The 45th Anniversary of 'Silver Thursday'
And why this Monday, March 31 is #SilverSqueeze Day!
Hello again SkepsisNation, and welcome to another installment of Cheap Thoughts, grumpy sofa-based scribbles from a 19th Century Refugee, noticer and analyst.
I’m glad you still find My 2¢ helpful.
So what exactly is Silver Thursday? Establishment mouthpiece wikipedia says:
Silver Thursday was an event that occurred in the United States silver commodity markets on Thursday, March 27, 1980, following the attempt by brothers Nelson Bunker Hunt, William Herbert Hunt and Lamar Hunt (collectively known as the Hunt Brothers) to corner the silver market.
…which just happens to be 45 years ago TODAY. But if Lamestream Media commemorates this event at all it will be, to quote John Cougar…
“When I fight authority, authority always wins”
…which is always true when ‘authority’ can change the rules during the game.
And just WHO WERE the Hunt Bros? From an article posted by the Scottsdale Mint:
The Hunt fortune is said to have begun with Haroldson Lafayette Hunt – born into a struggling family, he was neither educated nor did he have the means to do so. At the age of 22, he found success as a businessman, buying and selling cotton and cotton plantations. His focus soon shifted towards bigger and faster money: oil. Haroldson struck BIG in Texas, amassing billions, and with his passing [his sons] ran the bulk of the family business – Bunker, Herbert and Lamar Hunt.
Now we have the WHAT and the WHO of Silver Thursday. But whereas the establishment mouthpieces accuse the Hunt Bros of trying “to corner the silver market,” that’s not the whole story. And anyway, why would they do such a thing?
For a sympathetic retelling of the story, we turn next to Jon Matonis, from an article published on his blog, which begins:
If you want to know what happens when multiple long [futures] positions demand physical delivery of a commodity all at once, you need look no further than the Hunt Brothers’ silver saga of 1979-1980:
— They did nothing illegal;
— The Chicago Board of Trade (CBOT) and [New York] COMEX changed the rules in the middle of the game;
— The U.S. Commodity Futures Trading Commission (CFTC) implemented new regulations;
— And the Hunts were bankrupted, unjustly.
All they really did was simply request the delivery of the physical metal for which they held valid, legal [futures] contracts. The shorts were unable to meet the delivery — at any price — because enough deliverable silver did not exist.
A classic “short squeeze” — and the panic was on. This is their story…
OK…terminology time. Commodities, including silver, are traded on different exchanges than stocks and bonds, e.g. CBOT and COMEX, called futures exchanges. The contracts are bets on whether the price of the commodity in question will go up or down during a specific time period. If a gambler (let’s face it) thinks the price will go up, he buys a LONG contract; conversely, a SHORT contract is a bet on a price decline.
Since these are merely bets on price direction, the gamblers who win get paid in $USD, rarely demanding payment in the actual underlying commodity (in this case, silver).
But they CAN take delivery of the underlying, if they want to. And the exchange must then deliver the commodity in the amount (grams, tonnes, gallons etc.) of the contract…unless the exchange cannot produce the amount of the underlying commodity necessary to fulfill the contract; which would mean the exchange is in DEFAULT; which can only be caused by FRAUD; which is supposed to be prevented by government oversight (in this case, the US CFTC).
The essence of this particular fraud, called a “short squeeze,” is that the amount of the commodity in the exchanges’ vaults (or available for immediate purchase) is insufficient to fulfill the long contracts on the due date. This can only happen under the negligent watch of the regulatory body.
The Hunt Bros exposed the collaboration of Wall St. and D.C. in an ongoing fraud — in this case, selling silver they don’t have. And THAT’S HAPPENING AGAIN, RIGHT NOW (see below).
More from Matonis:
Beginning in 1973 and continuing into 1974, [the Hunt Bros] slowly began purchasing silver futures contracts totaling 55 million oz, and then took physical delivery of all the contracts. Since Bunker was concerned with impending inflation — and the potential confiscation of precious metals — following Nixon's closing of the gold window…
Tangent:
That last bit refers to the infamous Nixon Shock — August 15, 1971 — the date that the U.S. government ended — “temporarily” — the redemption of offshore $USD in gold at $35 per ounce, as per the Bretton Woods Agreement.
Nixon said, “I have directed Secretary Connally [who had previously rode shotgun in the open limo with JFK!] to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability, and in the best interests of the United States.”
Shills will never admit that this was the THIRD default of the U.S. Treasury:
1. DEFAULT on US domestic gold convertibility: Executive Order 6102 was an executive order signed on April 5, 1933, by US President Franklin D. Roosevelt, "forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States."
2. DEFAULT on US domestic silver convertibility: Treasury Halts Sale Of Its Silver Dollars - from the New York Times, March 26, 1964 - WASHINGTON, March 25 (UPI) “The run on silver dollars ended today. Secretary of the Treasury Douglas Dillon announced this afternoon that the Treasury would no longer exchange silver dollars for dollar bills. From now on, silver certificates will be redeemed in silver bullion only.”
3. DEFAULT on international gold convertibility: the aforementioned Nixon Shock
As Matonis states above: “Since Bunker was concerned with impending inflation — and the potential confiscation of precious metals — following Nixon's closing of the gold window...”
…this means that the Hunt Bros understood that the Nixon Shock meant an accelerated devaluation of the $USD, which would cause massive consumer price inflation (they were correct!):
…and that if FDR could confiscate citizens’ gold in 1933, physical silver coins and bullion could also be seized in the 1970s.
The US torpedoing of the Bretton Woods Agreement meant that for the first time in modern history, the world’s reserve currency ($USD) was not redeemable for an underlying asset, and ‘backed’ merely by the “full faith and credit” of the US government (read: US taxpayers’ incomes!). As the kids today would say: “sketchy AF!”
The de-monitization of gold and silver meant that they were now regarded as just another commodity, subject to the same financial speculation on price movements. But the ensuing rise of the prices of these precious metals became the ‘canary in the coal mine’ for the loss of purchasing power of the $USD.
Around this time, it is assumed that the Federal Reserve and US Treasury began using the Exchange Stabilization Fund, the CFTC and the futures markets to suppress those prices, to make the decline in the value of the $USD less obvious:
The Hunt Bros’ silver position was simply their HEDGE against monetary uncertainty, just as it has been for thousands of years.
By the spring of 1974, the markets started to get worried about the amount of silver out in private hands, because annual demand was 450 million oz but annual production was just 245 million oz. Of the estimated 700 million oz. above ground, only 200 million of that was deliverable against futures contracts.
The ‘authorities’ didn’t have the metal to cover the futures exchanges’ fraudulent suppression of the silver price. They knew they were vulnerable, and they perceived the Hunt Bros’ moves as an ATTACK.
…over 43 million oz of silver contracts were purchased through the COMEX and the CBOT, with delivery to be taken that fall. In the fall of 1979, the silver price doubled from $8 to $16/oz in only two months, and the COMEX and the CBOT started to panic. The warehouses of the two exchanges only held 120 million oz of silver, and that amount was traded in October alone. Many buyers, including the Hunts (through their International Metal Investment Company) were taking delivery on all their contracts.
And as always, when backed into a corner, CHEATERS CHANGE THE RULES.
Late in 1979 the CBOT changed their rules, and stated that…all contracts over 3 million oz per trader had to be liquidated by February of 1980; and the margin requirements were raised.
Bunker accused the COMEX and CBOT board members of having a financial interest in the silver market themselves. Investigations later found that many had substantial silver short positions.
“Substantial short positions” owned by the principals of the exchange means that the exchange itself is using non-existent metal to keep the price artificially low, in coordination with the government and central bank.
Bunker knew that a shortage now existed, or they would not be screaming so loudly. He bought even more. The price on the last day of 1979 was $34.45/oz. At this point Bunker and Herbert held…a grand total of 235 million oz…
And then finally on January 7th of 1980, the COMEX changed their rules to only allow 10 million/oz of contracts per trader, and that all contracts over that amount must be liquidated before February 18th. Of course, the CFTC promptly backed up the ruling.
Because they were complicit.
On January 21st, the COMEX announced that it was suspending trading in silver and that they would only accept liquidation [sell] orders. Predictably, with trading suspended and only liquidation orders going through, the price of silver dropped $10/oz and stayed around $39/oz until the end of January. Long lines formed outside metal dealer shops, and scrap silver, old silver coin collections and family silverware came into the market - about 22 million oz in all.
The the walls fell.
Forever the optimist, Bunker faithfully believed that he could maintain the silver spike if only he had cooperative fresh buying. However, by March 14th silver was down to $21/oz, Paul Volcker had raised interest rates, and the dollar had firmed-up. [They] still held 60 million oz of futures contracts. Their margin calls on those contracts amounted to $10 million dollars a day!
Bunker still believed the price would go back up if only he could promote more buying. He scrambled around Europe looking for a buying partner, but the more the price dropped, the harder it was to borrow more money against his silver holdings to buy more silver to hold up the price.
The Hunts’ brokerage sent them a margin call [meaning they had to pay back some of the cash they had borrowed to buy their positions] for $100 million on March 26th of 1980. Since the Hunts had also purchased vast quantities of Bache stock (more than 5% of issued and outstanding shares), they were technically "insiders,” required to adhere to the rules of only-fractional stock selling permitted on a monthly basis. With their Bache stock illiquid, and silver in freefall, the Hunt brothers had run out of cash.
Bunker was in Paris that day, so he called Herbert and simply said, "Shut it down.” Herbert promptly told his broker the following morning that they could not meet their total $135 million dollar margin call. The Hunt's brokers immediately sold $100 million dollars worth of silver on that day. Their account only had $90 million dollars worth of equity, and they were expected to lose all that the next day.
The CFTC chairman, the Chairman of the Federal Reserve, and the US Treasury Secretary began an around the clock silver monitoring session. Whoever could have foreseen the day when a change in the price of silver would cause tremors through the entire stock market, and adversely affect the reputations of leading brokerage and commodity firms?
Wall Street was on edge.
The understatement of the 1980s!
Which brings us to the topic of this article:
On March 27th, silver opened at $15.80 and closed at $10.80. The US stock market crashed on rumors of the Hunt Brothers’ liquidations of stocks in order to cover their silver losses, but the market then rallied to close roughly at the same level. The Hunts’ bullion purchases were all averaged to around $10/oz; but their futures contracts were purchased at or about $35/oz. When it was all over, the Hunts owed approximately $1.5 billion dollars.
Fearing a financial disaster, Federal Reserve Chairman Paul Volker gave approval for an emergency bailout plan for the brothers, and a group of banks agreed to loan them $1.1 billion, with the Hunt family posting $8 billion in collateral.
And the fallout:
Nelson Bunker Hunt filed for personal bankruptcy…in a 1989 settlement with the US CFTC, Hunt was also fined US$10 million and banned from trading in the commodity markets, as a result of charges of conspiring to manipulate the silver market stemming from his attempt to corner the market in silver.
Translated: he was scapegoated for daring to “fight city hall” and exposing the massive silver price suppression scheme run by the US government to defend the $USD.
“REMEMBER KIDS, DON’T TRY THIS AT HOME!”
But don’t feel bad for Bunky. He still had plenty of income from the family oil business!
"A billion dollars isn't what it used to be." — Bunker Hunt, on the Sunday after Black Thursday”
The reason this story is relevant in 2025 is because the same thing is happening right now, in London.
As
has been pointing out for some time now, the conditions at the LBMA are just as ugly as they were at the COMEX in January of 1980:
Also,
has brought to our attention that March 31st is being promoted as a citizens’ action day:
If you don’t own any physical silver, your assets are not fully diversified, and I suggest you trade some Federal Reserve Notes for some physical metal on Monday. And if you’re already in, KEEP STACKING.
How will it work out this time? Stay tuned…
Anyways…Happy Silver Thursday 2025! Let’s revisit this post next year.
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The Hunt brothers had a 100M oz. long position.
At the time, there was 12B oz. aboveground.
The metal did exist - it was just matter of letting the price run enough to bring it to the exchange.
This is why metal investments are very long term. Despite inflation, I don't think silver has ever topped that $50 dollar high in 45 years. I think that was the high. If it gets above $40, I will sell my minuscule holdings.
I do not trust that communist operation called wikipedia. They write their own version of leftism into every article.