable for anyone to hoard several billion, yes billion, dollars' worth of silver." The mechanic of a corner is that the shorts must either deliver the scarce metal or pay you to go away. The fatal flaw is that an artificially high price makes delivery look very attractive to anyone with a teapot.

As the University of Houston's Craig Pirrong later put it, "the main factor that has caused corners to fail throughout history is that the manipulator has underestimated how much will be delivered to him if he succeeds at raising the price to artificial levels." Eventually, the Hunts ran out of money to pay for all the silver that was thrown at them.

The exchanges finished the job. On January 7, 1980, COMEX adopted "Silver Rule 7," restricting margin buying and capping how much silver any one trader could control. Two weeks later the Chicago Board of Trade suspended all new silver futures, allowing traders only to close out old contracts. The one source of fresh demand, new buyers, was gone. Silver slid through February and March. The Hunts borrowed more, and their brokers began accepting silver in place of cash to cover margin calls.

On March 25, 1980, the Hunts told their main broker, Bache, that they had no more cash or silver to deposit. On "Silver Thursday," March 27, the brokers liquidated. Over the two weeks ending that day, spot silver had fallen from about $29.75 to $10.80 an ounce, roughly 80 percent off the January peak. The Hunts defaulted on a $432 million payment to Engelhard and owed about $1.75 billion in all. Bache alone was absorbing roughly $22.5 million a day in clearing charges it could not recover. Officials feared that if the Hunts' lenders went down, big Wall Street firms and banks could go with them. A consortium of banks, with Federal Reserve Chairman Paul Volcker's quiet approval, assembled a roughly $1.1 billion rescue loan so the position could unwind in an orderly sale instead of a panic.

The brothers lost more than a billion dollars, and the reckoning ran on for years. In August 1988 a federal jury in Manhattan found the Hunts liable for conspiring to corner the silver market and ordered them to pay more than $130 million to Minpeco, Peru's state minerals firm. Nelson Bunker and William Herbert filed for personal bankruptcy the next month. In 1989 the CFTC fined each $10 million and banned them for life from U.S. commodity markets. By 1982 the London Silver Fix had collapsed 90 percent to $4.90. Bunker Hunt died in 2014 still denying he had ever cornered anything.

The steal: a stock corner faces a fixed share count, but a commodity corner fights the whole economy's willingness to dig the stuff out of a drawer and melt it. The higher you push the price, the more supply you manufacture (scrap, stolen teapots, recycled coin) and the more demand you destroy (Kodak, Ilford, every jeweler priced out). The binding constraint was never buying enough silver to corner the market. It was having enough money to absorb the silver your own price called forth. Before you squeeze anything, ask whether your price will mint the supply that buries you.