The Real Hunt Brothers Silver Story

You may have read about the Hunt Brothers and how they supposedly cornered the silver market in the 1970’s. Thus causing the silver price to rise astronomically.  

We’ve read a fair bit about this episode in the past. The below video does a pretty good job of presenting a different take on the mainstream version of what took place.

 

The Other Side of the Story: The Hunt Brothers Were Simply Hedging Against Coming Inflation

The video presents the other side of the story.  That the Hunt Brothers were really just worried about the state of the USA, the US dollar, and inflation arriving. So they were simply buying more and more silver as a hedge against this.

Rather than the mainstream version that the brothers were simply cornering the market to make an outsized profit.

The videos shows the lengths that those in control went to in order maintain the semblance of order in the markets.

There are a number of articles you could read on the topic. But these two videos totalling just over 20 mins give a good run down of much of what is written elsewhere.  The videos content is taken from the likes of  Larry LaBorde and his H.L. Hunt’s Boys and the Circle K Cowboys article. Along with Stephen Fay’s Beyond Greed and Jeffery Williams’ Manipulation on Trial.  It’s 20 minutes well spent.

 

Why the 1970’s Silver Price Spike Was Not Simply Down to the Hunt Brothers

A common argument made is that the rise and spike in the silver price during the 1970’s was simply down to the Hunt Brothers “cornering the market”. That is controlling so much silver (physical and futures) that they could manipulate the price higher.

However some numbers demonstrate this likely to not be the case. At their peak the Hunt Brothers:

“…controlled about 250 million ounces of silver – 100 million in physical and 150 million in futures contracts. That’s a lot, and most reports conclude this is why silver skyrocketed in the 1970s.

How much of the silver market did they control? Several reports estimate the Hunt’s stash equaled 20% of silver supply. One account claimed it was one-third of global supply. Really?

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.

That figure, however, excludes rare coins and all silver used in jewelry, silverware, decorative items, etc. – throw all that in and we’re probably looking at something like 12 billion ounces of total above ground stock. If that figure is correct, then the Hunts controlled about 2% of total world supply at the time.

In either case it’s still a lot, to be sure, but it hardly matches how most mainstream articles portray the extent of their holdings.”

Source.

Until 1975 it was illegal for US citizens to purchase physical gold. So instead the Hunts bought silver as a viable alternative to protect them against inflation and a falling US dollar.

Jeff Christian, managing partner of CPM Group was working in the metals industry at the time. He notes:

“The Hunts’ purchases of silver clearly helped push the silver price up in 1979 into early 1980. However, at that time oil prices quadrupled, gold went from $190 to $850, copper tripled, other commodities prices rose sharply, inflation hit 14%, interest rates were deregulated and allowed to float, US hostages were in Iran, the Soviet Union invaded Afghanistan, Iranian and Soviet assets were frozen in the United States, among other things. Many other factors were driving silver prices higher. 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.”

So in short the silver price was just going up like everything else was in the 1970’s.

What Today’s Precious Metals Buyer Can Learn From the Hunt’s Mistakes

The author of the video also finishes up by looking at what a precious metals buyer today can learn from the Hunts mistakes in the 70’s such as:

• Taking physical possession
• The problems with using leverage
• And finally, how the fundamentals are different (even stronger) today than in the 1970’s

If you’re wanting to own a hedge against uncertainty and global risks yourself, then check out our range of physical silver available.

Related: What Percentage of Gold and Silver Should Be in My Portfolio?

 

Video 1: The Real Hunt Brothers Silver Story

Source: http://www.youtube.com/watch?v=swrrAQBsEE0

 

Video 2: What Todays Silver Buyer Can Learn From the Hunt Brothers

Source: http://www.youtube.com/watch?v=aoBgXW2SGWk

 

Editors Note: This post and video was originally published 28 February 2012. Updated 22 February 2019 to include data on the size of the Hunt Brothers silver hoard and reasons for silver rising in the 1970’s.